Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev Thread | Next Thread
Author: RGOLDPET Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19483  
Subject: marginal tax bracket Date: 7/26/2000 8:56 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Please correct me if I am way off. Is the marginal tax bracket only a guide as to where your income level is? That is if you are just below a new bracket say 31% vs 28% does it pay to worry about taking Social Security at 62?
Print the post Back To Top
Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4618 of 19483
Subject: Re: marginal tax bracket Date: 7/27/2000 9:22 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Greetings, Rgoldpet, and welcome. You asked:

<<Please correct me if I am way off. Is the marginal tax bracket only a guide as to where your income level is? That is if you are just below a new bracket say 31% vs 28% does it pay to worry about taking Social Security at 62? >>

Keep in mind that the marginal tax bracket is based on your taxable income. That's what's left after all deductions and personal exemptions have been taken. To determine whether and how much of your SS will be taxed, you start with adjusted gross income (that comes before deductions and exemptions) and add back half your SS and all unearned income (nontaxable municipal bond income for most folks). If you exceed certain threshholds based on your filing status (i.e., single or joint), then up to 85% of your SS will count as additional income and will filter down to your taxable income level to affect your marginal tax bracket. Depending on your total situation, they may or may not affect your decision to take SS at age 62.

And BTW... All you will really lose of the SS payment will be 31% of 85% based on your scenario. That means at most you would lose 26.4% of the age-62 SS payment. IMHO that's not an onerous burden to bear.

Regards..Pixy

Print the post Back To Top
Author: RGOLDPET Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4623 of 19483
Subject: Re: marginal tax bracket Date: 7/27/2000 2:59 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Thanks Pixie for boiling down the somewhat complicated calculation to a common sense conclusion. They now do tax 85% of my SS therefore they will tax 85% of my wifes if she starts at 62. But at 65 not only will the payments be larger ,we will be well back down to the 28% bracket from the impending 31%. So do you think that this combination could justify her waiting to 65?

Print the post Back To Top
Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4624 of 19483
Subject: Re: marginal tax bracket Date: 7/27/2000 3:23 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
Rgoldpet asks:

<<So do you think that this combination could justify her waiting to 65?>>

It wouldn't be to me because when it comes to SS I believe "a bird in the hand..." If I could predict the life expectancy with total accuracy of me and my spouse, then perhaps I wouldn't be so cavalier. Sadly, I cannot, so I would choose to have my spouse take it knowing if I predecease her, then she will step up to my payment slightly reduced due to her early retirment.

But I'm not you, and that's really got to be your decision and choice based on the numbers you run for yourself. I discussed the issue in four columns you can find at:
http://www.fool.com/retirement/retireeport/2000/retireeport000313.htm
http://www.fool.com/retirement/retireeport/2000/retireeport000320.htm

http://www.fool.com/retirement/retireeport/2000/retireeport000327.htm

http://www.fool.com/retirement/retireeport/2000/retireeport000403.htm

They may help as you decide for yourself.

Regards..Pixy

Print the post Back To Top
Author: RGOLDPET Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4628 of 19483
Subject: Re: marginal tax bracket Date: 7/27/2000 9:48 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Thanks for the links Pixy. A "bird in the hand" seems to be the consensus even at the local SS office.

Print the post Back To Top
Author: PVFOOL Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4643 of 19483
Subject: Re: marginal tax bracket Date: 7/29/2000 12:56 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
It wouldn't be to me because when it comes to SS I believe "a bird in the hand..." If I could predict the life expectancy with total accuracy of me and my spouse, then perhaps I wouldn't be so cavalier. Sadly, I cannot, so I would choose to have my spouse take it knowing if I predecease her, then she will step up to my payment slightly reduced due to her early retirment.

Pixy, you are a paragon of TMF'rs. Would that everyone be so honest and forthright.

My hero

Regards
PVF

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev Thread | Next Thread
Advertisement