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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121095  
Subject: Re: Roth ira vs Regular 401k ira... Date: 9/9/2009 12:21 PM
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OP: <<<I'm 66 years old and plan on working full time till I'm 70. My wife is 62.

I started collecting my Social Security benifits when I turned 66 and have 15% taxes taken out each month.>>>

TMFPMarti: "You need to better inform your mind. You're dangerously close to being one of those people who say, "Oh, I didn't pay taxes last year. I got a refund." Withholding is simply one method of pre-paying your taxes. It's not associated with a specific item of income.

. . .

Regardless of how you've looked at it in the past, you're headed for trouble if you continue looking at it the old way."


You do not mention your annual income (or whether your wifes works for pay), but given the income tax obligations on SS and the growth in SS payment if deferred, how much analysis when into the decision to start taking SS?

From the SS website:

"You may choose to keep working even beyond your full retirement age. If you do, you can increase your future Social Security benefits in two ways.

Each additional year you work adds another year of earnings to your Social Security record. Higher lifetime earnings may mean higher benefits when you retire.

Also, your benefit will increase automatically by a certain percentage from the time you reach your full retirement age until you start receiving your benefits or until you reach age 70."

http://www.ssa.gov/pubs/10035.html

"About one-third of people who get Social Security have to pay income taxes on their benefits.

If you file a federal tax return as an “individual,” and your combined income* is between $25,000 and $34,000, you may have to pay taxes on 50 ­percent of your Social Security benefits. If your combined income* is more than $34,000, up to 85 percent of your Social Security benefits is subject to income tax.

If you file a joint return, you may have to pay taxes on 50 percent of your benefits if you and your spouse have a combined income* that is between $32,000 and $44,000. If your combined income* is more than $44,000, up to 85 percent of your Social Security benefits is subject to income tax."

Id.

Just saying.

Regards, JAFO
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