Message Font: Serif | Sans-Serif
No. of Recommendations: 0
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."

"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."


Just saying.

Regards, JAFO
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.