Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev Thread | Next Thread
Author: jeduart Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19380  
Subject: Overpaid SS benefit. Date: 3/21/2006 10:56 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I am 64 years old, and have been self employed for many years. At the beggining of 2005 I did not have any leads for new contracts so I decided to get early SS payments. I applied and got a monthly check from SS.

Halfway through 2005 I got a contract, and started work. I think the SS rules are that for every $2.00 that I earn over $12,480.00 I have to deduct or return $1.00 of the benefits received.

The question is how, when and to whom do I return the extra benefits?

Thank you for any help,
jeduart
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: 10327 of 19380
Subject: Re: Overpaid SS benefit. Date: 3/22/2006 2:44 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 3
Greetings, jeduart, and welcome. You wrote:

I am 64 years old, and have been self employed for many years. At the beggining of 2005 I did not have any leads for new contracts so I decided to get early SS payments. I applied and got a monthly check from SS.

Halfway through 2005 I got a contract, and started work. I think the SS rules are that for every $2.00 that I earn over $12,480.00 I have to deduct or return $1.00 of the benefits received.

The question is how, when and to whom do I return the extra benefits?


For those, like you, who retired before full retirement age, the earnings limit before any Social Security forfeiture kicks in was $12,000 in 2005. In 2006 it's $12,480. You started this contract in 2005, so depending on what you were paid in 2005 it's possible a forfeiture exists for both 2005 and 2006.

You should report these earnings to the SSA immediately so they can adjust your benefit as needed. If you wait, then along about October of the following year in which the work occurred their crosscheck with the IRS will reveal the income you earned for that prior year. That will trigger the forfeiture, and they will withhold your benefit until that sum is repaid. If you're not working at the time the forfeiture kicks in, you might need the full benefit but you won't have it because the forfeiture is being deducted belatedly.

Bottom line: If you know you will exceed the earnings limit for Social Security, inform the SSA immediately. That way the bite won't be as bad as it would be if you no longer have that extra income and need the full Social Security benefit to survive.

Regards ... Pixy

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: ep0001 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10328 of 19380
Subject: Re: Overpaid SS benefit. Date: 3/22/2006 1:23 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I am in a similar situation and the didn't use the word "forfiture," After they determined that I had been overpaid, they calculated the amount of money I owed them and they withheld the number of months until the amount owed was repaid. It was automatic.

It is my understanding that once you start collecting, the monthly benefit is not adjusted except:

1. Jan. to adjust for COLA

2. When you reach full retirement age, to adjust for the months during which you did not receive a benefit. That would be the months during which they are recovering the overpayment

Print the post Back To Top
Author: jeduart Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10329 of 19380
Subject: Re: Overpaid SS benefit. Date: 3/22/2006 2:55 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Thank you for all your advice.

I wonder why the monthly benefit is not adjusted. If work income is earned, money is being paid to SS so the base to calculate benefits has increased.

Regards,
jeduart


Print the post Back To Top
Author: ep0001 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10330 of 19380
Subject: Re: Overpaid SS benefit. Date: 3/22/2006 4:34 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I wonder why the monthly benefit is not adjusted. If work income is earned, money is being paid to SS so the base to calculate benefits has increased.

I don't know. But the way it has worked with me is that when I owe them money, they withhold full months until they have recover what I owe. Likewise if they owe me because I estimate wrong, they give it in a lump sum.

The good news is that when you reach FRA, they will adjust your monthly benefit(#2 in my previous post) to remove the early retirement penalty for any month in which you did not receive a benefit.


Print the post Back To Top
Author: rosewine Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10331 of 19380
Subject: Re: Overpaid SS benefit. Date: 3/22/2006 8:44 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
My understanding was that they will also adjust the monthly benefit if the amount that you make is more than the lowest year of the 35 out of the last 40 that was used to calculate your benefit.

Also, if you just started drawing in 2005, their are some adjustments to the amount you can earn if you didn't draw SS all year.

Print the post Back To Top
Author: ep0001 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 10332 of 19380
Subject: Re: Overpaid SS benefit. Date: 3/22/2006 9:36 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
My understanding was that they will also adjust the monthly benefit if the amount that you make is more than the lowest year of the 35 out of the last 40 that was used to calculate your benefit.


I think you are correct. However, I believe the earned amount is compared to the base. Fro example:

1 say the base in 1963 was 4800 and you earned 5000

2. say the base in 2005 is 90000 and you earned 20000 while collecting SS,

Then there is no adjustment. This would be the case of most taking SS and working part time.


BTW, I got my adjustment check today for 2005

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev Thread | Next Thread
Advertisement