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Author: schnooky Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76237  
Subject: Social Security Date: 2/22/2000 11:37 AM
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I'll be 62 in April and am considering applying for SS benefits some time this year. My benefit will be about 1190/mo. I am still working and will make about 50k if I work all year. I believe I can earn about 9,600 before my SS benefit is reduced. Does all the money I make this year count against my benefit, or only the money I earn after I start receiving the benefit?
Also, suppose I start receiving the SS benefit and then decide to go back to work and earn more then 9,600, what happens to my benefits? I understand that they will be reduced 1 dollar for every 2 dollars I earn (over 9,600)--but, when/how does this happen? At tax time next year?
If my benefit is reduced (or totally lost), is it lost forever or will I get it back later?
What I'm thinking is-- why not take the benefit no matter how much I earn and invest it during the year and then settle up at tax time.
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19392 of 76237
Subject: Re: Social Security Date: 2/22/2000 12:15 PM
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Greetings, Schnooky, and welcome. You wrote:

<<I'll be 62 in April and am considering applying for SS benefits some time this year. My benefit will be about 1190/mo. I am still working and will make about 50k if I work all year. I believe I can earn about 9,600 before my SS benefit is reduced. Does all the money I make this year count against my benefit, or only the money I earn after I start receiving the benefit?
Also, suppose I start receiving the SS benefit and then decide to go back to work and earn more then 9,600, what happens to my benefits? I understand that they will be reduced 1 dollar for every 2 dollars I earn (over 9,600)--but, when/how does this happen? At tax time next year?
If my benefit is reduced (or totally lost), is it lost forever or will I get it back later?
What I'm thinking is-- why not take the benefit no matter how much I earn and invest it during the year and then settle up at tax time. >>


The Social Security Administration has written a great pamphlet that answers all of your questions. It's called "How Work Affects Your Benefits," and it's available at http://www.ssa.gov/pubs/10069.html. You should read it as it covers all the issues you raise.

BTW, do NOT wait until income tax time to tell the SSA you have worked while receiving benefits. They will take any forfeitures out of your following year's benefits should you do that. You might not be working that year, and thus might need all of the benefit in that year. If you tell them ahead of time, they will reduce the benefit in the year you are actually working. If they take too much, they'll return it to you.

Regards..Pixy

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Author: waldronr Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19424 of 76237
Subject: Re: Social Security Date: 2/23/2000 3:06 PM
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why not take the benefit no matter how much I earn and invest it during the year and then settle up at tax time.

That is certainly an approach. I have looked at this pretty closely and assuming I live into my 80s (I too will be 62 in April) I will collect more of what I've paid into SS if I wait until 65 to begin. If I needed the money I would take it at 62, but I don't.

In my case I think it is wiser (or more Foolish) to take joint lifetime distributions out of my pre-tax investments which should cushion the tax shock at 70 1/2.

Ron W.

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Author: markr33 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19686 of 76237
Subject: Re: Social Security Date: 3/1/2000 12:15 PM
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The law about forfeitures when working while receiving SS seem to be about to change. (The house approved new legistlation yesterday increasing the amount one may earn)

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