Decision About Drawing Social Security

[Jackie S]

Next year I will be faced with the decision that all of us will have to make, if we make it that far.

I will turn 66, and will be eligible to draw my full Social Security Benefits, which will be about $3000 a month. Of course, I have no intentions of actually "retiring", I will keep doing exactly what I do as long as my health, (mental and physical), allows.

I have had some say that "why draw it, you will give it all right back in taxes". Well, they won't take it ALL, I figure if I end up with one dollar more, I am ahead.

For you others that are facing this situation in the near future, or have already got there, what are your plans?

My attitude is, I have been paying into the system since I was 14 years old. For the past 15 years I have "maxed out", in other words, I have paid in as much as the Government can take. I would like some of it back.

[nevergaveitathought]

you will most likely be taxed on 85% of it, and it then will increase your adjusted gross income and therefore enters into other calculations on your return that can diminish deductions or cause AMT to be owed etc.

not knowing your marginal tax rate, but lets say its 30%. 85% times your benefit times your marginal rate of whatever it is, say 30%, is the direct tax in addition to the other things mentioned above that are possibilities.

so $30,000 x .85 x .30 is the tax = $7,650, netting you $22,350 less the medicare thing.

the thing abt social security is, there is no estate benefit, except a $255 death benefit, so if you took it at 66 versus 70 when you would be entitled to the max benefit, thats $22,350* x 4 = $89,400. you could save that and have it available for heirs or your use. no telling when we leave this place ya know.

*subject to cola increases

you would compare the above to your increased benefit at 70 years old and see what you want to do. it might take quite some time to make up the $89,000 (and thats without what you may be able to earn on the net benefit during the four years) and maybe it never could be made up.

[Cpalmson]

My take without getting into all the accounting and math, take the money now while you can. Who knows what will happen in 2, 5 or 10 years. At the rate the government is going into debt, there very well not be any SS in 10 years.

[Jackie S]

nevergaveitathought, I would like to hit it just right. That being, I write my last check to the undertaker, and it bounces.

[nevergaveitathought]

Originally Posted by Jackie S

nevergaveitathought, I would like to hit it just right. That being, I write my last check to the undertaker, and it bounces.

jackie..take da money and run

[boardman]

Originally Posted by Jackie S

nevergaveitathought, I would like to hit it just right. That being, I write my last check to the undertaker, and it bounces.

That's what the $255 is for.

[CJ7]

take it, its yours, you worked for it, you were taxed, and paid into your account.

nuff said.

[Jackie S]

I just thought of something. My SS benefits will almost, (well, almost almost), pay my Hobby expenses for a year.

That would be the ultimate "get back" at the Government. Use the Social Security Benefits to pay for my Hooker.

[CJ7]

Originally Posted by Jackie S

I just thought of something. My SS benefits will almost, (well, almost almost), pay my Hobby expenses for a year.

That would be the ultimate "get back" at the Government. Use the Social Security Benefits to pay for my Hooker.

I had a neighbor who was VERY well off but didnt really live like it. He had a problem with "social" anything. We had a conversation about this same topic, and I told him to call it a Tax Refund Check and buy some new toys.