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  1. #1
    Join Date
    Aug 2016
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    4

    Default How Does Age at Retirement Affect Social Security Benefits

    Hello I am helping my dad figure out his SS as he doesn't even have a computer. He just turned 64 and was born in 1952. He's working full time now making about 30k a year. His estimated SS is $2050 if he collects now and $2300 if at 66.

    If he collects now, and makes 30k would 15k of that be reduced $1 for every $2 (so he would lose out on $7500?) just want to make sure I have that right.
    Trying to see if it makes more sense for him to go part time and make up to the limit.

    Also how would he be taxed if he did work full time and collect? Not sure how the SS payment it taxed?

    Thanks in advance for any help!
    Tom

  2. #2
    Join Date
    Oct 2006
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    16,426

    Default Re: Helping Figure Out Fathers Ss

    Quote Quoting Burke8503
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    Hello I am helping my dad figure out his SS as he doesn't even have a computer. He just turned 64 and was born in 1952. He's working full time now making about 30k a year. His estimated SS is $2050 if he collects now and $2300 if at 66.

    If he collects now, and makes 30k would 15k of that be reduced $1 for every $2 (so he would lose out on $7500?) just want to make sure I have that right.
    Trying to see if it makes more sense for him to go part time and make up to the limit.

    Also how would he be taxed if he did work full time and collect? Not sure how the SS payment it taxed?

    Thanks in advance for any help!
    Tom
    If your father is healthy and working, he would be better off in the long run not to take SS benefits until he absolutely has to do so.

  3. #3
    Join Date
    Aug 2016
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    4

    Default Re: Helping Figure Out Fathers Ss

    Well he could use the extra money now. He would just retire if medical wasn't an issue so he is going to wait until he is at least 65 (just turned 64 this week). Just seeing if it still makes sense to work full time vs part time, and how his SS is taxes if he does work while collecting.

  4. #4
    Join Date
    Nov 2013
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    7,039

    Default Re: Helping Figure Out Fathers Ss

    In 2016, his benefits would be reduced $1 for every $2 he earns over $15,720.00. A more important question may be is how long will it take him to make up what he is paid by taking benefits early as opposed to waiting until full retirement age (not counting his earnings from employment).

    If he takes benefits now at age 64 and is paid $2050 then for 2 years he receives $49,200. If he waits until 66, he receives $2,300 per month which is an increase of $250 per month. At that differential, it would take him 16 years to make up the lost benefits for 2 years he received benifits. He would have to live to 80 to break even.

  5. #5
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    Oct 2006
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    Default Re: Helping Figure Out Fathers Ss

    Quote Quoting budwad
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    In 2016, his benefits would be reduced $1 for every $2 he earns over $15,720.00. A more important question may be is how long will it take him to make up what he is paid by taking benefits early as opposed to waiting until full retirement age (not counting his earnings from employment).

    If he takes benefits now at age 64 and is paid $2050 then for 2 years he receives $49,200. If he waits until 66, he receives $2,300 per month which is an increase of $250 per month. At that differential, it would take him 16 years to make up the lost benefits for 2 years he received benifits. He would have to live to 80 to break even.
    That is assuming that he will not be living solely on SS benefits. If SS benefits are all that he is going to have to live on during retirement, then how much he collects in a lifetime is less important than how much he is able to collect on a monthly/yearly basis.

  6. #6
    Join Date
    Nov 2013
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    7,039

    Default Re: Helping Figure Out Fathers Ss

    I don't understand your point. If I give you $49,200 that you didn't have and then I give you $2050 each month you still have received the $49,200 didn't you? It's pretty much a standard analysis of when you take your retirement benefits. In this case he stays ahead of the game until he reaches age 80 if he lives that long.

  7. #7
    Join Date
    Oct 2014
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    8,219

    Default Re: How Does Age at Retirement Affect Social Security Benefits

    Quote Quoting Burke8503
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    Also how would he be taxed if he did work full time and collect? Not sure how the SS payment it taxed?
    IRS Publication 915 discusses that in detail.

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