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3 Social Security Mistakes to Avoid in 2019
www.fool.com ^ | Nov 26, 2018 at 7:36AM | Maurie Backman

Posted on 11/27/2018 10:46:01 AM PST by Red Badger

Social Security serves as a lifeline for the millions of seniors who rely on it to pay the bills. If you're eager to make the most of your benefits, all the while avoiding unwanted surprises at present, here are a few key mistakes you'll want to steer clear of next year. 1. Not knowing your full retirement age

Though your Social Security benefits are calculated based on your lifetime earnings, the age at which you first file for them can cause that number to change. If you want to avoid losing out on benefits, you'll need to wait until you reach full retirement age, or FRA, to claim them. However, that age can change based on your year of birth.

If you were born in 1953, you'll reach your FRA of 66 in 2019, and you'll therefore be entitled to collect your full monthly benefits without a reduction. But if you were born in 1954, you'll have to wait until the following year to be eligible for full benefits.

Keep in mind that if you were born before 1958, you'll be allowed to claim Social Security in 2019, since the earliest possible filing age is 62. Remember that any time you take benefits ahead of FRA, you reduce them to some extent. Furthermore, since folks born after 1954 have a later FRA than those born in or prior to that year, it's important to understand the ramifications of filing at various dates. You can use the following table to see when you'll reach FRA based on your year of birth:

_______________________________________________________________________ Year of Birth Full Retirement Age

1943-1954 66

1955 66 and 2 months

1956 66 and 4 months

1957 66 and 6 months

1958 66 and 8 months

1959 66 and 10 months

1960 67

DATA SOURCE: SOCIAL SECURITY ADMINISTRATION.

_______________________________________________________________________

2. Not accounting for taxes on more of your earnings

Though many people regard Social Security as a welfare program of sorts, the truth is that those benefits are earned by paying into the system and racking up enough lifetime work credits to quality for retirement income down the line. Therefore, while you might grumble when you see that a portion of your take-home pay is lost to Social Security taxes, you should, at the same time, recognize that you're paying into a system that will provide for you when you're older.

That said, the income cap at which Social Security taxes are applied is increasing in 2019, which means if you're a higher earner, you'll lose a bit more money than in 2018. For the current year, the maximum taxable income for Social Security purposes is $128,400, but come next year, that limit will increase to $132,900. This means higher earners will be on the hook for taxes on an additional $4,500 of income.

If you're a salaried worker, you'll be responsible for paying a 6.2% tax on that extra $4,500 for a total of $279. If you're self-employed, though, you'll pay double that amount for a total of $558. Be sure to plan for this expense accordingly to avoid getting caught off guard. 3. Not fighting for a raise

The more you earn during your career, the higher a benefit you stand to collect in retirement. Therefore, if you're not making what you should be making at your job, you'll need to speak up about getting a raise.

Of course, you shouldn't approach that conversation blindly. Rather, do some research beforehand to understand what folks with your job title are making, and see how your salary compares. If you're earning well below the average, that's reason enough to get that data in front of your boss. Additionally, map out a list of ways you add value to your company, whether it's by maintaining specialized skills or simply going above and beyond on a consistent basis. All of these are arguments in your favor, so don't hesitate to vocalize them.

The moves you make next year could affect the amount of money you get from Social Security. Avoid the above mistakes, and you'll be better positioned to maximize your benefits while staying away from unpleasant tax-related surprises.


TOPICS: Business/Economy; Education; Military/Veterans; Society
KEYWORDS: brb; socialsecurity
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1 posted on 11/27/2018 10:46:01 AM PST by Red Badger
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To: Red Badger

Bkmk


2 posted on 11/27/2018 10:51:57 AM PST by sauropod (Yield to sin, and experience chastening and sorrow; yield to God, and experience joy and blessing.)
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To: Red Badger

Correction: For people born in 1954 (not 1953) and before FRA is age 66


3 posted on 11/27/2018 10:52:37 AM PST by Az Joe (I AM TRUMP!)
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To: Red Badger

SS was a sweet deal for Ida Mae Fuller!


4 posted on 11/27/2018 10:53:32 AM PST by utax
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To: Az Joe

I think the writer was speaking generally.......................


5 posted on 11/27/2018 10:54:16 AM PST by Red Badger (We are headed for a Civil War. It won't be nice like the last one....................)
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To: Red Badger

bkmk


6 posted on 11/27/2018 11:01:19 AM PST by Sergio (An object at rest cannot be stopped! - The Evil Midnight Bomber What Bombs at Midnight)
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To: utax
During her lifetime she collected a total of $22,888.92 in Social Security benefits and paid in $24.75.

She didn't exactly make a fortune, but she did have an excellent ROI.
7 posted on 11/27/2018 11:02:04 AM PST by rightwingintelligentsia (Democrats: The perfect party for the helpless and stupid, and those who would rule over them.)
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To: Red Badger

Another thing to watch out for....we had a one time income bump in 2017. Just received a notice yesterday from SS that they are deducting a total of $395 each month in 2019 from my SS benefit. $325 IRMAA against Medicare part B and $70 against part D.


8 posted on 11/27/2018 11:03:29 AM PST by noexcuses
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To: Red Badger

I’m 61. From what I can tell, it looks like age 64 is a reasonable time to start collecting. I figured it out, and you have to live past 80 for you to draw more by waiting for FRA.

At least that’s true for me.


9 posted on 11/27/2018 11:04:20 AM PST by brownsfan (Behold, the power of government cheese.)
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To: Red Badger

Interesting.

Born in 1955 ( a few days from now actually), but my first SS “yearly pay” was in 1974 for $32.00.

So, do I “remove” that year (since the next year’s salary in 1975 was much higher), or leave it as-is? After all, I expect to continue working for another 10 years or so.


10 posted on 11/27/2018 11:07:24 AM PST by Robert A Cook PE (The democrats' national goal: One world social-communism under one world religion: Atheistic Islam.)
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To: Red Badger

They didn’t figure for the break-even point; if Soc sec is taken at full retirement age, it takes a good number of years to recoup the money that would have been earned had the recipient taken soc sec at 62.


11 posted on 11/27/2018 11:08:04 AM PST by WildHighlander57 ((WildHighlander57 returning after lurking since 2000)
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To: brownsfan

I’m going to start collecting as late as possible, then move to Chicago and register as a Democrat. That way, I know I’ll be collecting until I’m at least 130 years old. :-P


12 posted on 11/27/2018 11:10:56 AM PST by Alberta's Child ("The Russians escaped while we weren't watching them ... like Russians will.")
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To: Alberta's Child

and the neat thing is that you can vote 1,000 times in Chicago, too


13 posted on 11/27/2018 11:12:28 AM PST by faithhopecharity ("Politicians aren't born, they're excreted." -Marcus Tillius Cicero (3 BCE))
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To: WildHighlander57

I did that calculation once.

I included the income that could be earned on money received starting at 62 at a modest 2.5%.

My break even age was 78 and some months.

A bird in hand, etc. Start taking benefits ASAP.


14 posted on 11/27/2018 11:13:34 AM PST by seowulf
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To: Red Badger

Retirement plans,,,
Thanks.


15 posted on 11/27/2018 11:14:55 AM PST by Big Red Badger (Despised by the Despicable!)
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To: brownsfan; Robert A Cook PE

Should You Take Social Security at 62, 66, or 70?
Here’s a game plan to help you figure out if it makes sense to take your Social Security early, on time, or late:

https://www.fool.com/retirement/2017/03/25/should-you-take-social-security-at-62-66-or-70.aspx


16 posted on 11/27/2018 11:15:29 AM PST by Red Badger (We are headed for a Civil War. It won't be nice like the last one....................)
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To: brownsfan; Robert A Cook PE

17 posted on 11/27/2018 11:16:07 AM PST by Red Badger (We are headed for a Civil War. It won't be nice like the last one....................)
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To: seowulf

Playing with That,,,
I’m 63,64 in January.


18 posted on 11/27/2018 11:16:38 AM PST by Big Red Badger (Despised by the Despicable!)
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To: Red Badger

Geeesh, if a person is born in 1958, say April 1, 1958, they can not draw until they are 62, which is in 2020, not 2019 as the article says. Only if they were born on January 1, 1958 - could they draw in 2019 because they would be deemed to be eligible the month before.


19 posted on 11/27/2018 11:17:25 AM PST by Penelope Dreadful (And there is Pansies, that's for Thoughts.)
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To: Red Badger

Geeesh, if a person is born in 1958, say April 1, 1958, they can not draw until they are 62, which is in 2020, not 2019 as the article says. Only if they were born on January 1, 1958 - could they draw in 2019 because they would be deemed to be eligible the month before.


20 posted on 11/27/2018 11:17:34 AM PST by Penelope Dreadful (And there is Pansies, that's for Thoughts.)
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