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.
Musta been a pretty good ‘bump’!...................
Me too!
Are we related?....................
Yes, I agree. I don’t think they want for us to think in terms of “break even”. My thinking is that, since SS stops cold when you die, it is beneficial to start taking benefits as early as is comfortable (based on one’s overall plans and other sources of retirement income). My theory is that I might as well use the SS money to live on, and preserve my savings and other assets to pass along to the kids. I think 65 is a good age, since most of us are stuck without health insurance until we can get Medicare, if quitting work before age 65.
I started collecting at 62,my break even point was age 75——and here I am,at 86. (sigh)
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Correct link
https://www.fool.com/retirement/2018/11/26/3-social-security-mistakes-to-avoid-in-2019.aspx
Looks like my calculation was correct.
I figure, if I live past 80, I won’t be spending much money, so I’ll risk it.
“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.”
pretty much true for most ... basically, one will collect .5% more per month that one waits ... however, it’s most instructive to add up the number of thousands one gives up each year one waits ...
in my opinion, it’s better to have a bird in hand rather than two in the bush, particularly by the time you get that extra bird most people are too decrepit to enjoy that extra bird ... just look at the number of people who are 80+ in “independent living” units and nursing homes ...
“————just look at the number of people who are 80+ in “independent living” units and nursing homes ...”
And just look at the number of people that aren’t,including quite a few FReepers like me.
Independent living quarters are VERY expensive in my area-—great places to “end up”——if you can afford them.
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“in my opinion, it’s better to have a bird in hand rather than two in the bush, particularly by the time you get that extra bird most people are too decrepit to enjoy that extra bird ... just look at the number of people who are 80+ in “independent living” units and nursing homes ...”
In regard to this, I have learned a lot from my neighbor. I sit with him almost daily and we chat about everything and nothing. He’s 88, and he told me not to worry about what you spend in your 60s. Take the money, spend it, you can’t take it with you. And as you age, you’ll spend less and less. First your energy goes, then your “want to” follows.
I’m not going to scrimp and save just to get the max payment at 66 1/2, then end up dying at 70.
“and the neat thing is that you can vote 1,000 times in Chicago, too”
But only as a Democrat.
But then one needs to figure the break even point
figuring for the job pay that is lost if they quit & take soc sec at 62
—or—
on the soc sec money lost if they keep working because the job pays good money
Yup! They only have D ballots in chi- town
I could care less about the break-even point and too many people focus solely on that. My wife and I both have significant pension income and have no need for additional income at this time. We’re delaying so the last person standing can get as much SS as possible to make up for the lost pension income. If I don’t “break even”, I’ll be too dead to care.
Yes, but on this thinking, the job will almost always pay more than the SS. The factor that cannot be put into dollars, is the desire to be done working, IMHO.
Like Ross Perot said in the ‘92 Presidential Debates, “What do I need Social Security for?”.................
Is your spouse receiving half of your benefit amount and you are receiving your full benefit amount?
yes.
Social Security is probably the single biggest factor in killing off the birthrate in the West...which may very well kill off the West.
It was INGENIOUS, a program designed to only ‘help people’ winds up accomplishing everything the Left ever dreamed of.
It doesn't effect your benefits or your wife's when she turns 70?
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