Drawing Social Security early....

[Old Arkansawyer]

I rolled the dice and waited until age 70 for the full SS enchilada. But I
enjoyed the my work and was in reasonable good health, two things to
consider.

 

[LoboGunLeather]

Anybody know how income from a company pension is classified? Is it like earned income (reduces your SSI payment) or is it like interest/dividends/capital gains?

Given that most men in my family have not made it to 70 I will

Generally speaking (every retirement plan differs so consult with a tax professional or investment adviser) pension income is not considered as earned income, it may include dividends, interest, capital gains, etc, some or all of which may be taxable as "other income".

Once again, the key advice is to consult with a tax specialist and/or financial adviser familiar with your pension plan and how it is treated under IRS codes.

 

[Doug M.]

I have to go to 65 to take my state pension without a large penalty (1% per month for each month before that date, IIRC). I will not have enough time in to go before then (one can go at 60 if they have 30 years , but then they have to deal with health insurance). I am not sure I will go right away; there are incentives to stay, and even with most of 4 years to go, people above and around are sweating the issue because I do some stuff that no one else has done or really knows how to do and it is a long learning curve. I also have a couple places that would like me to work for them a few months at a pop doing essentially the same stuff on a contract. I'll be ok.

My wife is faculty at a state school, and they did a tenure buyout that was attractive; she'll be done at the end of this year. She can continue or health insurance at our expense on the same plan until we are medicare eligible, which we are doing (the plans where I work are not good, so I decline and take the cash to pay for the state plan). Because we have had two houses since 2003 (jobs 160 miles apart) we had a forced investment. We sold the other house, which paid off this one, and just paid of her car. Mine will be paid off in a couple months (a 2018 and a 2020). We can do fine on my salary (total expenses are roughly half my take home) until she can actually collect her pension. SS will be gravy for both of us.

 

[LoboGunLeather]

My police pension would have reduced my SocSec by about $400 monthly, but I've paid in 29 years not including those 20, so it will actually cost me about $40 a month now. Not willing to work another year for $40 per month more in SocSec!

Some clarification for those who are not familiar with public employee pensions: Most public employees are enrolled in pension plans that require both individual and employer contributions, and employees do not pay into social security (although Medicare is generally mandatory). While not paying into social security means that there may be many years in which we are not building our SS benefits, many (perhaps most of us) have other work histories that result in a SS retirement benefit, although it is likely to be significantly less than those whose employment was subject to SS withholding for all of their working lives.

There are also provisions in the law for those drawing on public employee pension plans while also eligible for social security, generally requiring a reduced benefit from one or the other (or both).

I started working at age 11, and I started filing federal income tax returns at age 12. I had my minimum 40 quarters of social security withholding taxes paid by the time I was 23. Then I spent 24 years in public employee retirement plans, no social security withholding during those years. After that I ran a business for 20 years and paid both employee contributions for social security and Medicare (7.65%) plus self-employment taxes (another 7.65%), so I paid double what the typical employee paid into the social security program.

My benefits are greatly reduced because of the 24 years I spent outside the SS system. My wife and I always had relatively comparable gross incomes, but she was in SS all the time and her benefit is about 70% more than my own.

Of course, I have the public employee pension plans in which I participated, but those benefits are subjected to adjustments for SS benefits, and politicians continue to control the plans (investment media, payment structure, etc) beyond any control I might exercise.

The so-called "double dippers" can be given serious "haircuts" on both ends.

 

[tops]

I started drawing at 62 and figured 75 was my break even age. I am now 79 so I guess I've been going in the hole for 4 years. If I live long enough I will run out of money but it's not going to be next week and I'm glad I didn't work those extra years for a few more dollars per month. Larry

 

[sigp220.45]

I had mandatory retirement at 57, so Uncle Sugar kicks in a supplementary payment until 62, which is coming right up. Then I can either apply for Social Security or take a pay cut. I’ll take my SS, please.

I work a couple of part time jobs, mostly to get me out of the house, but I try to stay below the income cap ($18K). My pension and my 401k don’t count towards that.

My wife is still working. I play with the dog, fish when the weather is nice, and look for guns.

 

[Speedo2]

Just a couple of things to add to LoboGunLeather's excellent advice:

1. Earnings during your first year of collecting SS are not subject to the 16k (or whatever it is now) maximum before they start taking $1 for ever $2 that you earn over that limit. Sometimes they don't tell you that.

2. Earnings don't include things like banked vacation and incentive compensation that typically paid out in lump sums upon retirement.

3. Your local SS office may have more knowledge and intelligence when it comes to knowing what is and what isn't considered to be earnings. Just because somebody works in the SS headquarters (where such things get appealed to) doesn't make them very smart. Download and understand Social Security’s Publication EN-05-10069 (How Work Affects Your Benefits) and EN-05-10063 (Special Payments After Retirement).

Good luck and I hope that you enjoy your retirement for a very long time. -S2

 

[Onomea]

.... The so-called "double dippers" can be given serious "haircuts" on both ends.

Yessir, ye old WEP, Windfall Elimination Provision. I got hit with that too because I paid into two social security systems, Japan and the US.

Double dippers? How about full-up double payers oughta be full up double receivers?!

 

[HOUSTON RICK]

Since you are an S&W Forum member, I will give you the $1,000 an hour lawyer answer: "It Depends".

 

[hsguy]

My most salient advice would be to consult with Social Security and also a financial retirement professional to receive the best advice possible and then make an informed decision.

 

[steelslaver]

I took mine early and continued to do some work. The social security on anything earned went to increases my payment. Then a couple of years I hooked up with good short term jobs that paid real well and lost a couple years of payments. Those worked the same as kicking back my start date. Now at 69 because I have continued to work and their has been no limit once I was 65, I get the same money as if I had waited to my full retirement age.

Main thing I have going for me is I have no debt, biggest bill I have is my property tax and insurance. I could actually make it on my SS if I lived tight. My wife is 20 years younger than me and still works.

 

[ZGrand]

You guys who receive pensions are dang lucky. The company I worked for (36 years) did not have a pension plan. Interest from my savings and Social Security are my only income streams. When my wife is eligible for Medicare next year, that will help a lot. She's waiting till FRA to turn on her SS benefits. Those two actions will give us a lot more discretionary income. Retiring debt free at 59, I knew it was going to be lean for a few years. But I had grown to hate my job so much that it has been worth it not to have to work there any longer.

 

[andy52]

For me retiring at 62 was a no brainer. The combination of SS and my pension exceeded my annual income so the decision wasn't difficult, I've now be happily retired for 6+ years.

 

[F4phantom]

Retired when I was 70. Got tired of all the stuff. Worked the last 15 years as a contractor to NASA. The pay was good and the work was interesting but all the extra stress was not worth it. It took about a month getting used to being retired. That was four years ago and never looked back.

 

[Golddollar]

Retired when I was 70. Got tired of all the stuff. Worked the last 15 years as a contractor to NASA. The pay was good and the work was interesting but all the extra stress was not worth it. It took about a month getting used to being retired. That was four years ago and never looked back.

The moment I turned the ignition key at the end of my last day of work I was used to being retired. Coming up on 5 years retired and I never looked back either.

 

[NYlakesider]

Wife and I both had jobs at 14 and have been contributing to SS ever since. We both had good jobs with plenty of OT behind our names.

We both took SS just as soon as we could after retiring at age 55, as you never know what can happen when there is lots of money involved. Had our pensions and that held us till we hit 62 and SS started.

 

[kaaskop49]

I did it at age 62, because I needed to.
My understanding is the ding on over earning is only
until you reach your full retirement age.

Not really true. I'm 70, retired at 62, and 'dinged' yearly because my gambling winnings push me over the limit. Be interesting to see what happen next year S.S.-wise as the docs have instructed me to refrain from going to casinos due to my health and my income will be substantially lower.

Kaaskop49
Shield #5103

P.S.As I'm sure many of you have, I've found it wise NOT to get in any discussions about topics like this, especially with younger folks. Their futures may be less rosy, and I've found people will be jealous if you pick up a coin from the sidewalk.

 

[ladder13]

Not really true. I'm 70, retired at 62, and 'dinged' yearly because my gambling winnings push me over the limit. Be interesting to see what happen next year S.S.-wise as the docs have instructed me to refrain from going to casinos due to my health and my income will be substantially lower.

Kaaskop49
Shield #5103

P.S.As I'm sure many of you have, I've found it wise NOT to get in any discussions about topics like this, especially with younger folks. Their futures may be less rosy, and I've found people will be jealous if you pick up a coin from the sidewalk.

I didn’t really need the money, but figured the young, once they found out what’s been done to them, and the lock box gets emptied, I’d best get my money out.

I hopefully won’t be here when they tar and feather us boomers.

 

[mtgianni]

I was over 63 when I retired and waited until 66 to take SS. I am glad I did as most of my family makes it into their 90's and my health is good.
Visit with a financial planner and take an honest look at your life and health. I have people I worked with that cannot climb stairs, others are ok up a 24 foot ladder.

 

[HOUSTON RICK]

My most salient advice would be to consult with Social Security and also a financial retirement professional to receive the best advice possible and then make an informed decision.

Government taxation and benefit employees are 100% not responsible for what they tell you and generally know far less than they imagine that they do. Take any government advice with a large cube of salt.