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.
“...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?”
Social Security is figured on your highest 35 years of earnings. If you work more than 35 years, like me, year 36 wipes out the lowest year (assuming it is larger) and the same for year 37, etc. Wiping out some small years early in your working career makes a significant difference in the monthly payout. Also, if you start past 62, you can get a lump sum payout for as many months in arrears (till 62) that you want. It just reduces your monthly payout. Maybe to payoff your house, etc.
Just bought that book on eBay for $3.75. I think it will come in handy. Thanks for the tip.
Social Security must be repealed and completely dismantled. It is destroying our society by making us all into dependents to the state.
JoMa
We were born in ‘50 and ‘52 - both started SS at age 62 vs waiting because the lower amount still put us ahead of the power curve until our mid 70s...I wonder how many wait to get the bigger amount, then die early enough that they haven’t collected as much as they would have if they hadn’t waited.
Twins,,,
Separated at Birth!
But really,
I want to retire So bad
That it hurts!
Its like everything is Screaming,
,”RUN!”
That makes sense,
64 ,,,Retirement.
Can you expand on that?
Thanks.
The rules changed since I go on, I think. Contact your SS office or SS’s website. I think it’s https://www.ssa.gov/
I’ve thought about that, but decided not to.
The extra income that I have to report on my taxes would put me into a higher tax bracket, so the money would be taken back by government.................
I will not ‘retire’. I will keep working and being productive as long as my health holds out.
I’m not in ‘perfect health’, but I’m okay, just minor stuff, mostly.
I have friends who have retired ‘early’ only to get so bored they went out and got jobs that they really didn’t need.
There’s only so much golf, fish, travel and such that you can do, then it’s boring.
You have to feel like you are creating and contributing to society, it’s human nature.
Sure all that leisure time is great and it’s fun, but it’s not enough.
Too many people discover that late. When you stop working, you start dying..............
24 Years retired,
Not Bad.
I bet you’ve cleaned a few
Closets out.
For Later,,,
I’m still single.
My Job has been turned
Into crap,,,
“That makes sense,
64 ,,,Retirement.
Can you expand on that?
Thanks.”
I’m not a financial planner. Not sure what you’re looking for me to expand upon?
For me, at 64, I’ll be done with my career, I’ll draw SS, and most likely work some part time thing to keep me out of trouble, (and out of the wife’s line of fire). As it stands now, if you’re below FRA, you can only make something like 17k before they start dinging you.
64 - SS and partime job.
65 - Medicare.
That should keep me going until I don’t go anymore.
There’s plenty more out there!....................
We also retired when each of us hit 62 - made a big difference than if we had continued to work. Our retirements are enough we pay taxes on some of our social security but it isn’t that big a tab.
“I bet you’ve cleaned a few
Closets out.”
Nope,but I look at closets that NEED cleaning out———and decide to “do it tomorrow”,which never comes.:-)
.
That’s Good,,
Part time,,
That’s the Ticket!
I am right there, right now.
Time to get moving...
you are welcome. Mine has a Feb 2015 copyright date and it doesn’t mention the revision of “restricted” filing. I don’t know what else might be outdated in my book.
Their web site has info regarding updates to the book
http://www.getwhatsyours.org/updates/
Stop Working,,,
Start Dying.
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