Social Security Question

[Boomer]

I just got off the phone with our accountant and he was not completely sure on the answer to this. (I know. :dontknow: but I really like the guy and it is tax season and I am not going to make him look it up.)

He told me to verify with Social Security.

Well, I don't do "on hold" very well so I thought I would just ask the question here on TOTV because I'll bet there will be someone who knows.

So here's what's up:

Mr. Boomer and I are both retired and we are now slackers. We have not yet reached early Social Security age, but once we do, we intend to leap upon the benefits immediately in order to better pay for our health insurance and our property taxes and our longterm care insurance and our state tax and our federal tax and our dog's Rimadyl and - But wait. -- It's not that much. But we will take it and we will run when we are 62.

You know those benefit projection statements that you get in the mail once a year.

Well, I understand the part about the amount you can make and not have your benefit reduced if you are already receiving the benefit.

But here's the part that I don't understand:

If you take a parttime job before you begin to collect benefits, does the amount that you earn have any kind of negative impact on the amount of the benefit you are to receive? Can small earned income years that follow years where you earned more dilute the overall eventual benefit?

I think the answer is no but I am not sure. What I have in the back of my mind is whether or not the benefit calculation is based on any kind of average of income earned during certain years.

Someone wants to hire Mr. Boomer for awhile. He is interested in the project and had planned to just help out. Now, they are upping the ante to try to lure him into a paying job. It's not a big deal and it is not for a long period of time, but it is getting more interesting. I understand tax brackets, etc. But I don't know the effect on the eventual SS benefit.

I hope someone can help.

Thanks.

Boomer

(btw, I told our CPA that I would get back to him. ;) )

[Mikitv]

Have you checked out the social security web site. They have a lot of frequently asked questions and other info. You might find your answer there. I was using it for disability questions. Found it helpful.

[travelstiles]

Hey Boomer,
Below is from the Social Security website FAQs:

Q. Are my benefits figured on my last five years of earnings?
A. No. Retirement benefit calculations are based on your average earnings during a lifetime of work under the Social Security system. For most current and future retirees, we will average your 35 highest years of earnings. Years in which you have low earnings or no earnings may be counted to bring the total years of earnings up to 35.

http://www.ssa.gov/planners/faqs.htm

Also, the Leesburg office of the Social Security Administration can be reached at:
Local Number (352) 787-2624

[Rokinronda]

They take the 35 years of your highest earnings, and calculate based upon that. A woman from the social security office answers questions on WVLG weekly and this was a recent topic.

[handieman]

A bit of experience here: At age 62 I began drawing my SS even as I worked Part time. Now 8 yrs later, my SS monthly check has gone up 225.00 per month because of the extra earnings and COLA % compounded. Not a bad deal, maybe I'll work till I drop or max out my benefit, whichever comes first ;D
Handie :joke:

[Sidney Lanier]

Check the statements you've received from the Social Security Administration. If you have any zero years, then ANY earnings in ANY year from this point on can only increase your ultimate benefits, as these earnings would be in years that would replace the zero years.

[chuckinca]

From the SSA website:

If you are under normal (or full) retirement age (FRA): when you start getting your Social Security payments, $1 in benefits will be deducted for each $2 you earn above the annual limit. For 2008 that limit is $13,560 and for 2007, that limit is $12,960. Remember, the earliest age that you can receive Social Security retirement benefits remains 62 even though the FRA is rising.
In the year you reach your FRA: $1 in benefits will be deducted for each $3 you earn above a different limit, but only counting earnings before the month you reach FRA. For 2008, this limit is $36,120; for 2007, this limit is $34,440.
Starting with the month you reach FRA:, you will get your benefits with NO limit on your earnings.

[handieman]

Check the statements you've received from the Social Security Administration. If you have any zero years, then ANY earnings in ANY year from this point on can only increase your ultimate benefits, as these earnings would be in years that would replace the zero years.

Exactly ;D
Handie :joke:

[Boomer]

Thank you all for answering my question. Everything was helpful. - the links and the personal experience, too.

It is good to know that if Mr. Boomer decides to take them up on this thing, it won't cost us down the road. (We have been getting way too good at slacking anyway.)

btw Handieman, thanks for being the voice of experience. I did a little math in my head and -- Wow! From your picture it looks like all that work is really agreeing with you. You sure don't look like you are going to run out of steam anytime soon. Keep on keepin' on.

Boomer

[PJ]

:agree: :agree: :agree: Great picture Handieman! yum.