I think your idea of consulting an accountant is excellent, because he/she will be able to go over all of your income/deductions and come up with a figure that is tailored to you.

If you are going to continue working and save the SS benefits, why not hold off on claiming them so that when you claim them later you'll get a higher amount?

By the way, many states do not tax SS benefits, and the federal government only taxes a percentage. The highest percentage taxed is 85%.

Thank you everyone. I think that is what I'm going to do is contact an accountant first.

Lindsey-I didn't want to hold off on claiming benefits. I want to double dip so I can save more for what future I have left.

Not an expert, but want to put this ifo out there. I started SS at earliest ago... out of necessity... after an unfortunate/unwanted extended period of "unemployment". When I finally found a job (not very much $$ at all REALLY), I never thought about how much I was making. Eventually SS sent me a letter. Seems IRS eventually tells SS how much money people have made at some time in the past... think something like a year behind? Anyway, I made "too much" (yearly cap is something like $16,000... rolling in it, huh?!?) and was going to get NO SS that month. I frantically went to the SS office (luckily nearby) and was able to arrange for them to take the overage out a little at a time with NO interest... WHEW! Once I got to 65 was "allowed" to make more $$ but that was still not unlimited... think cap is now something like $45,000?

After you reach the month of full retirement your Social Security benefits will not be reduced at all due to employment as they are before that date. They may be taxed, though.

66 is my full retirement age. That's the age I can work and make as much as I want and not be penalized. I have to find that form from the IRS that we can roughly fill out to see an estimate of what federal taxes they we will owe. My DH did roughly fill out some form and came up with a figure, but we're not sure if that's correct.

Isn't all non-tax-deferred income subject to tax? Are you talking about retirement benefits from your employer? Can you collect these without leaving the company? Do you lose health benefits?

If you are talking about Soc. Sec. benefits, that's another ballgame. You might have more later by waiting to claim while the benefit amount goes up. Could you beat the government percentage increases by investing benefits you would take now? (You 'earn' XX percent by waiting, but can only grow your money X percent in a safe investment.)

"If you are going to continue working and save the SS benefits, why not
hold off on claiming them so that when you claim them later you'll get a
higher amount?"

Looking at social security benefits alone and considering nothing else (taxes, other investments, etc), the sole factor that influences maximizing total SS benefits is a person's age at death. SS payments options use a life expectancy assumption, which I believe is somewhere in the early 80s. It doesn't matter, but let's say it's 82.

If a person dies at age 82, the total SS benefits received on a discounted present value basis is exactly the same, whether benefits are started at age 62, age 70, or anytime in between. If you expect to die sooner than age 82, you should start benefits at the earliest possible point. If you expect to live longer, you should delay to 70.

If you don't know when you're going to die, then the time you choose to start benefits may or may not be optimal. There's no answer to the question "When is best?" because it's unknown.

"Isn't all non-tax-deferred income subject to tax?"

An apparently simple question but without a simple answer. It's Yes AND No.

Most pensions are taxable. Disability "pensions" and like payments (that very many people have, especially retired cops and firemen) aren't taxable. Social security is taxable to some people and not to others, depending on income level. Annuity income can be taxable, non-taxable, or partially taxable. Some states tax pensions, some don't. Some foreign pensions are taxable, some aren't. Etc.

I meant to say Social Security benefits, not retirement benefits. I'm going to talk to a financial person to sort this out before I sign up for SS. If I could collect SS without being taxed a huge amount by Federal, then that is what I'm thinking about doing. I don't want to wait until I'm 70 to start collecting. I don't think the 4 years is going to make that much difference in payment.

If you wait from 66 to 70, the monthly benefit will increase by 8% for every year you wait. If you go the full four years, the benefit you receive at age 70 is 8% x 4= 32% higher than at age 66.

Here's a story that reinforces Elmer's info -- for a Canadian audience. Good explanation of why deferring taking your Canada Pension from 65 to 70 can be a very good idea. Fundamental ideas are same for US folks.

I'm going to retire at 61 and draw my SS at 62. I will not wait - the big C recurring always hangs over my head. I know I will get less SS, but I do have other investments that will also come into play.

Back to my example, to understand how it works -

Say your monthly benefit is $1500 at age 66. If you wait until age 70, it will be $2000 (32 percent more). But by waiting, you're losing out on $1500/month for 4 years, or 1500 x 12 x 4= $72000. Starting at age 70, you're getting an extra $500 a month. $500/month will take 144 months to make up the $72000. 144 months = 12 years, so at age 70+12= 82, you're even. It doesn't work quite exactly that way because of the time value of money but that's an example.

If you die before reaching age 82 (in that example), it was the wrong decision to wait until age 70 to start. But, as before, there's no way to know for sure.

It all boils down to if you need the extra income now. Then, even though it would be beneficial to wait, it doesn't make sense in your particular scenario.

Some people really count on SS and for them it might makes sense to wait to start collecting the higher amount.

Elmer, your example is exactly why I started collecting at 62.

You can have tax deducted from your Social Security benefits. I started having that done after a couple of years of having to pay thousands of dollars at income tax time. The form is on the Social Security website.

If you keep working, count on paying big time taxes the ss.

I was appalled when I had to pay federal income tax on most of my ss. I thought that ss was supposed to be a life line when you were older. Besides, it's already been taxed once. So, now I have $$ taken out of my monthly ss check for the friggin' taxes. Fortunately, Calif doesn't tax ss.

You did not say what kind of retirement account you have. If it is a 401K that will be converted to an IRA upon retirement and if it was built with un-taxed income, then withdrawals from that account will be taxed as regular income. However, funds inside the IRA can be bought and sold without being taxed; Its only taxed when you remove it from the IRA umbrella, and its only the part withdrawn that is taxed.

Taxation amount varies from state to state. What worked for me was to withhold 15% for federal taxes and 5% for states on my withdrawals. That worked for me several years after I passed age 70.5 years. In the year that you become 70.5 years old, there is a required minimun distribution (RMD) that you must take out or suffer a big penalty. Due to the growth of my IRA and the increased required withdrawal, my income advanced and about 7 years after my age 70, I needed to increase my Federal withholding to 17%. Hopefully, this will give you some idea of the amount of income taxes you need to pay.

Since you're turning 66 in November, you could have commenced benefits on January 1, 2017, and jump started your savings by $12,000 or more for this year, even while you're working full time.

Or, let’s say you weren’t yet full

retirement age at the beginning of the

year, but reach it in November 2017.

You earned $45,900 in the 10 months

from January through October. During

this period, we would withhold $340 ($1

for every $3 you earn above the $44,880

limit). To do this, we would withhold

your first check of the year. Beginning

in February 2017, you would receive

your $600 (example) benefit, and this amount

would be paid to you each month for the

remainder of the year. In 2018, we would

pay you the remaining $260 we withheld

in January 2017.

Everyone who wants to wait to retire, for reasons other than needing money, just remember this:

My mother was going to retire at 77. She died at 76.

My college advisor retired at 66 and died two weeks later on the golf course.

My grandfather never retired, and died at 81, while he was at work.

The key is to enjoy LIFE. My biggest fear is that I will die before I get to retire.

LucyStar1 - I'll download the form. My DH is very good at filling out forms for our Income. I do plan on double dipping. He'll fill out the form to see roughly what we will owe on taxes and that's what we'll set aside. I'm not sure how long I will want to work, so double dipping will add more savings for me. Plus I'll have a few extra dollars to enjoy life. Because you never know when your time is up and I want to enjoy it while I can.

LucyStar1- I found the form and will be filling it out when I go to the SS office to begin collect my SS. Thank you for letting me know about that form. It made it much easier for me to let them deduct the tax.

Thanks for the 8% annual increase figure on deferred Soc. Sec. benefits, Elmer. I wasn't sure of the exact number, but knew it was more than most people can earn on safe investments.

When DH retired and applied for his Soc. Sec. benefits, I did the same. At the time, interest on safe investments was very high. Even ignoring the 'bird in the hand' value of the benefits, we could earn double-digit-interest by investing our Soc. Sec. benefits in insured CD's.

Now...there are no more double-digit-interest CD's. An 8% annual increase may be incentive enough for some people to delay benefits.

We're 'ahead' today primarily because we've lived long enough to collect for ten years -- and because we have not had high inflation to eat into this *fixed* amount.

Why on earth should we NOT expect to pay some taxes on benefits not needed to keep us alive and sheltered? Taxes fund the costly benefits Seniors receive from federal and state governments. Soc. Sec. was intended to assist people barely getting by, not to fund cruises. If your benefits are 'gravy', you might consider saving them to let you live better over the years ahead. Life expectancy is increasing. A fixed income will not.

My mother refused to apply for Soc. Sec. benefits until costs of her fatal leukemia ate up her savings. She had been the sole source of income for her parents and herself during the Depression (before Soc. Sec. existed). She insisted that she 'wasn't in need' -- while others were.

When you start collecting Social Security while still working ... do your employer stop withholding the Social Security fee that reduces your take-home pay?

If so, that'd be an additional monetary benefit to add to the calculation of whether you'd be better off to apply early.

That might depend on your age at the time, as well.

Sorry - being "out-of-country", I have no idea how that'd work.

This Canadian signed up for Old Age Security (term of residence requirement), at 65, no penalty for applying early or addition if delay - but there's a clawback that starts in the low $70,000s of income (of no effect to this lower income pensioner), with all clawed back at somewhere around $140,000. annual income ... so if one's income is over that upper limit, better not to apply, as it adds to one's income, thus tax, but one ends up with no benefit from it.

One can apply for Canada Pension Plan, intended to base on 65, at about 61, about a 30% reduction, with a more or less equal stepped up addition if one waits until 70. I'd had income lower than the amount that would have meant that I'd have made full contribution to my pension credit for a few years, resulting in my credit being somewhat lower than the full pension amount. I waited to begin to collect until 67, thus adding about 12% to the amount that I'd have received had I applied at age 65.

ole joyfuelled

Ole Joyfulled - I'm not sure how that works. I'll find out when I go and talk with them. I think they do and every year they re-evaluate my earnings.

Social security tax always applies to earned income. Being a recipient of benefits doesn't affect that.

What's much more significant is that if you are working and begin benefits before "normal retirement age", which varies (because of law changes) with your year of birth, your benefits will be reduced. No reduction takes place because of active earned income following attainment of normal retirement age.

The voluntary tax withholding that some mention is fine but, of course, the right amount depends directly on the amount of your other income. The percentage jemdandy mentioned may be right for him but may not work for others in different circumstances. Some may pay at a lower rate (or pay no tax at all), others will pay at a higher rate. Another thing to keep in mind is for those living in states where SS benefits are taxable, the voluntary withholding he mentioned applies to only federal tax. Additional payments for state tax can be required and may need to be done with quarterly estimated tax payments. To me, if you're paying quarterly to one agency, it's just as easy to pay to two, but that's a personal choice.

In our early fifties we are starting to think about whether to retire or not. We have 401Ks with matching through our jobs. My clinic also contributes to a pension. I have automated an increasing percentage of my wage going to my 401K until it reaches 10%. Based on projections we should have enough to retire at 60 should we choose to do so, and the market goes as expected based on historical cycles.

We like working, but can see working a lot less in 5-10 years.

I am a little concerned about GDP growth moving forward due to automation, demographics, low wage growth among low skilled workers, and our current debt/credit based monetary system. This is why I am not too concerned about the bond portion of my portfolio considering the fact that Ben Bernanke has projected no normalized interest rates in his lifetime. I remember 14% interest rates on long term CDs. Those days are gone as there is just not enough impetus for grown given above trends.

In that regard we have also started saving cash outside of our bank and credit union accounts, as well as some physical gold and silver. I would like to have a very sizable emergency fund in cash and bullion outside of financial assets by the time we retire.

We do prefer to spend cash for many of our weekly expenditures. We haven't used a credit card in over a year now. We have some cash back and other incentives though our cards, but I don't think it is a good habit to use them.

We developed the habit about a decade ago of saving all coins and small bills. I separate out all pre 82 pennies and nickels and set those aside from our rolled quarters, dimes and zinc pennies. I vividly recall getting Franklin halves, silver Kennedy halves and mercury dimes in my change in the 70s, so coins still fell like real money to me to this day. A 90% Washington quarter bought a gallon of gas the year of my birth, and today is worth over $3.

I also consider our gardens as part of our retirement plan, along with our firewood harvesting, hunting, fishing, foraging and food preservation in terms of both a health lifestyle and continued self-sufficiency.

Money is money, whether I pay upfront or monthly when the CC statement arrives. Some cards provide protection against fraud and some pay me back a small amount. (That's *their* mind game; it has no bearing on how much I spend, and the 'free float' from purchase to payment isn't enough to sway me either.) As with all of life choices, "You can pay now or you can pay later." (You will pay.)

I have made a budget annually for all of our marriage, just because I want to keep on top of income and expenses. There have been lines for savings and charity all 52 years.

We use travel-based credit cards for all our purchases, and pay them off in-full every month. We amass lots of points for hotels, airfare, and other travel-related expenses (Uber, rental cars, AirBnB, etc.). We are judicious in which card we use for a specific purchase. For example: if we are reserving hotel rooms, we always stay at Hilton properties and use our Hilton-branded card to pay for the hotel. That nets us a ton of Hilton points, which we then use for future hotel rooms - typically, for free nights, depending on destination/hotel selection. When flying domestically, we go Southwest - and we use the Southwest card (which nets us one free roundtrip per year, just for having the card) to amass points for future (free) air travel. I also activate all the "special offers" from these cards for bonus points - sometimes they'll offer an extra 2,000 points/night at Hilton or an extra number of Southwest points per flight booking (or on special purchases).

Our main card, though, is a Cap One Venture (I think) card. It gets us 1.25 "miles" for every dollar spent. We put EVERYTHING on that card, every month - groceries, gasoline, haircuts, phone bill, car payment, clothing, etc. Those points add up quickly - and it's why we're able to travel so much.

Not using a "rewards" card, when one can reap all sorts of benefits (insurance waivers, travel insurance, free travel) is a bit silly. Of course, it does take discipline not to "overspend." The key is to pay it off and not pay interest. Ever.

I just spent $145 on Amazon, courtesy of Discover rewards. We also have an Ally Bank card that pays 2% on purchases and offers a 10% bonus on rewards earned and deposited into a savings account. There are many ways to earn income when retired, one just happens to be a credit card.

I just thought, the question was, to retire, or not to retire...

For me it was simple. My job was really hard on my body, and the pay was rather meager.

Now I do things that are good for me, and I enjoy my life. Yes, with less money, but also lots and lots of less pain. My body loves me now. :) Well, as much as it can, with the arthritis....

Moni

In my later years of life, my work gave me purpose and I liked what I was doing. There were aspects that were troublesome, but these were management type loads, not the fruitful application of developing products. I had thoughts of retiring at age 67. However, other aspects of life interfered, mainly the reality of the Nation's economics. Retirement came at age 62. I have survived well enough and have not regretted it. I'll admit, the first few years were scary for the fear of running out of money.

The point is I would not have minded if I had worked to age 66 and died. That is not critical. What is important is a good feeling about yourself and that your efforts count. If you like what you do, what's the rush to quit? The time to hang it up is when your body begins to fail you, or you become a nuisance in your work, or there is something else you'd love to do before it is too late.

Jemdandy, My DH feels as you do. It's not about the money. He enjoys going to work each day. He likes his job and the people he works with. He is 70 and intends to work as long as he is physically able and they will have him. Some people enjoy kicking back, traveling etc. He is not one of them. He goes stir crazy after a long weekend unless he has specific projects to accomplish.

I started collecting on his retirement at age 62. Before they closed the window on file and suspend. Yes we do pay taxes on our retirement (a lot) but at least we have it and we are able to do a lot more things without going into debt.

He chose to grow his retirement for my future should he proceed me in death. We are also fortunate to have his employer continue to insure us with excellent health care policies (yes we pay more for me,but we are worth it) and his retirement continues to grow without mandatory withdrawal in effect. So for us it's a win.