Social Security Question

[DHK]

Pension income is income subject to taxation.

So yes, it counts.

 

[rousemark]

Wow! A thread that actually contains useful information and no flaming attracts.. I go to quit hanging out in the FE Forum so much..

 

[agentjhc]

Bend over.............

 

[somarco]

OK, I am reopening this thread for clarification purposes. My clarification. I am sure Rouse and the others fully comprehend this and don't have a mental block like I do.

Then her actual benefit amount will be reduced until age 66. Once she is 66 they give her back the withheld reductions.

Using this link from SSA, it says this.

any benefits withheld while you continue to work are not "lost". Once you reach NRA, your monthly benefit will be increased permanently to account for the months in which benefits were withheld.

I read this two different ways.

Let's say you were entitled to $1000/mo but because she is receiving the widow's benefit at age 64 her benefit is reduced to $870. Ignoring inflation adjustments, etc. at age 66 (Normal Retirement Age) her benefit will increase to $1000.

But does she recapture the $130 x 24 months as well or is that money gone forever?

 

[Larry Tew]

I've always assumed this is NOT retroactive... just a bump in benefits moving forward.

 

[scagnt83]

I read this two different ways.

Let's say you were entitled to $1000/mo but because she is receiving the widow's benefit at age 64 her benefit is reduced to $870. Ignoring inflation adjustments, etc. at age 66 (Normal Retirement Age) her benefit will increase to $1000.

But does she recapture the $130 x 24 months as well or is that money gone forever?

She recaptures the $130 x 24 months as well. So instead of $1000/m, she will get a bit extra to account for the withheld amount over the 24mo period.

 

[Tahoe Ray]

For what it's worth, I have a few clients that use this:

Horsesmouth: Savvy Social Security Planning for Boomers

and really like it. It is especially useful if you're looking to add this type of expertise to your marketing efforts.

 

[KaseyNM]

So, take what I'm saying with a grain of salt... or 7.
I just had a 3-hour info session with an advanced planning Attourney who focuses on SS. Aside from that, my knowledge is limited to minimal readings, complete with the dizzy affect and very little comprehension.
I feel like a qualifying consideration is that I'm Canadian, so I have NO experience with SS in my past.

What I did learn was several strategies that apply to widows and divorcees. They don't speak to your question directly, but I (in my limited knowledge) found them very helpful.
Does your client 'need' the widow benefit now?
If not, waiting until FRA is best, or, even claiming, then holding.
Holding allows the benefit to grow while also allowing access (and back pay) if they want to retroactively start collecting.

Also, is her benefit more than her widow benefit? OR, enough to float her to FRA, or longer (considering the taxation over benefit equation) ?
If the widow benefit is more, but she can manage on it, it might behoove her to live on that, and allow her widow benefit to grow/accrue until age 70 when it's 132% of original benefit.

 

[somarco]

I've always assumed this is NOT retroactive.

vs.

She recaptures the $130 x 24 months as well.

We need a tiebreaker vote.

On another note, why does Horsesmouth seem like a scam to me?

 

[Tahoe Ray]

vs.



We need a tiebreaker vote.

On another note, why does Horsesmouth seem like a scam to me?

I've had a Horsesmouth subscription for years and feel that it has good content...it is mainly geared to financial advisors but a lot of the concepts cross over to our side of the fence. I still send out the personalized "key data" piece annually. YMMV.