I’m retired and thinking about getting a part-time job, how will that effect my social security benefits? Our money man, Certified Financial Planner Paul Fain, answers this question this week on Sunday Money.
THIS IS A GREAT QUESTION FOR ANY RETIREE WANTING TO WORK PART-TIME…
True! Here are the rules for working AND collecting Social Security income:
– $17,640: Social Security reduces benefits by $1 for every $2 of earned income above $17,640
– Full Retirement Age: This reduction continues until the start of the year in which you reach full retirement age (FRA).
– No Penalty: After FRA, no “penalty”
IN GENERAL, SOCIAL SECURITY BENEFITS MAY BE TAXABLE AS WELL RIGHT?
Exactly! The first key is to calculate your “combined income”:
Your adjusted gross income
+ nontaxable interest
+ 1/2 of your Social Security benefits
= your “combined income”
THEN AT WHAT COMBINED INCOME LEVELS ARE BENEFITS FROM SOCIAL SECURITY TAXABLE?
– Individual return and your combined income is:
– $25,000-$34,000/50%: between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits
– $34,000+/85%: more than $34,000, up to 85% of your benefits may be taxable
– Joint return and your combined income is:
– $32,000-$44,000/50%: between $32,000 and $44,000, you may have to pay income tax on up to 50% of your benefits
– $44,000+/85%: more than $44,000, up to 85% of your benefits may be taxable
FAST MARKET FACT: SSI
How is Social Security funded?
87.7% Payroll taxes: 6.2%/6.2%
8.5% Interest income
3.8% Tax on benefits
QUESTION FOR OUR MONEYMAN?
Want to learn more about social security or other areas of retirement planning? Do you have other general questions about financial planning? Send them to our Knoxville financial planner Paul Fain or directly to Paul@assetplanningcorp.com!
