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Retirement Planning


Whether you are close to federal employee retirement or just starting out in your career, this is the place to share ideas with your federal colleagues on creating a secure financial foundation.


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cmonson  
#1 Posted : Monday, December 22, 2008 3:09:40 AM(UTC)
cmonson

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I reached 65 this past summer but plan to continue working for a while. What penalties do I encounter if I start drawing social security now and still work?
champinent  
#2 Posted : Monday, December 22, 2008 4:27:23 AM(UTC)
champinent

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Is the SS online THAT complicated??

http://www.socialsecurity.gov/retire2/whileworking.htm
LSA  
#3 Posted : Monday, December 22, 2008 6:00:24 AM(UTC)
LSA

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TO camon:

I believe it goes something like this if I can remember correctly.

If you are under your Full Retirement Age ([FRA] is Social Security jargon) then you must give back $1 for every $2 you make up until you make $10,000 (but probably no more than $15,000.) After the Approx $15,000 in the pay you make you get to keep all the rest.

After your FRA you get to keep all the money you make. (i.e. No $1 for every $2 rule)

If you decide not to apply for your Social Security Benefit until after your FRA then you get 7% more per year than what your benefit would be at FRA. The 7% accrues every year up until you are age 70. So you see there is quite a benefit for waiting until age 70 to collect your Social Security Benefit. This is a good strategy if you continue to work, are in good health and if you think the stock market will continue to tank so that you really have no place to put that extra money from SS. Where else can you get a guaranteed 7% per year every year???
The HalfBreed  
#4 Posted : Monday, December 22, 2008 8:58:31 AM(UTC)
The HalfBreed

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We had 5 people in our 'area'....we've all been together for over 25 years and 3 of them started drawing SS when they turned 62. That was 4-6 years ago on average. They are now retired, and they had to receive a reduced SS monthly check.

Now, remember, we are all on CSRS, and not FERS.
Their logic was that they can collect (numbers not actual, but close) $1,000.00 /month now, or wait till they get 72, which would've been 10 years later, and collect approx $1300 - $1400 per month.
They said that, $1000/month put them $120,000.00 ahead, whereas if they waited till age 72, it would take approx $120,000/$400 = 300 months or 25 years to recoup the difference (not accounting for increases on both sides of the equation).

They have been happy with their decisions. Do the math and see what's best for you. They are/were in a high pay category, 38-42 years CSRS, and really don't need the $$$ from Social Security....if that helps your decision making process.
RETIRED 12/19/2012 !!! Good Bye Tension !!! Hello Pension !!!
cmonson  
#5 Posted : Monday, January 05, 2009 1:38:00 AM(UTC)
cmonson

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quote:
Originally posted by Nelson in NC:
Is the SS online THAT complicated??

http://www.socialsecurity.gov/retire2/whileworking.htm


I am a working gal, who has time to read the SS online. There's a whole lot to read. Sorry if I offended you with my question.
ezurick  
#6 Posted : Wednesday, January 07, 2009 2:43:48 AM(UTC)
ezurick

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quote:
... They are/were in a high pay category, 38-42 years CSRS, and really don't need the $$$ from Social Security.... if that helps your decision making process.



Now that really gets my dandruff falling! Just like the same people that are collecting SS but never worked a day in their entire life. We need serious SS reform.
ezurick  
#7 Posted : Wednesday, January 07, 2009 2:48:50 AM(UTC)
ezurick

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quote:
Originally posted by camon:
quote:
Originally posted by Nelson in NC:
Is the SS online THAT complicated??

http://www.socialsecurity.gov/retire2/whileworking.htm


I am a working gal, who has time to read the SS online. There's a whole lot to read. Sorry if I offended you with my question.


Don't be offended... some folks just have bad hair days. I do too. Hopefully nothing personal is implied or taken. Ask your questions. That is the purpose of this forum. If it complicated to someone, it prolly is complicated to others. Alot of this may seem easy for some, but I am finding it very complicated in some areas. I work for the Navy and since our HRO consolidated, we have zero assistance until we're ready TO retire. It is absolutely pathetic. I know a guy that recently retired from the Army as a silly villain... and their was a HRO rep to assist him along the way. Answer his questions and provide help when things got complicated. Grrrrr. makes me wanna hate the Navy HRO!
unemp13  
#8 Posted : Wednesday, January 07, 2009 1:15:30 PM(UTC)
unemp13

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Response to your original question:

I reached 65 this past summer but plan to continue working for a while. What penalties do I encounter if I start drawing social security now and still work?

Answer:
If 65 is your Full Retirement Age you can earn all you can and still draw a full SSA benefit.

If you are under your FRA, and draw SSA, you can earn 14,160 before it affects your benefit. For every dollar you earn above 14,160 you must "give back .50 of your SSA benefit. This scenario is only true if you are receiving a benefit for the full calendar year, January thru December.

If you began drawing benefits mid-year, the amount you earned before drawing a benefit does not count against your SSA benefit. Once you receive a benefit, and continue to work in this partial year, take the allowable amount of 14,160 divide it by 12 = 1180. 1180 is the amount you can earn each month without losing your entire benefit for that month. In otherwords for that partial year your allowable earnings are on a monthly basis.

I am CSRS also and have elected to continue to work and since my work is on an as needed basis, I applied for and am receiving an SSA benefit.

In 2008, a partial SSA year for me, I earned more than the allowable amount in October and November, and since I earned less than the allowable amount in September and December, I received my full SSA benefit for those months.
I have done the math and the difference between receiving a benefit now at age 62 or waiting until my FRA at age 66 would require me to live until I am 84 and the amount of increased benefit at that age would be minimal.
biggsy  
#9 Posted : Wednesday, January 07, 2009 1:16:05 PM(UTC)
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Camon,

Since you turned 65 this summer, that means you were born in 1943, which means your Full Retirement Age (FRA) for Social Security is age 66. If you go ahead and start collecting SS, it will be reduce approx. 0.6% for each month under age 66.

As for continuing to work. Because you will reach FRA in 2009 you can earn up to $37,680 this year before you turn 66 without affecting your SS benefits. Above that you will lose $1 of benefit for every $3 above the $37,680. This amount and the $1 for $3 rule ONLY applies in the year you reach FRA. After you actually turn 66, there is no earnings test for your SS benefit. However, there is a earnings test on your tax return for how much is taxable.

So in your case, it "probably" makes sense to go ahead and collect your SS benefits.

Hope this is what you were looking for.

Randy
unemp13  
#10 Posted : Wednesday, January 07, 2009 1:23:30 PM(UTC)
unemp13

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biggsy,

my post failed to take into consideration the fact that this is the year in which he reaches FRA. The rule is a little different for that.

Thanks
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