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Lane
Lane, JD,CFP, MBA, CRPS
Category: Social Security
Satisfied Customers: 11838
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial, Social Security & Tax advice since 1986
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I am currently collecting survivors benefits from my late

Customer Question

I am currently collecting survivors benefits from my late husband 1225 a month. I turn 62 in Feb. currently my ss benefits read 1624 a month at 62. this is will an annual income of 32k. I am currently working part time and my annual income will drop to around 9k-12k. I believe this will significantly reduces my social securities amount. I wanted to wait till I am 66 to start my social security, but I'm not sure this is a good idea. how will my annual salary effect my benefits? and should I start at 62
JA: These retirement benefits are supposed to help us but they can be so complicated! The Retirement Expert will help you get the most benefits propertly. Is there anything else important you think the Retirement Accountant should know?
Customer: no
Submitted: 8 months ago.
Category: Social Security
Expert:  Lane replied 8 months ago.

Hi. My name's Lane. I can help here.

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If you can live comfortably on the cash flow by waiting until age 66, you will certainly, over a normal life expectancy generate a LOT more money.

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The reduction from Full Retirement Age benefits for taking at 62 is 25%. And that reduction stays there for life.

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Another issue is the reduction of benefits for working and receiving while under age 66. If you DO take early, and continue to work, Social Security FURTHER reduced your benefit by $1 for every $2 you earn over an annual limit (15720 in 2016).

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However, it looks like (based on what you've said) that this may not be an issue.

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The last thing you should know before making a decisions is that if you wait PAST age 66 your benefit is increased by 8% for every year you wait, until age 70. (These are called delayed retirement Credits).

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ALL other things being equal, from a PURELY financial perspective, assuming a normal life expectancy, waiting until a year of so after Full Retirement Age is what maximizes lifetime benefits.

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But what YOU must factor in are issue such as what YOU want... what level of total income you need, etc.

Expert:  Lane replied 8 months ago.

Please let me know if you have any questions at all, before you rate me

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If this has helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit").

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Thanks!

Lane


I have a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986

Customer: replied 8 months ago.
I guess the big question is how will my benefit decrease based on significant decrease in salary from 32k to currently 10k a year? That's the real guestion.
Expert:  Lane replied 8 months ago.

OK. Again, it completes avoids the "reduction for working while taking benefits between 63 and 66."

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(again that threshold is 15720)

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But as it relates to reducing your overall benefit (your Primary Insurance amount - PIA - that EVERYTHING is based on - also referred to as the Full Retirement Age amount)

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It may have little to no effect at all.

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You PIA is generated by taking something called your AIME (Average Indexed Monthly earnings) and applying some factors to it.

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And AIME is calculated by taking your 35 highest earns years, inflating them to current dollars, and averaging them out.

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So, as you can see, this is very dependent on YOUR specifics.

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If, for example, you didn't HAVE 35 years in, then your earning anything at ALL going forward will increase your benefit by replacing zeros in that average.

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If you HAVE 35 years or more then this will likely having little to no effect at all, ad they would be a part OF those higher 35 years.

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If you HAVE your earnings history (shows up on the statement they send AND you can get from MySocial Security), you can enter the earnings in this SSA calculator, then enter a number (that 10,000) that you'll be earning until you do retire, the calculator does a very good job.

Expert:  Lane replied 8 months ago.

If you'll read down the left side of this page; Benefit Calculation Examples

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And then be sure to click "next" at the bottom.

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Those two pages give a VERY good overview of how the calculation works.

Expert:  Lane replied 8 months ago.

If this has helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit").

...

Thanks!

Lane


I have a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

Customer: replied 8 months ago.
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Thanks for your help
Expert:  Lane replied 8 months ago.

You're very welcome ... Your positive rating … (by using those the stars or faces on your screen, and then clicking “submit”) …is thanks enough.

Otherwise I receive no compensation for the work here.

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Thank you!

Lane