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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29774
Experience:  Taxes, Immigration, Labor Relations
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Lev. I'm wondering how to estimate my projected income for

Customer Question

Hi Lev. I'm wondering how to estimate my projected income for SS early retirement. I've worked as an independent contractor and will need to continue to do so until age 66. I'm age 63 now. Never know how much money I'll make each month so don't know what to tell SS.
Submitted: 2 years ago.
Category: Tax
Customer: replied 2 years ago.
Additional Note: I would make more than the allotted $15,700 limit but have no idea how much. Depends on who hires me and for how long. Can't continue to work full time but need to make more than the $15,700 limit. Understand that if I under estimate, they will ask for money back and if I over estimate, it may be months before I get a check. Don't have any other sources for retirement income (i.e. pension, 401K, etc.)
Customer: replied 2 years ago.
Additional Note: When I log into the SS website to get my estimated monthly amount (assuming I take retirement now) it says the calculations are based on continuing to make the same amount of money until I'm 66. If I take early retirement, I would not be making this much money...not by a long shot. Does this mean my monthly amount would be reduced down the road or will it hold at the current projected amount?
Expert:  Lev replied 2 years ago.
Hi and welcome to our site!
That will affect you ONLY if you are started social security benefits before the full retirement age.
As you do not know your earning - you woudl not be able to know what amount must be paid back to SSA.
So the best we may do - to make estimation and that estimation will be corrected later as you will know better your situation.
You can get Social Security retirement benefits and work at the same time.
SSA uses the following earnings limits to reduce your benefits: If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.
For 2015 that limit is $15,720.
For 2016 that limit is not yet set. Most likely - it will be a little higher.
Please be aware that NET earnings must be considered. That will be after deducting all qualified business expenses.
So - we woudl not only need to estimate your gross pay - but also your deductible expenses.
If you feel that your earnings will be much higher that the limit - it might be better to stop your social security benefits and apply again later - that will allow larger benefits.
Let me know if you need help with calculations - but we still need to make some assumptions regarding your income.