I love growing old

[JonSchuck]

I turned 66 almost a year ago.  I was going to file for Social Security then but I never got around to it and. hey, the longer you wait the more you get per month, right?  Plus I'm still working and I can live without it.  But Sunday night I decided to file and I filed online.  I figured a few months and I would start getting my social security check.  Monday a lady from SSA called me and  said I could receive my first check on the third Monday in January and also she could pay me from June if I wanted. I asked how much and she gave me almost a five figure number.  I squeaked in a high pitched voice "OK" and this morning that money was in my checking account.  That was 2 1/2 days after I filed. 
Needless to say I went shopping and added to my arsenal some badly needed items like:
3 meter guide rail
1010 router
LR32 Drilling stuff
MFK 700 trim router
Centrotec installers set (not needed but looked cool)

I would like to grow old more often.

 

[PeterK]

Yea I am 60 but sure can't say I love growing old!
Hoping I can delay filing like you did.
Just remember that since you had the pleasure of earning the money and already paying taxes that your new found wealth of SS payments will all be considered earned taxable income come tax filing time! Seems crazy to have to pay taxes on money you put into the system.

 

[Theshipstore]

I have to agree, paying taxes on money I have paid into the system is wrong, I have been working since I was 14 with working papers and At 67 collecting my social security money, I kinda get upset when the accountant tells me how much I need to pay on my earnings, I don't get it...
But welcome to the system I guess
[dead horse]

Sal

 

[Deadskins]

Recently turned 65, and went to a pre-retirement class last week.  Although I had planned to file for SS next October, I plan to continue working, and making sawdust on Fridays and weekends.  That way, I can continue with my normal salary, but, add a monthly bonus to pay for my green kool aid addiction.

Ranny

 

[greg mann]

It may seem unfair to be required to pay taxes on SS but remember that you did not pay taxes on it when it was witheld, and, with luck you just might draw more than you put in. I'm pulling for you to outlive your contribution.  ;D

 

[gkaiseril]

It may seem unfair to be required to pay taxes on SS but remember that you did not pay taxes on it when it was witheld, and, with luck you just might draw more than you put in. I'm pulling for you to outlive your contribution.  ;D

In the U.S. you do pay taxes on the Social Security tax, FICA, and Medicare. Your employer matches your FICA and Medicare tax contribution and gets to expense that payment as a cost of doing business.

For the self-employed you pay taxes for FICA and Medicare at 2 x the individual rate but you get to deduct 1/2 of that tax from your gross income. It is done this way because you are your employer. so you pay taxes on the 1/2 that is the employee's contribution and you can deduct the employers 1/2. You should realize that if you have more than one self-employed business activity (sole proprietor, partnership with self-employed income, LLC, etc) all of your self-employed business income is combined and the tax is computed on the net of the net income and net loss.

The payments grow tax free until you apply for the benefit. Thanks to Ronald Reagan, you can pay income tax on up to 85% of the Social Security benefit. The assumption is that this is the amount of money earned tax free.

Do not confuse Social Security with a 401-k savings plan.

You might want to discuss this with your tax adviser, but stay calm and carefully listen to him/her.

Currently there is no payback on earnings after one starts to draw Social Security. At one time recipients need to repay some of the benefits.  In the 1950's the self-employed were not allowed to deduct 1/2 of their self-employment tax but the Social Security benefits were not taxed at the federal level.

 

[greg mann]

You are right. I stand corrected. The assumption regarding SS was that you would be paying taxes at a lower rate, albeit the second time around. I think the original thought process was most folks would be living ONLY on social security income, and probably not for very long. There are many folks like the OP who are still working. That makes the SS money additional income and forces the recipient to pay a higher rate.