Nov 4, 2021
We have paid into Social Security our whole working lives. However, maximizing your Social Security strategy can be confusing to navigate. We want to make sure you are strategically planning your retirement income. On today's show, we will be answering some questions about Social Security. Since retirees are one of the largest groups of small business owners and entrepreneurs earning limits are important to be aware of. We will be discussing earning limits, pension impacts on those earning limits, and how divorce impacts Social Security eligibility.
What is the earning limit for those eligible to take Social Security? Well, it depends on a few factors like your age and when you file. The full retirement age is 66 to 67 depending on when you were born.
If you are attempting to take Social Security before full retirement age your earning limit is $1,580 a month or $18,960 a year. If your earnings are more than this the Social Security office takes $1 from your benefits for every $2 you earn above the annual limit.
Now, if you are full retirement age your annual limit is $50,520. They will take $1 for every $3 you earn above this limit. These limits are also adjusted for inflation and may change by the time you are in retirement.
Does a pension and investment payout count as earnings by the Social Security office? They consider these streams of income very differently. Pensions and investments go on your tax return. Combined with 50% of your Social Security income, these forms of income will determine your tax bracket and therefore your Social Security payments.
Some divorcees worry about Social Security benefits after their separation. If you were a stay-at-home parent you are still eligible for some benefits after your divorce. You can qualify for 50% of your ex-spouses Social Security with no effect on them if you are still single at the time you apply. If they pass away before you do, you can apply for 100% of their benefits. This can be confusing to navigate so don't hesitate to give us a call and we can help you develop a maximized plan!
Listen to the full episode for more details or skip around to certain topics.
1:11 – Halloween story
3:21 – Am I earning too much to start Social Security?
7:00 – What does substantial self-employment services mean?
9:15 – What happens if I am above the earning limit?
10:52 – What about a pension and investments?
16:20 – How does a divorce impact Social Security?
For more, visit us online at http://flemingfinancialservices.com