I recommend John Rekenthaler's recent three-part column at Morningstar.com, where he simply explains the mystery of Social Security accounting. The trust fund concept can be very confusing and is often used to scare seniors. Better yet, Rekenthaler shows that the tools to "fix" it are well within reach without cuts to benefits. https://www.morningstar.com/articles/1139948/the-two-great-myths-of-social-security-reform
This isn't a "nit" for me -- it describes my situation exactly. I crossed the social security tax limit during my most recent 30 working years, but the earlier years are well below the threshold. What's the net effect to keep working? I know what my benefit would be to continue working five more, fully taxed years to age 67. The SSA online calculator shows that projection. But what if I stopped working this year at age 62 and waited until age 67 or 70 to apply for benefits? I don't think the calculator shows that. My "monthly benefit amount" seems to assume that I stop working and apply for benefits at the same time. So, unless there's another way to do it, I'm also left guessing at the magnitude of the effect.
Comments
I recommend John Rekenthaler's recent three-part column at Morningstar.com, where he simply explains the mystery of Social Security accounting. The trust fund concept can be very confusing and is often used to scare seniors. Better yet, Rekenthaler shows that the tools to "fix" it are well within reach without cuts to benefits. https://www.morningstar.com/articles/1139948/the-two-great-myths-of-social-security-reform
Post: Going for Broke
Link to comment from March 26, 2023
This isn't a "nit" for me -- it describes my situation exactly. I crossed the social security tax limit during my most recent 30 working years, but the earlier years are well below the threshold. What's the net effect to keep working? I know what my benefit would be to continue working five more, fully taxed years to age 67. The SSA online calculator shows that projection. But what if I stopped working this year at age 62 and waited until age 67 or 70 to apply for benefits? I don't think the calculator shows that. My "monthly benefit amount" seems to assume that I stop working and apply for benefits at the same time. So, unless there's another way to do it, I'm also left guessing at the magnitude of the effect.
Post: Marginal Benefit
Link to comment from January 14, 2023
Thanks, good info.
Post: Trust but Verify
Link to comment from January 14, 2023