I think my wife and I are ready for an amicable retirement, but let us know what you think.
We are both 70 years old. I retired her in 2011 and she retired her in 2015. I get about $70,000 a year in my pension and she gets about $14,000 a year. I also have a small pension thanks to a fun part-time job I had as a high school soccer coach for about 35 years. This will give you a profit of about $163 per month. Our investment is about $800,000 (after the market downturn). We have a free home with a market value of about $200,000. I have no debt other than credit card debt and pay it off every week.
I’m five quarters short of Social Security eligibility, and I’m thinking of going back to work to get my eligibility. The downside is that the windfall deduction clause will significantly reduce my Social Security benefits.
I have two questions. First of all, are you okay financially? And second, is it worth going back to work to qualify for Social Security?
Thank you for your advice!
look: I want to quit my job when I turn 55 and take advantage of my $2.1 million 401(k) plan, what should I do to stop me?
Dear Reader,
A person’s financial well-being depends on so many factors, including living expenses, money specifically allocated for emergency savings, and anticipated future expenses related to health and housing. I can’t tell you what. , leisure and even taxes. But I can talk a little bit about the Social Security question, so I’ll elaborate on that.
because it affects windfall relief clauseThe first thing you should do is contact the Social Security Administration to review your income history and confirm with them that you only really need 5 quarters to qualify. For those unfamiliar, WEP is a provision that applies to people who don’t pay Social Security taxes on their income, and is common for some government and non-profit employees. WEP reduces Social Security benefits before other reductions, such as early billing, if the retiree is eligible for benefits.
Next, you’ll need to see what kind of work you might be doing and whether the employer you’ll be working for will give you the Social Security credit you need.
Always look at the numbers. Units are based on income, not hours. “Five quarters doesn’t necessarily mean working 15 months. can be satisfying,” says Jeremy Kale, a certified financial planner at Kayle Financial Partners. . For example, in 2023, if he has eligible earnings of $1,640 and he has 1 credit, he can get up to 4 credits per year. Keil suggests using the information from the Social Security Administration. calculator Determine what it takes to get the perks. WEP is also taken into consideration.
Nicholas Bunio, a certified financial planner at Retirement Wealth Advisors, said WEP was designed to reduce social security benefits simply because retirees are receiving their pensions elsewhere. , said they would not necessarily lose their benefits. In fact, your pension is over the cap for Social Security benefits. In 2023, when she turns 70 (the age at which benefits peak), anyone who claims Social Security will receive benefits of $4,555 a month, or just under $55,000 a year.
While technically we could work longer to reduce or eliminate the WEP cut, it would take 30 years of “substantial income to avoid benefit cuts,” said a certified financial planner. Kate Gregory, president of Gregory Advisors.
See also I’m 52, single, no kids, and have a 401(k) of just $190,000. “I don’t want to die alone, forgotten at home.” What should I do?
Before you make a decision, go back to the Social Security Administration and think about what benefits you’ll get if you get those five credits. Sounds like it’s worth it? Run all the calculations you can think of: how much your benefits, your wife’s benefits, spousal benefits, if any, how much it costs to get back to work, what income taxes you’ll pay, and so on. please. Consider the long-term impact of Social Security benefits you may get and how you can incorporate it into your larger financial picture and monthly bills.
At the end of the day, only you can really decide if it’s worth going back to work. Joey Roth, certified financial planner and founder of Flow Financial, said, “Ultimately, whether or not you need more income through Social Security or other sources of income depends on the couple’s lifestyle and legacy. It depends on the desire for,” he said. “In some cases, it may be absolutely worth sacrificing five work zones to qualify for social security benefits. It does not affect the ability to maintain
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