Skip to main content

Great News About Social Security

Well, I've just done some research and I am pleased about what I learned about social security. I knew that there was a downside to retiring early. The check you get for an early retirement significantly reduces the benefits that you might have received if you waited until full retirement. However, I also knew that there were rules about what you could and could get in terms of income while still collecting social security. However, I discovered that I was wrong.

The limits come into play only for people who are NOT at full retirement age. If you are at full retirement age, you can earn as much as you want with no penalty. So these wierd limits only apply to people who are "younger than full retirement age during the whole year".

http://www.socialsecurity.gov/pubs/10069.html

And even better, investment income, capital gains, 401k and IRA distributions etc are never counted as earnings that could reduce your social security benefits. Instead, the only things that are considered to be part of the earnings that reduce your benefits are actual earnings. That is, money that you get for working.

http://www.socialsecurity.gov/pubs/10069.html#count

So, it is generally easier to retire early as long as you can cover your expenses etc. from the time you retire up through the point where you get medicare. Obviously, health insurance is the big expense there. Many people look at a secondary insurance anyway in order to cover expenses that medicare doesn't cover so I don't think (I hope) it will be that big of a shock in terms of coverage.

The reason I was so happy to read this is because I truly think that I will be "earning" money until the day I die. But I am not sure how much of that money will be money I worked to get. Since I really like to focus on passive income, it would appear that this means that I am in good shape with regard to the current setup of social security.





Labels

Labels:

Comments

Post a Comment

Popular posts from this blog

On Buying a Lifestyle...with a Fixed-Rate Mortgage

Despite all of the back and forth about sub-prime mortgages and the housing bubble, I am feeling just fine. The reason is that when purchasing, I followed some old advice: Don't expect to flip. In general, I've been told by many people that you shouldn't buy a home unless you plan to hold on to it for 7 years or longer. If the market does well and you decide to sell, fine. But if you want to be sure not to lose money, don't buy something that you only want for a year or two. I've been in my current location for more than 3 years. I like it. And I have no intention of leaving in the short or medium term. It seems to me, that real estate, like any asset class, has its ups and downs. But as a practical point, I don't look at my home as an asset per se. Rather, I consider it to be a fixed expense that I need to survive, much like food and water. Therefore, as long as the payment is reasonable and it functions to keep me warm and sheltered and comfortable, that is a...
Post a Comment
Read more

Do Better With Your Time

Recently, I've been extremely busy with some work commitments. The interesting thing for me is that this increased work activity has really helped crystallize some of my feelings with regard to time. And these ideas are a critical part about my view on personal finance. I'm curious to know if others feel similarly. Time is money. That is, Time, in some way, contains energy. Money, is also energy. In the act of working, I am able to compound and increase the amount of money that I have. I am exchanging my time and effort and thought which are components of my work, for the productivity that I produce. And this production gets me money from my employer. However, the first dollars that I make each day, week, or month are the most valuable. Then the ones that I make at the end are the most valuable. (Forget about taxes for a minute.) The reason is, the first ones help me have a place to live and food to eat. And the last ones are the ones that I can use to really improve my life lo...
3 comments
Read more

Quantitative Easing Round Three

It appears that we have another round of Quantitative Easing in the works. If you've been listening to any of the money shows over the past several months, you'll note that most of the major players were not anticipating that! However, a recent update from the Bernanke indicates that the possibility of Quantitative Easing Round Three (QE3) is a very real one....but not in the near term. This article from International Business Times does a good job of explaining the thought process around a possible QE3 and why the timing is not likely to be now. All that being said, the CPI is up and the price of energy is skyrocketing. It is not an easy thing for people to get to work in cars that are not efficient. However, that is not stopping people from certain segments of the political/media spectrum from announcing dirty secrets about Clean Energy . I find that Google News has a great mix of stories from all over and this story -- the increased energy costs is certainly one to watc...
Post a Comment
Read more