• Question
  • early retiirement

    Asked by someone from Toledo, OH on 3/28/2013

    I am allowed to make 15,100 is that before or after taxes?

  •  
  • Categories: Early Retirement, Work and Retirement

Answers

  • Get a FREE phone consultation
    with an advisor. Learn more...
  • Assuming you are referring to Social Security benefits, you can earn up to $15,120 in 2013 before taxes without having your benefit reduced. Your benefit will be reduced by $1 for every $2 earned above $15,120, pre-tax. So if you earn $16,120, the additional $1,000 of earnings would reduce your annual benefit by $500.

    However, if you are currently in the year in which the Social Security Administration considers you to be of Full Retirement Age (FRA), the benefit will be reduced by $1 for every $3 earned above $40,080, pre-tax. For most people, their FRA will be age 66.

    Depending on how you file your tax returns (as an individual, joint, etc), if you earn between $34,000 - $44,000 or above, up to 85% of your benefits may be taxable. Half of your Social Security benefits will be included in that figure. So if you earn $15,000 in wages, for example, your annual benefit is $20,000 and you file taxes as an individual, your benefit may not be reduced, but it will likely be taxed. The Social Security Administration's (SSA) website has more information about taxes here: http://www.ssa.gov/planners/taxes.htm

    They also provide this guide for more details and examples about how work will affect your benefits, http://www.socialsecurity.gov/pubs/EN-05-10069.pdf. Note that, although benefits would be reduced up front, earning additional income will still likely increase your benefit after you reach your FRA.

    And, NewRetirement also offers a calculator along with links to additional related resources, https://www.newretirement.com/Services/Social_Security_Start_Age_Calculator.aspx.

    To get the most accurate answer for your specific circumstances, it's best to get an estimate provided from the SSA and a tax professional.

    This answer is provided as general information only and provided by Master’s students pursuing a degree in Personal Financial Planning at Texas Tech University. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or Certified Financial PlannerTM as to your unique financial situation.

  • Login to rate this answer:   Answered on 5/14/2013
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.