Both my wife and I are nearing age 66, but we have yet to apply to
receive SS. I have a real basic question; though I apologize if it
does not comply with the "Tax Subject line", to this most useful
We now earn over $75k in interest & dividends. Will that unearned
income reduce the amount we will receive in SS benefits - once we
Once you reach your social security full retirement age, your "earned
income" no longer impacts how much benefit you receive. Unearned income
has never been used to determine how much you receive. That said, if
your other income including tax-exempt interest/dividends plus 1/2 of
your SSA benefits exceeds $32K when filing MFJ, your SSA benefits will
start to be taxed.
See page 7 of IRS Pub 915, where you can calculate how much of any
benefit would be taxed using the data from your 1040 tax return.
No. Once you are at "full retirement age", which I believe is 66 for
you, your income has no effect on your Social Security benefits.
However, that income may cause part or all of your benefits to be
taxable. See the "Social Security Benefits Worksheet" in the
instructions to form 1040.
Think long and hard, and perhaps consult a financial planner, before
you start to take Social Security benefits earlier than age 70. For
every month past your Full Retirement Age that you delay, your
monthly benefit (when you do start to take it) will be increased by
2/3 of a percent. That means that if you delay to age 70 -- the
longest you can delay, and the longest that the deferral credit
mounts up -- you will get 32% more per month, for life, than you
would if you start taking benefits at age 66.
If you expect to live past about age 82 -- and for our age group, the
odds are good -- then you'll get more money over your lifetime by
waiting. But there are wrinkles for married couples, because of
spousal benefits. Your wife may be able to take spousal benefits even
though you are waiting till age 70 for your own benefits. Or vice
versa. (Being single, I haven't paid close attention to that part of
the regs, but our financial planner should know them by heart.)
BTW, you can get Medicare, if you want it, without receiving a Social
Stan Brown, Oak Road Systems, Tompkins County, New York, USA
Stan Brown wrote in
Keep in mind that if you defer starting Social Security after becoming
eligible for Medicare Part B (for most people age 65) and you elect
to take Medicare Part B, your Part B fee may be higher than it would
be if you are also receiving Social Security. This is due to rules
that stipulate that annual increases in Part B fees to participant
can't exceed the COLA increase in Social Security. In years when
that happens (i.e., low inflation results in little or no COLA)
the difference in what Part B fee should be vs actual is instead
pushed onto those who aren't receiving Social Security (also those
who first become Part B eligible in that year).
If you don't start Part B when eligible, and want it later you have
to pay a penalty for periods you did not participate. And if you
have "too much" income in the prior year, you get to pay a surcharge
in the current year.
1. Not everyone who defers Part B when they become eligible at age 65 is
subject to a late enrollment penalty. E.g., someone still actively
employed or who has a spouse still actively employed and is covered by
an EGHP (employer group health plan) can defer without penalty.
2. IRMAA (Income-Related Monthly Adjustment Amount) is based on your
income from 2 years back, not the prior year. 2018 IRMAA is based on
the 2016 tax return.