Social Security sign up or not

A friend is about to turn 62, is earning 35,000 per year and just barely making ends meet. Should she sign up for social security? I say yes, regardless of tax rates *any* additional income would be helpful. Her accountant (without benefit of in depth discussions) was quick to say no, that the tax rates are too high? TIA for any input.

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Reply to
F.H.
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There are lots of factors to consider when making a decision as to when to take SSA benefits: early, at FRA or deferred until age 70. In this case we don't have to consider all of them as two factors work against her:

  1. She has not reached FRA (full retirement age). Therefore, for every of earnings she makes in excess of 480 (2006) she loses of benefits. In her case that amounts to a loss of ,260.
  2. Her income is such that her SSA benefits will become taxable to some extent. Therefore, the amount of SSA benefits she would net after having to pay back for every plus having to pay tax on any balance would leave her with probably very little or nothing if one assumes that her historical earnings record is similar to her current earnings.
Reply to
A.G. Kalman

Don't forget about amount of benefit!

If she signs up now, she'll have a permanently reducted benefit.

Depending on her currrent financial situation and her life expectancy it may yet make sense for her to sign up now for reduced benefits, but she darned well better take the permanant reduction into account in her thinking.

-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us

Reply to
Rich Carreiro

If your friend is only 62 and making $35,000 a year, she is not eligible for any social security. Technically, she could file for a reduced benefit but the "give back" rules would take is all away. If she files but has to repay benefits because of excess earnings, she locks in the reduced, early benefi for the rest of her life. Not a good idea! Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans

Reply to
L K Williams

And future COLAs will apply to a smaller number.

-HW "Skip" Weldon Columbia, SC

Reply to
HW "Skip" Weldon

Social Security Gov. Website:

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Milt Baker CPA

Reply to
cpabakem01

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