My Father's job and Social Security

[DisabledGeek89]

Can my Father work and still get his social security he has paid into? What limits are on his income to get his full benefits? Will it impact him once he retires? (He will be of age to get benefits next year) Also will the fact he is support a disabled adult child (that being me) affect anything as well? Sorry in advance for the multi part question.

 

[Bali Hai Again]

Can my Father work and still get his social security he has paid into? What limits are on his income to get his full benefits? Will it impact him once he retires? (He will be of age to get benefits next year) Also will the fact he is support a disabled adult child (that being me) affect anything as well? Sorry in advance for the multi part question.

Your father can find the answers to his questions in the below link:

https://www.ssa.gov/onlineservices/?gad_source=1&gclid=EAIaIQobChMI55WDpLawhgMVRE7_AR2YcgNWEAAYAiAAEgKrSPD_BwE

 

[adjusterjack]

Everything your Dad needs to know is on the Social Security website. It is in HIS own best interest to study up and learn about Social Security retirement benefits.

The United States Social Security Administration | SSA

You can also find information about SSI and SSDI there.

 

[LdiJ]

Can my Father work and still get his social security he has paid into? What limits are on his income to get his full benefits? Will it impact him once he retires? (He will be of age to get benefits next year) Also will the fact he is support a disabled adult child (that being me) affect anything as well? Sorry in advance for the multi part question.

I will give you a few basic pieces of information:

Age 62: This is early retirement age. Someone can collect SS benefits but they are lower than normal and will remain lower than normal for their lifetime if they start collecting then. They are also limited in how much they can earn from employment until they reach full retirement age. That amount is $22320 for the year. They will have to pay back 1 dollar of SS benefits for every 2 dollars of earnings over the limit. It is not a good idea for most people to start collecting benefits at age 62. It can be wise for a few people.

Full Retirement age (probably 67 for your dad but it varies based on the year someone was born): The person can receive full benefits and has no limitation on how much they can work except in the first year. In the first year someone can earn $59520 prior to starting SS benefits.

Age 70: A person who waits until age 70 to start collecting receives significantly more in monthly benefits and again, is not limited in how much they can earn from employment. It can be a big advantage to some people to wait until age 70 to start benefits, particularly if they are not going to have a lot of retirement income from other sources.

Disabled Adult Child benefits (if the disability started before age 22) are available in some cases.

 

[Bali Hai Again]

I will add that Social Security retirement benefits are federally taxable (state taxable in some cases) up to 85% of the benefit depending on the amount of other income. You have already paid federal and state taxes on YOUR portion all those years when the SS tax was withheld from your paycheck. You are now being taxed twice on this money. Some people don’t agree that the money is double taxed but that’s their opinion.

 

[LdiJ]

I will add that Social Security retirement benefits are federally taxable (state taxable in some cases) up to 85% of the benefit depending on the amount of other income. You have already paid federal and state taxes on YOUR portion all those years when the SS tax was withheld from your paycheck. You are now being taxed twice on this money. Some people don’t agree that the money is double taxed but that’s their opinion.

I am one of the ones who do not agree that it is double taxed. First, 1/2 of the original contribution was definitely not taxed if a person was employed, because the employer paid 1/2 of the original contribution, and the employer got to deduct it as a business/payroll expense. Even a self employed person gets to deduct 1/2 of the original contribution so 1/2 of their original contribution can't count as double taxed either. Then, 15% of the benefit is never taxed, which for many people would be about the amount they originally contributed. What ends up getting taxed for some people, is, at most, the growth, which wasn't previously taxed because it wasn't previously treated as income.

On top of that not everyone pays any tax on their SS benefits. People who have only SS benefits for retirement or small pensions/small investments plus SS benefits don't pay any tax at all on their SS benefits. Some people pay tax on a tiny percentage of their SS benefits with others gradually working up to the 85% you mentioned if their other income is high enough.

Therefore, you will never get me to agree that it is double taxed for the majority of people. There might be a few people who have relatively high other retirement income, who end up dying fairly young, who might have gotten double taxation on a portion of their benefits, but that is going to be a relative few.

The 15% that is never taxed is going to cover the 1/2 of the original contributions for the people who live normal lifetimes.

 

[adjusterjack]

You have already paid federal and state taxes on YOUR portion all those years when the SS tax was withheld from your paycheck. You are now being taxed twice on this money. Some people don’t agree that the money is double taxed but that’s their opinion.

LdiJ is right.

Real life example: In the 40 years that I worked I contributed $55,601 which, of course, was from my income that I paid tax on.

I started collecting SS at age 62 and, to date, have collected $282,878.

Between my SS and investment income I bring in about $45,000 per year and pay little or no tax.

 

[Bali Hai Again]

Some good points have been made. To be fair to everyone (including those who unfortunately expire earlier than what is considered ”normal”), the tax on benefits would be imposed less than the tax already paid until such time that there was no double tax remaining. In the beginning and not the end.

Example: Employee has paid into SS and been taxed on $100k of contributions during their working years. The first $100k in benefits received and already taxed should not be taxed no matter what other income is received.

This problem may go away when every income level is forced to contribute to keep the program solvent as has been discussed in the recent past. There won’t be anymore discussion about that until after the election.

 

[LdiJ]

Some good points have been made. To be fair to everyone (including those who unfortunately expire earlier than what is considered ”normal”), the tax on benefits would be imposed less than the tax already paid until such time that there was no double tax remaining. In the beginning and not the end.

Example: Employee has paid into SS and been taxed on $100k of contributions during their working years. The first $100k in benefits received and already taxed should not be taxed no matter what other income is received.

I understand the above but personally would not like it done that way.

This problem may go away when every income level is forced to contribute to keep the program solvent as has been discussed in the recent past. There won’t be anymore discussion about that until after the election.

I don't recall ever seeing that particular idea discussed. I have seen many ideas discussed, just not that one. The most prevalent ideas that I have seen discussed have mostly to do with changes for the younger generations coming up.

 

[Bali Hai Again]

https://www.whitehouse.gov/briefing-room/statements-releases/2024/03/11/fact-sheet-the-presidents-budget-protects-and-strengthens-social-security-and-medicare/

 

[LdiJ]

https://www.whitehouse.gov/briefing-room/statements-releases/2024/03/11/fact-sheet-the-presidents-budget-protects-and-strengthens-social-security-and-medicare/

I clearly misunderstood what you were saying. I took what you said to mean that everyone would have to pay tax on their SS benefits. I don't know why I took it to mean that. In any case yes, I not only have heard about the proposal that all levels of earners should have to pay SS taxes on all of their earnings, but agree with it on a fairness level.