Tuesday, April 5, 2016

Another Escape from Bookkeeping

Sunday the bookkeeping ball was in my husband's court.

Before going in the afternoon for a quilting activity, I continued to read up on social security and (think I) discovered this somewhat random collection of things:

1.  You have to make around at least $1,750.00 to get one credit for a quarter of work. It doesn't seem to matter if you are paid it actually in one quarter, seems to count as long as it's within a year. One needs 40 quarters of credit to be eligible for social security.  Of course, the more you work, the higher your benefit.

2.  One does not have to do anything if they are not going to collect benefits when they reach their full retirement age, BUT there there are a few reasons that it is good to go through the steps to "file and suspend" your benefits.

2a.  Let's say you think you will not retire until you are 70.  Something happens you need to retire when you are 67 1/2.  You would get your benefits based on 67 1/2.  However, if you have filed and suspended then you get benefits starting when you filed and suspended at your full retirement age -between age 66 and 67.  So if I understand correctly file suspended person would get a lump sum back check (but your monthly amount then is based on the the earlier starting date which may not be the best thing, but if it's only a few months difference then probably you'd want to accept the earlier date).

2b.  If you are married then it might be good to have the older person - file and suspend when they reach retirement age.  Then the younger person can claim spousal benefits without changing the date of benefits for the first person.  This option is going away the end of the month, but if someone is at full retirement and not going to be collecting benefits seems like it would be a good thing to do.

3.  If you are divorced but had been married for ten years, the first person to retire can do get spousal benefits without affecting the date or benefits for the person who has not retired.

4.  If you are divorced but had been married for ten years, appears you can file to collect spousal benefits as long as you have not remarried (or are 60+ years old).

5.  Until you are 70 your monthly benefit will increase by 8% each year you delay, so if at all possible delay claiming benefits.  Full retirement (FRA) is age 66 or 67 depending on your birth year and if you claim benefits then you will get your 100%.  People can retire at 62, but for every year before full retirement their benefits will be -8%.

6.  If your annual post retirement income reaches $44K (thru working+ inheritance +interest + dividends+ half social security benefit+ other pension*) then you will be taxed on part (85% to 100%) of that income.  *Roth is not included.

7.  If you receive another pension, then it may decrease the amount you receive in social security.  There are two ways this could happen, one is maxed at around $460 a month deduction, the other is more complicated.  But the other pension is not changed, only the social security benefit. Even in my case where my social security benefit will be rather low as I worked longer in a profession that had it's own retirement system, I will still get some social security. For government bookkeeping, more than likely it will be listed as being my spousal benefit rather than my own benefit.

8. There are all sorts of free dinners offered to folks as they near retirement age, seems they are given by companies offering information and help - but in the end they are just trying to sell things so beware. I have gone to two of these events. (The second masked itself saying it was a national non-profit for financial education, but it ended up they were just wearing the non-profit hat to then get people as paying clients for their other business.) Their not so-fine-print said "Attendees should seek the assistance of a financial or tax professional familiar with the course prior to implementing any of the ideas and strategies taught or discussed in the course. This workshop is strictly educational; no products will be sold or endorsed at the class." For both of them I felt like I was watching one of those long-form infomercials where they give information to tease you into buying. Except these workshops did not really give enough information to tease me. Supposedly the real information would be given in the individual appointment they wanted to set up.  I left thinking about how they needed an educational designer help them organize things and that I had to spend time trying to figure it all out!

9.  If you goof up on your filing you have a one time chance to correct it as long as you do the refiling within a year and you are willing to return the money you received as part of the mistake so they can reissue later.

The actual calculations are difficult.  I wish it were set up though so it weren't so hard to understand or get information.  Should be a simple way for people to answer YES/NO questions and get answers on when and how to apply.  One can set up an account to see their status on the social security site, but it's like learning another language to understand.  (At least for me.)

In the end: work as long as you can, make as much money as you can, put aside money for the future, stay fit, be a good person, read, volunteer, do things with family and friends, be able to be alone though too, etc.

And don't make any social security decisions based on what I wrote, but hopefully now you know to investigate and get information.


I went to the Sunday Cozy Quilt Free Motion Quilt group to relax.  It was fun to see the 'homework' folks brought in to share, to finally have something to share myself Designs 1 and 2 - Design 3, and to see the new design for the month.

They had a collection point for dog beds in the store, I spied this one made with fabric printed with the design from my green quilt attempt.  Interestingly, I guess because my blocks missed the mark, I hadn't even noticed how the design could create a secondary design before!

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