I went to work pretty early in my life and by the time I started working for the Forest Service at the age of 21 I had paid Social Security taxes for 12 years. I then went to work for the Forest Service for 39 years.
I was eligible for Social Security retirement when I got to age 62 even before I ever went to work for the Forest Service because you become eligible to draw the compensation after paying into the fund for 40 quarters. Interestingly after I had worked a little over 20 years for the Forest Service Congress passed the double dip law that significantly reduced the amount of Social Security I would receive when I retired because I would also be getting retirement from the Forest Service.
I retired from the Forest Service at 61 and from Social Security at 62. Due to the double dip law my benefits were cut 77% so the payments from SS are not really that great and it will take 38 years for me to recover the funds that were paid into the fund by me and my employers (99 years old). Because I retired at 62 any earnings over $14,600 are penalized by the Social Security Administration at the rate of $1 for every $2 earned. If you retire at 65 the penalty doesn't kick in until around $36,000 and the penalty is $1 out of $3.
So I chose to retire at 62 and because I made quite a bit more money than the $14,600 so I owe them half of what I made above that figure. So this is where the debate comes in. If I had waited until 65 to start drawing SS then I would have owed them nothing for last year but since I did I owe them this money from the penalty. I really don't care which way it is because they are going to deduct it from my future checks. And I did make the money---and spent it too.
What does that mean???? They are going to stop paying me benefits in April and not pay me any other benefits until March, 2013. THAT'S RIGHT A FULL YEARS BENEFITS. If I had waited until I was 65 to start getting benefits from SS I would owe them nothing. So here is the rest of the story---when they start paying me benefits again I will be awfully close to 65 so I'm going to try to make all the money I can this fire season.
PERHAPS INKLINGS WAS RIGHT---I SHOULDA WAITED UNTIL I WAS 65 TO DRAW ANY BENEFITS. BUT SINCE THEY ARE REDUCED 77% ANYWAY IT DOESN'T MATTER MUCH.
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2 comments:
My husband is trying to decide if he should draw SS now or wait till he's 65 (3 more years). I'm going to let him read your post. He's leaning to waiting till 65.
If he plans to contract back then I'd say 65. I'll be 65 before I get any with the penalty from this year.
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