You’ve heard it many times: Being 60 today is like being in your 50’s decades ago. Bottom line, we’re living longer, not necessarily because we are healthier but partly because modern medicine can patch us up, give us more pills and put us back in the game.
So many of us, after retiring in our early to mid 60’s from careers with the government, get bored or need to supplement our savings and pension income, embark on a new career, part or full time. Those who started collecting SS benefits at say age 62, are often shocked when they realize their social security benefits are being taxed.
So as you are planning that second career or part time job, here are the rules straight from the Social Security Administration’s website:
- Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.
- No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:
- file a federal tax return as an “individual” and your combined income is between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
- file a joint return, and you and your spouse have a combined income that is between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
- are married and file a separate tax return, you probably will pay taxes on your benefits.
Case In Point
We know of a man who took SS at age 62 and got a bill from them for $2,000 when he was 65 because his new career made more than his previous one. Of course the new job was too lucrative to quit over the $2,000, but a shocker nevertheless.
Free Retirement Analysis
If you are contemplating returning to work and would like a FREE personal benefit review visit our website or call 866-201-7829.