$17,040 is the earnings allowed in 2018 before Social Security payments are reduced.

My wife is drawing SS now and still works. She will make more than that this year unless she retires this fall. It looks like it would be worth it to just eat the penalty because her working gets us health care. She is 63. If she retires we will have to buy Health Insurance off the street for two years.

Anyway, our question is... is there any way to reduce the amount of earnings that contribute to the max you can earn. Specifically, do 401k contributions count toward the 17,040 allowed earnings or are they exempt? Would upping her 401k contribution (a small number now) help reduce the penalty?



Thanks
TD

We are going through the same thing right now. I believe that the increased contribution will lower the SS amount. I am going to talk to my accountant on some other matters today or tomorrow. If this is not the case I will let you know.

Jim

Several people I know take several long vacations to reduce their income. I don’t know if they will let her keep her health care if she does that.

I retired at 61, so no personal experience. The SS site info seems to indicate this will be a wash?

Exempt Amounts Under the Earnings Test
"It is important to note that any benefits withheld while you continue to work are not "lost". Once you reach NRA, your monthly benefit will be increased permanently to account for the months in which benefits were withheld."

PDF

quote:

Originally posted by springnr:
I retired at 61, so no personal experience. The SS site info seems to indicate this will be a wash?

Exempt Amounts Under the Earnings Test
"It is important to note that any benefits withheld while you continue to work are not "lost". Once you reach NRA, your monthly benefit will be increased permanently to account for the months in which benefits were withheld."

PDF

I have seen this and it is a plus but IF I understand it correctly, the monies withheld are indeed added back but prorated over your expected lifespan so yes you get it back... pennies at a time.

I don't know where you live so it might vary a little bit. But I'm just a year younger and health care for my wife and myself is $3k per month (and that's with a 10K deductible). The health care issues dwarfs all other issues.

quote:

Originally posted by greco:
Several people I know take several long vacations to reduce their income. I don’t know if they will let her keep her health care if she does that.

She has asked for minimum hours to maintain coverage, 30 hr per week, they did not rule that out at some point but current staffing and demand doesn't allow for it, they say. She has trouble getting the random week off.

quote:

Originally posted by hrcjon:
I don't know where you live so it might vary a little bit. But I'm just a year younger and health care for my wife and myself is $3k per month (and that's with a 10K deductible). The health care issues dwarfs all other issues.

Yup... And, no pre existing condition are covered either it seems.

It's been awhile since I've delved into the SS rules, but as I recall, you can suspend your benefits and then reactivate down the road. This would increase the payments she would get when payments are reactivated. Of course that presupposes you don't need the ss income to make ends meet at this time.

My retirement goal is to be virtually ineligible for SS. (assuming it still exists in 17 years)

quote:

Originally posted by hrcjon:
I don't know where you live so it might vary a little bit. But I'm just a year younger and health care for my wife and myself is $3k per month (and that's with a 10K deductible). The health care issues dwarfs all other issues.

Damn, I thought my old plan was bad.