Retirement Party

<65yrs old; >$12,000 income Social Security

Question:

>I had the same problem as your father.  I received book royalties that >pushed me over the top.  I don’t know of any way to delay the income. >It is a lesson to those of us who took our SS at age 62.  The lesson is >"don’t".  In fact, delay to age 70 if possible.

There is no one correct answer for everyone.  Delaying SS until 70 for me would cost me.  $140,000 in lost SS payments.  I would have to live to nearly 80 to make up the difference even if I could support  myself and wife with out SS at 62. Thumper

Response:

> How do you get paid from the LLC?  Is it earned income or dividends? > Have you explored a SEP IRA?  Some of that can be shielded there I > believe. > Thumper

We get paid thru monthly ‘payouts’. Basically, we just agree to keep a minimum amount of money in the checking account at the end of each month and then write checks to each of us. We don’t get a salary nor do we get wages. I’ll look to see if a SEP IRA will be applicable here.

Response:

I had the same problem as your father.  I received book royalties that pushed me over the top.  I don’t know of any way to delay the income. It is a lesson to those of us who took our SS at age 62.  The lesson is "don’t".  In fact, delay to age 70 if possible.

Response:

>I had the same problem as your father.  I received book royalties that >pushed me over the top.  I don’t know of any way to delay the income. >It is a lesson to those of us who took our SS at age 62.  The lesson is >"don’t".  In fact, delay to age 70 if possible.

   Or, don’t work.  I realize some have psychological problems if they don’t work, but I’m not among that number myself.

Response:

- Hide quoted text — Show quoted text ->> Right Rita.  People try to get too clever.  He’ll be paying 50% on the >> amount in excess of 12,000.   Even if he could give up SS he would >> probably lose more money that way.  Would you have 1/2 of your SS or >> none? >> Thumper > Actually, i meant to say he is a partner (with me and two others) in an > LLC, not that it makes much of a difference in this topic from being > self-employed. I guess the best we can do is pay all our bills early to > lower our profit. You’re right, 1/2 of the SS is better than none. ><G>

How do you get paid from the LLC?  Is it earned income or dividends? Have you explored a SEP IRA?  Some of that can be shielded there I believe. Thumper

Response:

> Right Rita.  People try to get too clever.  He’ll be paying 50% on the > amount in excess of 12,000.   Even if he could give up SS he would > probably lose more money that way.  Would you have 1/2 of your SS or > none? > Thumper

Actually, i meant to say he is a partner (with me and two others) in an LLC, not that it makes much of a difference in this topic from being self-employed. I guess the best we can do is pay all our bills early to lower our profit. You’re right, 1/2 of the SS is better than none.

Response:

> Right Rita.  People try to get too clever.  He’ll be paying 50% on the > amount in excess of 12,000.   Even if he could give up SS he would > probably lose more money that way.  Would you have 1/2 of your SS or > none? > Thumper > Actually, i meant to say he is a partner (with me and two others) in an > LLC, not that it makes much of a difference in this topic from being > self-employed. I guess the best we can do is pay all our bills early to > lower our profit. You’re right, 1/2 of the SS is better than none.

<G>

Response:

>>My father is 63 yrs old, and is currently receiving ss benefits. It is >likely, that thru self-employment, he will surpass the $12,000 tax-free >limit in earnings next year, and will then be taxed $1 for every $2 he >earns above $12,000 (thus 50%!!). >Is there a way to ‘postpone’ benefits for the next two years til he >hits age 65? Or is it "once you’re in, you can’t get out of it"? >Thanks, >Mike >If he opted for SS at age 62, he’s in and that’s it.

Right Rita.  People try to get too clever.  He’ll be paying 50% on the amount in excess of 12,000.   Even if he could give up SS he would probably lose more money that way.  Would you have 1/2 of your SS or none? Thumper

Response:

>My father is 63 yrs old, and is currently receiving ss benefits. It is >likely, that thru self-employment, he will surpass the $12,000 tax-free >limit in earnings next year, and will then be taxed $1 for every $2 he >earns above $12,000 (thus 50%!!). >Is there a way to ‘postpone’ benefits for the next two years til he >hits age 65? Or is it "once you’re in, you can’t get out of it"? >Thanks, >Mike

What for?  Getting the half pay is better than none. Thumper

Response:

- Hide quoted text — Show quoted text -> My father is 63 yrs old, and is currently receiving ss benefits. It is > likely, that thru self-employment, he will surpass the $12,000 tax-free > limit in earnings next year, and will then be taxed $1 for every $2 he > earns above $12,000 (thus 50%!!). > Is there a way to ‘postpone’ benefits for the next two years til he > hits age 65? Or is it "once you’re in, you can’t get out of it"? > Thanks, > Mike >If you are talking about 2006, surely he can find some business equipment >that he really wants that fits under the 100% expensable in the year >purchased category that would put him under the limit. Heck, buy a >$12,000.00 widget by paying $100.00 down and financing the rest. He writes >off 12 grand even though he only laid out $100.00. Do that until he hits 65 >and then sell the equip at a writeable loss or just keep on keepin on.

Not unless he is running a business.  If he lies about it and gets caught,  he’ll end up paying a lot more. Thumper – Hide quoted text — Show quoted text ->Many smart people say this to their kids. "To hell with college, learn the >IRS code" It’s much cheaper and a hell of a lots more profitable!!!

Response:

My father is 63 yrs old, and is currently receiving ss benefits. It is likely, that thru self-employment, he will surpass the $12,000 tax-free limit in earnings next year, and will then be taxed $1 for every $2 he earns above $12,000 (thus 50%!!). Is there a way to ‘postpone’ benefits for the next two years til he hits age 65? Or is it "once you’re in, you can’t get out of it"? Thanks, Mike

Response:

> My father is 63 yrs old, and is currently receiving ss benefits. It is > likely, that thru self-employment, he will surpass the $12,000 tax-free > limit in earnings next year, and will then be taxed $1 for every $2 he > earns above $12,000 (thus 50%!!). > Is there a way to ‘postpone’ benefits for the next two years til he > hits age 65? Or is it "once you’re in, you can’t get out of it"? > Thanks, > Mike

If you are talking about 2006, surely he can find some business equipment that he really wants that fits under the 100% expensable in the year purchased category that would put him under the limit. Heck, buy a $12,000.00 widget by paying $100.00 down and financing the rest. He writes off 12 grand even though he only laid out $100.00. Do that until he hits 65 and then sell the equip at a writeable loss or just keep on keepin on. Many smart people say this to their kids. "To hell with college, learn the IRS code" It’s much cheaper and a hell of a lots more profitable!!! — What this country needs is a government in which there are two four year term limits for everybody, no contributions of any kind to anyone that the contributor can NOT vote for, no retirement plan for politicians and no taxpayer money to anyone that has not voted in 3 of the past 4 elections and no taxpayer funded grants to anyone, only loans that must be paid back at the private sector rate of interest. And I submit to you that it is YOUR fault for not insisting that we have such a system. Criticism is easy and takes no intelligence at all. Offerring a valid, different solution takes brains. J. C.

Response:

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