1 Reply Latest reply on Apr 15, 2017 1:07 PM by THB_adjusting

    Should I draw Social Security while continuing to work?

    lrg1951

      I just turned 66. I decided to begin to draw Social Security while I continue to work for another 3 to 5 years. I don't know if this is a smart move or not. And I'm looking for advice. And there is a lot of it out there…

       

      Here's an example of my situation:

       

      My employer pays me $100,000 annual salary. My Social Security monthly benefit will be $2416. My wife draws Social Security and retirement. Together we are within two to $300 of moving into the next higher tax bracket. When I add my Social Security payments I will instantly be in the 28% tax bracket.

       

      A colleague suggested that even though I will continue to work I should begin to draw Social Security when I turn 66. He said that I should then increase my pretax contributions to TIAA-CREF to reduce my income and hence reduce my taxes.

       

      Thinking about this is driving me nuts. I don't have any idea if I should follow his recommendation or delay taking my Social Security which will increase my monthly benefit by 8% per year for the next four years.

       

      Any advice from your experience?

        • Re: Should I draw Social Security while continuing to work?
          THB_adjusting

          Dear LRG1951

             I am in a slightly different situation, having just turned 66 (my full retirement age), but my question also involves when to sign up for Social Security benefits.  I am still  working full time, and frankly I am concentrating on adjusting to the whole idea of retirement.  I am eligible to apply for spousal benefits based on a previous marriage, which of course is smaller than the full benefit rate, but it will still be taxed (as everything is eventually).  Fortunately, I can leave my own benefits to increase until age 70 while taking these (ex-)spousal benefits, so I will probably do it.  Perhaps it will help convince me that the future will come, and I should adjust my thinking to meet it.

             I don't have the tax wisdom to address the question of increasing  "... my pretax contributions to TIAA-CREF to reduce my income and hence reduce my taxes".   Personally, I think I am now maxed out on that now.  Can that make up for skipping the 8% per year increase from your full retirement age to age 70?

              Good luck.