Playing with SS calculator today. If I wait until full Retirement age (June 2026) I get $114 more per month.
Meanwhile, I forego about $20,000 waiting 5 months. It will take 175 months (14.6 years) to recoup.
As I will only be receiving salary for 6 months this year (thinking of taxes here), I am thinking it is foolish not to sign up now. I haven't done a full analysis (again, taxes), but wonder what I might be overlooking.
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If I am reading this correctly, They will only reduce SS at the 1/3 rate on an amount equal to earned income above $65,160?
I'd consider leaving earlier than planned to stay below this limit, but then I lose my employer insurance and salary for those months. And then have to pay Part B and Megigap for two additional months. The trade off does not seem worth it.
I.e. - I go
$20,000$15,000 over the $65,160 limitation andlose 1/3 of 2 months @ $4000 per month Social Security benefit. So, a loss of $2666 versus a gain of $20,000 salary, plus deferring Part B and Medigap (for both myself and spouse) for two additional months.Edit: OOPs - bad math, I would lose 1/3 of the earnings amount over $65,106, not 1/3 of the SS amount. So more like a $5000 reduction from SS, adjusting my previous example to a more likely $15,000 amount above threshold.
Also do they calculate on gross earnings, MAGI or net (after 401K) earnings? I am assuming gross earned income, unless I discover otherwise.
And wouldn't that statement still apply if I signed up right now? IOW, I would only be subject to the higher reduction threshold, as this is the year that I reach "full retirement age"?
Also, saw this: "Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings".
I take this to read that since June is the month that I reach full retirement age. Only any SS amounts from Jan 1 to May 30 are counted towards any SS reduction limit ($65,160). Which would be possibly 3 months. How that works in reality is anyone's guess.
DrVenture's Big Adventure
No idea how this might figure into the any of this, but I will be getting about 1/2 a year's typical earnings in 2026, but contributing 401K after-tax to the full IRS limit in that interval. My actual taxable earnings will thus be quite low this year.
@bee Thanks
M recollection is if you file to begin immediately, they set the actual benefit date to the month you receive your first check, whatever that turns out to be.
I look at it mostly as longevity insurance.
Social Security provides an annual COLA which makes it more attractive than
most (all?) single premium immediate annuities or deferred income annuities.
I recently retired at age 62 and I'm single.
My current plan is to start Social Security payments shortly after reaching age 67 (full retirement age).
You may want to play around with Social Security's "Online Benefits Calculator"
and the "Open Social Security Calculator" if you haven't done so already.
most (all?) single premium immediate annuities or deferred income annuities.
I recently retired at age 62 and I'm single."
Be aware that the SS COLA can be a significantly negative number. This year and last our monthly SS was reduced because our total income from all sources, as reported to SS by the IRS, was above whatever limit that SS uses to adjust their payment. I don't have the information paper handy right now so I can't quote it exactly. But our combined SS monthly payments went from-
2024: $5334
2025: $5185
2026: $4987
Annually that's-
2024: $64010
2025: $62220
2026: $59844
So in just three years there's been a reduction of almost $4200 in SS income. Add the actual rate of inflation to that, and our actual income is significantly decreasing rather than increasing. This will be the first year that our expenses will exceed our combined SS and pension income, and that we will actually start to decrease (draw down) our retirement savings total rather than increasing that.
The Cost-Of-Living Adjustments (COLAs) for 2024, 2025, and 2026 were 3.2%, 2.5%, and 2.8% respectively.
I didn't find any negative COLAs going back to 1975.
COLAs payable in 2010, 2011, and 2016 were 0.0%.
I wonder why your monthly Social Security payments decreased.
https://www.ssa.gov/oact/cola/colaseries.html
"Starting with the month you reach full retirement age, we will not reduce your benefits no matter how much you earn."
But they have been. I guess that I should try to contact SS, though with my hearing issues I can't use the phone, so that should be an experience to look forward to. I have no idea where to even start on this.
so that should be an experience to look forward to. I have no idea where to even start on this."
@Old_Joe,
If SS results are unsatisfactory, you might try contacting your elected U.S. Representative.
Representatives should be able to provide assistance with these type of matters.
I believe that you can contact SS via your online Social security account, I assume that this is direct secure messaging. They will then have verification who they are communicating with, and all your relevant information.
Alternatively, you should schedule a face-to-face meeting via appointment at your local SS office.
I agree that there is no reason that your monthly payment should be decreasing, though I am no expert.
The relevant example:
"Let’s say you aren’t yet at full
retirement age at the beginning of the
year, but reach it in November 2026. You
expect to earn $68,520 in the 10 months
from January through October. During
this period, we would withhold $1,120 ($1
for every $3 you earn above the $65,160
limit). To do this, we would withhold the 2
benefit payments for January 2026 through
February 2026, your first 2 checks of
the year. Beginning in March 2026, you
would receive your $600 benefit, and this
amount would be paid to you each month
for the remainder of the year. In 2027,
we would pay you the remaining $80 we
withheld in February 2026."
How would they know what you were going to earn in a shortened year?
"We adjust the amount of your Social
Security benefits in 2026 based on what
you told us you would earn in 2026. If
you think your earnings for 2026 will be
different from what you originally told us,
let us know right away."
The best I can figure is that that if I go over by $15, 000 they will subtract $5000 from my benefit. It appears I still come out ahead by 3x $4000 for three additional months of SS, So, $12,000 in SS, minus $5000, with a potential positive outcome of $7000.
The wife gets a spousal benefits increase. And I still defer Medicare Part b and Medigap for both of us a few months more until I officially retire. Probably, I am missing something.
We bumped into IRMMA during a particular one year period. Wondering if this is the monthly change you indicated. The below may provide helpful information.
---
Medicare IRMAA FAQs - Tax Deductions, Duration, and How to ...
IRMAA (Income-Related Monthly Adjustment Amount) adds extra to your monthly Medicare Part B & D premiums if your income (MAGI) from two years prior exceeds certain levels, like a single person earning over $109,000 (for 2026 premiums based on 2024 income) paying a surcharge on top of the base premium (around $202.90 for Part B), increasing with higher income brackets. For example, a single filer with a $205,001 - $500,000 MAGI in 2024 might pay an extra $324.60 for Part B, totaling $527.50 monthly, plus a Part D surcharge.
How IRMAA Works (Example)
Income Look-Back: The Social Security Administration (SSA) looks at your Modified Adjusted Gross Income (MAGI) from two years ago (e.g., 2024 income for 2026 premiums).
Thresholds & Surcharges: If your MAGI is above the standard amount (e.g., $109,000 for single filers in 2026), you pay an extra amount (IRMAA) on top of your regular Medicare premiums.
Tiered System: The surcharge increases in steps (brackets) as your income rises.
Example Scenario (Using 2026 figures for 2024 income)
Standard Part B Premium (2026): ~$202.90 (no IRMAA).
Single Filer (MAGI >$205k - $500k in 2024):
Base Part B: $202.90
IRMAA Surcharge (Level 3): +$324.60
Total Part B: $527.50/month
Part D Surcharge: An additional amount (e.g., ~$85.80 for 2025, varying) added to your plan's premium
I found this... might this be the case with your "take home" reduction:
Assuming that @Old_Joe provided pre-deduction amounts, puzzle for SSA reductions beyond FRA remains. I don't know of WEP/GPO offsets applied - they went away in 2025.
This should be easy to discern from a look at a 1099-SSA to check if Part-B is more than the base amount in any particular year. And a glance at 1099 income levels.
@yogibearbull Everything based on pre-deduction amounts makes sense.
And yet another reason to perform aggressive Roth conversions.
MFO comes through again. Thank all of you very much for your insight and help on this. At least we don't have to fight with SS or the IRS... that's something, I guess.
But the end result is pretty much the same- in planning don't necessarily expect a SS increase every year. In fact if you have substantial retirement income you might plan on what amounts to a "Minus COLA" kicking in at some point.
It will never append!?
If that were where the tariff tax income were being funneled, I'd possibly be more supportive. SS pays out ~$1.3 trillion annually.