How Much Money Can You Make After You Retire?

How Much Money Can You Make After You Retire Before Your Benefits Are Reduced? 

Financial and Retirement Planning Information - 
for Beginners

When a person retires, we think of them as no longer working. In today's climate, however, many people continue to work, or return to work after they "retire". They may be doing the same thing they did before they retired, or they may be doing something entirely new.

So... if a person retired, why on earth would they go back or continue to work? There are many reasons, but the main ones are: lack of money and boredom.

Many people thought it would be so nice when they no longer had to work, but once that became a reality, they found it wasn't so nice after all. What can you do around the house for the 9 to 10 hours a day that you used to be gone? You can only nap so much. You can only visit your friends so often.

You can only go shopping so much. Well, you could do some of those projects that you said you would do "some day", but eventually you will run out of things to do. Now what? Go back to work! You can pick up some extra money and fill those long hours at the same time.

You can go back to your former line of work, or you can find something new to do. Maybe your job was welding, but you always liked working in the dirt. Maybe you could go to work as a gardener or a landscaper.

You might like to teach and could hold some classes in your former field. Who would know more about that job than you?

Too many people are forced to go back to work, whether they want to or not because of finances. Maybe you had all of your retirement funds tied up in the stock market. Perhaps you just didn't save enough and can't afford to live on social security alone. Maybe you have enough saved to live on, but you have a lot of outstanding debts that you have to spend your savings on, or you have a lot of unexpected medical bills, or your wife ran off with the guy next door and took all of your money with them.

Whatever the reason, you now find yourself in a position where you have to work. So how much are you allowed to make while drawing social security before you are penalized?

  

The Social Security Administration (SSA) uses the formulas below, depending on your age, to determine how much your benefit must be reduced:

Full Retirement Age (FRA):  Age 66 and 6 months for people born January 2, 1957 through January 1, 1958.  Unlimited earning.  Do deductions on any amount you earn.

If you are under:  normal (or full --  retirement age (FRA) when you start getting your Social Security payments, $1 in benefits will be deducted for each $2 you earn above the annual limit. For 2019 that limit is $17,640. Remember, the earliest age that you can receive Social Security retirement benefits remains 62 even though the FRA is rising, but your benefits will be greatly reduced at ages 62 to FRA.

In the year you reach your FRA: $1 in benefits will be deducted for each $3 you earn above a different limit, but only counting earnings before the month you reach FRA. For 2019, this limit is $46,920.

Starting with the month you reach FRA:, you will get your benefits with NO limit on your earnings.

If a child or spouse on your record works while receiving benefits, the same earnings limits apply to him or her as apply to you. If your child or spouse is eligible for benefits this year and is also working, you can use our earnings test calculator to see how those earnings would affect the child's benefit payments. (Your child's or spouse's earnings affect only his or her own benefits. They do not affect your benefits or those of any other beneficiaries on your record.)

If you retire during the year:

When entitlement to benefits begins or ends during the year, many people work in months before or after entitlement. $1 in benefits will be deducted for each $3 you earn above a different limit, but only counting earnings before the month you reach FRA. For 2019, this limit is $46,920.

For complete details see:  How Work Affects Your Benefits


Note: There are different rules for people receiving Social Security Disability:


See:  Substantial Gainful Activity for details.

Retirement and the American Recovery and Reinvestment Act of 2009 ("Stimulus Check")

Retirement and the American Recovery and Reinvestment Act of 2009 

("Stimulus Check") 


Financial and Retirement Planning Information - 
for Beginners

As most of you know by now, there are no "Stimulus Checks" this year.  There are instead payroll tax cuts and other worker based incentives.

There are however, some people who will qualify for a check this year under the American Recovery and Reinvestment Act of 2009.

Unlike last year's stimulus checks, the IRS will not be mailing these checks.  This year's payment will be made by the respective agency under which you are qualified.

These checks are to be sent out in late May of 2009.

If you are retired or disabled, and are receiving benefits from the Social Security Administration, such as Social  Security or Supplemental Security Income (SSI), you will receive a $250.00 check from the Social Security Adminstiration.

If you are a disabled veteran, receiving payments from the U.S. Department of Veterans Affairs, you should contact the Dept. of Veterans Affairs to learn more about your payments.

If you are a railroad retirement beneficiary, then contact the Railroad Retirement Board.

The Social Security Administrations says,

President Obama recently signed the American Recovery and Reinvestment Act of 2009. This act provides for the one-time payment of $250 to individuals who get Supplemental Security Income (SSI) or Social Security benefits.

We expect everyone who is entitled to a payment to receive it by late May 2009. No action is required on your part.

Go to: http://www.socialsecurity.gov/payment/ for "Social Security's Economic Recovery One-Time Payments Information Page"

The IRS says,

A one-time payment of $250 will be made in 2009 to:

* Retirees, disabled individuals and Supplemental Security Income (SSI) recipients receiving benefits from the Social Security Administration.

* Disabled veterans receiving benefits from the U.S. Department of Veterans Affairs.

* Railroad Retirement beneficiaries.

The IRS will not make this payment — unlike last year's economic stimulus program. Individuals who may qualify for this year's economic recovery payment should contact their respective agency for more information.

Go to:http://www.irs.gov/newsroom/article/0,,id=204468,00.html for "IRS One-Time Payment Information Page"

You should also know that if you did NOT receive a stimulus check last year (2008), you may qualify for a recovery rebate credit on your 2008 tax return.

According to the IRS, here are the conditions under which you may qualify:

• Your financial situation changed dramatically from 2007 to 2008.

• You did not file a 2007 tax return.

• Your family gained an additional qualifying child in 2008.

• You were claimed as a dependent on someone else’s return in 2007 but cannot be claimed as dependent by someone else in 2008.

Go to: http://www.irs.gov/newsroom/article/0,,id=203191,00.html for "How to Get the Recovery Rebate Credit Right"

How to Find and Use Retirement Planning Tools

How to Find and Use Retirement Planning Tools

Financial and Retirement Planning Information - 

for Beginners 

There are thousands of retirement planning calculators and retirement planning software programs on the internet.

My first suggestion is: Never buy what you can get for free. I also live by the rule, you get what you pay for, but this seems to apply more to physical things, such as air guns, dishwashers, and furniture. Why do I say that? Because there are some excellent software programs to be found that are absolutely free. They cost you zilch, nada, nothing.

If you are like me, you are leery to download stuff because you don't know what you will be getting. Well, I found that some sites like Cnet (download.cnet.com) and PC World (pcworld.com) are excellent sites. They review and test a lot of the downloads so you know it is safe. A word of caution, they have freeware, shareware, and trialware, so be careful when choosing something.

Different retirement calculators allow you to calculate for your retirement in different ways. With some you enter how much you want to save per week or month, and for how many years, and the retirement calculator will tell you how much you will end up with. With others, you do it the opposite way. You put in how much you want when you retire, and how many years you have until then, and the calculator will tell you how much you need to save per week or month. By doing a little retirement income planning now, assuming you are starting early enough, and stick with it, you should be set all right when it comes time to quit working.

An excellent place to calculate what you will get from social security is the "Benefits Calculators: About the Social Security Retirement Estimator" on the Social Security Administration website at http://www.socialsecurity.gov/planners/  By entering your earnings the calculator:

• provides an estimate of your retirement benefits comparable to the estimate you receive on your Social Security Statement each year, and
• lets you create additional "what if" retirement scenarios based on current law.

You could hire a retirement planner, and if you will have a large amount of money, you should. However, most of us can get by using an income calculator and then sticking to the plan

Your retirement savings should be in a separate account or better yet, an Individual Retirement Account (IRA), or a 401k if available. There are also SEP IRA's for the self-employed. No matter what you have, you should plan on making the largest contribution possible.

Some things you should think about when you are planning for retirement. How do you want to live, and where do you want to live? Will you be satisfied living in your present home and reading books all day, or are you thinking more about retirement communities, and a yacht? Do you want enough retirement income to allow you to buy a motor home and travel? You will want to have the financial freedom to live as you would like.

I wrote earlier about debt consolidation, but when you are doing your financial planning, your goal should be to be debt free when you retire. You should get out of debt and then be able to stay out. You want to cancel your credit card debt and your mortgage. Don't, however, cancel your credit cards. That can hurt your credit.

Debt consolidation for beginners can be overwhelming. You might ask yourself, "Will I really be saving money?" or "How much will my new loan cost?" "Where is the best place to consolidate my loans...a bank, credit union or finance company?"  You need to shop around and get the best rates.  If you can see that you will have to consolidate your loans, do so before you get behind in all of your bills and hurt your credit.  Since interest on loans is based on your FICO (credit) score, the better your credit when you apply for a consolidation loan, the better your interest rate will be.

When considering an IRA, shop around and look for the best IRA rates. As with a loan, all banks and credit unions do not offer the same rates. Do you know that you can have several IRA accounts?

Be sure to consider the consequences of getting a traditional or Roth IRA. Put all of the money you can afford into your retirement, but don't forget to set aside some for that rainy day. If you should lose your job, or get sick, or hurt, and unable to work for while, you want to be able to live without having to make an IRA withdrawal. There are substantial penalties for withdrawing your money early. By the way, if you do lose your job, be sure to ask your HR person about a 401k rollover.

Well, that's it for today. Be sure to subscribe so that you will be notified when new posts are added.