Social Security

Man, there are some FUCKED UP RULES with SS.  I did not know this:

Quote :

Until you reach full retirement age, Social Security will subtract money from your retirement check if you exceed a certain amount of earned income for the year. For the year 2017, this limit on earned income is $16,920 ($1,410 per month). The amount goes up each year. If you are collecting Social Security retirement benefits before full retirement age, your benefits are reduced by $1 for every $2 you earn over the limit. Once you reach full retirement age, there is no limit on the amount of money you may earn and still receive your full Social Security retirement benefit.

Example
Henry is considering claiming early retirement benefits this year, at age 64. Social Security calculates that if he does so, he’ll receive $866 a month (which is about 13% less than if he waited until his full retirement age of 66). But Henry also intends to continue working part-time, with an income that will be about $5,000 over the yearly limit on earned income. If he does claim the early benefits and makes that part-time income each month, Henry would lose one dollar out of two from the $5,000 he earns over the limit, which means $2,500 for the year. So, by claiming early retirement and continuing to earn over the limit, Henry incurs a double penalty: His retirement benefits are permanently reduced by 13%, and he loses an additional amount every month (until he reaches full retirement age) to the extent he earns over the income limit.

Social Security does not reduce each monthly check by a small amount, unfortunately. Instead, the agency may withhold several months' entire checks until the reduction is paid off. (The way Social Security reduces your benefits is actually very complicated. For the details, read Social Security's pamphlet on "How Work Affects Your Benefits." You can also use Social Security's earnings test calculator to see how much your reduction will be and when Social Security will withhold your benefits.

Note that if you are working and you lose your job, you may collect unemployment benefits (assuming you otherwise qualify for them) even though you are also collecting your Social Security retirement benefits.

That's actually one that is reasonably well known.

Because I have been receiving SS payments for years, when my wife signed up for SS - almost three years after her full retirement age - we found out that she is entitled to receive a check for six months of the amount of my SS. It doesn't reduce my payments; it's just free money. That's according to the guy at SS.

Of course, we haven't received the check yet.

But if you think SS is fun, wait until you get involved with MediCare. Wahoo!

If you're on SS, and working, and lose your job, and apply for UI...

Are you limited to $1410/mo before your UI is taxed at 50%?

I'm not sure but I believe that fifty percent is only applied to earnings. Not to UI or interest or capital gains, etc.

Short WTF Social Security story.

In September 2023 we received a letter from SSA telling us that the State of Washington would begin paying our Medicare Part B premium beginning August 2023. No explanation why.  It was an extra $349.20 per month so we said what the hell don't look a gift horse.

We got the larger SS checks, plus a check for a couple months' back payments, until last month, January 2024.

Today our February SS checks were deposited, and $698.40 had been deducted from them.  No explanation.

After an hour and 48 minutes on hold at SSA (with the crappiest hold music I've ever heard) I finally spoke to Maryanne, who said the deduction was for January and February Medicare Part B reimbursements, because the State of Washington was no longer paying for it. She indicated it was under a program called QMB Qualified Medicare Beneficiary.

Looking up QMB online--which I'd never heard of--turns out its a program for low-income taxpayers who fall below the federal poverty level. Now, in 2022 we definitely WERE low income, because we lived only on MY social + moving some post-tax money out of our investment account.  Our income on paper was very low.

However in October 2023 Mrs NoCo started taking SS and that put us over the poverty line.  Plus we started moving some money out of pre-tax 401(k)s into our post-tax investment account to save the tax burden later on, PLUS we were getting rent on a condo we bought for our daughter.  Bottom line in 2022 we owed $5418.

So we were QUALIFIED for QMB for August, September and October and then I guess we weren't anymore.  Shucks, I wonder if SS will dun us for November & December, as well as January and February. I wonder if we were eligible for QMB earlier? I began taking SS in 2018. WTF knows.

And any kind of explanatory letter would've been nice.