Question For U.s.a. Expats Who Retired Before 62

[khaowong1]

You do NOT need to work until age 62!!!!

If the letter says you have met the minimum credits, you will be eligible.

Now the AMOUNT of the benefit is another matter. It is a complicated formula. Basically if those last years were going to be really high earning years that would usually have helped your benefit, assuming it is under the maximum. That is a very few years of not working. If I were you, I would forget this and not bother even calling them. You have absolutely nothing to worry about, again, assuming the letter says you already have met the minimum credits. BTW, I stopped work at 47 and I have met the minimum credits so I know what I am talking about.

all this is exactly right... if you already have the minimum credits needed to draw your social security at 62, your in.... keep in mind, that you can't draw your social security until you reach the age of 62.... until then, your on your own...

[khaowong1]

The OP should consider delaying his SS benefit until age 70 if he can afford to live without it until then. If he starts collecting at age 62 he will get 75% of his Full Retirement Age benefit for life. However, if he can wait until age 70 before collecting he will get 132% of his FRA benefit. That's a guaranteed increase of 7% to 8% for each year he waits, not including the cost of living adjustment.

I think it is criminal that the SSA does not offer expert advice to recipients on how to collect the maximum benefit for which they are eligible. How many divorced wives know that they can collect the spousal benefit (roughly 50% of the husband's benefit) provided that they were married for at least 10 years and she has not remarried?

very true statement... if you can live without your social security until you reach 70, your doing real good... a lot of accountant friends in the U.S. advise agains't this for only one reason, the death accuaries show that many, many people don't reach 70 after retiring... for some reason, not sure why... my guess is spousal abuse... they all advise taking the money at 62 and spending it while your still healthy... AND please, lets don't get the ex-wives stirred up... actually, my Mom told me the other day in an e-mail, my ex-wife called and wondered how she could get a hold of me... now I understand what she wants... haven't seen her in over 23 years... had 15 years of married hel_l... to think she could get some money from s.s. thru me would drive me to drink... more.....

[TerryLH]

"I saw it mentioned that they reduce your benefit if you start drawing at age 62 but continue to get an income from work."

If you mean 'if you continue working', the answer is "maybe".

If you live in the states you can earn up to $xxxx per month with no reduction.

If living abroad, you can work up to 40 hours a month with no reduction. If more than 40 (it might be 45), you don't get anything for any month over those hours. It doesn't make any difference how much or how little you make during the hours worked, if abroad.

[barryofthailand]

I saw it mentioned that they reduce your benefit if you start drawing at age 62 but continue to get an income from work. Do they also reduce your benefit if you get an income from a private pension and investments?

I have two pensions. One private, and the other is social security. And no they do not reduce your benefit if you have a private pension. If you continue to work, then don't file for social security.

Barry

[Lancelot]

I stand corrected it is the highest 35 years

Benefit: Social security uses your highest thirty-five years of work history to calculate your social security retirement benefit. Make sure you have a full 35 years of work history in to maximize your benefits.

Works if: You have less than 35 years of work history, or you have many low earning years listed in your 35 years, you are now earning more, and you can keep working so that some of your higher earning years will bump some of your lower earnings year of the top 35.

Snipped from http://moneyover55.about.com/od/socialsecu...ialsecurity.htm

:D:D

[phuketrichard]

I was told about 6 years ago thta if i retired at 62 i would earn $447/month>>> bear inmind out fo the past 25 years i have ONLy worked 1 year in the states and they have me on file as lifetime salry of $48,000 !!!!!

What u put in is what u get out

[Jingthing]

I was told about 6 years ago thta if i retired at 62 i would earn $447/month>>> bear inmind out fo the past 25 years i have ONLy worked 1 year in the states and they have me on file as lifetime salry of $48,000 !!!!!

What u put in is what u get out

I find your post a little confusing. To be eligible for ANY social security retirement benefits a person must have earned a minimum number of work credits over the years. One year would never be enough. Another point. Before I mentioned there was a minimum dollar benefit for all those who do qualify for some benefit based on the work credits. It appears I was mistaken. There is no minimum benefit payout. Also, if someone got a dollar estimate six years ago, it is in six years ago dollars, due to inflation the actual figure would be higher now.

[jimbo38]

There is a SUBSTANTIAL difference in your monthly check between retiring at 62 or 65. I waited til 65 and am glad I did.

If you retire at 62 you will get the lower amount each month forever. It doesn't jump up when you reach 65.

Each year that you work after 65 also increases how much they pay you. The "cost of living allowance" or "COLA" is a percentage figure so the larger your montly payment the larger the COLA increase will be. Get all the figures, you will be surprised.

[KhunG]

I saw it mentioned that they reduce your benefit if you start drawing at age 62 but continue to get an income from work. Do they also reduce your benefit if you get an income from a private pension and investments?

No reduction generally. The complex formula penalizes you if you or your spouse earned a pension outside of the FICA system. No penalty for investments, but maybe income tax on SS pension.

I found the "Windfall Elimination Provision" formulas. You're right, they're complex. I'm borderline problematic due to some overseas assignments. I wonder if taking my small pension earned working overseas as a lump sum and my US (FICA paid) pension normally would avoid the extra penalty?

Edited September 20, 2009 by KhunG

[KhunG]

they all advise taking the money at 62 and spending it while your still healthy

That's how I feel. Yes, I'll get less in the long run if I live a long time, but I'd rather see something for all the money I poured into the program while I'm still active enough to enjoy it.

[IMA_FARANG]

Hi,

According to the letter I receive yearly from the Social Security Administration I have enough credits to qualify for retirement payments at age 62.

I will use ficticious numbers but here is the gist of my last 2 letters

2008: $888 per month starting at age 62

2009: $1000 per month starting at age 62

Again those are not the real amounts. Each year I am worth more at age 62, 66, 70 etc.

But the wording is ambiguous and implies I must keep working until age 62.

I want to retire at age 59, move to Thailand and start collecting at age 62. So I would not work for those 2 1/2 to 3 years.

Do any of you have any experience in this area? I need to call SSA but their line is always busy for long periods and coincides with my work hours.

The answer to this question could affect the timing of my retirement.

Thanks in advance!

If you are now 59 years old, you may not be eligable to retire at age 65 with full Social Security pension.

I was born in 1946....will be 63 in October.

According to the new law I have to wait until age 67 for full amount of pension.

I plan to retire next year, when I will get 75% of my full amount.

For me it will be enough to live in Thailand. (I already have a house).

[IMA_FARANG]

You are right. People who are 59 now are set for this program. The younger you are now, the less set.

Unlike Thai immigration, the politicians want to give people as much warning as possible about the future of this vital program. There is no logical reason to think they will spring a big change on people so close to the benefits age.

Funding for SS is not a crisis and can rather easily be tweaked to fix. Medicare is another story entirely.

Not exactly. As I just posted you are not gaurenteed to be able to retire at age 65 with a full pension.

I was born in 1946, I will be 63 in October,

According to the new law I will not qualify for a full pension until I reach age 67.

The age you will get a full pension depends on your birth date. Those born before about 1943 (I believe) will get 100% of the full amount at retirement age of 65. For those born later the age required for full pension increases.

I, at age 63, born 1946, will need to be 67 before I can retire at full pension. Some people will not get a full pension before they reach age 70.

The information is on that annual summary of Social Security benefits you get from the SSA.

By the way, the amount you will get depends on a calculation of the cumulative record of the amount you earned and that was paid into the Social Security fund over the years by you and the company you worked for.

There is a formula the Social Security uses, based on your earnings that includes your "5 best income" years.

Exactly how it works...I'm not sure than even an accountant understands it.

If you retire before your "full benefits" age you will get 75% of the full pension. It won't ever go to full pension if you retire before that age.

[walt]

Most retirees never pay one cent of US income tax on SS benefits. If they do, they're not being double-taxed.

PeaceBlondie, that’s a little misleading – it's true that MOST SS recipients don't pay tax on their benefits, but about ONE THIRD do. You don't want to be seen as being too kind to Uncle Sam, do you? In other words, a lot of people pay income tax on their SS benefits.

According to the latest issue of Money magazine (Oct 2009, Vol 38, Num 10, p.90), currently about one third of Social Security recipients pay income tax on a portion of their benefits. If your total annual income, including benefits and even exempt interest on muni bonds, is greater than $32,000 ($25,000 for singles), up to 50% of your benefits are taxable. If your income is $44,000 ($34,000 for singles), then up to 85% of your benefits are taxable.

Check it out.

Walt

[PeaceBlondie]

Most retirees never pay one cent of US income tax on SS benefits. If they do, they're not being double-taxed.

PeaceBlondie, that’s a little misleading – it's true that MOST SS recipients don't pay tax on their benefits, but about ONE THIRD do. You don't want to be seen as being too kind to Uncle Sam, do you? In other words, a lot of people pay income tax on their SS benefits.

According to the latest issue of Money magazine (Oct 2009, Vol 38, Num 10, p.90), currently about one third of Social Security recipients pay income tax on a portion of their benefits. If your total annual income, including benefits and even exempt interest on muni bonds, is greater than $32,000 ($25,000 for singles), up to 50% of your benefits are taxable. If your income is $44,000 ($34,000 for singles), then up to 85% of your benefits are taxable.

Check it out.

Walt

Walt, thanks for correcting me. I knew that some paid tax on their SS pension. I didn't knpw it was that many. And those who fall into the 85% marginal bracket are being double-taxed, indeed. Pardon me for being too kind to my ex-employer. Blame Congress.

[snooky]

This from an article on CNNM today may help answer some questions for all!

http://money.cnn.com/2009/09/17/retirement/Social_security.moneymag/index.htm

Sorry, not sure how to put the underline but you can copy and paste!

[JimGant]

From the CNN Money article, above:

Despite what you may hear about the system going broke, the funds from workers' payroll taxes will cover all retirees' payments until 2016 even if no changes are made to the current program. After that the Social Security Administration can cover full benefits until 2037 by cashing in its Treasury bonds from the Social Security trust fund.

I can't believe they threw in that baloney for after year 2016...

When surplus payments end in 2016, the Social Security Trust Fund's Treasury Bonds aren't exactly the same as having Eurobonds, AAA bonds from corporations, or anything redeemable from outside the Federal government. Lending to yourself from within the same business (in this case, Uncle Sam Inc.), builds zero wealth. This quote says it better:

As the U.S. General Accounting Office (GAO) explains, "While the Social Security Trust Funds' Treasury Securities [bonds] are assets of the Social Security program, they are also liabilities for the rest of the federal government that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing other federal expenditures."

And that's what faces us after the FICA surplus collections end -- with, of course, a reduction in benefits too.

The Social Security Trust Fund is an accounting gimmick. And no gimmick will make the forthcoming problems go away. Why not just incorporate FICA into the overall income tax structure, and play with the income tax rates to get to the financially solid ground needed. Yeah, the better off will then most likely pay more for less. But, since they can afford it, good!

[PeaceBlondie]

Well, because it's an insurance trust fund, which shouldn't be comingled with other funds for daily expenses like stupid wars and bailouts.

[chuckd]

PB:

Don't forget stupid stimulus packages and stupid health care reform.

[PeaceBlondie]

The general revenue/expenditures/federal annual deficits/quintillion dollar federal debts do not relate to trust funds. Generally accepted accounting principles; off topic.

[midlifecrisis]

The OP should consider delaying his SS benefit until age 70 if he can afford to live without it until then. If he starts collecting at age 62 he will get 75% of his Full Retirement Age benefit for life. However, if he can wait until age 70 before collecting he will get 132% of his FRA benefit. That's a guaranteed increase of 7% to 8% for each year he waits, not including the cost of living adjustment.

I think it is criminal that the SSA does not offer expert advice to recipients on how to collect the maximum benefit for which they are eligible. How many divorced wives know that they can collect the spousal benefit (roughly 50% of the husband's benefit) provided that they were married for at least 10 years and she has not remarried?

I would deplete too much of my investments if I did. My plan is my 17K from SSI and augment from savings but my first two years I will be living just on savings.

But you are correct. On the other hand, I may not live to be 70.

[Jingthing]

A huge percentage of people are dead before they collect penny one. Especially men, they die earlier. I say take the money and run at the earliest opportunity!

[midlifecrisis]

There is a SUBSTANTIAL difference in your monthly check between retiring at 62 or 65. I waited til 65 and am glad I did.

If you retire at 62 you will get the lower amount each month forever. It doesn't jump up when you reach 65.

Each year that you work after 65 also increases how much they pay you. The "cost of living allowance" or "COLA" is a percentage figure so the larger your montly payment the larger the COLA increase will be. Get all the figures, you will be surprised.

factored in and accepted as the price for early retirement

[JimGant]

Well, because it's an insurance trust fund, which shouldn't be comingled with other funds for daily expenses like stupid wars and bailouts.

It's plain and simply an accounting entity -- and a cost accounting one at that (GAAP only applies to financial accounting).

And as far as commingling, where do you think the surplus FICA taxes are today going? Under the mattress? Or to private corporation securities? No, they're mixed in with other revenues of the US Gov't -- to help pay for stupid wars and bailouts.

A 'trust fund' in name doesn't make it a trust fund in deed, complete with fiduciary requirements and tools. You could set up a trust fund, in name, to account for, say, the Dept of Defense's finances. Ludicrous, of course. But it would work ok as a cost accounting entity.

The very use of the term "trust fund" when applied to federal trust funds like Social Security, Medicare, and others, is misleading. As the government itself puts it: "The Federal budget meaning of the term "trust" differs significantly from its private sector usage.

But, yeah, off topic. Why doesn't someone explain why your Thai girlfriend won't qualify for a spousal Social Security check, if she marries you, unless......... That would be helpful -- and Thai related.

[KhunG]

But, yeah, off topic. Why doesn't someone explain why your Thai girlfriend won't qualify for a spousal Social Security check, if she marries you, unless......... That would be helpful -- and Thai related.

Actually she will, if she lived as a permanent resident in the US for at least 5 years while you're married.

http://www.ssa.gov/pubs/10137.html#additional

"If you receive benefits as a dependent or survivor of the worker, special requirements may affect your right to receive Social Security payments while you are outside the U.S. If you are not a U.S. citizen, you must have lived in the U.S. for at least five years. During that five years, the family relationship on which benefits are based must have existed."

Edited September 23, 2009 by KhunG

[retirednavyman]

Funny (in the US,) liberals always scare senior citizens with the idea that if they vote for a conservative he will cut their retirement money - but the only time that has happened has been when liberals are in power!

Get the money as soon as you can if you are not working. When you turn 65 expect to lose around $100 a month for SS part B.

That was very misleading. Granting COLAs or not is based on a set formula based on objective economic criteria. Bush tried very hard to privatize social security and happily failed miserably.

Yearly Social Security increases are based on a COLA formula but every year for the past 30 years some increase was voted in just to keep up with Medicare expenses. This year the people in power voted against even a token 1% but they will give more money to foreign countries, even those countries who hate the US! With the cost of Medicare going up seniors on SS may end up with less money in their checks. The election is over there is no need to kiss senior citizen butts for votes until just before the next election. Expect an increase in SS money just before the next election!

Edited September 25, 2009 by retirednavyman

[retirednavyman]

Wrong! Social security, military retiree, Federal employee COLA's are indexed to the CPI (Consumer Price Index), it has nothing to do with the "people in power" e.g. if the prices go down for the cost of goods and services, then the COLA won't be there; on the other hand if the prices of goods and services go up, then the cola will be there, it's based on the CPI

As for the increase in SS money just before the next election, that is done on a yearly basis by actuaries, so if there is an actuary out there that can actually predict what the COLA will be in 2011, 2012, etc, then that would be a down right miracle!

Peace out

[phuketrichard]

I was told about 6 years ago thta if i retired at 62 i would earn $447/month>>> bear inmind out fo the past 25 years i have ONLy worked 1 year in the states and they have me on file as lifetime salry of $48,000 !!!!!

What u put in is what u get out

I find your post a little confusing. To be eligible for ANY social security retirement benefits a person must have earned a minimum number of work credits over the years. One year would never be enough. Another point. Before I mentioned there was a minimum dollar benefit for all those who do qualify for some benefit based on the work credits. It appears I was mistaken. There is no minimum benefit payout. Also, if someone got a dollar estimate six years ago, it is in six years ago dollars, due to inflation the actual figure would be higher now.

That was 1 year out of ther past 25, I did NOT say i have only worked one year in the states. So maybe now i would make $500/month :-)

and heres something to ponder on in regards to SS

"Our Senators and Congresswomen do not pay into Social Security and, of course, they do not collect from it.

You see, Social Security benefits were not suitable for persons of their rare elevation in society. They felt they should have a special plan for themselves So, many years ago they voted in their own benefit plan.

In more recent years, no congress person has felt the need to change it. After all, it is a great plan.

For all practical purposes their plan works like this:

When they retire, they continue to draw the same pay until they die.

Except it may increase from time to time for cost of living adjustments. ....

For example, Senator Byrd and Congressman White and their wives may expect to draw $7, 800,000.00 (that's Seven Million, Eight-Hundred Thousand Dollars), with their wives drawing $275, 000..00 during the last years of their lives.

This is calculated on an average life span for each of those Dignitaries.

Younger Dignitaries who retire at an early age, will receive much more during the rest of their lives.

Their cost for this excellent plan to them is $0.00. NADA!! ! ZILCH!!!

This little perk they voted for themselves is free to them. You and I pick up the tab for this plan. The funds for this fine retirement plan come directly from the General Funds;

"OUR TAX DOLLARS AT WORK"!

From our own Social Security Plan, which you and I pay (or have paid) into, every payday until we retire (which amount is matched by our employer), We can expect to get an average of

$1,000 per month after retirement.

Or, in other words, we would have to collect our average of $1,000 monthly benefits for 68 years and one (1) month to equal Senator Bill Bradley's benefits!

Social Security could be very good if only one small change were made.

That change would be to

Jerk the Golden Fleece Retirement Plan from under the Senators and Congressmen. . Put them into the Social Security plan with the rest of us

Then sit back.....

And see how fast they would fix it! "

Edited September 26, 2009 by phuketrichard

[CaptHaddock]

A huge percentage of people are dead before they collect penny one. Especially men, they die earlier. I say take the money and run at the earliest opportunity!

SS is an insurance program. When we buy insurance, a break-even analysis is not the right way to consider it. The purpose of insurance is to pay someone else to take a risk that you cannot afford to bear yourself. So we buy fire insurance because we can't afford to replace the house if it burns down. Houses seldom do burn down, but that fact usually doesn't figure much into the insurance decision.

In the case of SS insurance, the risk that we can't afford to bear ourselves is outliving your assets and being poor in old age. By delaying benefits as long as you can, you are in effect paying to get a higher monthly benefit that you can't outlive. When I project how much I will have to spend per year in retirement the number goes up if I delay SS until age 70. The reason is that I can afford to spend more of my assets during my sixties because the govt will cover more of my expenses during my nineties. In fact, this remains true even if I die during my 60's without collecting a penny. i still benefit by being able to spend more of my assets instead of having to save them against the possibility of living well beyond 90 and having to pay the entire cost myself.

[Jingthing]

SS is not insurance.

[TerryLH]

"Funny (in the US,) liberals always scare senior citizens with the idea that if they vote for a conservative he will cut their retirement money - but the only time that has happened has been when liberals are in power!"

retirednavyman

Can you be more specific? Who cut social security retirement money, and when did that happen?

Are you confusing cuts with a lower/no cost of living increases, or are you equating other costs to seniors as being a cut?

I'd be very surprised (that happens a lot, actually) to find there had been an actual cut in the gross amount of retirement money a person got.