The Press-Dispatch
Issue link: https://www.ifoldsflip.com/i/1191166
The Press-Dispatch Local Wednesday, December 11, 2019 A- 5 Social Security Matters Survivor benefits, my own benefits and taxes Since 1990 CHRISTMAS Dazzle her THIS Southgate Center, Jasper www.olingerdiamond.com • 812-482-4214 Holiday Hours: Mon.-Fri. 9:30 a.m.-8 p.m. Sat. 9 a.m.-4 p.m. • Sun. Noon-4 p.m. WWW.ENGLERTSHOMECOMFORTCENTER.COM HOME COMFORT CENTER 3.8 CU. FT. WASHER HTW240ASKWS Stainless steel wash basket, heavy- duty agitator, PreciseFill with the option of 4 water level selections. 6.2 CU. FT. DRYER HTX24EASKWS Autodry™ drying system, aluminized alloy drum, 3 heat selections SOLD IN PAIRS ONLY $ 449 each DAILY dine in or carry out *Your Choice of Regular Coffee, Tea or Coke Product. /CakesAndCoffeeCafe Like us on Facebook! In a Hurry? Call 812-354-2004! 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GREAT FOOD & NOSTALGIA cafe & cof fee cafe Mon-Fri 7am-8pm Saturday 7am-2pm NEW HOURS Gift Certificates Are Quick Easy Christmas Gifts For Any Amount GREAT FOOD & NOSTALGIA cafe & cof fee cafe is certificate entires the holder to ��������������� To������������������������������������������ From ��������������������������������������� Authorized by �������������������Expires������� Dear Rusty: I am 67 and still working full time, but plan to retire af- ter June of next year. Because of my income I have not been drawing my Social Securi- ty benefits; howev- er, my income will not be a tax issue in 2020 with my planned retirement. If I be- gin drawing my SS when I'm 68 next June, can I draw it retroactively to the first of the year at that rate? Or, beginning January 1, 2020, can I draw on my deceased wife's SS and then switch to my higher rate upon my birthdate in June? Signed: Exploring My Options Dear Exploring: Since you are eligible for both a survivor benefit from your wife and your own SS re- tirement benefit you have a choice of which one to choose and when to claim. You can choose the survi- vor benefit first and contin- ue to delay your own SS ben- efit, thus allowing your own benefit to continue to earn delayed retirement credits. You can delay until you are 70 years old or, depending upon your financial needs, you can claim your own benefit at any time, includ- ing June of next year. Your survivor benefit from your wife will be 100 percent of the benefit your wife was receiving (or entitled to re- ceive) at her death. You could have started that ben- efit when your wife passed, but it would have been re- duced if that was before you reached your full retirement age (66). Survivor benefits reach maximum at your full retirement age (FR A), and at FR A you get 100 percent of your deceased wife's SS benefit. You can restrict your application to your sur- vivor benefit if you choose to do so, and you can request up to six months in retroac- tive survivor benefits if you wish. By doing that, you are delaying the claim for your own benefit so it continues to grow in value. Since you have not yet claimed your own SS retire- ment benefit, you have al- ready been earn- ing Delayed Re- tirement Credits (DRCs) at a rate of 2/3rds of 1 per- cent per month past your FR A of 66. DRCs accu- mulate until you are 70 years old, when your monthly benefit would be 32 percent more than it would have been at your FR A and 16 percent more than it will be when you turn 68 in June 2020. If, instead of continuing to delay, you decide to claim your own SS benefit in June of next year, you can claim up to six months retroactive benefits, but doing so will move your effective claim date back six months and your monthly benefit amount will be permanently reduced by about 3.3 percent. So, to answer your two specific questions: yes, you can claim your SS retire- ment benefit in June 2020 and get six months retroac- tive benefits but your ben- efit will be reduced as ex- plained above. And yes, you can claim your survivor ben- efit from your deceased wife in January 2020 and then switch to your own SS retire- ment benefit in June. From a purely financial standpoint, the latter method would give you some extra money start- ing in January without re- ducing your own SS retire- ment benefit. And it would also give you the option of delaying your claim for your own benefits beyond June 2020 and continuing to earn DRCs until a later time, up to age 70 if you wish. Doing so would give you a substantial- ly higher SS retirement ben- efit for the rest of your life. But in either case, the SS benefits you collect will only become part of your taxable income if your "combined in- come" exceeds $25,000 (as- suming you file your income tax as "single"). Your "com- bined income" is your nor- mal Adjusted Gross Income (AGI) for income tax pur- poses, plus 50 percent of the SS benefits you received for the tax year, plus any non- taxable interest you may have. If your combined in- come exceeds $25,000 then up to 50 percent of the SS benefits you received in the tax year becomes part of your overall taxable income; if your combined income ex- ceeds $ 34,000 then up to 85 percent of your SS benefits becomes part of your tax- able income. Santa stops atv Otwell for breakfast and Christmas lists Above: Gracie Boger tells Santa what she wants for Christmas at the Otwell Community Center's Break- fast with Santa on Saturday. Above right: Hayden Chestnut was more than ea- ger to talk with Santa on Saturday. Right: Tristan Kinman teases his friend Kodee Miller with candy canes they got at the Otwell Break- fast with Santa.