I am 65 years old. I want to draw Social Security at 66 and continue working full time - and reduce salary into 401k to offset the tax implications.

What is the best way to do this?

Asked by Jim

3 Answers

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Answered by Michael Hoffman, RFC, CLU, ChFCPRO+ in Grass Valley, CA
Jim,
You may want to defer taking Social Security until later (age 70) if you do not need the income now. Your benefits will increase by as much as 25%. In addition, it sounds as if you are eligible to defer income into a 401k through your employer. Assuming so the new limits are up to $24,000 for 2015 over age 50.

To really give you a good answer it is best to have the complete picture, if your retirement income exceeds your current income it may alter this advice. | 12.04.14 @ 21:07
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$commenter.renderDisplayableName() — {comment} | 12.05.16 @ 04:51
Answered by Rafael Rios, II in Diamond Bar, CA
Keep in mind that what you put into your 401k is only deferred. You WILL pay taxes (and maybe at a higher rate than today) in the future. You will also be forced to take taxable withdraws from your 401k at the age of 70 1/2. You should consider seeking help from a financial professional who can help you create a strategy that is best for you. Feel free to contact me if you have any questions. | 07.08.15 @ 00:51
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$commenter.renderDisplayableName() — {comment} | 12.05.16 @ 04:51
Answered by James Biasotti, Financial Adviser in Roseville, CA
Jim,

That's a good strategy, but other things to consider- are you married? If you are there are other Social Security planning opportunities to consider and quickly, if you will be age 66 before April 30th 2016. You can also file and suspend if you are 66 before April 30th 2016. This will enable you to defer taking Social Security until later up to age 70 (your benefits will increase by as much as 25%) if you do not need the income now, but also this allows a qualified spouse to file a restricted application for 1/2 of your benefit at her Full Retirement Agency.

In addition as was said previously most advisers can not give you a best recommendation without a complete picture of your finances and retirement goals & needs. | 11.19.15 @ 21:02
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$commenter.renderDisplayableName() — {comment} | 12.05.16 @ 04:51
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