Monthly Benefits The Social Security Administration has a computerized service that determines your benefits because Social Security benefits are based on a fairly complicated formula. In fact, the government is required to provide all covered workers with a Social Security Statement. Identify the range of benefits you can expect. % of your If you retire at age 62, benefits of to . If you retire at age 65 to 67. receipt of . If you delay retirement until age 70, you can receive in your benefits. Range of Benefits Paolo, a 66 years old worker, is deciding between retirement either this year or the next year. His average monthly benefit is determined to be $1,089.50. Assume that the benefit is the same for this year and the next year. Compute Paolo's annual benefit reduction amounts in each of the following scenarios. If Paolo retires this year and secures a part-time job earning $18,000, his annual benefit reduction amount is S If Paolo retires this year, secures the same part-time job, and in addition projects interest and dividend earnings of $7,000 per year, what his annual benefit reduction amount is . If Paolo retires next year and secures the same part-time job, the annual benefit reduction amount is S. Taxes on Benefits Social Security is paid in with after-tax dollars but may be subject to tax if annual income exceeds a base amount. A single taxpayer's base is $25,000. Married taxpayers filing jointly have a base of $32,000 Married taxpayers filing separately have a base of zero. Suppose Van is retiring this year at age 67. The following table shows his data. $275 Part-time salary Annual dividends $31,500 $2,500 Annual savings account interest Annual interest on Denver municipal bonds $1,350 Based on the income calculated, Van will have % of his Social Security benefits taxed