Monthly Social Security benefits

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.

$$ If you retire at age $62,$ benefits of $70\%$ to

$80$

$\%$ of yourfull retirement benefits $.$

$$ If you retire at age $65$ to $67,$ receipt ofyour full retirement benefits $.$

$$ If you delay retirement until age $70,$ you can receive an increase in your benefits.

Range of Benefits

Antonio, 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\mathrm{.}50.$ Assume that the benefit is the same for this year and the next year.

Hint: Use the $2018$ annual income limit of $$17,040$ when computing the annual reduction benefit.

Compute Antonio$$s annual benefit reduction amounts in each of the following scenarios.

$$ If Antonio retires this year and secures a part$-$time job earning $$18,000,$ his annual benefit reduction amount is

$

$.$

$$ If Antonio retires this year, secures the same part$-$time job, and in addition projects interest and dividend earnings of $$7,000$ per year, what his annual benefit reduction amount is

$

$.$

$$ If Antonio retires next year and secures the same part$-$time job, the annual benefit reduction amount is

$

$.$

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 Dmitri is retiring this year at age $67.$ The following table shows his data.

Part$-$time salary $$31,500$ Annual savings account interest $$275$

Annual dividends $$2,500$ Annual interest on Denver municipal bonds $$1,350$

Based on the income calculated, Dmitri will have

$\%$ of his Social Security benefits taxed.