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The Social Security 'Tax Torpedo'?

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    This is a new one on me. I spend a good bit of time keeping up with SS benefit news and info, and it can get pretty complicated quick. Just came across a CNBC article detailing the very real possibility of having to deal with what they dub the 'tax torpedo' for social security retirees.

    Basically, it has to do with how much the government CAN tax your SS benefits once you retire, depending on 2 factors: what age you retire and how much other income you are drawing.

    Surprise, surprise, if you retire at max retirement age, age 70, and if you are not making more than $25-32K a year in additional income, you will get hit the least. I think. Again, it's a bit confusing.. if you understand this, please chime in and clarify.

    But my understanding is that if you retirement early, or even at FRA (full retirement age) your benefits can fall under higher tax %s quickly. And it gets worse when you have other steady streams of earned income coming in.

    This honestly makes me annoyed and somewhat angry and dismayed to read. You pay into this mandatory retirement account all your working life. And on the backend, if you need the money early, and/or if you have managed to set up other solid income streams, they punish you for it. Is that about the take of it in your opinion? Or does this 'tax torpedo' make sense economically speaking?

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    I don't see a problem with taxing income people make outside of their Social Security paychecks, especially if they are given a $32,000 buffer.

    Take my in-laws as an example. They are both retired and held off on drawing their SS benefits until they reach full retirment age. My father-in-law turned 70 this year and began drawing his benefits because he basically had to.

    He and my mother-in-law have a handful of rental properties, which provides them a healthy amount of additional income. I'm sure he doesn't necessarily enjoy paying taxes on the income he and my mother-in-law receive from the renters of their properties, but he's never once complained or said he thinks paying taxes on that income is a punishment.

    The fact of the matter is that the vast majority of retirees are not making an additional $32,000 a year on top of their Social Security income and I don't really see a problem with individuals or couples paying taxes on the income above that threshold.


    My main issue with the Social Security age cap is that people are living longer and longer and therefore receiving their benefits for decades instead of years. The average person didn't even live long enough to benefit from Social Security when it was first passed, but now they are living longer than ever. Add in the fact that Baby Boomers are beginning to draw on their benefits and we have a recipe for disaster if drastic measures aren't made soon.

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    WHEN I worked for Social Security it was explained to us that the real reason (according to management at the time) we have a problem with being able to continue to pay benefits far into the future is simply because of ABORTION. If all those children who were aborted had instead been born we (according to management at the time) would have plenty of people working and paying into the system to cover all those applying for benefits TODAY!
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    Maronita1 Wrote: WHEN I worked for Social Security it was explained to us that the real reason (according to management at the time) we have a problem with being able to continue to pay benefits far into the future is simply because of ABORTION. If all those children who were aborted had instead been born we (according to management at the time) would have plenty of people working and paying into the system to cover all those applying for benefits TODAY!

    That is an absurd argument if it's true your management actually said that.