Comments on: Why and how to avoid income lumps http://www.savings-bond-advisor.com/why-and-how-to-avoid-income-lumps/ Fri, 12 Mar 2010 04:56:54 +0000 http://wordpress.org/?v=2.0.4 by: Tom Adams http://www.savings-bond-advisor.com/why-and-how-to-avoid-income-lumps/#comment-449 Tue, 20 Jun 2006 21:17:39 +0000 http://www.savings-bond-advisor.com/why-and-how-to-avoid-income-lumps/#comment-449 Charles - you are correct. In some cases your SS benefits will be reduced if you have wages or self-employment income over a certain amount. But as you now realize, this article is about something different - SS benefits being taxed (not reduced) when your income level rises above a certain amount. While working can cause this, too, so can moving money out of tax-deferred accounts. Looking at it the other way, moving money out of tax-deferred accounts will never reduce your benefit, but above certain levels it causes your benefits to be taxed. Charles - you are correct. In some cases your SS benefits will be reduced if you have wages or self-employment income over a certain amount.

But as you now realize, this article is about something different - SS benefits being taxed (not reduced) when your income level rises above a certain amount. While working can cause this, too, so can moving money out of tax-deferred accounts.

Looking at it the other way, moving money out of tax-deferred accounts will never reduce your benefit, but above certain levels it causes your benefits to be taxed.

]]> by: Charles http://www.savings-bond-advisor.com/why-and-how-to-avoid-income-lumps/#comment-445 Tue, 20 Jun 2006 19:44:08 +0000 http://www.savings-bond-advisor.com/why-and-how-to-avoid-income-lumps/#comment-445 Never mind, I did read it wrong. I had reduction in SS benefits on my mind. Which is something else you can add to the illusion of SS on top of taxes. Never mind, I did read it wrong. I had reduction in SS benefits on my mind. Which is something else you can add to the illusion of SS on top of taxes.

]]> by: Charles http://www.savings-bond-advisor.com/why-and-how-to-avoid-income-lumps/#comment-444 Tue, 20 Jun 2006 19:31:51 +0000 http://www.savings-bond-advisor.com/why-and-how-to-avoid-income-lumps/#comment-444 Hi Tom, According to the Social Security page at http://www.ssa.gov/pubs/10069.html, there is no reduction of benefits on interest earnings, which I assume Savings Bonds would fall under - unless I am reading it wrong, which isnt very difficult to do on a govt web site :) Also the earning limit looks off. Am I missing something? i.e. <b>If you work for someone else, only your wages count toward Social Security?s earnings limits. If you are self-employed, we count only your net earnings from self-employment. We do not count income such as other government benefits, investment earnings, interest, pensions, annuities and capital gains.</b> Hi Tom,
According to the Social Security page at http://www.ssa.gov/pubs/10069.html, there is no reduction of benefits on interest earnings, which I assume Savings Bonds would fall under - unless I am reading it wrong, which isnt very difficult to do on a govt web site :)

Also the earning limit looks off. Am I missing something?

i.e. If you work for someone else, only your wages count toward Social Security?s earnings limits. If you are self-employed, we count only your net earnings from self-employment. We do not count income such as other government benefits, investment earnings, interest, pensions, annuities and capital gains.

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