Clear solutions in a complex world®
Russell G. Lowry
CFP®, CRPC®
Wealth Planning Advisor
Sagemark Consulting
100 Northfield Drive
Suite 200
Windsor, CT 06095

ph: 860.298.1800
fax: 860.298.1812
toll free: 888.921.8455

russell.lowry@lfg.com
Limits on Social Security Income
If you are collecting Social Security benefits and are still working, there are two factors that may be working against you. The first factor you must consider is the so-called Social Security "give-back." If you are age 62 or older, under the full retirement age (65 - 67 depending on your birth year), and receiving reduced Social Security benefits, you must "give back" $1 for every $2 earned above $13,560 in 2008. If you attain full retirement age in 2008, your benefits would be reduced by $1 for each $3 earned over $36,120. Upon attainment of full retirement age, you may earn as much as you like and Social Security benefits are not reduced.

The second factor is the potential taxability of Social Security benefits. Individuals with higher levels of earned income (including tax-exempt interest) might have to pay regular income taxes on as much as 50% to 85% of their Social Security benefits. Again, the taxable amount depends largely on actual benefits received, your tax filing status, and your adjusted gross income (AGI) with certain additions. It is important to consult a qualified tax professional for specific details, especially if you want to - or must - continue working for the extra income.

Copyright © 2008 -- Liberty Publishing, Inc. All rights reserved.

Life Goals: Financial Essentials For Your 40s

Here are several financial steps you may want to consider taking right now:


1. Diversify investments.

Expand your investment options to provide a mix of higher-return and more secure investments according to your plans for retirement.

2. Develop an estate plan.

A plan for your property and assets will ensure that more of the earnings you've accumulated will go to your children or beneficiaries.

3. Review your Will.

Changes in your family or other circumstances make it important to regularly review your plans for your property and your medical care.

4. Re-evaluate insurance needs.

Review your coverage for auto, life, universal liability and disability insurance. Can you save money by choosing a higher deductible?

5. Analyze employer benefits.

Make sure that you're using your benefits to the best advantage, including retirement plans, insurance, health coverage and even group discounts.

6. Review business agreements and transfer plans.

If you have a business, you need to plan for a fair and predictable transfer of your business should you die or wish to move on.

7. Continue to build education funds.

Anticipate the cost of higher education for your children and evaluate your plans for building a fund to pay for their education.

8. Investigate a trust.

Planning now to establish trusts for your children or loved ones can be an excellent way to pass along their inheritance with less of a tax burden.