Early retirement and working after and your taxes

[moneysense]

Taking an early retirement can seem like a great idea to a lot of people but there can be problems in doing that if you plan on working after your retirement.

If you retire early you get a lesser amount of social security but your will collect it longer, and if you retire at the normal time, you will get more money, but because of your age, you will collect fewer checks in the long run.

Taking Social Security early means you may have to pay some back. If you have income from investments, you will be just fine and not have to pay anything back but, if you decide that the Social Security payment isnt enough for you to live on, and you can only make around $13,500 a year on a job, you will end up paying taxes on anything above the $13,500 that you earn per year.

When you retire is another issue, if you are working and plan on retiring in the middle of the year, you may also end up paying taxes on the wages you made over the $13,500.

It is therefore better to retire at the end of the year, that will make your first check arrive in the new year.

Tax implications as far as early retirement is concerned are as follows: if your income from work and half the amount you have recieved in Social Security benefits is under $25,000 for singles, and $32,00 for married couples, you wont owe any taxes.