Can anyone tell me if I can use deferred comp to offset the extra earnings penalty imposed by the social secur

Question

The social security office only allows $ 12,900 that you can earn annually if I take age 63 early ss benefits.they then will COLLECT FROM YOU $1 OF EVERY $2 OF EARNINGS above that. Can this PENALTY be offset with deferred comp contributions. neither the ss office, or my investment counselor can answer what should be a simple question .thank you for your answer

Answer 1

Wow. SS and your financial adviser can't answer it but you think a bunch of people on Yahoo can?

I think I'd probably ask a CPA before I'd accept an answer from people posting on here.

Answer 2

If I understand your question, you are asking if you can avoid going over the $12,900 limit (and begin losing SS benefits) by putting the extra salary over the $12.9K into defferred comp.

The quick answer is yes, so long as you (a) are allowed to put that amount into your deferred comp program, they are all different and (b) the program is a qualified program with pre-tax contributions.

Basically you need to have under 12.9K in W-2 income to avoid this penalty. If you contributed to the def comp plan last year, look at you W-2. If the def comp amounts were subtracted before getting to the gross wages amount, then your plan shoudl be qualified.

The question of how much you can put in should be known by your employer.plan sponsor.

I make no warranties as to the applicability of this advice.

Answer 3

yes you can do it go for it good luck