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Benifits

If in looking at my yearly statement it says @ age 62 your benifits would be $1450 and I am beyond that age ,when I actually speak to a rep on the phone after giving all that long drawn out info I am told it is only $1170.I know that first number is based on some assumptions but the difference of approx $400 seems out of line.It is very decieving and it maks it very tough to plan anything out if I can not believe what is written on the statement.
If the max you can earn is approximately $14000 a year while collecting benifits and you work and earn more than that amount your benifit is reduced by $1 for every $2 you earn.Is it permissabled to work and make say $50,000 a year ,sock 50% in a qualified 401 therefore reducing your taxable income to $25,000 and then use the above formular of $1 for every $2 earned over the $14,000 .In this case your benifit would only be affected by the $11,000 which woyuld alloew a person to build their 401 at the same time.

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Note the following quote from ssa.gov :

Wages for Social Security purposes are gross wages - wages before any payroll deductions for income tax, Social Security tax, dues, insurance, or other deductions by the employer. We use gross wages as the basis for Social Security credit and for determining whether benefits must be withheld because of earnings.

I read this to say that one can not reduce his earned income for purposes of the Social Security earnings limit test by saving in a 401k or similar plan.

http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/277

Are withdrawals from annuities considered as income when figuring the SS earnings limit test?


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