For people who want to work while collecting Social Security, the “retirement earnings test” (RET) rules can be confusing. Some people think they’ll lose out on benefits if they continue to work, but that’s not true.
Most importantly, RET rules only apply if you work and receive Social Security benefits before reaching full retirement age. Any income you earn after reaching full retirement age does not affect your benefit.
If you are under full retirement age, you’ll see a $1 deduction in benefits for every $2 in gross wages or net self-employment income above the annual exempt amount ($18,960 in 2021).
That might seem like a big penalty, but you don’t really lose those deductions. Instead, your Social Security benefits will be recalculated when you reach full retirement age to account for the previous withholding.
For example, if your deductions, added up, equal six months of lost benefits, Social Security will basically reset as if you filed six months later than you actually did. In the year you retire, a monthly limit (instead of annual) will apply. That limit is $1,580 per month in 2021 unless you are self-employed, in which case different calculations apply.
One critical note: If you are working, you need to notify the Social Security Administration (SSA) if your wages will exceed the annual exemption amount. If you don’t, and you receive excess benefits, you could be fined, required to return the excess, or receive lower future payments.
Similarly, if you update your expected income and the SSA determines your earnings are on pace to exceed the annual exemption, you may see a temporary stoppage of benefits. For example, if your monthly benefit is $1,800, and the SSA determines your annual benefits will need to be reduced by $3,600, you could go two full months without payment before they resume.
The Sensible Taxation and Equity Promotion (STEP) Act would get rid of what’s known as the step-up in basis to tax the unrealized gains of certain estates at death.
Step-up in basis refers to the way the value of an asset is readjusted for tax purposes upon inheritance.
Telecommuting is the new normal for many employers who never would have considered such an arrangement in the past.
Employers with out-of-state remote workers should consult with a lawyer to discuss associated legal risks and develop policies to address them
The Setting Every Community Up for Retirement Enhancement (SECURE) Act, which passed in late 2019, was only the start of changes for the retirement industry. A bipartisan bill, which has been nicknamed “SECURE Act 2.0,” is in the works.
A new federal law targets wealthy buyers who purchase high-priced homes and commercial properties through anonymous shell companies. The law is designed to combat money laundering and stop the flow of illicit money into U.S. real estate.
If you are in a committed relationship but are not married to your partner, estate planning is essential. Unless you each draft a will and designate the other person as a beneficiary, your assets will pass to other family members and your partner will receive nothing when you die. Further, without proper planning you won’t
When setting up a will and other estate planning documents, many clients are concerned about making the most efficient use of their attorney’s time. While these meetings are bound to raise some questions you hadn’t thought of, there are things you can do to prepare.
The more thought you put into certain goals and wishes (including those below), the easier it is for your attorney to create a set of documents that reflects your intentions.