How Will Working Affect Social Security Benefits?

How Will Working Affect Social Security Benefits?

In a recent survey, 70% of current workers stated they plan to work for pay after retiring.1
And that possibility raises an interesting question: how will working affect Social Security benefits?

The answer to that question requires an understanding of three key concepts: full retirement age, the earnings test, and taxable benefits.

Full Retirement Age

Most workers don’t face an “official” retirement date, according to the Social Security Administration. The Social Security program allows workers to start receiving benefits as soon as they reach age 62 – or to put off receiving benefits up until age 70.2

“Full retirement age” is the age at which individuals become eligible to receive 100% of their Social Security benefits. Individuals born in 1960 or later can receive 100% of their benefits at age 67.

Earnings Test

Starting Social Security benefits before reaching full retirement age brings into play the earnings test.

If a working individual starts receiving Social Security payments before full retirement age, the Social Security Administration will deduct $1 in benefits for each $2 that person earns above an annual limit. In 2022, the income limit is $19,560.2

During the year in which a worker reaches full retirement age, Social Security benefit reduction falls to $1 in benefits for every $3 in earnings. For 2022, the limit is $51,960 before the month the worker reaches full retirement age.2

For example, let’s assume a worker begins receiving Social Security benefits during the year he or she reaches full retirement age. In that year, before the month the worker reaches full retirement age, the worker earns $65,000. The Social Security benefit would be reduced as follows:

Earnings above the annual limit
$65,000 – $51,960 = 13,040

One-third excess
$13,040 ÷ 3 = $4,347

In this case, the worker’s annual Social Security benefit would have been reduced by $4,347 because they are continuing to work.

Taxable Benefits

Once you reach full retirement age, Social Security benefits will not be reduced no matter how much you earn. However, Social Security benefits are taxable.

For example, say you file a joint return, and you and your spouse are past the full retirement age. In the joint return, you report a combined income of between $32,000 and $44,000. You may have to pay income tax on as much as 50% of your benefits. If your combined income is more than $44,000, as much as 85% of your benefits may be subject to income taxes.2

There are many factors to consider when evaluating Social Security benefits. Understanding how working may affect total benefits can help you put together a strategy that allows you to make the most of all your retirement income sources – including Social Security.

How much would you pay for a more secure retirement?

How does zero dollars sound?

For a limited time, Crown Haven Wealth Advisors, Indiana’s most trusted fiduciary, is opening up spots for our free financial planning sessions.

We are happy to meet with you online or in our offices in Carmel. It costs you nothing to create a plan for a dependable future.  Click here to schedule a complimentary relationship visit or call (317) 564-4691 to speak with one of our specialists.

1., 2022
2., 2022

59 1/2: Why Is This Age So Important?

59 1/2: Why is this age so important? That age marks a turning point of sorts in your life—on a number of fronts. In particular, the Internal Revenue Service (IRS) allows you to make withdrawals from your retirement account without incurring a penalty. It has also been nearly a decade since you were granted the right to make “catch-up contributions” to your IRA.1 

In roughly 30 months, you’ll be eligible to claim Social Security benefits. You’re about 66 months away from Medicare eligibility. 

In this report, we explore your retirement choices, your healthcare concerns, and how to move vibrantly into those golden years. We also turn back the clock to take a quick look at how history may have shaped your outlook. Keep in mind that this


Some research suggests you should have at least $1 million in retirement savings to get you comfortably through a 30-year retirement.2 

Some retirement savers say there’s a 45% chance they expect to run out of money sometime during their retirement. In fact, 22% of baby boomers (those born between 1946 and 1964) report having less than $25,000 in retirement savings.3,4 

If your retirement savings are not quite up to par, the IRS provides a catch-up clause that applies to people over the age of 50.5

Older employees may exceed the IRS’s standard, elective deferral ($19,500 in 2020) to their employees’ workplace-based retirement savings plans. Elective deferrals are contributions to retirement plans by the employer at the employee’s request. Deferrals apply to 401(k)s, 401(b)s, and other retirement plans.6,7 

The catch-up amount for 2020 is $6,500 and applies to the following plans: 

  • 401(k)s 
  • 403(b)s 
  • 457s8 

Deferrals to retirement plans must exceed the standard $19,500 limit (2020) to be counted as catch-up contributions.8

You may make annual catch-up contributions if the amount is less than: 

  • The catch-up contribution dollar limit, or 
  • The excess of the participant’s compensation over the elective deferral contributions that are not catch-up contributions.8 

Catch-up contributions are $3,000 for Savings Incentive Match Plan for Employee Individual Retirement Account (SIMPLE IRA) plans. These plans are often used by small business owners.8

You may make $1,000 in catch-up contributions to your traditional or Roth IRA in 2020. To qualify for the tax-free and penalty-free withdrawal of earnings, Roth 401(k) distributions must meet a five-year.

holding requirement and occur after age 59½. Tax-free and penalty-free withdrawals can also be taken under certain other circumstances, such as result of the owner’s death. Employer match is pretax and not distributed tax-free during retirement.8 

Under the Setting Every Community Up for Retirement Enhancement (SECURE) Act, once you reach age 72, you must begin taking required minimum distributions from your 401(k), 403(b), 457(b), or other defined contribution plans in most circumstances. Withdrawals from your 401(k) or other defined

contribution plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty.9 Also, under the SECURE Act, once you reach age 72, you must begin taking required minimum distributions from a SIMPLE IRA in most circumstances. Withdrawals from SIMPLE IRAs and traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty.9

Getting Financial Guidance

You’re approaching a major turning point in your life. A financial professional can help you discover wise solutions and develop smart retirement strategies for a fulfilling and exciting future. We can help you analyze your financial situation to shape the life you envision.

We know now more than ever that people in the great state of Indiana need a financial advisor they can trust. To help, Crown Haven Wealth Advisors is offering a limited number of spots for our free financial planning sessions.

Our team is happy to meet with you online or in our offices in Carmel, IN. Stop stressing about money or how you will pay for the retirement you always wanted. You deserve a secure financial future. Click here to schedule a complimentary relationship visit or call (317) 564-4691 to speak with one of our specialists.

Note: Keep in mind that this article is for informational purposes only. It is not a replacement for real-life guidance. Also, tax rules are constantly changing, and there is no guarantee that the tax landscape will remain the same in the years ahead. Please consider working with a financial professional before implementing or modifying a retirement strategy.

Footnotes and disclosures:
Information current as of September 15, 2020.
Investing involves risk including the potential loss of principal.
No investment strategy can guarantee a profit or protect against loss
in periods of declining values.
These are the views of FMG Suite, and not necessarily those of the
named representative, Broker/Dealer or Registered Investment
Advisor, and should not be construed as investment advice. Neither
the named representative nor the named Broker/Dealer or Registered
Investment Advisor gives tax or legal advice. All information is
believed to be from reliable sources; however, we make no
representation as to its completeness or accuracy. Please consult
your financial professional for further information.


1., February 12, 2020
2., September 15, 2020
3., June 28, 2019
4., December 31, 2019
5., January 15, 2020
6., November 22, 2019
7., December 20, 2019
8., January 9, 2020
9., September 23, 2020

Estate Management Checklist

Estate Management Checklist

Estate Planning & Long-Term Healthcare are among the most ignored areas of financial planning, but they are some of the most important. This estate management checklist is a great starting point to create goals and outcomes for a successful outcome.

Do you have a will?

A will enables you to specify who you want to inherit your property and other assets. A will also enable you to name a guardian for your minor children.

Do you have healthcare documents in place?

Healthcare documents spell out your wishes for health care if you become unable to make medical decisions for yourself. They also authorize a person to make decisions on your behalf if that should prove necessary. These documents may include a living will, a power of attorney agreement, and a durable power of attorney agreement for healthcare.

Do you have financial documents in place?

Certain financial documents can outline your financial wishes. If you become unable to make decisions for yourself, these financial documents can be structured to empower a person to make decisions on your behalf. These documents may include joint ownership, durable power of attorney, and living trusts.

Have you filed beneficiary forms?

In some cases, naming a beneficiary for bank accounts and retirement plans makes these accounts “payable on death” to your beneficiaries. In other cases, you will need to fill out a “Payable on Death” form.

Do you have the right amount and type of life insurance?

When was the last time you assessed your life insurance coverage? Have you compared the life insurance benefit with your financial obligations? Keep in mind that several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

Have you taken steps to manage your federal estate tax?

If you and your spouse have more than $24.12 million in assets (for 2022), you may want to consider taking steps to manage federal estate taxes, which will be due at the second spouse’s death.1 In Indiana, we are fortunate that the State imposes no estate taxes. Every custom-tailored RetireSHIELD® includes an assessment of your possible liability and how to address it.

Have you taken steps to protect your business?

Do you have a succession plan? If you own a business with others, you may also want to consider a buyout agreement.

Have you created a letter of instruction?

A letter of instruction is a non-legal document that outlines your wishes. A strong, well-written letter may save your heirs time, effort, and expense as they administer your estate.

Will your heirs be able to locate your critical documents?

Your heirs may need access to the specific documents you have created to manage your estate. These documents may include:

  • Your will
  • Trust documents
  • Life insurance policies
  • Deeds to any real estate and certificates for stocks, bonds, annuities
  • Information on your financial accounts and safe deposit boxes
  • Information on your retirement plans
  • Information on any debts you have: credit cards, mortgages, and loans.

At Crown Haven, every RetireSHIELD® is designed so that both spouses are covered in the event of an untimely passing, ensuring that neither spouse ever sacrifices their standard of living or has to deal with additional financial stress during their time of grief and mourning.

Learn more about RetireSHIELD® plan and our Long-Term Healthcare and Estate Planning.

Crown Haven Wealth Advisors has a limited number of free financial planning sessions available.  We are happy to have the meeting with you in person in our offices in Carmel, Indiana, by Zoom or over the phone. You can schedule your complimentary appointment online or by calling 317-564-4691

Note: Power of attorney laws can vary from state to state. An estate strategy that includes trusts may involve a complex web of tax rules and regulations. Consider working with a knowledgeable estate management professional before implementing such strategies.

2022 Changes To Your Money

2022 brings new tax and saving changes that could impact your finances. Updates include standard deductions, retirement-plan contributions, estate, and gift tax changes are the federal government’s effort to the American people feel fewer effects of record-high inflation. Read below or watch Casey’s interview on WRTV Indianapolis to learn more about how you can make adjustments to maximize these changes.

  1. The IRS is changing and boosting tax brackets which is normal for them to do to combat inflation. This year it’s going from 1% in 2021 to 3% 2022 due to inflation indexing. The adjustment will reduce the amount of taxes deducted from paychecks and raise take-home pay.

    Standard Deduction
    $12,950 – Single
    $25,900 – Joint

    Tax rates on capital-gain and dividend taxable income
    0% Up to $41,675 (Single) / Up to $83,350 (Joint)
    15% $41,676 to $459,750 (Single) / $83,351 to $517,200 (Joint)
    20% $459,751 or more (Single) / $517,201 or more (Joint)
  2. The IRS is also changing the maximum amount taxpayers can contribute to their 401ks, increasing it by $1,000. he top tax-deductible contribution to a 401(k) for savers under age 50 will rise to $20,500 from $19,500 in 2021, about 5%. For non-qualified contributions to IRAs and Roth IRAs, the limit will remain $6,000 for people under age 50, due to rules preventing increases until there is a $1,000 increment. The income thresholds for these tax breaks will be higher for most taxpayers, however.

    Retirement-plan contribution limits
    – Traditional or Roth IRA $6,000, plus $1,000 for age 50 and older 401(k) or
    – Roth 401(k) $20,500, plus $6,500 for age 50 and older
    – SEP IRA or Solo 401(k) $61,000, plus $6,500 for age 50 and older, for Solo 401(k)
  3. Social security checks are increasing This is the biggest boost in 40 years on average, Social Security beneficiaries are seeing an extra $92 a month 

    Bonus Information
  4. Estate & Gift Tax changes
    Lifetime exemption – $12,060,000 per individual
    Annual exclusion $16,000

So a lot of things to be watching for. This is the beginning of some pretty high inflation, and I think this is going to continue for a while. Interest rates are responding, and they’re going up as well, so I think folks are going to have to get used to higher prices for a while.

Inflation and rising interest rates are causing millions of people to rethink their budgets or plans for retirement. Now more than ever, people in the great state of Indiana need a financial advisor they can trust. To help, Crown Haven Wealth Advisors is offering a limited number of spots for our free financial planning sessions.

Our team is happy to meet with you online or in our offices in Carmel, IN. Stop stressing about money or how you will pay for the retirement you always wanted. You deserve a secure financial future. Click here to schedule a complimentary relationship visit or call (317) 564-4691 to speak with one of our specialists.

Year-End 2021 Tax Advice

Year-End 2021 Tax Advice. Many of us don’t like paying taxes, and most everyone wants to save money. Our founder Casey Marx was just featured on Money Tips to prepare for the 2022 tax season WTHR 13 NBC Indianapolis telling everyone to start making tax moves right now because it can help increase our tax break before the end of the year.

You can start by making all of your charitable donations by December 31st. Any deductions for cash contributions must be made to qualified charitable organizations. Taxpayers who claim a standard deduction claim up to $300 $600 per tax return for those married filing jointly. Make sure you get and keep donations receipts for any contributions regardless of the amount.

Our next move to reduce your tax liability is to look at your retirement accounts like traditional IRAs or 401(k)s and convert these to Roth IRAs. You will pay taxes on those deferred tax savings now, but in retirement, you get the benefit of having tax-free income distributions in retirement.

We know a lot of people initially are afraid of paying the taxes upfront because nobody likes to pay taxes. When you look at this objectively, and you do that in a measured way, you’re then allowing your money to grow and it completely tax-free environment going forward. In retirement you are able to take those funds out tax-free later if you are retired age 72 or older.

Don’t forget about the required minimum distribution from your retirement accounts each year. If you don’t take that from your qualified account from your IRA or other qualified accounts, there’s a stiff penalty. It’s 50% of what it should be. As a side note that requirement was suspended in 2020 but activated for 2021.

If you are a homeowner, you can make an extra mortgage payment on December 31st, you may be able to claim that additional interest paid as a tax deduction in the tax year paid.

At Crown Haven Wealth Advisors we know part of a solid financial plan is proper tax preparation is to review your financial goals. If you want to experience the holistic way we approach financial planning with our RetireSHIELD® plan please feel free to schedule a complimentary appointment online. We can meet in-person or via zoom call.

Do Not Wait Until April 2022 To Start Thinking About Taxes

Don’t wait until April to start thinking about taxes. Now is the time to start planning for your 2022 taxes. There are several things you can do right now to give yourself a better chance to reduce your tax burden. Our founder Casey Marx spoke with WRTV to share investment and tax planning strategies to consider before December 31st

Tax Planning Move #1

Consider converting traditional IRAs and 401ks to tax-free accounts like a Roth IRA. We are currently in a low-tax environment, but we believe taxes are probably going to go up in the future. That’s one of the things that we really can’t control. You need to make moves now.

Right now you should consider converting traditional IRAs and 401ks to tax-free accounts like a Roth IRA. The downside is you are going to pay taxes when you convert these accounts. The huge benefit that outweighs this is that your money is going to be taxed free when you start to take the income in retirement. If you do it later you are going to be paying taxes when you convert that money and any gains.

Trust me… Taxes are a legislative risk and something you need to strategize around. Pay those taxes now when you convert these accounts instead of paying when you take it out in retirement.

Tax Planning Move #2

Another pre-tax move to make is a charitable donation. Those over age of 72 are required to make a minimum distribution so they can tax you.

If you make a qualified charitable donation, it can be a win-win situation. You can take the money out of the IRA and donate it to a nonprofit charity. This allows you to bypass the income taxes you typically incur for taking an income distribution. It saves you on taxes and will enable you to do something charitable with the money.

Now remember that money must go directly from your IRA to the charity to ensure that distribution does not count towards your taxable income for the new year.

Tax Planning Move #3

Get professional advice. The further head you think about your tax situation, the better chance you have at reducing your tax burden. Many tax rules follow the calendar year meaning you want to make any tax-saving moves before December 31st.

We invite you to schedule a complimentary consultation to review your tax planning, investment allocation, estate planning, and healthcare planning. Crown Haven manages all of these financial planning elements serving as your Fiduciary for our clients.