Sometimes one learns things through a series of accidents.
For instance, I had been thinking lately, after spending so much money on cataract surgery, that I should take some funds from what little I have left in my 401K account. This started out at about 70,000, but since I retired early at 55, this fund was pretty much our sole source of income over a period of about seven years, until I turned 62 and began to collect Social Security.
Well around the same time, I happened to click on an episode of the Judge Mathis show, which had appeared for some reason in my YouTube recommendations feed. Why it would appear there, I do not know, for I watch almost without exception American news broadcasts on YouTube.
What I learned from this Judge Mathis episode was that if "extra" money appears in one's bank account, Social Security interprets this as meaning that you don't need your Social Security check for the month. Clearly, you are independently wealthy. In the particular episode, a woman had deposited a lottery winning of $5000, only to be informed that she needed to repay her SSA benefit for that month. In other words, she had won nothing at all.
So, I realized that if I were to transfer money from the 401K to my bank, this would merely cancel the Social Security benefits. In other words, the money I have left in my retirement fund, accrued over a lifetime of labor, is useless to me. In fact, I had intended to leave this money to my son upon my death, but my son beat me to it. Moreover, since he himself was on Social Security Disability, the money I left would have been worthless to him as well.
So I am thinking now of 'gifting' the money to someone else. Someone ought to be able to use it, right? But that in itself could be a tricky proposition, especially considering that nearly everyone I know is in Indonesia and using Indonesian bank accounts.
It's a kerfuffle.
Any lawyers out there interested in giving free advice?
For instance, I had been thinking lately, after spending so much money on cataract surgery, that I should take some funds from what little I have left in my 401K account. This started out at about 70,000, but since I retired early at 55, this fund was pretty much our sole source of income over a period of about seven years, until I turned 62 and began to collect Social Security.
Well around the same time, I happened to click on an episode of the Judge Mathis show, which had appeared for some reason in my YouTube recommendations feed. Why it would appear there, I do not know, for I watch almost without exception American news broadcasts on YouTube.
What I learned from this Judge Mathis episode was that if "extra" money appears in one's bank account, Social Security interprets this as meaning that you don't need your Social Security check for the month. Clearly, you are independently wealthy. In the particular episode, a woman had deposited a lottery winning of $5000, only to be informed that she needed to repay her SSA benefit for that month. In other words, she had won nothing at all.
So, I realized that if I were to transfer money from the 401K to my bank, this would merely cancel the Social Security benefits. In other words, the money I have left in my retirement fund, accrued over a lifetime of labor, is useless to me. In fact, I had intended to leave this money to my son upon my death, but my son beat me to it. Moreover, since he himself was on Social Security Disability, the money I left would have been worthless to him as well.
So I am thinking now of 'gifting' the money to someone else. Someone ought to be able to use it, right? But that in itself could be a tricky proposition, especially considering that nearly everyone I know is in Indonesia and using Indonesian bank accounts.
It's a kerfuffle.
Any lawyers out there interested in giving free advice?
2 comments:
Not so. 401k withdrawals are taxable as income, but treated differently than earned income. If you work and acquire income from a job, it can be deducted from your SS benefit on a formula basis. But withdrawals from savings are not treated in that manner and do not count against your SS benefit. Perhaps lotto winnings are treated as earned income - don’t know never been lucky.
Anonymous: Oh! Thank you for the information. A relief to know this.
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