Letter to the Editor
and Outs of Social Security
SEPTEMBER 2006 - Editor’s
note: The article “Retirement at 62: Is Receiving
Social Security Early Worth It?,” by Thomas M Dalton
(The CPA Journal, June 2006), generated a greater number
of responses from readers than any other article in recent
history. Some readers appreciated the focus on a topic that
was personally very important to them. Others disagreed
with the author’s conclusions, or described different
outcomes based upon varying individual circumstances. The
editors forwarded readers’ comments and inquires to
the author, Thomas Dalton, who responded to two of them.
Social Security affects the spouse
Dalton’s article did not consider the effect of the
decision on when to start receiving Social Security on an
individual’s spouse. The spouse’s age and life
expectancy would impact the decision (i.e., it impacts the
benefits that would go to the spouse upon the death of the
B. Caspari, CPA (Retired)
but I disagree with the article. I attended a seminar in
November 2004. One speaker was Michael Saglinbeni, who started
working at the Social Security Administration in 1966 and
is still working as a supervisor. He stated that it takes,
on average, 14 years to collect Social Security benefits
when starting at age 65 that would equal the money collected
if you started collecting at age 62. So collecting early
article says that there is a one-dollar deduction for every
two dollars earned. This old rule is no longer valid; it
was changed during the Clinton administration. There are
no longer reductions in Social Security payments for money
earned from employment while collecting Social Security.
Although the Social Security payments become up to 85% taxable,
it is still more money in your wallet.
S. Kahn, CPA
Rego Park, N.Y.
effect on a spouse regarding the decision of when to begin
Social Security benefits is an important point. My calculations
consider only one person, not a husband and wife together.
When a spouse is involved, the choice becomes more complicated
and requires a more sophisticated analysis. I appreciate
the insight offered by the readers’ comments.
Saglinbeni’s estimate (that it would take 14 years
of collecting Social Security beginning at age 65 to equal
the benefits one would receive if benefits began at age
62) is consistent with my analysis in the article. I estimated
that it would take 14 to 15 years to reach equality if the
normal retirement age is 66 (i.e., 81 years less 66 years).
Certain assumptions (such as COLAs), however, can significantly
influence this estimate.
the reduction in benefits for working and collecting Social
Security was modified in the Clinton administration, it
was not eliminated. The rule still applies to all who receive
benefits before their normal retirement age. The rule is
correct as stated in the article.
M Dalton, PhD, CPA
University of San Diego, San Diego, Calif.
Online Reader Says ‘Thank You’
am an attorney and an investor, with just enough math and
spreadsheet ability to talk coherently (I think) to my accountant.
For the past week, I’ve been teaching myself about
IRC sections 1031 [regarding like-kind exchanges] and 121
[regarding the exclusion of gain on the disposition of a
principal residence] for investment purposes. Four of the
six articles that have been most useful to me have come
from The CPA Journal website [www.cpaj.com]. Thank
you for being here and for sharing your work with the general
River Forest, Ill.