Retirement in Sight – October 2016

Do You Understand the Social Security “Earnings Penalty”?

Most baby boomers know that their Social Security benefits can be reduced if they earn too much in retirement. While 76% of baby boomer respondents to a 2015 AARP survey understood this fact, 57% also thought they would never recoup those surrendered benefits. That is incorrect.

Social Security’s “earnings test” only applies before you reach Full Retirement Age (66-67 years old, depending on your birthdate). If you receive Social Security benefits before your FRA, your benefits will be reduced by $1 for every $2 in wage income or self-employment income you earn above a $15,720 yearly threshold. During the 12 months prior to your FRA, you can earn up to $41,880 without any of your benefits being withheld; $1 of your benefits will be held back for every $3 you earn above that amount.

If some of your benefits are withheld as a consequence of all this, Social Security will try and make it up to you. After your FRA, your monthly Social Security payment will grow slightly larger; any benefits withheld will gradually be paid out to you, and you will no longer face the “earnings test.”1

Could Exercise Keep Our Minds Sharper?

Perhaps it can. In a study published this spring in Neurology (the American Academy of Neurology’s monthly journal), a team of researchers from Columbia University, the University of Miami, and other institutions concluded that “moderate to intense exercise” may delay mental aging by as much as ten years. Even when controlling for other aging influences, such as alcohol consumption, obesity, high blood pressure and smoking, exercise clearly made a difference in subjects retaining memory and critical thinking skills.

The average age of the 900 study participants was 71 when the study began, and the researchers tracked them over 12 years. They received brain MRIs an average of seven years into the study, plus tests of their memory and mental abilities; five years later, the tests were given again. Just 10% of the subjects were categorized as participating in intense aerobic exercise, such as running; 90% engaged in light exercise such as yoga or walking. Whether you like to work out or simply walk about, exercise seems to have real mental benefits; in addition, it often costs little or nothing.2


 According to the Census Bureau, the poverty rate among seniors fell to 8.8% in 2015. That was a near historic low.3

Kent Butcher may be reached at 918-747-5585 or


This material was adapted from MarketingPro, Inc. content and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

1 – [10/7/16]

2 – [3/23/16]

3 – [9/13/16]