When Work Doesn't Pay For The Middle Class
Posted: Fri Sep 04, 2020 7:18 pm
When Work Doesn't Pay For The Middle Class
https://www.forbes.com/forbes/2009/1005 ... 6357e26ca9
We are all familiar with the dilemma of the those on the lower income end. And, trying to set proper policy. How when they do work, they get a lot of their benefits taken away so that they are not that economically much better off by having a job.
The above article does an excellent job pointing out a similar dilemma for some in the middle class.
Have more income and the following can result:
1) Higher tax bracket
2) Lose tax credits due to exceeding Adjusted Gross Income limits
3) Lose college financial aid
4) Have increased child care expenses
I, myself, was facing something similar next year (2021). I could no longer NOT collect Social Security. Plus, prior to the passage of the SECURE Act, I was going to have to start taking the Required Minimum Distributions. The combination of the two of them was going to be a fair amount of increased taxable income to me.
It made me question whether or not I wanted to continue working in 2021. Doing so would cause more of my Social Security income to be taxed. Therefore, I looked at that as really being an additional tax on my income from working.
Now, for me, there may no longer be an issue.
As mentioned above, The Secure Act moved the Requirement Minimum Distribution age from 70 1/2 to 72. That gives me two more years before they start (2023).
And, in mid-May I decided that the balance on my job (good versus bad) was tiling bad so I decided to leave it.
I stopped being an employee the first week of July and transitioned to a consultant, a role which I will have until at least the end of next month.
I am NOT retiring. Just taking a break from work. For far too many years I've worked way too many hours for income I did not need. Just being super conscientious to various organizations / individuals who were dependent upon me.
I will definitely not be taking on any kind of regular work with all the deadlines that come with them. At this point I have no plans on looking for any more work. But if the right thing comes along that fits into my new lifestyle I would strongly consider it.
Right now my main priority is dealing with things in my personal life that have been neglected for decades due to working too many hours.
Vinny
https://www.forbes.com/forbes/2009/1005 ... 6357e26ca9
We are all familiar with the dilemma of the those on the lower income end. And, trying to set proper policy. How when they do work, they get a lot of their benefits taken away so that they are not that economically much better off by having a job.
The above article does an excellent job pointing out a similar dilemma for some in the middle class.
Have more income and the following can result:
1) Higher tax bracket
2) Lose tax credits due to exceeding Adjusted Gross Income limits
3) Lose college financial aid
4) Have increased child care expenses
I, myself, was facing something similar next year (2021). I could no longer NOT collect Social Security. Plus, prior to the passage of the SECURE Act, I was going to have to start taking the Required Minimum Distributions. The combination of the two of them was going to be a fair amount of increased taxable income to me.
It made me question whether or not I wanted to continue working in 2021. Doing so would cause more of my Social Security income to be taxed. Therefore, I looked at that as really being an additional tax on my income from working.
Now, for me, there may no longer be an issue.
As mentioned above, The Secure Act moved the Requirement Minimum Distribution age from 70 1/2 to 72. That gives me two more years before they start (2023).
And, in mid-May I decided that the balance on my job (good versus bad) was tiling bad so I decided to leave it.
I stopped being an employee the first week of July and transitioned to a consultant, a role which I will have until at least the end of next month.
I am NOT retiring. Just taking a break from work. For far too many years I've worked way too many hours for income I did not need. Just being super conscientious to various organizations / individuals who were dependent upon me.
I will definitely not be taking on any kind of regular work with all the deadlines that come with them. At this point I have no plans on looking for any more work. But if the right thing comes along that fits into my new lifestyle I would strongly consider it.
Right now my main priority is dealing with things in my personal life that have been neglected for decades due to working too many hours.
Vinny
