My dad is 63 (birthday in August) Gross annual salary is $67,500
He will get $2100 mo. from ss at 64
He will get $2500 mo. from ss at 66 1/2
He will get an additional $1000 (50% of benefits) because he has a minor child who is 10.
He will also get $1500 mo. from a pension starting at 65
AND if he retires from his job at 65 but does NOT take social security his job will give him a pre social security benefit of 500 a month.
I've convinced him to take social security no later than 65 because if he keeps waiting he's losing the 10 year old benefits.
Now he wants to know if it makes sense to take social security at 64 and keep working until 65.
He knows the tax penalties are 50%.
But! If I understand correctly he will get the tax penalties back at 66 1/2. He is curious about this, he sees it like a savings plan. Start taking social security at 64, not see any of it and then get a huge windfall at 66 1/2.
I am understanding all this correctly? I told him this is overly complicated. He says he's going to talk to a tax lawyer about it.