Hi Quilter, I'm glad you like to plan and run different scenarios because there is a lot Of variables deciding when to start SS. I became exposed to taxation and SS in 1996 when my Dad was ill and needed me to complete his taxes. He had the same income basically as my DH and I and paid a federal tax bill of $265 dollars while our tax bill was $4500. What an eye opener.

To answer your question Social Security is counted as income and in the 1040 booklet there is a worksheet entitled "Social security benefits worksheet-line 20a and 20b"

If you don't have a 1040 booklet you can get this from irs.gov. it is a little confusing at first but I will try to give you an example. There is plenty of information coming out now on maximizing social security for couples and holding till age 70 to collect but this creates a tax torpedo (meaning a huge tax bill) when combine with required minimum distributions from a 401k or tax deferred IRA. Say one of you qualified for the max in SS at 66 and the other one of you was going to take spousal at 50% so that would be roughly $45,000 and if you take it at 62 it would be reduce by 25% to $33750. A good amount for a frugal couple! but if you wait for four years you will forgo getting a total of $135,000 and you will need to get your expenses from savings and Pay taxes on your Roth conversion too, also reducing your stash. So plugging in the $33,750, is line 1 into the worksheet. One half of it, Line 2 would be $16875. I did the math behind getting a zero tax bill and you could do a Roth conversion of $18,400 on line three for a total of $35,275 on line 5. Line6 as zero. So line 7 would be also $35,275. subtract $32,000 from this and you have $3,275 left and this is less then the extra $12,000 as a married couple so one half of that rounded is $1638 and this is the amount of your social security that is taxable which would go on 1040 form, line20b. Add this to your $18,400 for a total of $20,038 which is slightly less then 2014 standard deduction and personal exemptions for a tax bill of zero. So the total income between the SS $33750and $18,400 is $52,150. If like you said your only other taxable money is the Roth conversions using the social security worksheet you could pay zero taxes total on Social Security and a Roth conversion of $18,400. If you want to you could increase the Roth conversion up to $27,125 and still be only in the 10% tax bracket and pay roughly $1382 total federal tax bill if you use the standard deductions. So by the time you got to age 70 the $1382 or less taxes per year alternative would have a Roth balance of more then $217,000 and choosing the zero tax scenario you would have a balance of $147,000 plus earnings. Any of these earnings and the contributions per each can be touch on Jan 1 of the fifth year after the individual contribution. Any 2014 conversion on Jan 1, 2019 tax free,2015 conversion on Jan 1, 2020,etc. See Ed Slott site for further details on this.

I don't know how large your tax deferred 401k or IRA is but the next step is to find out what the minimum distributions will be when you turn 70 1/2 and beyond. I use Fidelity's minimum required distribution calculator and put your birthday year as 1944 and your current balance. Look at all of the yearly projections usually maxes out in your late eighties. I use 4%,5%, 6% as my assume rate of return to get different charts or plug in your ten year average if you want to be more accurate. You can then compare the yearly figures to the two figures of $18,400and $27,125 to see if you will be taking enough out before you reach 70 1/2 to eliminate the huge tax bill that comes when you have to take required distributions. The huge tax bill comes because 85% of your SS becomes taxable and this is added onto the RMD pushing you into a much higher tax bracket. I found after doing all the figures I was way ahead taking SS early and the Roth conversions. I hope this helps you. Sincerely, Neva More as in neva more will I have to work!