Interesting post today over at Home Biz Notes called More Enlightenment on Social Security for the Home Business Owner.
I have always been of the mindset that I would never see my own Social Security benefits. I certainly don’t think we should have this be our only safety net for retirement. If there is one disadvantage to being a home office based business, it is the fact we have to do the double whammy withholding for SS.
Categories: Retirement
February 1, 2008
4 Comments
I’m pleased you found my posts about Social Security at Home Biz Notes of interest. This definitely is a topic that requires much thought and planning.
True, the disadvantage of what is known as the “self-employment tax” (essentially paying both halves of the 15%+ of withholding - half of which is paid by employers in the non-home business workplace) is only exacerbated by the realization that by the time I’m in my 60s, the Federal Government will have boosted the retirements/benefits age to 70 or so. And even by that time, the cupboard will be bare and I’ll be living with my kids (so THAT’s why I treat them so kindly today ;-).
But in all seriousness, for about the past 10-12 years, I’ve had money directly withdrawn from my business checking account and deposited into my SEP IRA. It’s tax deductable today, and funds my peace of mind for tomorrow. I/we cannot rely on Uncle Sam to provide for me/us. The only people we home officers can rely upon are ourselves. Isn’t that why we started working from home in the first place…?
Grant, I wrote a lengthy post last month on the effect of Baby Boomer retirements on Social Security benefits. You can see it at http://www.pissd.com/2008/01/baby-boomer-ret.html. It might make you feel a little better about receiving your Social Security retirement benefits, but worse about getting Medicare.
Bob Kraft
Grant, you’re probably okay for Social Security. From what I can see, most of the Boomers will probably keep working as long as they can. That’s one of the things about our dynamic economy - it allows rapid adaptation. But make sure that your kids plan early - I’m not sure that there will be any safety net for them.