I respectfully disagree for one reason, there is a rule based on "earned (wages)" vs "unearned (investment)" income while receiving early SS/SDI/SSI that can affect your SS payments until full retirement age, what ever it is, that can appear to be a kind of tax/penalty too. This turns out to be a Federal SS administration rule not a Federal IRS rule even though both are based on income reported to the Federal government, which is what caused my confusion until I figured it out. Since I only had "unearned" investment income until full retirement age, I was not effected. But someone that needs to supplement their SS to make ends meet can suffer this ding or penalty based on Reported "earned" (wages) income.
Now this is apparently in addition to paying taxes on SS payments actually received if you exceed an established limit to included all sources of income including SS too and therefore can be responsible for increasing your entire tax bracket on all taxable income no doubt. So SS payments can result in decreasing your over all net income. Something people should understand well when planning for retirement.
The thing is both scenarios are based on Federally reported incomes, albeit one is a Federal SS rule and the other is an Federal IRS rule, but still is based reported incomes and can cause confusion as it did for me.
I hope this helps someone else understand the differences on both these Federal income related issues surrounding SS.
This had been difficult to understand as these two separate government rules whether a tax or reduced monthly payments can ultimately reduce your bottom line unless you are low income.
