Early Retirement

Study #258 - Does It Pay to Work?

What is the economic reward for working? The answer is surprisingly complicated. Going to work, earning a living, and spending one's earnings over time raises a variety of taxes and government benefits and lowers a variety of taxes and benefits - and not just in the current year, but in all future years as well.

If you save and invest some of you current earnings and spend the proceeds in the future, you'll raise your future capital income taxes as well as consumption taxes. You'll also limit your ability to qualify for the receipt of future income- and asset-tested government tax credits and welfare benefits. Earning more today will also affect the calculation of your future Social Security benefits as well as the federal income tax assessed on those benefits.