Social security discussion

[kamik86]

One other thing that might be an option to change is how spousal benefits work. My mom was able to take her benefits at 62 and then when Dad retired at 65 (they are the same age) switch to calculating off his benefits (he worked mroe years and made much more).

Now this will suck for us since my husband is older then I am and if this didn't change could do the same thing. Retire first on his money then change to get the spousal part of what I paid in when I reach retirement age, since I make way more then he does.

However why should they pay out twice on what one person makes? If someone was a SAHP for years they lived on one salary, paid in on one salary, so they get benefits on one salary. I don't think both spouses should be able to collect off the same salary at the same time. (I realize the idea behind spousal benefits was for the stay at home mom whose husband died at age 60 so they would still get something, and that should stay, just not both collecting together)

 

[mnrose]

It is fair because the cap is there for everyone and everyone has the chance to increase their income to exceed that cap. Hopefully that 80k salary will increase over the years for that person. To me fair means presenting the same opportunity or rules for everyone.

I see both sides. I've been on the upside of the cap, and I've been on the downside of the cap. I honestly never noticed much of a difference when I hit the cap in my paycheck. It just wasn't enough to really register as a difference in my lifestyle. To a person making 1000000, a few hundred more per week is pretty insignificant. Is it an "insignificant" amount in abstract? No. But, to a person making huge dollars, nope. No big deal at all. And, that's how I thought about it.

 

[mnrose]

One other thing that might be an option to change is how spousal benefits work. My mom was able to take her benefits at 62 and then when Dad retired at 65 (they are the same age) switch to calculating off his benefits (he worked mroe years and made much more).

Now this will suck for us since my husband is older then I am and if this didn't change could do the same thing. Retire first on his money then change to get the spousal part of what I paid in when I reach retirement age, since I make way more then he does.

However why should they pay out twice on what one person makes? If someone was a SAHP for years they lived on one salary, paid in on one salary, so they get benefits on one salary. I don't think both spouses should be able to collect off the same salary at the same time. (I realize the idea behind spousal benefits was for the stay at home mom whose husband died at age 60 so they would still get something, and that should stay, just not both collecting together)

I think they've changed this just recently. They are gradually closing these loopholes...like the one where you could collect your lesser amount age 62, and then "reset" to the higher amount when you reach age 70 simply by paying back what you "collected" from age 62-70. That was a really cool little loophole that allowed people with assets to collect "just in case" they passed before age 70, but then still get the MUCH higher payment at age 70. Closed.

 

[mefordis]

I believe this is how the spousal benefit works. You would collect the higher of your own benefit (calculated on your earnings) or half of your spouse's.

At the risk of getting flamed, I am not going to voice another opinion that I have. I believe the spousal benefit is fair in the case of one of the spouses dying. This would probably help to ensure the surviving spouse is not receiving a tiny benefit. However, this is the 21st century and I think a spouse who has not been in the workforce getting to collect another 50% of the working spouse's benefit is part of what is draining the system. In my opinion, not paying into social security is one of the results of leaving the workforce. If one has not been paying in, I am not sure it is fair to double dip at the time of collection.

What about the money they did pay in for 20+ years? I think if you work and pay into social security for x amount of time, you should collect since it's not like you paid nothing.

 

[mefordis]

I see both sides. I've been on the upside of the cap, and I've been on the downside of the cap. I honestly never noticed much of a difference when I hit the cap in my paycheck. It just wasn't enough to really register as a difference in my lifestyle. To a person making 1000000, a few hundred more per week is pretty insignificant. Is it an "insignificant" amount in abstract? No. But, to a person making huge dollars, nope. No big deal at all. And, that's how I thought about it.

Do you think over $1100 a month is insignificant? Just a scenanrio: if a family with one person working brings in 250k, they stop paying in around July. Their household income then goes up about $1100 per month x 6 months = $6600 per year. To me that is not chump change.

I first discovered the cap when I was in my late 20's and one year I noticed a larger check and thought I'd actually gotten a raise. It's always made a difference to me but I am a penny counter and I notice every dime that enters our household!

 

[morgan98]

What about the money they did pay in for 20+ years? I think if you work and pay into social security for x amount of time, you should collect since it's not like you paid nothing.

Right, you should collect based on your own earnings while your spouse is alive. I never said you should not collect at all (This is just my opinion). If your spouse dies and one half of their benefit is greater than yours, I could see the argument for receiving the higher amount then.

 

[mnrose]

Do you think over $1100 a month is insignificant? Just a scenanrio: if a family with one person working brings in 250k, they stop paying in around July. Their household income then goes up about $1100 per month x 6 months = $6600 per year. To me that is not chump change.

I said it wasn't. But, $1100 a month to someone making 250,000 (which is over 20K per month), still leaves them a LOT of money to spend doesn't it? The person making 80K per year makes $6600 per month. See the difference? To that person, $1100 is a LOT of money. To the person making 20K per month, not so much. To a person making a million dollars a year, that 6% on everything is really trivially. Yes, it's 60,000 per year, or $5000 a month, but even assuming that they pay SS, and ALL other taxes at the 50% rate per annum, they have 7 years of the 80K person's salary left to spend. They are hardly poverty stricken.

As I've said, I've been there. I've made the a huge amount of money per year. Not bragging. Stating a fact. I always considered taxes to be a good problem to have. I'd rather be wealthy with a huge income and owe taxes than the other way around. To whom much is given, much is expected and all that.

 

[georgina]

Right, you should collect based on your own earnings while your spouse is alive. I never said you should not collect at all (This is just my opinion). If your spouse dies and one half of their benefit is greater than yours, I could see the argument for receiving the higher amount then.

I believe if my spouse dies I get his FULL amount then (not just half).

I agree it may be not fair, but as long as the rules are what they are, I feel no guilt in taking what they will give me.

 

[mefordis]

I said it wasn't. But, $1100 a month to someone making 250,000 (which is over 20K per month), still leaves them a LOT of money to spend doesn't it? The person making 80K per year makes $6600 per month. See the difference? To that person, $1100 is a LOT of money. To the person making 20K per month, not so much. To a person making a million dollars a year, that 6% on everything is really trivially. Yes, it's 60,000 per year, or $5000 a month, but even assuming that they pay SS, and ALL other taxes at the 50% rate per annum, they have 7 years of the 80K person's salary left to spend. They are hardly poverty stricken.

As I've said, I've been there. I've made the a huge amount of money per year. Not bragging. Stating a fact. I always considered taxes to be a good problem to have. I'd rather be wealthy with a huge income and owe taxes than the other way around. To whom much is given, much is expected and all that.

In this case the money is earned, right? We'll have to agree to disagree and in my case I'm very glad it is not the way you propose.

 

[morgan98]

I believe if my spouse dies I get his FULL amount then (not just half).

I agree it may be not fair, but as long as the rules are what they are, I feel no guilt in taking what they will give me.

I believe you are correct about the full amount.

I also understand that the rules are what they are. However, I think as someone mentioned above, these loopholes are what need to be closed in order to maintain the system for everyone.

 

[mefordis]

I believe you are correct about the full amount.

I also understand that the rules are what they are. However, I think as someone mentioned above, these loopholes are what need to be closed in order to maintain the system for everyone.

Another loophole (I guess not really a loophole) I have read about is people who are collecting when they are dead! I mean to say, someone is cashing those checks. When my grandmother died my mom had to send a check back... I guess not everyone is doing that.

 

[georgina]

I believe you are correct about the full amount.

I also understand that the rules are what they are. However, I think as someone mentioned above, these loopholes are what need to be closed in order to maintain the system for everyone.

I'm not sure something like that (which is available to ALL spouses, not just SAHM, like Mefordis I worked quite a few years) is considered a loophole. Right now, you automatically get whichever is higher - your own benefit or half your spouse's.

 

[aprilgail]

I believe this is how the spousal benefit works. You would collect the higher of your own benefit (calculated on your earnings) or half of your spouse's.

At the risk of getting flamed, I am not going to voice another opinion that I have. I believe the spousal benefit is fair in the case of one of the spouses dying. This would probably help to ensure the surviving spouse is not receiving a tiny benefit. However, this is the 21st century and I think a spouse who has not been in the workforce getting to collect another 50% of the working spouse's benefit is part of what is draining the system. In my opinion, not paying into social security is one of the results of leaving the workforce. If one has not been paying in, I am not sure it is fair to double dip at the time of collection.

The spouse should only be entitled to what they worked for, not what someone else worked for if the person that worked for it is collecting. I can understand the spouse getting half of what the other earned upon their death but no way should they be entitled to half of what they didn't earn themselves. If they worked prior to staying home that is what they should be getting social security based on-not their spouses!

 

[Patch'sD]

First off, I am not in favor of eliminating the cap on income. The Social Security System was founded to assist with Retirement. So basically what you paid in would be paid back in benefits to you or surviving spouse (50%). It is not a tax to help fund the workings of the Federal Government, it was a protection program for retired workers. It is an insurance policy that you and your employer paid in 12.4% of your lifetime of earnings. I would not expect two people to buy the same exact product and because one's income is higher than the others and then have the higher earner pay more.

To protect Social Security, I would phase in increases in the retirement age to 75. This would allow younger people to plan for the changes. I would also divert any Federal taxes on Social Security income back into the Social Security Trust fund. I would move the Disability portion of Social Security into the Federal Tax Funded Supplemental Security Income, which is more like an entitlement program than a Retirement Income Insurance Program.

 

[soccerdad72]

First off, I am not in favor of eliminating the cap on income. The Social Security System was founded to assist with Retirement. So basically what you paid in would be paid back in benefits to you or surviving spouse (50%). It is not a tax to help fund the workings of the Federal Government, it was a protection program for retired workers. It is an insurance policy that you and your employer paid in 12.4% of your lifetime of earnings. I would not expect two people to buy the same exact product and because one's income is higher than the others and then have the higher earner pay more.

I agree with this. Besides, if you lift the cap on income, you would have to allow for higher distribution for those higher income workers upon retirement. You can't expect a worker paying into the system at a $200,000 income to collect the same benefit as someone paying in at a $100,000 income.

 

[mefordis]

First off, I am not in favor of eliminating the cap on income. The Social Security System was founded to assist with Retirement. So basically what you paid in would be paid back in benefits to you or surviving spouse (50%). It is not a tax to help fund the workings of the Federal Government, it was a protection program for retired workers. It is an insurance policy that you and your employer paid in 12.4% of your lifetime of earnings. I would not expect two people to buy the same exact product and because one's income is higher than the others and then have the higher earner pay more.

To protect Social Security, I would phase in increases in the retirement age to 75. This would allow younger people to plan for the changes. I would also divert any Federal taxes on Social Security income back into the Social Security Trust fund. I would move the Disability portion of Social Security into the Federal Tax Funded Supplemental Security Income, which is more like an entitlement program than a Retirement Income Insurance Program.

Yep - when are you running for president so I can vote for you!

 

[mefordis]

I agree with this. Besides, if you lift the cap on income, you would have to allow for higher distribution for those higher income workers upon retirement. You can't expect a worker paying into the system at a $200,000 income to collect the same benefit as someone paying in at a $100,000 income.

Well, some people would expect that.

 

[Christine]

Do you think over $1100 a month is insignificant? Just a scenanrio: if a family with one person working brings in 250k, they stop paying in around July. Their household income then goes up about $1100 per month x 6 months = $6600 per year. To me that is not chump change.

I first discovered the cap when I was in my late 20's and one year I noticed a larger check and thought I'd actually gotten a raise. It's always made a difference to me but I am a penny counter and I notice every dime that enters our household!

Exactly. I *always* notice when I hit my cap (usually in November). It's a good amount of money.

 

[descovy]

Another loophole (I guess not really a loophole) I have read about is people who are collecting when they are dead! I mean to say, someone is cashing those checks. When my grandmother died my mom had to send a check back... I guess not everyone is doing that.

My dad just passed away a month ago. So I am newly learning about how this works.

The funeral home contacted the social security office directly as they were preparing the death certificate. So there was no hiding the fact he died. SS gets paid in the arrears so at least this first check will be paid like it always was.

My stepmom gets either his full SS or her own SS. While he was living they got both. The funeral home picked the higher amount on her behalf, which happens to be his. Hers goes away.

So dad was $1000 a month. She was $500 a month. Together they got $1500/mo. Now she will only get his $1000/mo. Her $500 goes away.

She also loses his income (at age 72 and 68 both were still working) And of course, she has to pay his bills.

Funny enough, my mom was married to my dad for 10 years, but has been divorced for the past 35 years also gets the same $1000/mo my stepmom does. And of course is not responsible for his bills.

 

[mefordis]

My dad just passed away a month ago. So I am newly learning about how this works.

The funeral home contacted the social security office directly as they were preparing the death certificate. So there was no hiding the fact he died. SS gets paid in the arrears so at least this first check will be paid like it always was.

My stepmom gets either his full SS or her own SS. While he was living they got both. The funeral home picked the higher amount on her behalf, which happens to be his. Hers goes away.

So dad was $1000 a month. She was $500 a month. Together they got $1500/mo. Now she will only get $1000/mo. Her $500 goes away.

She also loses his income (at age 72 and 68 both were still working) And of course, she has to pay his bills.

Funny enough, my mom was married to my dad for 10 years, but has been divorced for the past 35 years also gets the same $1000/mo my stepmom does. And is not responsible for his bills.

I'm very sorry about your dad! So two people can earn off of one person, both the spouse and ex spouse? Interesting.