Social Security - spousal benefits limited

lbonga1

TL/DR- Social security is limiting two strategies in regards to spousal benefits. The first strategy being eliminated allowed people to claim benefits for themselves and their spouse, then suspend their own benefit, which allowed it to increase in value when claimed later. The second strategy was to file a "restricted" claim for just spousal benefits. Now all benefits must be claimed and continue to be claimed for both the primary claimant and the spouse.

I'm sure this is the start of more social security restrictions to come. I'm not sure that it will be gone completely by the time I retire, but I don't have much hope for my children's generation.

Here's a link to the article: here!

AprilZ81

I'm not planning on receiving a dime (I'm almost 35).  Current estimates say I would receive about $1600/month based on my current salary history.  I'll consider myself lucky if I get half of that when I retire.

Honestly, we will probably end up investing our SS benefits for our kids/grandkids.  Between our current savings and a conservative estimate on our inheritances we shouldn't need it unless something catastrophic happens to the economy.  If that happens we will have bigger problems anyway.

brij2006

Yet another reason I'm not relying on the government at all to give me a single penny in retirement.  

They will have it so confusing and so many restrictions at that point, IF there is any money left. 

cbee817

It's a big ponzi scheme!

Edit: Had to look mine up real quick. $2,320 with retirement age = 67 

brij2006

@AprilZ81 My H received one of those letters the other day.  "Based on your past contributions, you will receive $XXXX each month from social security, at retirement."  It's like they're trying to give young people false hope. 

I really hope people our age don't look at those and think they don't need to put anything else aside because of it. 

Xstatic3333

I tried reading about the proposed changes and honestly didn't "get" it. Oh well. Like PP, I expect I'll be getting nothing from SS. H doesn't have to pay in since he has a government pension, so at least for him we'll get back what we put in. If he leaves before he's vested he gets a big check for his contributions, though they will have lost money to inflation.

Mustard76

Count me in the group who assumes nothing will be left. I can't tell you the last time I've reviewed the statements that come. Also, H doesn't pay into SS, and as long as we stay together, his pension pays out at 150%. between that and our current savings ::knock on wood:: we should still be set.

jessica490

I don't even think we get statements mailed anymore, so I have no clue what we would even be getting, but I'm not even going to count on it.

formerlyGDaisy09

not planning to get anything from SS when we retire. if there's anything left in that program by the time we get there I'll just consider it gravy ontop of whatever we worked to put into our retirement accounts 

short+sassy

Yeah, unfortunately, SS has turned into a big scam.  Paying lots of money throughout my lifetime to probably never get anything back.

I wish they would revamp it, to an extent, and still force people to have that money taken out of their paychecks...but then allow them to keep it in safe retirement vehicles until they are of retirement age.  But, that way, it is always your money.  And can be left as a part of a person's estate if they don't live to 65.  The way it is now, if someone single dies suddenly before they start SS...poof, gone!  Whatever they have put in is just gobbled up by the system.  It's like win-win for the SS agency when people die young.

AprilZ81

brij2006 said:

@AprilZ81 My H received one of those letters the other day.  "Based on your past contributions, you will receive $XXXX each month from social security, at retirement."  It's like they're trying to give young people false hope. 

I really hope people our age don't look at those and think they don't need to put anything else aside because of it. 

My figure was based on retiring at 62.  I'm planning on starting to draw any benefits I can as soon as I can.  I know waiting will get me more, but there is no guarantee that I will live long enough to make the wait worth it.

AprilZ81

short+sassy said:

Yeah, unfortunately, SS has turned into a big scam.  Paying lots of money throughout my lifetime to probably never get anything back.

I wish they would revamp it, to an extent, and still force people to have that money taken out of their paychecks...but then allow them to keep it in safe retirement vehicles until they are of retirement age.  But, that way, it is always your money.  And can be left as a part of a person's estate if they don't live to 65.  The way it is now, if someone single dies suddenly before they start SS...poof, gone!  Whatever they have put in is just gobbled up by the system.  It's like win-win for the SS agency when people die young.

I would love to see the Government do that, but that would make too much sense and it would leave Congress with a heck of a lot less money to spend (not that it stops them now).

Not to mention the screams of "not fair" by those who don't work.

BlueBirdMB

SS was suppose to be a voluntary retirement fund organized by the government.  Similar to what the president is currently proposing.  Then they realized the only to make it work was to make it mandatory.  Then they realized that they were paying out more than what they were taking in and so... here we are.

Count another who doesn't believe there will be a dime left by the time I retire. 

vlagrl29

I have no idea if it will be around for us or not, but there are people that really believe it will still be going on for our generation.  we still contribute to retirement just in case.

kmurphy2131

Mustard76 said:

Count me in the group who assumes nothing will be left. I can't tell you the last time I've reviewed the statements that come. Also, H doesn't pay into SS, and as long as we stay together, his pension pays out at 150%. between that and our current savings ::knock on wood:: we should still be set.

Does your husband work for a railroad?  I find it hard to believe that any other companies/industries have a plan like that, because I think it is pretty unreal.  It seems like a pretty stable system too.  My husband reminds me of it when I get annoyed with his job haha

kmurphy2131

short+sassy said:

Yeah, unfortunately, SS has turned into a big scam.  Paying lots of money throughout my lifetime to probably never get anything back.

I wish they would revamp it, to an extent, and still force people to have that money taken out of their paychecks...but then allow them to keep it in safe retirement vehicles until they are of retirement age.  But, that way, it is always your money.  And can be left as a part of a person's estate if they don't live to 65.  The way it is now, if someone single dies suddenly before they start SS...poof, gone!  Whatever they have put in is just gobbled up by the system.  It's like win-win for the SS agency when people die young.

I've been saying this for years.  You perfectly summed up how I feel.  Why should I have to pay out so much money now to potentially (likely?) never see any of it?  So crazy. The argument that people have made back to me has been is that not everyone is knowledgeable enough to save for themselves, but making it essentially forced retirement savings would be a great compromise.

als1982

AprilZ81 said:

short+sassy said:

Yeah, unfortunately, SS has turned into a big scam.  Paying lots of money throughout my lifetime to probably never get anything back.

I wish they would revamp it, to an extent, and still force people to have that money taken out of their paychecks...but then allow them to keep it in safe retirement vehicles until they are of retirement age.  But, that way, it is always your money.  And can be left as a part of a person's estate if they don't live to 65.  The way it is now, if someone single dies suddenly before they start SS...poof, gone!  Whatever they have put in is just gobbled up by the system.  It's like win-win for the SS agency when people die young.

I would love to see the Government do that, but that would make too much sense and it would leave Congress with a heck of a lot less money to spend (not that it stops them now).

Not to mention the screams of "not fair" by those who don't work.

Conservatives cry about the Affordable Care Act. You think they'd be agreeable to the government compelling them to do this?

smerka

Wow. My parents have been using this strategy for a couple years. Damn Baby Boomers ruining it for the rest of us. I thought SS security was supposed to be a safety net to keep the elderly off the streets in their old age, not a retirement plan.

AprilZ81

als1982 said:

short+sassy said:

Yeah, unfortunately, SS has turned into a big scam.  Paying lots of money throughout my lifetime to probably never get anything back.

I wish they would revamp it, to an extent, and still force people to have that money taken out of their paychecks...but then allow them to keep it in safe retirement vehicles until they are of retirement age.  But, that way, it is always your money.  And can be left as a part of a person's estate if they don't live to 65.  The way it is now, if someone single dies suddenly before they start SS...poof, gone!  Whatever they have put in is just gobbled up by the system.  It's like win-win for the SS agency when people die young.

I would love to see the Government do that, but that would make too much sense and it would leave Congress with a heck of a lot less money to spend (not that it stops them now).

Not to mention the screams of "not fair" by those who don't work.

Conservatives cry about the Affordable Care Act. You think they'd be agreeable to the government compelling them to do this?

I think it is the Democrats that would be whining about it the most.  The money is already being confiscated out of our checks, at least taxpayers would be able to keep their own money and have it guaranteed to be paid out if it was in an individual account.

kyrgyzstan

Lol that SS is a scam. They're closing a couple of loopholes that only upper middle class and above ever used. Fine by me. 

AprilZ81

kyrgyzstan said:

Lol that SS is a scam. They're closing a couple of loopholes that only upper middle class and above ever used. Fine by me. 

I don't think that anyone called it a scam.

Most of us think that the program isn't going to remain solvent because Congress keeps raiding the "lockbox" and leaving IOUs.  

Between the fact that the baby boomers are all retiring and so many people being out of the work force there just isn't enough money to fulfill all of the current obligations, let alone future obligations.

Mustard76

kmurphy2131 said:

Mustard76 said:

Count me in the group who assumes nothing will be left. I can't tell you the last time I've reviewed the statements that come. Also, H doesn't pay into SS, and as long as we stay together, his pension pays out at 150%. between that and our current savings ::knock on wood:: we should still be set.

Does your husband work for a railroad?  I find it hard to believe that any other companies/industries have a plan like that, because I think it is pretty unreal.  It seems like a pretty stable system too.  My husband reminds me of it when I get annoyed with his job haha

He does work for a railroad. I agree that it's unreal, but it's stable as can be. Being a railroader is a hard life sometimes, especially for those actually on the rails (which H isn't.) But they sure do take care of their people with benefits. Unless you consider work/life balance a benefit. Then newp. Haha.

abrewer5

Mustard76 said:

Count me in the group who assumes nothing will be left. I can't tell you the last time I've reviewed the statements that come. Also, H doesn't pay into SS, and as long as we stay together, his pension pays out at 150%. between that and our current savings ::knock on wood:: we should still be set.

How does one get out of paying for SS? I'm just curious because I thought you HAD to do it by law. Is it only certain industries that can do that?

I agree with @short+sassy that whatever people are contributing they should be getting back at retirement age. It really seems ridiculous that someone like myself who has worked since I was 15 years old and will have paid so much into the system by the time I'm able to draw on it likely won't be able to.

Xstatic3333

AprilZ81 said:

als1982 said:

short+sassy said:

Yeah, unfortunately, SS has turned into a big scam.  Paying lots of money throughout my lifetime to probably never get anything back.

I wish they would revamp it, to an extent, and still force people to have that money taken out of their paychecks...but then allow them to keep it in safe retirement vehicles until they are of retirement age.  But, that way, it is always your money.  And can be left as a part of a person's estate if they don't live to 65.  The way it is now, if someone single dies suddenly before they start SS...poof, gone!  Whatever they have put in is just gobbled up by the system.  It's like win-win for the SS agency when people die young.

I would love to see the Government do that, but that would make too much sense and it would leave Congress with a heck of a lot less money to spend (not that it stops them now).

Not to mention the screams of "not fair" by those who don't work.

Conservatives cry about the Affordable Care Act. You think they'd be agreeable to the government compelling them to do this?

I think it is the Democrats that would be whining about it the most.  The money is already being confiscated out of our checks, at least taxpayers would be able to keep their own money and have it guaranteed to be paid out if it was in an individual account.

You're right-this idea is way more popular on the right than the left.  Bush 1 tried to push a plan through, and the current Democratic candidates are arguing against any sort of privatization.  The rationale seems to be 1) that you can't trust people to plan for themselves, and 2) that Wall Street will try to rip people off if they are managing their own retirement accounts.  It's also an issue of the transition from the current system to a private or partially private system being tough to pull off without cutting benefits for current retirees.

I'm pretty solidly on the Democratic side of the aisle; I've made no secret of that around here.  But it does bum me out how frequently my party seems to discourage investing as an option for the middle class, like when the President briefly proposed altering the tax benefits of 529 plans.  I'd rather see the middle class empowered to see how their money can grow given the power of time and compound interest, and educated to take advantage of tax advantaged savings options.  So many people see investing as the province of the wealthy and just don't bother with it.  In our family, we know that both of H's parents are planning to retire with just SS benefits and a paid for house, and that's pretty darn scary.  But heck, even putting away $20 a paycheck into a target date fund account over the course of your working life will give you a significant retirement e-fund, if not around the world cruise money.  

Off soapbox.

Xstatic3333

abrewer5 said:

Mustard76 said:

Count me in the group who assumes nothing will be left. I can't tell you the last time I've reviewed the statements that come. Also, H doesn't pay into SS, and as long as we stay together, his pension pays out at 150%. between that and our current savings ::knock on wood:: we should still be set.

How does one get out of paying for SS? I'm just curious because I thought you HAD to do it by law. Is it only certain industries that can do that?

I agree with @short+sassy that whatever people are contributing they should be getting back at retirement age. It really seems ridiculous that someone like myself who has worked since I was 15 years old and will have paid so much into the system by the time I'm able to draw on it likely won't be able to.

I think it is people with pensions who don't have to pay in, with the theory being that the pension will replace what SS would do.  In H's case, 9% of his income goes to the state pension fund, and he has absolutely no control over that.  He already paid in quite a bit before starting with the state, so in theory he could still get a SS check, but it will be smaller if he stays in government employment for his full career.  Religious clergy can also get out of paying in if they have a religious objection to the SS system.  

hoffse

AprilZ81 said:

kyrgyzstan said:

Lol that SS is a scam. They're closing a couple of loopholes that only upper middle class and above ever used. Fine by me. 

I don't think that anyone called it a scam.

Most of us think that the program isn't going to remain solvent because Congress keeps raiding the "lockbox" and leaving IOUs.  

Between the fact that the baby boomers are all retiring and so many people being out of the work force there just isn't enough money to fulfill all of the current obligations, let alone future obligations.

Exactly.  Back when SS was established, we were having unprecedented population growth.  The Boomers were being born, and you had 3-4 workers supporting one retired person with social security.

Our population hasn't maintained that level of growth (in fact, the number of children per family has shrunk since the 60's), and now you have the big population (the Boomers) retiring with a much smaller population supporting them financially.  Plus, we live longer than we used to just 50 years ago.  The numbers simply don't work.

The SSA itself says that the trust fund is expected to be exhausted by 2040 if something doesn't change because our demographics have essentially turned upside down since the program was put into place.

Also, I think the history of social security is really interesting.  It came on the heels of the New Deal when FDR threatened to stack the Supreme Court because the sitting justices thought his policies were unconstitutional.  He got a couple of them to turn to vote his way, but that move alienated a lot of people on both sides of the aisle.  He was also in office long enough that by the time he died he had appointed most of the court through normal means (though this happened after social security).  I think he actually left like 7 justices behind.

People forget that social security is less than 100 years old.  We're just now getting to the point where it's being tested across multiple generations, and the framework that was put in place in the 30's didn't contemplate such huge shifts in population/demographics only a couple generations later.  The real problem is it has become so institutionalized in people's minds that changing any of it seems politically impossible, even though it's a fairly young system.

als1982

AprilZ81 said:

als1982 said:

AprilZ81 said:

short+sassy said:

Yeah, unfortunately, SS has turned into a big scam.  Paying lots of money throughout my lifetime to probably never get anything back.

I wish they would revamp it, to an extent, and still force people to have that money taken out of their paychecks...but then allow them to keep it in safe retirement vehicles until they are of retirement age.  But, that way, it is always your money.  And can be left as a part of a person's estate if they don't live to 65.  The way it is now, if someone single dies suddenly before they start SS...poof, gone!  Whatever they have put in is just gobbled up by the system.  It's like win-win for the SS agency when people die young.

I would love to see the Government do that, but that would make too much sense and it would leave Congress with a heck of a lot less money to spend (not that it stops them now).

Not to mention the screams of "not fair" by those who don't work.

Conservatives cry about the Affordable Care Act. You think they'd be agreeable to the government compelling them to do this?

I think it is the Democrats that would be whining about it the most.  The money is already being confiscated out of our checks, at least taxpayers would be able to keep their own money and have it guaranteed to be paid out if it was in an individual account.

I think that if they could, Republicans would end SS. But I simply can't imagine they would THEN work to pass a law compelling people to save and invest, considering their key party platforms are limited government and "maximum economic freedom." It would just be replacing one government program with another.

maple2

als1982 said:

als1982 said:

short+sassy said:

Yeah, unfortunately, SS has turned into a big scam.  Paying lots of money throughout my lifetime to probably never get anything back.

I wish they would revamp it, to an extent, and still force people to have that money taken out of their paychecks...but then allow them to keep it in safe retirement vehicles until they are of retirement age.  But, that way, it is always your money.  And can be left as a part of a person's estate if they don't live to 65.  The way it is now, if someone single dies suddenly before they start SS...poof, gone!  Whatever they have put in is just gobbled up by the system.  It's like win-win for the SS agency when people die young.

I would love to see the Government do that, but that would make too much sense and it would leave Congress with a heck of a lot less money to spend (not that it stops them now).

Not to mention the screams of "not fair" by those who don't work.

Conservatives cry about the Affordable Care Act. You think they'd be agreeable to the government compelling them to do this?

I think it is the Democrats that would be whining about it the most.  The money is already being confiscated out of our checks, at least taxpayers would be able to keep their own money and have it guaranteed to be paid out if it was in an individual account.

I think that if they could, Republicans would end SS. But I simply can't imagine they would THEN work to pass a law compelling people to save and invest, considering their key party platforms are limited government and "maximum economic freedom." It would just be replacing one government program with another.

STUCK IN THE BOX

I believe that Republican politicians might be in favor of ending SS ideologically, but the reality is that a lot of Republican voters actually rely on SS (even though some of them don't realize it is, in fact, a government program) so it would be a tough sell for the Republican electorate. Especially since SS recipients are more likely to vote than other age groups. This same problem applies to any Democratic attempts to reform SS.

On a side note, I find the table in this link showing the % of beneficiaries of a particular government program who think they have never taken advantage of a government program totally fascinating. 44.1% who have used Social Security--Retirement and Survivors think they have never taken advantage of a government social program.

 http://economix.blogs.nytimes.com/2011/02/11/keep-your-government-hands-off-my-government-programs/?_r=0.

blondie42107

I don't look at Soc Security retirement or survivors benefits as taking advantage of a government program.  I don't work for the government, my state, RR or USPS, etc.  Therefore Soc Sec is taken out of my paycheck without my choice.  Also you can't decline Soc Sec income.  I work with the aging population.  Most female individuals aged 70 and older who were married (10+ years to their husband) didn't work outside of the home or didn't have enough work credits, so they are able to claim off of their spouse who worked and paid in.  So we have a large number of retirees and many of them didn't pay into the system.  I haven't looked at number but I imagine there might be some benefit to Soc Sec with the younger generation where most married couples both work and pay into Soc Sec.

Pensions scare me a little too.  I recently heard of a situation where a city was doing very bad, financially. One thing that resulted was that the a large group of retirees completely lost their benefits.  They went from pension and medical benefits to nothing.  My grandpa's theory of stashing money in a cigar box doesn't sound half bad  He died at the age of 85, over 20 years ago and never had a bank account, had plenty saved and lived well.

smerka

Here's more thanyou ever wanted to know. SS started in 1935 in response to all the elderly people living in poverty during the depression. It was never designed to be a retirement plan. I think of it as an insurance plan to keep me off the streets when I am old. To save SS, someone has to take the hit. Either old people will get reduced benefits or the younger people will have to pay more in and/or retire later. If the Millenials weren't such a big group, I am sure the Baby Boomers would start to pressure Congress to have younger people pay more because that's how they roll. https://en.m.wikipedia.org/wiki/Social_Security_(United_States)

lbonga1

If/when the SS fund runs out, whichever generation it falls on to be retiring at that time is not going to be prepared, and we're going to have a huge problem. What do other countries do in regards to retirement? Is it solely up to the citizens to save for themselves, or do they have a system similar to ours? Really people need to start thinking of it as more of a safeguard instead of an entitlement.