Social Security - spousal benefits limited

hoffse · November 2015

lbonga1 said:

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.

SIB***

A lot of European countries actually take it further than we do. The math is different. The tax rates tend to be higher, but the population is a lot smaller. They also have a VAT, which I would be super in favor of here because it's consumption-driven. The state will often bankroll healthcare and university-level education, but for the latter there are competitive nationwide tests that set you on a university or non-university track at a young age. It's very different.

One problem some of these countries are facing is that individuals with lots of money are leaving. My H's dad does quite a bit of European immigration work for high-net-worth individuals who want to move to the US and get their assets out of their home countries. The calculation depends on where they live and what kind of assets generate their wealth.

Another problem they are having is that their populations (and therefore their tax base) is also shrinking. I suspect that one reason Germany is embracing the Syrian refugees so strongly is that Germany could have a monster economy if they had more people of working age.

A major problem the US has relative to the rest of the world is that our healthcare costs are obscene. The same drug sold in another country might cost a fraction of what Americans pay for it. That's a really big problem that gets exacerbated as your population ages and healthcare consumption goes up.

maple2 · November 2015

blondie42107 said:

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.

I guess I don't totally understand your position on why SS isn't a government program that people take advantage of. Can you expand on your reasoning? I get that you personally may feel like you'll pay in more than you get out so it's not a program that benefits you, but the women you describe sounds like they definitely do take advantage of SS. I don't mean "take advantage" in an exploitative way, only in the basic sense that they take advantage of the opportunity to participate in a government program for which they are eligible.

jtmh2012 · November 2015

lbonga1 said:

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.

I told my financial advisor when we first started to pretend social security doesn't exist and go from there. Anything I get out of it will be a bonus.

AprilZ81 · November 2015

jtmh2012 said:

lbonga1 said:

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.

I told my financial advisor when we first started to pretend social security doesn't exist and go from there. Anything I get out of it will be a bonus.

That is almost word for word what I told our advisor this week.

vlagrl29 · November 2015

can someone explain to me what this means. I'm so not smart on SS talk. My mom just sent me an email if I heard about what happened. She said congress is screwing the baby boomers over.

smerka · November 2015

They really aren't screwing over just the Baby Boomers, it's all people not yet claiming SS. I will try to explain it, but we will see how I do. If you are married, you can claim your SS benefits or benefits based on your spouse's record. As an aside, you can claim an ex spouse's spousal benefits if you were married for at least ten years and are not currently married. Anyway, people have been claiming their benefits, having their spouse claim their spousal benefits and then suspending their own benefits until later so they can receive more benefits when they older (70). Just so your mom feels better, they did change something that kind of sticks it to the people doing this. I don't know if it was the ACA or this budget deal, but the people on Medicare who are not receiving their SS benefits, have to pay an extra $200 a month for Medicare. I don't know if that $200 number is just for my dad or for everyone of suspended their benefits.

vlagrl29 · November 2015

smerka said:
They really aren't screwing over just the Baby Boomers, it's all people not yet claiming SS. I will try to explain it, but we will see how I do. If you are married, you can claim your SS benefits or benefits based on your spouse's record. As an aside, you can claim an ex spouse's spousal benefits if you were married for at least ten years and are not currently married. Anyway, people have been claiming their benefits, having their spouse claim their spousal benefits and then suspending their own benefits until later so they can receive more benefits when they older (70). Just so your mom feels better, they did change something that kind of sticks it to the people doing this. I don't know if it was the ACA or this budget deal, but the people on Medicare who are not receiving their SS benefits, have to pay an extra $200 a month for Medicare. I don't know if that $200 number is just for my dad or for everyone of suspended their benefits.

It's still confusing to me but that's not your fault:) so can my mom claim hers and my dad claim his at same time? Also if my dad passes first can she still collect his or is she on her own?

smerka · November 2015

I am pretty sure you collect whichever is greater - your own or your spousal benefits. The rule change only affects the people like my dad who apply for benefits who apply, have their spouse claim the spousal benefits, and then suspend their own. The SS website is pretty helpful. https://faq.ssa.gov/link/portal/34011/34019/Article/3754/What-is-the-eligibility-for-Social-Security-spouse-s-benefits-and-my-own-retirement-benefits

kyrgyzstan · November 2015

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.

One person called it a scam and one person called it a ponzi scheme.

Shutting loopholes like this are the only way we will keep it solvent.

simplyelise · November 2015

I'm another pensioner (not yet vested though) in the Missouri local government pension. So I am exempt from paying in to SS. But my pension is 98% pre-funded and has high ratings from all the ratings agencies powers that be. It's also completely employer funded, so I don't contribute anything. So if I make it to vesting, I will include the pension in our retirement calculations. It's certainly not 150% salary, but it is fairly generous: highest salary from last 18 months x years of service x 2%.

I do not love my job, but they do cover health insurance premiums for me and my husband and they contribute to my pension. It means I get to take home a very high percentage of my gross income. I'm only going to leave this position if I can move to a local or county government position where I'll be on the same pension.

I agree that for those who are on top of it, they should not consider SS in their retirement calculations, but I also don't think the outlook is not nearly as dreary as some are describing.

short+sassy · November 2015

I've also heard...and I don't know if this is true or not...that during the "boon" days of SS, when there were way more people working as compared to retirees, that the "surplus" money in SS was allowed to be taken by other govt. agencies. Which, of course, has exacerbated the problem now that the glut of working BBers are starting to retire.

Social Security - spousal benefits limited

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