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Old 02-01-2017, 08:53 AM
 
210 posts, read 150,873 times
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I keep thinking that on some "fairness" issues, people are seeing correct problems but I am not so sure I agree with solutions. Take the stay at home spouse and an example using round numbers and years of no COLA before one spouse dies.

Both couples are the same age and have the same number of children.

Family 1. Husband works and over a life time the husband and his employer contribute $100,000 total to SS and SS disability and $25,000 to Medicare. The wife doesn't work. After retirement, the husband gets $1000 SS so the non-working wife gets $500.

Family 2. Husband and wife work and each earn an identical salary as the husband in 1. Both pay $100,000 into SS and disability and both pay $25,000 into Medicare for a total of $200,000 to SS and disability and $50,000 to Medicare. They retire on the same day as the husband in Family 1 and both get $1000 based on their own records for a total of $2000.


Husband 1 dies and his widow get $1000 for life all based on a claim of her deceased husbands contribution or 2/3 of their former income from SS.

Husband 2 (or wife 2) dies on the same day as husband 1 and the widow gets $1000 and no plus up based on the spouse's contributions or 1/2 of their former income from SS.

We can all agree that the widow in family 1 can't be left with nothing but, from the point of view of family 2, if the "insurance" or "annuity" were under the same purchase conditions, it paid for the death in family 1 but shafted family 2. Family 2 put in a claim and got nothing.

Should the wife in family 1 be left with nothing or should the wife in family 2 receive the same half plus-up a stay-at-home wife gets? Should the stay-at-home wife's share have been deducted from her husband's pay in order to qualify? At what rate should the husband pay or should the husband's and his employer's contribution go up too? Is stay-at-home wife a job that should pay small business rates on some accepted, government set level of pay so every claim can be individual based on their own work record? After all family 2 with both working encountered a host of expenses related to child care and rearing that family 1 did not.

Or is it OK as it is?


This is just one example for illustration and the questions it poses kind of show why it has never been addressed.
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Old 02-01-2017, 08:58 AM
 
2,952 posts, read 1,637,878 times
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^^^ wow I need more caffine or a chart for that. (Its me not you) Very interesting questions.

Quote:
Originally Posted by JOinGA View Post
Yes, you are correct. It is a personal decision. My issue is with social security benefits favoring stay-at-home spouses who never work over women (or men) who take a limited amount of time off for childcare. Looking at it another way, people who contribute the same as I do, get significantly more in benefits if they have a stay-at-home spouse. At the same time, I get zeros when I stay at home for a few years.
How is this so, just askin'. Do you mean because these women married someone who makes more money than you? And paid more into the system. I'm not going to go back and look, (my apologies if you aren't). But if you were one that has no respect for the institution of families and marriages. Most of the country does. SS partly was set up to protect widows. The poverty rate was very high prior to SS going into effect.

My guess ( I could be wrong) is that you are looking for some type of fairness? Life isn't fair, parents told me that 50+ years ago. So I don't waste time hashing an argument out that will never be. In fact now when I hear someone say that isn't fair, I feel bad for them they are using an argument that they can never win on. And are wasting their life stuck in the not fair thing.
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Old 02-01-2017, 09:36 AM
 
210 posts, read 150,873 times
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I've heard that only people in the high income brackets can afford to have only one worker. I wonder what the actual stats on that are.


This PEW report seems to say that one working spouse families have about half the income of two working spouse families, a result that doesn't confirm the "only people in high income brackets can afford one worker" theme.
http://www.pewsocialtrends.org/2015/...hare-the-load/

Last edited by AnnaLee2; 02-01-2017 at 09:48 AM.. Reason: Found a Pew report I want to add
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Old 02-01-2017, 09:38 AM
 
Location: Haiku
4,071 posts, read 2,572,689 times
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Quote:
Originally Posted by BLS2753 View Post

It's interesting that it's almost universal, that all SS haters are the financially successful that are 50 or older.
I consider DW and myself to be financially successful and we don't hate SS at all. I don't really care if we don't get out of it what we put into it and actually have never even thought about that. It is a key part of our 3-legged retirement stool (the other legs are my 401k and my wife's pension). Each leg complements the other two. Safety through redundancy. You never know when/if one of the other legs will get pulled out from under us. I think SS is great and hope Congress does not take it away.
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Old 02-01-2017, 10:18 AM
 
25,985 posts, read 32,996,703 times
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Quote:
Originally Posted by matisse12 View Post
To clarify, most or many people never come anywhere close to those numbers. Those are just the 'maximum' amounts one can receive. (after having worked a very good job with high taxable earnings for many years)

The average amount or most common amount of Social Security people receive is $1200 or $1300 per month.
Very glad I am not in that average.
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Old 02-01-2017, 10:25 AM
 
25,985 posts, read 32,996,703 times
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Quote:
Originally Posted by BLS2753 View Post
The entire problem with the high earner scenario, is that the SSA isn't a fortune teller. It's easy to play Monday morning QB in your 50's and older, and reflect on how financially successful you've been, and what a waste all those FICA taxes you've paid have been. But in your 20's you didn't know that. You could have become disabled at some point, some Madoff type character could have ripped off your investments, and a variety of other unpredictable financial calamities could have occurred. You pay FICA taxes to provide a basic income in case of such occurrences.

It's interesting that it's almost universal, that all SS haters are the financially successful that are 50 or older.
What?? What nonsense.
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Old 02-01-2017, 10:46 AM
 
Location: OH>IL>CO>CT
5,234 posts, read 8,399,632 times
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Quote:
Originally Posted by rocafeller05 View Post
Some great advice here.

Are all these "projected" social security amounts at early, FRA and 70 on my SS page based on me working & contributing at my current income until I'm 62? Are there any calculators out there that give you SS numbers if you plan on retiring early?
SSA has several calculators at https://www.ssa.gov/planners/benefitcalculators.html depending on what you are looking for.
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Old 02-01-2017, 10:58 AM
 
Location: Florida and New England
1,233 posts, read 1,417,753 times
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Quote:
Originally Posted by TwoByFour View Post
99% of Americans claim SS benefits. That rate is not what the insured claim for insurance benefits. You can call SS insurance but for most Americans it is an entitlement to an annuity. And just like an annuity, you use it or you lose it.
Perhaps 99% of _eligible_ claimants. But not 99% of all American participants. Such a high percentage cannot possibly claim SS Old Age benefits -- 99% do not survive to 62 years old (only about 86% do), much less do 99% survive to Full Retirement Age, soon to be 67 (only about 80% do).

Source: https://www.cdc.gov/nchs/data/nvsr/nvsr53/nvsr53_06.pdf

So one out of five Americans who waits until Full Retirement Age gets ZIP.
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Old 02-01-2017, 11:32 AM
 
71,550 posts, read 71,730,589 times
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Quote:
Originally Posted by westender View Post
Perhaps 99% of _eligible_ claimants. But not 99% of all American participants. Such a high percentage cannot possibly claim SS Old Age benefits -- 99% do not survive to 62 years old (only about 86% do), much less do 99% survive to Full Retirement Age, soon to be 67 (only about 80% do).

Source: https://www.cdc.gov/nchs/data/nvsr/nvsr53/nvsr53_06.pdf

So one out of five Americans who waits until Full Retirement Age gets ZIP.





NOPE! NOT QUITE THE WAY IT WORKS . a 65 year old couple still has an almost a 74 % chance one will see 85 and almost 50% one will see 90 .
a 65 year old male has a 42% chance of seeing 85 , a woman 54%.

you can't look at numbers from birth , you need to look at a survival curve when dealing with social security that first starts at retirement age . you can't count those who die young .. as you get older and older you weed out those with health issues ,suicide and homicide , accidents, etc . the older you get the more you are inclined to live longer since only the strong survive as they say . For instance, a child born in 2014 has a life expectancy (average age at death) of 79. However, the median age of death for the same child is 83, and the modal (most common) age at death is 89!

so your 1 in 5 statistic is just flat out incorrect .



AS MICHAEL KITCES SAID .

“life expectancy” can be a somewhat misleading term. Many people hear the term and think of it as a measure of how long they can “expect to live”. In reality, though, life expectancy is a measure of the average time a person within some particular population is expected to live. While the average is meaningful in many respects, it may not always provide the best measure for setting expectations about the actual age someone is likely to reach. Because mortality rates aren’t constant across a lifespan and the distribution of ages at death are heavily skewed (i.e., more people die old than young), commonly cited life expectancy measures—particularly life expectancy at birth, which is most often cited in the media—may result in misleading expectations.

For instance, a child born in 2014 has a life expectancy (average age at death) of 79. However, the median age of death for the same child is 83, and the modal (most common) age at death is 89! Given the shape of the distribution of ages at death (negatively skewed), it’s simply a mathematical fact that the mean is going to be lower than the median or the mode.

One way to explore some of the nuances within mortality figures is to visualize that data through the use of a survival curve – a figure which plots percentage of people still alive (i.e., the “survival rates” of a population) over time. Looking at the trends in how survival curves change over time can help us to not just see whether life expectancy is changing, but specifically where changes are occurring across it.

As you can see in the survival curve above, only roughly 1-in-10 people born in 2014 is expected to die prior to age 60 (i.e., 90% are still alive), but beyond that point, the rate of death begins to increase substantially. However, over 60% of children born in 2014 are still expected to be alive when the cohort reaches their “life expectancy” (i.e., average age at death) of 79. The median (age 83) is equivalent to the 50th percentile, and the mode (89) is roughly around the 30th percentile. By age 100, only 2% of people born in 2014 are expected to still be alive. While simple statistics like life expectancy certainly serve a purpose, survival curves give us a much better look at the “story” behind the data.he lifespan.


Last edited by mathjak107; 02-01-2017 at 12:12 PM..
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Old 02-01-2017, 11:51 AM
 
Location: Albuquerque NM
1,659 posts, read 1,523,899 times
Reputation: 3640
Quote:
Originally Posted by AnnaLee2 View Post
I keep thinking that on some "fairness" issues, people are seeing correct problems but I am not so sure I agree with solutions. Take the stay at home spouse and an example using round numbers and years of no COLA before one spouse dies.

Both couples are the same age and have the same number of children.

Family 1. Husband works and over a life time the husband and his employer contribute $100,000 total to SS and SS disability and $25,000 to Medicare. The wife doesn't work. After retirement, the husband gets $1000 SS so the non-working wife gets $500.

Family 2. Husband and wife work and each earn an identical salary as the husband in 1. Both pay $100,000 into SS and disability and both pay $25,000 into Medicare for a total of $200,000 to SS and disability and $50,000 to Medicare. They retire on the same day as the husband in Family 1 and both get $1000 based on their own records for a total of $2000.

The real unfairness is for a couple where each makes $50K for a total of $100K compared to the breadwinner who makes $100K with a wife who does not work. Putting these numbers into the SS calculator the estimated SS results are:

Working couple: At age 66, each spouse collects $1292 for a total of $2584. If one dies, the total social security benefits will be $1292.

Breadwinner couple: At age 66, the husband collects $2079 and the wife collects half or $1040 for a total of $3118 - an increase of $534 a month over the working couple although both families contributed the same to social security. If one dies, the total social security benefits will be $2079.

Single person making $100K: At age 66, collects $2079.


So the working couple gets the shaft and the single person is subsidizing both. I'd like to see an overhaul of social security so that it is more fair while favoring the lower income to some extent. But I doubt this will happen any time soon.

Last edited by ABQ2015; 02-01-2017 at 12:45 PM..
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