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Old 05-20-2012, 11:19 AM
 
11,191 posts, read 10,210,045 times
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Quote:
Originally Posted by Escort Rider View Post
For a description of the workings of the Windfall Elimination Provision as well as a discussion of its rationale, you can read my post #42 on page five of the thread "Interim retirement solutions for those without pensions" here in the Retirement Forum. Right now that thread is about two-thirds of the way down page one.

Thanks, EscortRider. I'll check it out. Personally, I won't have to worry about it but I do have a friend who recently started Social Security and was surprised to learn the benefits had been reduced due to the offset. I'll take a peek at the other thread, though. Sounds interesting.
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Old 05-20-2012, 12:48 PM
 
Location: Wisconsin
21,539 posts, read 44,010,725 times
Reputation: 15140
Quote:
Originally Posted by HereOnMars View Post
You're kidding, right? You purposely scare your kids by pretending? Wow! Wonder if the kids know they're being played. Where I come from that's called deceit.
P&C troll, for sure. We best not feed it.
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Old 05-20-2012, 12:57 PM
 
11,191 posts, read 10,210,045 times
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Quote:
Originally Posted by Ariadne22 View Post
P&C troll, for sure. We best not feed it.
As much as I'd like to believe so, there are parents who do this to their adult children. With that many posts and reps, s/he is not a troll but may be yanking our chain. Whatever!
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Old 05-20-2012, 01:05 PM
 
Location: Lakewood OH
21,699 posts, read 23,668,169 times
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Quote:
Originally Posted by lenora View Post
It does seem that way, doesn't it? This was predicted by several sociologists/economists as early as 1940.

Myrdal argued that all pay-as-you-go public pension systems rested on a fundamental contradiction. Before the creation of such systems, parents depended on their own children as their ultimate “safety net,” their true insurance. If other forms of savings and asset accumulation failed, the adult children would be there to provide financial support, shelter, or care. This created a strong incentive for having children.

However, a public pay-as-you-go system reversed the incentives. Pensions were now provided by the government as a right. Children were still needed to make the system work in the future. However, Social Security represented the socialization of the private insurance value of children. Pension benefits were now tied to work and salary; not family size. Childless workers received the same pensions as workers who had spent much of their income to raise large families. This created a perverse incentive: the rational, income-maximizing individual would now have no children at all. As he or she would reason: Let others spend money on raising children who will grow up to be taxed to pay for my retirement. Economists label this the “free rider” problem. Myrdal called this contradiction “the burning core” of the population problem.
The Howard Center: The Family In America

I personally find it hard to believe that young Boomers deliberately decided not to have children based on the idea that the government would one day replace the family's former role as a safety net, but we definitely have a problem. Younger generations are more likely to choose childlessness when faced with the economic hardship of providing for themselves while paying increased taxes to support the Boomers.

I think the only solution is to rework Social Security to meet its original goal: Prevent retirees from falling into poverty. Real poverty, as in below the Federal Poverty level. If someone needs more than that, well, he or she needs to figure out how to reach the level of security or lifestyle that suits him or her. Otherwise, be prepared to do without.
So do I. I think this report is the largest bunch of drivel I have ever read.
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Old 05-20-2012, 01:08 PM
 
Location: Lakewood OH
21,699 posts, read 23,668,169 times
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Quote:
Originally Posted by HereOnMars View Post
As much as I'd like to believe so, there are parents who do this to their adult children. With that many posts and reps, s/he is not a troll but may be yanking our chain. Whatever!
Yeah, I think this is a shameful way to treat your kids. It might all come down to the "boy who cried wolf" and when help is legitimately needed it will not be there. What goes around comes around.
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Old 05-20-2012, 01:14 PM
 
11,191 posts, read 10,210,045 times
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Quote:
Originally Posted by Minervah View Post
Yeah, I think this is a shameful way to treat your kids. It might all come down to the "boy who cried wolf" and when help is legitimately needed it will not be there. What goes around comes around.
I had similar thoughts but didn't post them.
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Old 05-20-2012, 01:29 PM
 
Location: Wisconsin
21,539 posts, read 44,010,725 times
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Quote:
but we definitely have a problem. Younger generations are more likely to choose childlessness when faced with the economic hardship of providing for themselves while paying increased taxes to support the Boomers.
Way too many people in this country - and the world - already.

We have a problem, but low birth rate isn't one of them, imho. Quality of those reproducing is. Population in U.S. has increased from 209 million to 308 million in 40 years - 50% increase. Our problem is wages have not increased. People, with any brain cells at all, choose not to reproduce more than they can decently care for. Those who do breed indiscriminately, unfortunately, often cannot support the children they have, relying on the social safety nets to support them. Their children perpetuate the cycle.

We have a problem because our economic base for the social networks is deteriorating due to decreased earning capacity of those now working and greater and greater drains on those resources.

Indiscriminate breeding and, secondarily, wage suppression are the culprits.
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Old 05-20-2012, 08:29 PM
 
Location: Metropolis IL
1,602 posts, read 1,892,707 times
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Quote:
Originally Posted by Art2ro View Post
I worked for the U.S. government for 30 yrs, in the military and for civil service combined and when I applied for my Social Security benefit at age 62, I only received 40% of what was estimated! They said it was because of the "government offset" computation, because I made too much money when I worked for the U.S. government! I still don't understand it, but it's a done deal in their eyes or justification!
What triggers the Windfall Elimination Provision, is if you receive a pension from a job in which you didn't pay FICA taxes.

If I were to guess, I would bet you were under the old Civil Service retirement plan, where you didn't pay FICA taxes. Military members pay FICA taxes, and since the 1980's, Civil Service employees do as well. But if you were under the old retirement system, you didn't.

These days, WEP affects mostly state and local employees. School teachers, with split careers, seem to be the largest group affected.

If you're only getting 40% of the estimate, your benefit amount must be fairly low. The maximum WEP reduction is around $400.
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Old 05-20-2012, 08:49 PM
 
Location: In The Pacific
986 posts, read 1,178,839 times
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Quote:
Originally Posted by BLS2753 View Post
What triggers the Windfall Elimination Provision, is if you receive a pension from a job in which you didn't pay FICA taxes.

If I were to guess, I would bet you were under the old Civil Service retirement plan, where you didn't pay FICA taxes. Military members pay FICA taxes, and since the 1980's, Civil Service employees do as well. But if you were under the old retirement system, you didn't.

These days, WEP affects mostly state and local employees. School teachers, with split careers, seem to be the largest group affected.

If you're only getting 40% of the estimate, your benefit amount must be fairly low. The maximum WEP reduction is around $400.
Yup! You got it right! Even thought I retired 6 yrs early at age 49, the COLAs helped out quite a bit after 11 yrs of retirement and now my pension amount isn't too bad, it's manageable/doable here overseas for now, but the global recession makes it hard on a lot of retirees with fixed incomes living anywhere!
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Old 05-20-2012, 11:57 PM
 
Location: Florida and New England
1,233 posts, read 1,418,186 times
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Quote:
Originally Posted by forest beekeeper View Post
If they pay into their account consistently, [at whatever level they wish to], then after 40-quarters they will have a 'loaded policy'. Even if those 40-quarters were paid in only 1-day.

How much you earn, does not always equate to how much has been paid into S.S.
It's not that simple. Social Security has several algorithms to account for the total pay, the quarters of pay, the consistency of pay, and the recency of pay.

If you worked only, say, from 1959-1979 (80 quarters) and were born in 1941, eligible for full retirement in 2006, you would receive a lot less than if you worked only (at the same actual dollars of pay) from 1979-1999 (also 80 quarters).

There are some complex calculations that reward recent pay and consistent pay in determination of Social Security benefits.
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