New Social Security Regs (taxation, problems, receive, distribution)

[nicet4]

Originally Posted by mathjak107

except social security is more like a whole life insurance policy .

i paid in , i want my fair share . it is a key part of our income .

I couldn't agree more.

Three or four years ago I worked up a spread sheet of what I would have today if, starting when I worked in 1965, the money my employer and I paid in had been placed in a plain Jane bank passbook savings account.

Three or four years ago the amount was around $800k. This is just simple bank passbook savings and nothing special.

I'm 67 now and if I put off collecting benefits to age 70 my wife and I will collect right around $4,200/month in social security benefits.

To break even we will both have to live 190 months or nearly 16 years; I will be 86 and she will be 84.

To make it simple I did not factor any interest or increase in the value of the money stuck in the "account".

// I know, I know, I know... there is no such thing as "my account" so don't go off on me on a tangent; I am just making a point.

Now, do I have to live to 86 to "break even"?

No, I've already had a lot of value from social security even though I never collected a dime.

I always carried life insurance, and a lot of it when I was younger, in case something happened but I always had social security for my family too.

I benefited from social security when I was a little boy. There was my two sisters and me when my dad died in the very early 1950's leaving a young widow with three little ones ages 1, 3 and 4.

Until I graduated from high school we collected on dad's social security and it was a lot. I remember in 1961 my mother telling me we each received $33/month for a total of $99.

Today $99 isn't squat but in 1961 it was equivalent to $787.49 today which, with my mother working (she was a PBX operator at Stanford University), enabled us to live a decent life. That social security benefit enabled my mother to purchase a new home (1960) on Dundee Drive in Santa Clara so while it didn't buy groceries it did provide a roof over our head. There were "tight" times but never any poverty.

I shiver to think what might have happened to us were it not for social security in the 1950's.

A young man with wife and children has the same benefit today. We all need to remember social security is more than just a retirement.

According to social security that average 2015 benefit had by a Widowed Mother and Two Children was $2,680 which, for most, is free of state and federal taxes. For 15 years that is half a million and that doesn't count the automatic cost of living adjustments.

I look at my good neighbor and his wife with two children. He is a hard worker, he provides well and his wife works a bit too but if something were to happen to him I am glad that social security will be there to provide extra protection to the family.

Oh wow, did I ever go off on a tangent here! Now where was I? Is this an age thing?

Oh, beyond retirement my main goal is to provide my surviving spouse with as much money as possible. I am getting to the age where bad things can happen and I will rest easier knowing she won't have any financial worries and not have to depend on children or relatives to survive.

[TuborgP]

Originally Posted by Graywhiskers

But the logic is the same. It is a benefit singles don't get.

Why does it matter? If you are single you don't have a spouse who needs to be provided for. If a couple both die at the same time there is no spouse to worry about either. Single or married when you die you personally get no more.

[Graywhiskers]

Originally Posted by TuborgP

Why does it matter? If you are single you don't have a spouse who needs to be provided for. If a couple both die at the same time there is no spouse to worry about either. Single or married when you die you personally get no more.

If a woman, on her own earnings, has less of a benefit than her husband, if her husband passes, she will then get his social security check, which is more than hers.

Say a single woman has a social security check based on her earnings of $1000 a month.

Say a married woman has a check of $1000 a month based on her earnings, and her husband has a $1700 check based on his earnings. The widow will then get a check of $1700, compared to the single woman who gets $1000.

I like Social Security as it is currently structured. If we collectively determine, as one example, that single people are not treated fairly, then we should find ways to increase their benefits, rather than cut benefits for married couples.

[TuborgP]

^^^^^^Considering the current fiscal state of trust fund I doubt if any benefits will be increased for one without cutting for another.

[mathjak107]

yep , the name of the game is cut where you lose the fewest votes meaning the dead with estate taxes and aspects of ss which few boomers use since 80 million voting baby boomers can cost a party their jobs if they hit the masses with something negative .

[Graywhiskers]

Originally Posted by TuborgP

^^^^^^Considering the current fiscal state of trust fund I doubt if any benefits will be increased for one without cutting for another.

That is a conscious decision that can be made either way. Eliminating the salary cap is one way to fund higher benefits.
There is no valid reason the well off pay a lessor rate of social security tax than the middle class.

[TuborgP]

Originally Posted by Graywhiskers

That is a conscious decision that can be made either way. Eliminating the salary cap is one way to fund higher benefits.
There is no valid reason the well off pay a lessor rate of social security tax than the middle class.

Increasing the cap to save the fund is one thing, raising it to give others more is income redistribution and if you try that you will see the wrath of: Redistribution as a policy is already getting old and you only need to follow Bill Diblasio to see that. That also
Means companies big and small paying more in SS taxes and that will come at the expense of jobs, salaries and benefits often for those you might want to help.

[TuborgP]

Originally Posted by Graywhiskers

That is a conscious decision that can be made either way. Eliminating the salary cap is one way to fund higher benefits.
There is no valid reason the well off pay a lessor rate of social security tax than the middle class.

Lurkers note the poster is saying a lesser rate rather than lesser amount as anyone at the cap is paying more in SS taxes than anyone not at the cap. So they want those paying the most in total contributions to pay more. This is the problem we face those who could and might be willing to pay more are tired of bring vilified.

[Graywhiskers]

Originally Posted by TuborgP

Lurkers note the poster is saying a lesser rate rather than lesser amount as anyone at the cap is paying more in SS taxes than anyone not at the cap. So they want those paying the most in total contributions to pay more. This is the problem we face those who could and might be willing to pay more are tired of bring vilified.

If someone making $100,000 per year pays the 13.5% (or whatever it is) per year, so can someone making $200,000 per year. Fairness will win out in the end, whether you like it or not. You can pretend to be "vilified", stop playing the victim.

[bUU]

Originally Posted by Graywhiskers

If someone making $100,000 per year pays the 13.5% (or whatever it is) per year, so can someone making $200,000 per year.

This is actually not the whole story: All other variables the same, someone making $200,000 per year can more likely afford more than what someone making $100,000 per year can afford. So a regressive assessment for old age insurance doesn't make sense, from society's standpoint.