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Old 07-21-2012, 07:35 PM   #41
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Originally Posted by NW-Bound View Post
Ah, your explanation makes sense and it is not as complicated as I thought.

But then, the info on that Web page that you provided has conflicting info. For a single homeowner retiree whose max payment is $695.30 (biweekly), the two limits do not work out.

For ($696250-$192500)*($1.50/$1000) = $755.63 and not $695.30.

Boy, why do I get so involved in this, not being an Aussie?

But while we are comparing systems of the two countries, I realized how little I knew about our own.

For example, I just learned that the way SS is computed in the US using actual income history, there is no minimum SS payment. Theoretically, a person's benefit may compute out to just pennies. The SSA Web site says that if the computed amount comes out to less than $1, they will not make a check.

How could someone get so little? It is possible because even though there is a minimum wage, theoretically some people may work part-time and have so little income that their benefits work out to pennies.

I am not going to compute what a full-time minimum wage US worker would get. I have to save that for another day. But I will add that poor people with little or no SS benefits can apply for SSI, which is a form of welfare. It is definitely much less than the $18K/yr that the Aussie system provides.
For practical purposes, the minimum SS payout is equivalent to the SSI benefit amount, currently $674 a month. If at age 65, the earned SS retirement amount, is less than the SSI amount, an additional amount will be added to equal the amount of an SSI benefit. The caveat is, that ones assets and income will have to be within SSI guidelines. Essentially, everyone 65 or older, of limited means, is considered qualified for SSI regardless of whether they're disabled or not. Additionally, under these circumstances, they would also qualify for food stamps.

I don't know what percentage of the population would qualify at age 65 for such a scenario, but I do know of some. Usually widows with enough time in the workforce, or surviving spouse benefit, to qualify for a minimal SS retirement, but no other source of income.

You have to weed through the SSA website to put all the pieces together, to figure out how this works. I only know from people I know, who get such a benefit.

I suppose the true minimum SS retirement benefit, is someone who works 40 quarters (10 years), at a minimum wage job, and works no more throughout their lifetime. You could plug the numbers into the detailed calculator on the SSA site, and come up with an estimate.
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Old 07-21-2012, 08:49 PM   #42
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Thanks to Mbooth and BLS53 for the information.

It would appear to me that the Aussie minimum pension of $755/biweekly or $19.6K/yr would allow an elderly person to survive financially without further assistance, while the lower US SSI would be supplemented with food stamp, housing assistance, etc...

If the above is true, then the US system is way more complicated than the Aussie's.
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Old 07-23-2012, 12:18 AM   #43
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Quote:
Originally Posted by NW-Bound View Post

For example, I just learned that the way SS is computed in the US using actual income history, there is no minimum SS payment. Theoretically, a person's benefit may compute out to just pennies. The SSA Web site says that if the computed amount comes out to less than $1, they will not make a check.

How could someone get so little? It is possible because even though there is a minimum wage, theoretically some people may work part-time and have so little income that their benefits work out to pennies.

I am not going to compute what a full-time minimum wage US worker would get. I have to save that for another day. But I will add that poor people with little or no SS benefits can apply for SSI, which is a form of welfare. It is definitely much less than the $18K/yr that the Aussie system provides.
My cousin's mother gets no SS at all. She was a young drunk from what I hear and had some children taken away from her. Then she lived with my Dad's cousin for many decades having 5 children with him. He died without marrying her and she never worked while with him. Her daughter took her to apply for SS and that was when she found her parents had never married. Now her mom is 81 shacking up with an old man in his house. Her daughter is planning to take her in when he dies or kicks her out. She has no assets or income except part of a duplex she inherited. Her daughter bought the other party out, maintains it and rents it out but it isn't worth much. She didn't plan for old age at all, good thing one of the kids will take care of her.
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Old 07-23-2012, 04:44 AM   #44
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I don't have my 40 quarters yet. Will get to 40quarters in the Fall because I spent many years abroad. Therefore, so far, my spreadsheet has zero in the SS column, starting age 62. I also agree with the post below.
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For planning purposes, I would use 100% of what the SSA projects you would receive. This amount will vary over your remaining working career. The SS Trustees and Congress will make changes to the revenue and benefit amounts over the decades as they always have. You will need to adjust your plan accordingly as they do.
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