SS Trust Fund to run dry sooner than anticipated

[rodi]

Quote:

Originally Posted by marko To be clear: a 65-ish guy with a 40-ish wife with minor children. No disability. The wife can claim her own SS?? Does the same hold if there are no children?

No. The wife is claiming under his, if she's the caregiver for the kids.
Only works if there are children.

Then when she reaches retirement age she could collect under her own wage history, or the spousal coverage.

If she's 40, and has young ones, they'd turn 18 before she turns 62... so there would be a gap before she could collect spousal benefits at age 62.

[73ss454]

Try this.

Social Security Family Benefits Mess

[rodi]

Even in the Trump scenario it's capped by the family max. So Ivana & Melia (wives) and Tiffany and Barron (minor kids) would all get reduced amounts.

[GrayHare]

Even after reading SSA's descriptions, I'm not clear Who's on First. Which of the following is correct for couples married over 10 years?

A. The younger spouse can claim spousal benefits as soon as the older spouse reaches eligible age.
B. The older spouse can claim spousal benefits as soon as the older spouse reaches eligible age.
C. Both are true.

[73ss454]

D. Both are false.

We need some ages and if kids are involved.

[GrayHare]

Quote:

Originally Posted by 73ss454 D. Both are false. We need some ages and if kids are involved.

Surprised such specifics make a difference, but let's say no kids, older spouse is age 60 and younger is 50, both have worked.

[73ss454]

You get to keep working.

[GrayHare]

Quote:

Originally Posted by 73ss454 You get to keep working.

which means spousal benefits are not possible unless there are kids... wow, the SSA info certainly didn't make that clear

[73ss454]

...and the bread winner is 62 or over. Then the whole family gets money with young kids and a wife earning less than around 15K a year.

[ronocnikral]

Quote:

Originally Posted by GrayHare which means spousal benefits are not possible unless there are kids... wow, the SSA info certainly didn't make that clear

I've found the SS handbook to be an excellent resource and pretty easy to navigate.

Here is the answer to when a spouse can begin drawing on SS

Quote:

You either: Are age 62 or over; or Have in care (as defined in §312) a child under age 16 or disabled who is entitled to benefits on the worker's Social Security record; and

That's really suppose to be the letter "D" and not "1". Also, you only have to be married 1 year prior to applying for benefits for your spouse to qualify. 10 years is the amount of time you must be married to qualify for divorced spouse's benefits (and that is not computed in the family maximum).

Here is how their benefit is reduced starting at age 62.

Quote:

A spouse can choose to retire as early as age 62, but doing so may result in a benefit as little as 32.5 percent of the worker's primary insurance amount. A spousal benefit is reduced 25/36 of one percent for each month before normal retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per month. There is no reduction for the prior entitlement as a wife or husband.

[GrayHare]

Hmm, still not clear. http://www.ssa.gov/OP_Home/handbook/...book-0305.html discusses injured workers (only?). Much of the confusion comes from text referring to "you" or "your" when it is unclear if those words refer to the spouse or the person seeking spousal benefits.

[ronocnikral]

Quote:

Originally Posted by GrayHare Hmm, still not clear. SSA Handbook § 305 discusses insured workers (only?). Much of the confusion comes from text referring to "you" or "your" when it is unclear if those words refer to the spouse or the person seeking spousal benefits.

in that section, you and your refer to a spouse of an insured worker. Insured worker is the person who's record of work you are claiming benefits on.

Example: DW is 5 years older than me. When she turns 62, i'll be 57. the earliest she can claim a spouse's benefit on my record is when I turn 62, she'll be 66. She will be near FRA at that time and will benefit from waiting ~6 months until she is 67 to take the full 50%.

Example 2: Let's say the example above is flipped. I am 5 years older than DW. When I reach 62, she will be 57. I can begin my benefit, based on my work record, anytime after I reach 62. DW cannot claim a benefit on my work record (or her work record any earlier than age 62 unless I die or we have a baby by immaculate conception). If I take my early retirement at age 62, it is based on my work record and the rube goldberg calculation poops out a number known as PIA (primary insurance amount, benefit at full retirement age). DW's spouse's benefit is based on my PIA. So when she turns 62, she can take 32.5% of my PIA or wait until FRA to take the full 50%, regardless of when I elected to start my benefit. She cannot take a benefit earlier than age 62 (exceptions noted above).

[rodi]

Quote:

Originally Posted by GrayHare Surprised such specifics make a difference, but let's say no kids, older spouse is age 60 and younger is 50, both have worked.

In this scenario
No benefits till the older person starts collecting at retirement age. They can start collecting a reduced benefit at age 62, or wait till full retirement age (66 or 67).
When the younger person reaches retirement age they get the greater of the following: their own benefit, or the 1/2 of their spouses benefit.
And it gets tricky - if they're collecting on the spousal benefit - and the spouse took early retirement (62) - the spousal benefit is also reduced.

There's also a scenario where the younger person collects the 1/2 spousal benefit at 62, but waits to apply for their own benefit (under their own wage history) till age 70. I think... I could be wrong because that scenario likely won't apply to us so I wasn't paying as close attention to this situation and the nuances.

[GrayHare]

Thanks, ronocnikral, with your examples I think the confusion is clearing. If I understand correctly: if there are no children, spousal benefits are not available to spouse A unless spouse B is eligible for benefits, and spouse A is at least age 62.

[Finance Dave]

Quote:

Originally Posted by BigE Every day I see healthy appearing person "scamming" the disability system. 40 yr olds with normal spines claiming back pain. Don't know just how pervasive this is (ie, don't have hard data on this), but it would appear that the nation of "food stamps" is also a nation of "I can't work, give me a monthly check" for my fibromyalgia". Please refrain from hate-mail, I know there are plenty of people who justifiably need SSDI, but those who don't are robbing the social security system (read: stealing from seniors).

You're right. I've had injuries where I went to physical therapy...and I had guys next to me on the fitness machines telling me how to make sure I didn't have to return to work for months. I WANTED to get back to work asap...ended up being off 3 days for a back spasm issue.

[ShortInSeattle]

Quote:

Originally Posted by BigE Every day I see healthy appearing person "scamming" the disability system. 40 yr olds with normal spines claiming back pain. Don't know just how pervasive this is (ie, don't have hard data on this), but it would appear that the nation of "food stamps" is also a nation of "I can't work, give me a monthly check" for my fibromyalgia". Please refrain from hate-mail, I know there are plenty of people who justifiably need SSDI, but those who don't are robbing the social security system (read: stealing from seniors).

I think this situation is a tough one to assess. We can't see into someone's heart (and medical history) to pass judgement, but on the other hand many of us can think of people we've met who are living off the government unnecessarily.

I have a young relative who gets several hundred a month because he has a parent on disability. He has a working parent too (doesn't need the money) and spends most of the cash on snowboarding and X-box games. Some goes to a college fund.

A friend's brother couldn't hold down a job because he wouldn't wake up on time and had poor hygiene. His disability attorney had him take jobs to "prove he'd get fired" while they appealed to SSI. He was eventually approved, the lawyer took a big bite of the cash, and now he spends almost all of his time playing online videogames. He'd like to get a part time job and see if he can re-enter the workforce, but doesn't want to risk his benefits which include medications.

I don't think of either of these young men as "robbing the system" but it does seem to me that we're not making the best use of our tax dollars.

[thefinancebuff]

Quote:

Originally Posted by rodi Even in the Trump scenario it's capped by the family max. So Ivana & Melia (wives) and Tiffany and Barron (minor kids) would all get reduced amounts.

I don't think divorced spouse is subject to the family max.

[Bdroc]

Quote:

Originally Posted by BigE Every day I see healthy appearing person "scamming" the disability system. 40 yr olds with normal spines claiming back pain. Don't know just how pervasive this is (ie, don't have hard data on this), but it would appear that the nation of "food stamps" is also a nation of "I can't work, give me a monthly check" for my fibromyalgia". Please refrain from hate-mail, I know there are plenty of people who justifiably need SSDI, but those who don't are robbing the social security system (read: stealing from seniors).

I read that SS disability has doubled in recent years and that many new claims occur after unemployment benefits run out. I also read that more than 40% of new claims are for mental stress. Smells like a scam to me.

[REWahoo]

Quote:

Originally Posted by Bdroc I read that SS disability has doubled in recent years and that many new claims occur after unemployment benefits run out. I also read that more than 40% of new claims are for mental stress.

Can you provide us a link to the source of your info?

[Cb]

Quote:

Originally Posted by REWahoo Can you provide us a link to the source of your info?

The Econtalk podcast addressed this topic last week:

David Autor of MIT talks with EconTalk host Russ Roberts about the Social Security Disability Insurance (SSDI) program. SSDI has grown dramatically in recent years and now costs about $200 billion a year. Autor explains how the program works, why the growth has been so dramatic, and the consequences for the stability of the program in the future. This is an illuminated look at the interaction between politics and economics and reveals an activity of government that is relatively ignored today but will not be able to be ignored in the future.