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Old 02-02-2013, 09:06 AM   #41
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Originally Posted by growing_older View Post
Just to be clear, this is not correct. "Social Security" as we usually discuss it is only the old age pension and death benefits. SSI, the disability income program, is not Social Security. It is Supplemental Security Income and is often confused with Social Security.

From the ssa.gov website:

Supplemental Security Income (SSI) is a Federal income supplement program funded by general tax revenues (not Social Security taxes)
While the bold is correct, your earlier comment is incorrect. Social Security includes disability insurance as well as retirement and survivor benefits. SSI is a supplementary program which provides benefits to people who may or may not qualify for Social Security.

Also from the ssa.gov website Social Security Disability Benefits

Social Security pays disability benefits to you and certain members of your family if you have worked long enough and have a medical condition that has prevented you from working or is expected to prevent you from working for at least 12 months or end in death.

You may see the acronym OASDI when referring to Social Security (sometimes it appears in the context of payroll taxes being deducted from your paycheck). OASDI means "Old-Age, Survivors, and Disability Insurance."

When someone runs the numbers comparing payroll taxes to some expected return on them had they been invested in a personal account, one should exclude the portion which pays out disability and survivor benefits because as with those forms of insurance, there is no expectation of getting money back - something unforeseen and tragic must occur (unlike simply turning 65 and retiring, for example) in order to collect those benefits.
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Old 02-02-2013, 09:20 AM   #42
Thinks s/he gets paid by the post
 
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Oops. The fact that SS administers SSI made me assume it was funded the same way.

Sorry for the confusion.

Quote:
Originally Posted by growing_older View Post
Just to be clear, this is not correct. "Social Security" as we usually discuss it is only the old age pension and death benefits. SSI, the disability income program, is not Social Security. It is Supplemental Security Income and is often confused with Social Security.

From the ssa.gov website:

Supplemental Security Income (SSI) is a Federal income supplement program funded by general tax revenues (not Social Security taxes)
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Old 02-02-2013, 09:32 AM   #43
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So Social Security pays regular disability that is dependent on having worked out of FICA, and pays SSI (which is not dependent on having worked) out of general funds?

I had no idea that SS had two separate disability programs.

An idea on how much SS pays out in regular disability? I've had trouble finding any details on it.

Quote:
Originally Posted by scrabbler1 View Post
While the bold is correct, your earlier comment is incorrect. Social Security includes disability insurance as well as retirement and survivor benefits. SSI is a supplementary program which provides benefits to people who may or may not qualify for Social Security.

Also from the ssa.gov website Social Security Disability Benefits

Social Security pays disability benefits to you and certain members of your family if you have worked long enough and have a medical condition that has prevented you from working or is expected to prevent you from working for at least 12 months or end in death.

You may see the acronym OASDI when referring to Social Security (sometimes it appears in the context of payroll taxes being deducted from your paycheck). OASDI means "Old-Age, Survivors, and Disability Insurance."

When someone runs the numbers comparing payroll taxes to some expected return on them had they been invested in a personal account, one should exclude the portion which pays out disability and survivor benefits because as with those forms of insurance, there is no expectation of getting money back - something unforeseen and tragic must occur (unlike simply turning 65 and retiring, for example) in order to collect those benefits.
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Old 02-02-2013, 09:41 AM   #44
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While the bold is correct, your earlier comment is incorrect.
Thanks for the correction. I am apparently confused by multiple programs calling themselves SS and addressing disability in various ways. With the overlap, I'm not sure how we account for the "value" of these various benefits when discussing what the social security premiums are paying for. So any comparisons to a private alternative system are going to be confused by which of these disability benefits to include.
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Old 02-02-2013, 09:45 AM   #45
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Originally Posted by Midpack View Post
Just a detail, but actually it's 35 years. With only 30, SSA will use 5 years of $0 wages.

Computing benefits with less than 35 years of work
Furthermore, IIRC, the year before you turn 62 is the last year that enters in the calculation. So, if you start work at 35 and work until you are 70, only 26 or 27 of those years count towards calculating SS benefits.

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Old 02-02-2013, 09:58 AM   #46
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Originally Posted by Marc View Post
Furthermore, IIRC, the year before you turn 62 is the last year that enters in the calculation. So, if you start work at 35 and work until you are 70, only 26 or 27 of those years count towards calculating SS benefits.

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You can continue to earn benefits after you are 62.

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If you continue working past age 62, your additional earnings could increase your benefit.
Social Security Publications
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Old 02-02-2013, 10:17 AM   #47
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Growing_Older and Hamlet, it can be confusing to figure out how much SS pays in retiree versus disability versus survivor benefits (versus benefits which might fall into any of these categories).

This report might shed some light on the breakdown of the payouts.

FINANCIAL OPERATIONS OF THE TRUST FUNDS ANDLEGISLATIVE CHANGES IN THE LAST YEAR

One ratio I use (Calendar year 2011, all figures in millions) is Retired Workers divided by total payments, or 461,234 / 725,148, or 63.6%. The Disability payments as a percentage of total payments is shown in the report, 128,935 / 725,148, or 17.8%. Survivors payments as a percentage of total payments is 106,310 / 725,148, or 14.7%.

As for SSI, it is a program administered by SS but whose funds come from general revenues. Many people get this confused with actual SS. For income tax purposes, however, SSI is treated like SS. (A friend of mine received SSI many years ago and it was reportable on his income taxes as SS.)
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Views on SS as a function of age
Old 02-02-2013, 10:58 AM   #48
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Views on SS as a function of age

A lot of your opinions depend on your seat in the ballpark.
This is where I have seen my views on social security and the amount paid for it over the years.

Age 20 - 35

Contributions: This is sort of pricey, but everybody pays the same. I am OK with it because I can reconcile it with the benefits.
Expectations: I donít expect there to be anything in this system for me when I retire. I need to plan for funding my own retirement. I work for a company that has a pension plan, and that looks like a good deal. But Iím not sure I trust the company I work for. I might switch jobs and have to restart the pension formula, so I better stash some cash for myself.
Benefits: I see my grandparents and their generation is getting a check every month. They never put much into the system, but it seems like it is a big deal to them. Some of those folks never saved any money, and it is a very big deal to them. My contributions are paying for their benefits.

Age 35-50
Contributions: This is part of that big chunk of income that goes out every paycheck. Seems like quite a chunk, especially when you consider that my employer is paying the same amount. Taxes are inevitable; everybody complains about them, I guess it is my job to pay them.
Expectations: I sure hope there is something in benefits down the road. I have paid in quite a bit. But I also see my own 401K growing nicely, and think I will pump up the contributions there. I think about changing jobs, but that pension thing looks like it turns into a real benefit if I stick around a few more years. I really donít trust the company I work for, so I better put another percent into the 401K.
Benefits: Grandmother really looks forward to when the check shows up in the mail. My parents are starting to draw social security. They are much better off financially than where my grandparents were, but they live very differently also. They are very active, travel, and have a lake place. They grouse a little bit because they had a small business and wrote big checks to SS every payday (the company sides of the contribution), and they think the check isnít very big. But I suspect they like the regular source of money also.

Age 50-65
Contributions: Now that the kids are out of the house, it seems like we have more discretionary income. Stuff is mostly paid for. We can max out the 401K and the wifeís IRA contribution.
Expectations: I have paid for SS for 30+ years, maxing out the amount probably 25 of those years. There had dang well better be a check there every month. This 2% reduction is one of the stupidest things that I have ever heard of. Most folks I work with donít even see it. The 401K is really rockiní and rolliní now. It took a beating a couple times, but the market is cyclical. It is interesting to look back 20 or 25 years to where I was watching the balance every day or two. Heck, those accounts were so small then, I have that much in my savings account now! I still donít trust the company that I work for, but it is probably as good as it gets.
Benefits: When I start working on my retirement planning, that projected SS amount shows up in the calculation. When you add it in with the projected pension amount, it makes a difference. Seems like there are a number of different ways to draw it out, I wonder what the rules will be when it comes time to make those decisions. I worry about a lot of stuff when planning for retirement, but the reality is that we have it made in the shade! There are lots of things that can go wrong, but even if they do- we will be in a much better position than a lot of folks. Life is good.
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Views on SS as a function of where you sit
Old 02-02-2013, 11:03 AM   #49
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Views on SS as a function of where you sit

Of course, there are other seats in the ball park. It seems like the following are the folks that show up on TV:

Age 20 Ė 35
Contributions: I sure could buy some more beer with that FICA money.
Expectations: I am going to live forever and there will always be beer in the fridge!
Benefits: Those old people that are worried about Social Security should have taken care of themselves.

Age 35-50
Contributions: I sure could make payments on a boat with that FICA money.
Expectations: I am going to live forever and somebody is drinking the beer in my fridge!
Benefits: Those old people that are worried about Social Security should have taken care of themselves.

Age 50-65
Contributions: I sure could make payments on another pickup or motorcycle with that FICA money.
Expectations: I am going to work forever and hope there will be beer in the fridge!
Benefits: I am going to have it made when that SS check rolls in at age 60! I wish it was a bigger check!
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Old 02-02-2013, 11:53 AM   #50
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That's exactly what I was looking for.

Thanks!

Quote:
Originally Posted by scrabbler1 View Post
Growing_Older and Hamlet, it can be confusing to figure out how much SS pays in retiree versus disability versus survivor benefits (versus benefits which might fall into any of these categories).

This report might shed some light on the breakdown of the payouts.

FINANCIAL OPERATIONS OF THE TRUST FUNDS ANDLEGISLATIVE CHANGES IN THE LAST YEAR

One ratio I use (Calendar year 2011, all figures in millions) is Retired Workers divided by total payments, or 461,234 / 725,148, or 63.6%. The Disability payments as a percentage of total payments is shown in the report, 128,935 / 725,148, or 17.8%. Survivors payments as a percentage of total payments is 106,310 / 725,148, or 14.7%.

As for SSI, it is a program administered by SS but whose funds come from general revenues. Many people get this confused with actual SS. For income tax purposes, however, SSI is treated like SS. (A friend of mine received SSI many years ago and it was reportable on his income taxes as SS.)
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Old 02-11-2013, 09:01 AM   #51
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Originally Posted by MichaelB View Post
Could be.

Here's a link to the study http://www.nasi.org/sites/default/fi...icans_Want.pdf

Pretty strong support. No sign of "other people's money" syndrome either. People like Social Security and want to see it strengthened.
Thanks for the link, it's interesting reading. Lots of detail regarding various options. This was a lengthy survey.

Page 19 says that support for "Eliminate Cap" gets almost identical support to "Raise my tax from 6.2% to 7.2%". That really surprised me.

I think wording matters here. Their wording was:

Quote:
Workers currently pay 6.2% of their earnings to Social Security, matched by the employer. One proposal
would very gradually raise the Social Security tax rate over the next 20 years.

Example: For a worker earning $50,000, gradually raising the tax rate by 1/20th of 1% per year for 20
years would mean, each year, paying about 50 cents more per week, matched by the employer
.
I think it would be more accurate to say

Quote:
Workers currently pay 6.2% of their earnings to Social Security, matched by the employer, for a total of 12.4%.
One proposal would gradually raise the Social Security tax rate over the next 20 years, to 7.2% for each or 14.4% in total.

Example: After 20 years a worker earning $50,000 would pay an additional $42 per month, with the employer also paying an additional $42 per month.
I expect support for the tax rate increase would have been less. But, the strength of the support for the question with their wording probably indicates that even my wording would have had significant support.
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Old 02-11-2013, 09:30 AM   #52
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Originally Posted by Independent View Post
I expect support for the tax rate increase would have been less. But, the strength of the support for the question with their wording probably indicates that even my wording would have had significant support.
I think it would be more supported by those who don't expect to paying the higher tax for too many more years. If all they did was raise my taxes 0.05% per year for another 3 years or so (hoping for Class of 2016) and my benefits wouldn't be watered down or means tested, that would be going a little too easy on me at the expense of those just entering the work force and having to pay the higher tax for their whole lives... and probably face another crisis in SS when they hit middle age.
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Old 02-11-2013, 10:54 AM   #53
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I think it would be more supported by those who don't expect to paying the higher tax for too many more years. If all they did was raise my taxes 0.05% per year for another 3 years or so (hoping for Class of 2016) and my benefits wouldn't be watered down or means tested, that would be going a little too easy on me at the expense of those just entering the work force and having to pay the higher tax for their whole lives... and probably face another crisis in SS when they hit middle age.
According to the survey, you're correct.

Percent Favor:
76% Silent Generation
75% Baby Boomers
68% Gen X
55% Gen Y
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