Taking what you don't need...

[enjoyinglife102]

I couldn't agree more with all the other posters. This trend of "taking" rather than emphasizing "making" is troubling. Plus, with all the uncertainty of finanicial markets and individual circumstances over many years, who's to say what's needed? I definitely don't know what life will be like 40 years from now but safe to say my needs won't be exactly as I've imagined them today.

 

[lrak]

We have many posters on this board who say that they have achieved FIRE, and do not actually need SS. Given the next generation will have to pay more to benefit less, some may say taking Social Security when you don't even need it presents a moral dilemma. We all have the choice not to file for benefits, but I do not hear about very many taking turning it down. (other than by dying younger than expected).

Anyone here considering not filing for benefits? I know many will reply they ""earned" the benefits, but that is not my point.

Given the next generation will have to pay more to benefit less, I say retiring while you are still able to work presents a moral dilemma. We all have the choice to continue working and continue paying FICA taxes, but I do not hear very many on this board talking about working into their 90s to benefit future social security beneficiaries. It is 50% better for you high earners to contribute $15k in social sec taxes rather than just opt out of collecting their $30k benefit. Anyone here considering working so they can give the government more money?

 

[samclem]

Like others, I'd take it and, if I wanted to I'd give it away.

You could make a moral argument that it is wrong NOT to take it even if you don't "need it." If everyone takes the money they are due and it causes stress on SS, then we'll have to come up with an institutional fix to the problem. If good, well-meaning altruistic people don't take the money while greedy, selfish people DO take the money, then we've got a situation in which "bad" people prosper and "good" people are relatively worse off. "Good" shouldn't equal "sucker." Anyone failing to take the money is actually undermining public support for Social Security, and we shouldn't stand for it!

Would anyone consider not taking any tax deductions? Mailing extra dough to the Treasury? Same thing. I know a lot of causes more worthy than the federal government.

 

[nun]

I see participation by everyone in programs like SS and Medicare as vital to their continuation. Once the well off either choose not to participate or are excluded by means testing it opens up the way for politicians to further restrict and reduce the programs for the middle class and poor using the libertarian and deficit arguments that the powerful and wealthy use to enrich themselves at the expense of most of society.

 

[RockyMtn]

after watching the federal gov't fritter away all of the tax money I paid to them over the years I don't believe that opting not to take SS and letting them keep the money is the prudent course of action. I will take it and decide who or what charity/cause will receive it.

 

[mystang52]

If I die with leftover cash (not that I want to do the former, but do want the latter), I would rather decide in my will where these funds go and not leave it to the govt to choose.

+1

 

[truenorth418]

The whole idea of "means testing" SS makes me angry. So the reward for anybody who is prudent and lives below their means for their whole lives, works hard, saves, and invests and pays into 401(k) programs and IRAs is to be "means tested" into lower SS benefits than someone else who may have earned the same and paid just as much into the system but who spent their take home pay away by living to the max?

Plus, in reality, "means testing" already exists in the form of higher tax brackets against the higher combined income from the SS, retirement programs and pensions from the hard workers and savers. I did the math. Most of my SS benefits will go to pay taxes on my IRA RMDs. Makes me wonder why I bothered to save so much on those accounts.

 

[ls99]

I have great difficulty rounding up any altruistic goodwill when it comes to SS. I had no option in "contributing" to SS, it was confiscated from each and every paycheck of mine. And my employers were, under penalty of pain, required to to contribute as well.

Collecting it I am and would, out of spite even if I was better off than the Oracle of Omaha.

 

[Alan]

Seeing the other thread on LTC also raises the issue that unless you can be certain that you can afford all the end of life care that you may need, then taking SS at age 70 or earlier makes sense.

 

[brett]

This was my money to start with.

The Government has taken enough of my money. I would like some back. I am entitled to it.

After that, it is my decision where to spend it. I would much rather increase my financial support to our local food bank in the knowledge that just under 97 percent goes where it should...to buy food. Can the Government come even close that that level of efficiency?

 

[FinanceDude]

No moral issues here. Being self-employed is a real eye-opener.........I will be taking SS if it is still there..........

 

[Bob Adams]

Interesting post Shanky, and very thought provoking. I'm probably going to regret making this statement but WTH. If I knew that I had enough for me and my spouse to live out our lives in our current manner, then yes, I could see doing without SS and leaving it for others. What prevents me from doing that is that I don't know of a way to calculate with certainty how much we're going to need.

 

[W2R]

If I die at a "normal" age, I won't need it, true. This is a common goal - - to be independently FI first, and then retire.

But given that I have no predilection towards suicide, what if I don't die at a normal age?

Wikipedia says that Jeanne Calment of France lived to 122. If I lived anywhere near that long surely I would need it.

 

[Major Tom]

Strictly speaking, I don't need it, as I am currently getting by comfortably on ~17K/yr. However, I'd really like to have a bit more, and the difference that SS will make to my budget will be considerable. The promise of SS, as it gets closer, will allow me to increase my WR a little, and then the relatively large extra influx of income when I turn 62 will feel like a shot of adrenaline - or perhaps more accurately, a mug of hot, rich cocoa with a shot of whiskey

I will definitely be claiming SS.

 

[NW-Bound]

There are social benefits that I never thought of claiming in the past, even if I might be eligible.

1) Unemployment benefits.

My wife left her work in disgust due to job pressure. She never intended to work ever again. The last time I worked full-time was in 2003. Since then until 2012, I only worked sporadically when my sources needed me. Because we did not actively seek work, we did not think of claiming for unemployment.

2) College benefits

I have never seen a FAFSA form. I paid for all my children college costs. No subsidized loans either. When I went to college, I did need assistance, but not now. When I filed my taxes, I was surprised to see I got all kinds of educational tax credits already. At first, I even felt a bit guilty about it. Then, I figured that my children would be getting better jobs, and would become productive workers to pay that back to society, so I felt better.

SS is not a freebie to me, so I will claim it.

 

[LARS]

Interesting concept of "moral dilemma" when it comes to government payments/SS. I suppose I would have found this a question worth contemplating if the payments in had been voluntary. As the "contributions" were mandatory I see ZERO moral dilemma, but if you do, feel free to follow your conscience...

 

[travelover]

Why leave the distribution of your untaken benefits to chance? I, who have spend a lifetime of gambling, chasing women and drinking, definitely need your money. PM me for an address to send the checks to.

 

[Mulligan]

Why leave the distribution of your untaken benefits to chance? I, who have spend a lifetime of gambling, chasing women and drinking, definitely need your money. PM me for an address to send the checks to.

I think that is a disability check you need to file for. While I have not lost a step of speed in concern of gambling, I have found your other two vices much harder to stay up with as I have gotten older.

 

[travelover]

I think that is a disability check you need to file for. While I have not lost a step of speed in concern of gambling, I have found your other two vices much harder to stay up with as I have gotten older.

The OP can call it what ever they want, as long as they sign the back before they forward the check.

 

[LitGal]

DItto

Why a moral problem?

If my friend and I both made the income, hence the same SS contribution, but he never saved any money in his 401k while I did, why should I subsidize him now?

The reason I had been saving is that I can have extra beyond SS for more comfort in my old age. It is called delayed gratification, and it is good to encourage people to save and to invest. It is not good to punish savers.

If I have extra, I would rather give to charities (which I do) than to spendthrifts. Or I can leave to my children, who are paying into SS to subsidize those spendthrifts too.

If SS benefits have to be cut to avoid heavy lifting by younger generations, then cut mine and my friend's equally. Watching him suffer will teach youngsters to save. That's a good moral lesson.

+1 Those who have failed to learn the rewards of delayed gratification may still have the chance to learn that important lesson. Many of us could only ER because of lifetimes of LBYM, teaching ourselves basic investing, continual frugality/doing without the toys many of the "Joneses" bought (either on credit, or by living paycheck to paycheck). We "did without" during our working years, so that we would not "do without" in our elder years. We made those choices.

Those who used their $ differently (and did not save) were free to make that choice.....and enjoy that lifestyle. To me, freedom at 59 was way more important than extra "toys" in my '30's and '40s.

FWIW

 

[gauss]

OP sets up a false proposition when he claims:

Given the next generation will have to pay more to benefit less, some may say taking Social Security ...

SS could be fixed by lifting the income cap on high income individuals. In 2013 any earned income over $113,700 is not subject to Social Security withholding. Why do only the middle and lower income folks pay 6% of their income to Social Security but the high income earners do not?

No need to cut benefits to future generations or raise their tax rates.

-gauss

 

[farmerEd]

OP sets up a false proposition when he claims:



SS could be fixed by lifting the income cap on high income individuals. In 2013 any earned income over $113,700 is not subject to Social Security withholding. Why do only the middle and lower income folks pay 6% of their income to Social Security but the high income earners do not?

No need to cut benefits to future generations or raise their tax rates.

-gauss

Yes and no, if you remove the cap on contributions, do you also remove the cap on payments you can collect? Would we then have very rich folks getting $50,000/month SS checks when they retire? I don't see how or why you would have a cap on contributions, but not on payouts.

And if there is a cap on neither, you don't really solve any problem do you? You take more money in on one hand, but pay more money out with the other.

 

[NW-Bound]

I do not know if they would plan to cap the distributions or not, but it still helps even if there is not.

As SS benefit formula is regressive, it's OK to pay very rich folks $50K/month, if we took in from them $100K/month while they were working. Of course, some people would gloss over that last fact, and lament that SS is a welfare for the rich.

 

[Which Roger]

Yes and no, if you remove the cap on contributions, do you also remove the cap on payments you can collect? Would we then have very rich folks getting $50,000/month SS checks when they retire? I don't see how or why you would have a cap on contributions, but not on payouts.

And if there is a cap on neither, you don't really solve any problem do you? You take more money in on one hand, but pay more money out with the other.

Removing the cap on both would actually help, due to the redistributive nature (from higher to lower earners) of the payments. Presently, for the amount you earned per month in excess of $4,768, you only get 15% back in SS payments (vs 90% up to $791 and 32% from $791 to $4,768).

 

[ERD50]

Who keeps saying that getting posters on this forum to agree on anything is like herding cats?

I think this is about as close to consensus as one can come! I also think the OP just had a semi-interesting question, until he inserted "moral dilemma". Then it turned into a judgement.

I'm more concerned about the "moral dilemma" of those who chose frequent new cars, fancy vacations, and lots of (relatively) conspicuous consumption over the principles of LBYM, saving, and learning about investing, who are now dependent on that SS check. Maybe the govt will need to reduce those payments in the future. Most of us will survive, but those others will be hurt. Maybe they should have acted more 'morally' in regards to their own future?

-ERD50