S.S. as annuity - interesting Greaney article

[FinanceDude]

Where can a 70-year-old buy the least expensive life annuity?

Interesting article - any thoughts? How long can this loophole last?

K.

Interesting......I've been calling SS an annuity for years..........

 

[CitricAcid]

Interesting......I've been calling SS an annuity for years..........

Is that why you hate SS or why you hate annuities?

 

[FinanceDude]

Is that why you hate SS or why you hate annuities?

Neither.......I have just maintained that pensions and Social Security ARE annuities, when folks on here get uppity and say: "I don't own any annuities and I never will"!!!

 

[OAG]

Hi again OAG,
So will you be receiving SS benefits from August thru October of this year or not? If not, does SS pay those benefits for August thru October back later, or does SS treat the period of Aug. thru Oct. as a suspension of benefits, or do you simply lose SS benefits for the months of Aug. thru Oct.?

Thanks again,
Robert K

PS - from Aug 1-Oct 31 is 3 months, not 4 months

Your original post said 1/8-10/31/08 which is roughly 10 months. Apparently you meant to write 8/1-10/31/08, but again that is 3 months, not 4 months. Perhaps it goes 7/1-10/31/08, which would be 4 months.

Gee, it was early, I guess, I looked at the bill again and it said Aug 1 to Oct 31 of 2008 but the actual amount was for a 4 month period ($96.40 X 4 = $385.60) and after giving it some more thought I guess they really mean the months of Aug, Sep, Oct and Nov of 2008. Reasonable since my LAST Medicare deduction was from the Social Security benefit deposit for which was paid in late June 2008. No I will not receive any further SS payments (account has been "suspended") UNLESS I fail to respond to the repayment letter (yet to get here but I have been assured it has been sent) with a valid check/payment; which I intend to do.

Nothing unique about the Medicare billing as that is what almost everyone will do at age 65 if they are not receiving SS benefits (from which they deduct the payment amount and send it to MC).

 

[Marquette]

Neither.......I have just maintained that pensions and Social Security ARE annuities, when folks on here get uppity and say: "I don't own any annuities and I never will"!!!

I still maintain that position... but I am aware that I'm buying someone else an annuity right now.

But, how can something be both an annuity and pay as you go?

The Future of Social Security

Current Social Security system is unsustainable in the long run

Many people think that the Social Security taxes they pay are held in interest-bearing accounts earmarked for their own future retirement needs. The fact is that Social Security is a pay-as-you-go retirement system—the Social Security taxes paid by today’s workers and their employers are used to pay the benefits for today’s retirees and other beneficiaries.

Obviously, it's not a pure pay-as-you-go system, but it seems quite different from an annuity.

 

[Robert8]

Hi again OAG,

Thanks for your reply. See if I have this about right. If a person withdraws and repays the process might take 12 months. During the first 8 months nothing changes. You continue to receive your old SS benefits and Medicare premiums are deducted from your SS benefits. Then you receive the bill from SS for repaying benefits, which includes those 8 months and SS benefits are suspended for about 4 months until the higher benefits kick in. During those 4 months you are billed for your Medicare premiums, since there are no monthly SS benefits to deduct the Medicare premiums from. Have I got this about right?

Thanks again,
Robert K

 

[OAG]

Hi again OAG,

Thanks for your reply. See if I have this about right. If a person withdraws and repays the process might take 12 months. During the first 8 months nothing changes. You continue to receive your old SS benefits and Medicare premiums are deducted from your SS benefits. Then you receive the bill from SS for repaying benefits, which includes those 8 months and SS benefits are suspended for about 4 months until the higher benefits kick in. During those 4 months you are billed for your Medicare premiums, since there are no monthly SS benefits to deduct the Medicare premiums from. Have I got this about right?

Thanks again,
Robert K

No SS does not resume at the end of 4 months. It does not resume until a NEW SS APPLICATION is made at the choosing of the the applicant (BTW I will be 68 in October 2008. I can apply immediately after paying it back and get the NEW HIGHER RATE or wait til later (no benefit to go beyond 70). Personally, I plan to wait until age 70 to resume (new application) benefits. Medicare payments will be on going regardless. Much cheaper than buying an regular annuity.

 

[Robert8]

Thanks OAG,
That clears it up for me.

Robert K

 

[CitricAcid]

I still maintain that position... but I am aware that I'm buying someone else an annuity right now.

But, how can something be both an annuity and pay as you go?

The Future of Social Security



Obviously, it's not a pure pay-as-you-go system, but it seems quite different from an annuity.

Sounds a bit like a pyramid/Ponzi scheme, money is fed from the people buying into it into those alraedy in it and they hope the chain continues as more people put into it until it explodes. Obviously it isn't the same exact scenario since Congress has the power to levy taxes and regulate closer, but the similarities in the structure is still there

 

[FinanceDude]

Sounds a bit like a pyramid/Ponzi scheme, money is fed from the people buying into it into those alraedy in it and they hope the chain continues as more people put into it until it explodes.

Sounds like a UAW pension contract............