Another clever SS scheme?

[mickeyd]

Here is yet another article on SS, but I had never heard of this scheme before. I suspect that there are about a million SS-related articles yet to be written and that many different schemes will be hatched in an effort to break the bank even earlier than previously predicted (2017?). I will probably read them all.

The scenario: George, at his full retirement age of 66, expects a benefit of $2,000 a month. His wife, Martha, at her full retirement age of 66, expects a benefit of $1,000 a month.

The strategy: Martha files for a reduced benefit on her own at age 63, or $800 a month. George, at age 66, files for just a spousal benefit, based on Martha's earnings. He would get $500 a month as Martha's spouse. (Yes, Social Security allows George to get half of what Martha was projected to receive at her full retirement age.) Then, at age 70, George applies for benefits based on his earnings history. With the "delayed retirement credit" (the additional dollars one receives for waiting until age 70 to claim Social Security), George's benefit would be 32% higher, or $2,640 a month.

http://finance.yahoo.com/focus-reti...to-Social-Security?mod=retirement-preparation

 

[FinanceDude]

Seems a bit ironic that everyone's trying to figure out how to "cheat the system", when the system is running out of money.

These folks are late to the party..........

 

[OAG]

Mickeyd: This was referenced in your other SS thread "Social Security~ Pays to delay says Scott Burns" towards the end of the thread.

I read the article, even printed out, regarding the indication that it is correct according to the SSA Head Baltimore Office. May use it for future reference, if necessary.

Is it "cheating the system" when you work within the system? SSA wrote the rules and people will find what works best for them. Personally, I contributed to the system for approximately 47 years.

 

[FinanceDude]

Mickeyd: This was referenced in your other SS thread "Social Security~ Pays to delay says Scott Burns" towards the end of the thread.

I read the article, even printed out, regarding the indication that it is correct according to the SSA Head Baltimore Office. May use it for future reference, if necessary.

Is it "cheating the system" when you work within the system? SSA wrote the rules and people will find what works best for them. Personally, I contributed to the system for approximately 47 years.

Some rules are ok, others should be changed. What about single folks like my sister, who paid SS for almost 30 years but forfeited all her payments because she was single when she died? Isn't that an archaic rule??

Shouldn't single folks be able to direct their SS payments to a trust or charity or something. SS was NOT set up with singles or people with life partners................

 

[OAG]

FD: I agree and so does one Presidential hopeful. I think it was Gov Mitt Romney who suggested that you could draw or leave the money, in some lump sum, to go to a child, grandchild or others.

The unfortunate thing about suggestions and plans during an election is that they mostly just get put aside after the election.

 

[bots2019]

Some rules are ok, others should be changed. What about single folks like my sister, who paid SS for almost 30 years but forfeited all her payments because she was single when she died? Isn't that an archaic rule??

Shouldn't single folks be able to direct their SS payments to a trust or charity or something. SS was NOT set up with singles or people with life partners................

Agreed. But wouldn't this just increase the funding problems?

 

[Texas Proud]

Some rules are ok, others should be changed. What about single folks like my sister, who paid SS for almost 30 years but forfeited all her payments because she was single when she died? Isn't that an archaic rule??

Shouldn't single folks be able to direct their SS payments to a trust or charity or something. SS was NOT set up with singles or people with life partners................

It was set up as an 'insurance' system, not a retirement system... so some people do not collect on their insurance... not great, but there you have it...

PS... my dad died before he every collected a cent also...

 

[FinanceDude]

Agreed. But wouldn't this just increase the funding problems?

And my response is, so what? According to the "nice" folks at SS, you better die with a spouse or they're going to keep your money.........

Congress could fix the SS problem if they want to, but they don't want to.

If there was NO cap on SS wages that are taxed, we could fund SS forever, bottom line. Whether I agree with that or not is immaterial.....it would work, but those Senators would never get re-eelected, so they're not going to suggest it.

You could make "early retirement" 65 instead of 62, make full benefits at 70 instead of 67, etc.

There's ALWAYS a solution unless the govt is involved............

 

[lets-retire]

FD: I agree and so does one Presidential hopeful. I think it was Gov Mitt Romney who suggested that you could draw or leave the money, in some lump sum, to go to a child, grandchild or others.

That would imply ownership of the funds in the account. Oh the horrors.

 

[FinanceDude]

That would imply ownership of the funds in the account. Oh the horrors.

Yeah, you would get ownership of YOUR own contributions.............what a disaster THAT would be.............

My dad is already way ahead of what he put in, and he continues to thank my brother and I for funding his check............

 

[youbet]

Some rules are ok, others should be changed. What about single folks like my sister, who paid SS for almost 30 years but forfeited all her payments because she was single when she died? Isn't that an archaic rule??

Shouldn't single folks be able to direct their SS payments to a trust or charity or something. SS was NOT set up with singles or people with life partners................

They could run it like private pensions are run. You could elect a beneficiary at some percentage of your payout - 100%, 50%. etc. But your benefit would be reduced by whatever the actuarials say. So, say your benefit would be $18k, but you want a neice to collect 50% at your death. You'd collect say, $12k (or whatever the calculation says), instead of the $18k but would have your neice protected.

 

[aaronc879]

"You could make "early retirement" 65 instead of 62, make full benefits at 70 instead of 67, etc."

That's the "arguement" that pi$$es me off. Not everyone has a cushy office job that they can do till they die. Some people still do the blue collar work such as work in factories. The reason I plan to retire early is because I have no other choice. It is impossible for me to do my job into my 60's let alone age 70. I already have arthritic kness and back problems and I have decades to go. The ages should stay the same. Either reduce benefits or raise the cap or both.

 

[Cut-Throat]

Seems a bit ironic that everyone's trying to figure out how to "cheat the system", when the system is running out of money.

These folks are late to the party..........

The system is not running out of money! - This is the Bush Koolaid that you've been drinking!

******************************************************

An article on the fiscal crisis the U.S. has.

The ultimate irony is that Social Security is the easiest problem that we have to fix.

Yet this is what the Bush Administration tried to focus the country on!

U.S. Faces Fiscal Tsunami| Newsweek Business | Newsweek.com

 

[FinanceDude]

"You could make "early retirement" 65 instead of 62, make full benefits at 70 instead of 67, etc."

That's the "arguement" that pi$$es me off. Not everyone has a cushy office job that they can do till they die. Some people still do the blue collar work such as work in factories. The reason I plan to retire early is because I have no other choice. It is impossible for me to do my job into my 60's let alone age 70. I already have arthritic kness and back problems and I have decades to go. The ages should stay the same. Either reduce benefits or raise the cap or both.

I can empathize with your situation, I worked in a factory for two years while "taking a break" from college. I made the choice to get a degree and have the ability to work in one of those "cushy jobs" as you call them.

You had choices in your life also...........

 

[aaronc879]

I tried college but I barely made it through high school. Despite studying for every test, doing all homework and extra credit when available I barely had a c average in high school. I got an 18 on my ACT test and that was the best of 3 tries. Being at 52% in my class and under 19 ACT I wasn't even supposed to get into college. It was only because of very good references from 2 teachers and a guidance counsler that I was accepted. Once in college there wasn't any homework or extra credit to lift my grades and despite never missing a class and studying a lot I left school after 3 semesters with a 1.9 GPA. Not everyone is able to graduate college. It's not just a choice whether or not to get a degree. I would if I could. Now i'm just trying to make the best of what I have by saving 40%-50% of my 45K income.

 

[FinanceDude]

I tried college but I barely made it through high school. Despite studying for every test, doing all homework and extra credit when available I barely had a c average in high school. I got an 18 on my ACT test and that was the best of 3 tries. Being at 52% in my class and under 19 ACT I wasn't even supposed to get into college. It was only because of very good references from 2 teachers and a guidance counsler that I was accepted. Once in college there wasn't any homework or extra credit to lift my grades and despite never missing a class and studying a lot I left school after 3 semesters with a 1.9 GPA. Not everyone is able to graduate college. It's not just a choice whether or not to get a degree. I would if I could. Now i'm just trying to make the best of what I have by saving 40%-50% of my 45K income.

If you continue saving 40-50% of your $45K income, you won't need Social Security............

$18K a year for 20 years at 8% is.........$823,715, and a 4% withdrawal rate on that is $32,948 PLUS SS, which would be maybe $1500 a month or so for you, so that's another $18K, giving you $50,000 a year to live on.................

Both my parents are retired teachers, and their pensions alone are staggering.........I however have no pension so it's "up to me".........

I hope you didn't take my comments the wrong way.........both Bill Gates and Michael Dell dropped out of college,and ended up "ok"..........

 

[Moemg]

Maybe soon they will be coming up with schemes such as arranged marriages for the social security survivor benefit ?

 

[whitestick]

Here is yet another article on SS, but I had never heard of this scheme before. I suspect that there are about a million SS-related articles yet to be written and that many different schemes will be hatched

Ok, here's another question then. If instead of the husband waiting till 65 to claim full benefits on his spouse, what if he also filed for spousal benefits at 62 (assuming they are both the same age). Then when he turns 65 or 70 or whatever age he wants to file at, he pays back his spousal portion and refiles for his full benefits. Would that be allowed? Seems like a way to get partial cash flow, and resulting interest, and then because it is so low, relative to his amount, be able to file for the higher amount with no reduction.
Does this sound like it could work as a variation of both worlds?