Social Security (House) Proposal

[TheWizard]

Does that include earnings? I find it hard to believe that if I just dumped my SS payment plus my employers payment into an Roth like instrument for 35 years, that I wouldn't be farther ahead.

But wait, there's more!
You can pay into SS for forty years, age 20 to 60, then pass away and get nary a cent paid back to you or your estate.
The System expects that to happen to the appropriate percentage of workers...

 

[frank05]

Include a capital gains tax to fund social security.

 

[Al18]

Include a capital gains tax to fund social security.

I think this is the best option. I would add 3% tax to all the brackets. This 3% would specifically be dedicated to the SS fund. So for LTCG, the brackets would be 3%,18% and 23%. These rates are still fairly low according to recent history. Until President G.W. Bush signed the new law in 2006, the current 0% bracket used to be 5%. https://en.wikipedia.org/wiki/Capital_gains_tax

 

[badatmath]

Nope, fair is BS in this case. Often a family makes a joint decision that one stays home to raise children, the other works full time. I understand many do both, but right now that's a family choice and should be respected.

Get Out and Earn means less children = less future taxpayers paying into SS.

And often wives stay home and don't work and don't have any children. . . and still get it.

 

[JoPeter57]

SS minimal age to collect is 62. It was 65 until the late 1950's then lowered to 62 for woman only ......and not lowered for men until early 1960's. I think it's time to raise it to 63.

 

[GenXguy]

Nope, fair is BS in this case. Often a family makes a joint decision that one stays home to raise children, the other works full time. I understand many do both, but right now that's a family choice and should be respected.

Get Out and Earn means less children = less future taxpayers paying into SS.

The perk is there for the spouse whether they have kids or not, although that's a personal decision they make, and other taxpayers shouldn't be on the hook so that the couple can double dip based on one spouse's income. I know plenty of people who are doing that.

Note, I didn't say I was against death benefit if the working spouse who actually earned benefits passes away. I do believe in that protection, just not the double dipping part while both are living.

Remember, non-working single people won't get that benefit when they didn't pay into it, even if they have a child. It's really nuts to allow a married couple to double dip on SS benefits while both are still alive when only one of them worked. This isn't going to stop the expanding population we suffer with to create more taxpayers.

Bottom line is this is not an entitlement, welfare or a transfer payment. It is defined benefit reimbursement for paying into a system through taxes.

It is a for some people, as I mentioned. A spouse can claim SS benefits on the other spouse's work record despite not working, or working little, regardless of kids (which shouldn't matter anyway). So some people are getting a nice payout despite not paying anything into SS. I don't know if that is the situation with your wife's benefit that you mentioned or if she paid in enough taxes to earn that much benefit. Some obviously do not. I don't support the double dipping but do support the death benefit as a form of protection/insurance after earning (or higher earning) spouse passes.

 

[GenXguy]

SS minimal age to collect is 62. It was 65 until the late 1950's then lowered to 62 for woman only ......and not lowered for men until early 1960's. I think it's time to raise it to 63.

I'm not sure how that helps as you always get more by waiting. The FRA would need to be increased also, and it probably should be for workers under 60. GenXers and younger, basically, maybe another year or two more for the younger generations.

 

[MichaelB]

And often wives stay home and don't work and don't have any children. . . and still get it.

The perk is there for the spouse whether they have kids or not, although that's a personal decision they make, and other taxpayers shouldn't be on the hook so that the couple can double dip based on one spouse's income. I know plenty of people who are doing that.

Note, I didn't say I was against death benefit if the working spouse who actually earned benefits passes away. I do believe in that protection, just not the double dipping part while both are living.

Remember, non-working single people won't get that benefit when they didn't pay into it, even if they have a child. It's really nuts to allow a married couple to double dip on SS benefits while both are still alive when only one of them worked. This isn't going to stop the expanding population we suffer with to create more taxpayers.


It is a for some people, as I mentioned. A spouse can claim SS benefits on the other spouse's work record despite not working, or working little, regardless of kids (which shouldn't matter anyway). So some people are getting a nice payout despite not paying anything into SS. I don't know if that is the situation with your wife's benefit that you mentioned or if she paid in enough taxes to earn that much benefit. Some obviously do not. I don't support the double dipping but do support the death benefit as a form of protection/insurance after earning (or higher earning) spouse passes.

So, can either of you quantify the financial impact of non-working women getting spousal benefits?

According to BLS statistics around 65% of men 16-65 are in the labor force, and 56% of women are, so this may be a factor but it doesn’t look significant.

 

[Route246]

Understand fully how things work in reality but my original statement had to do with others laying a guilt trip on me, someone who "doesn't need the money" but I willingly take it. It doesn't matter how to books are cooked as most public pension plans don't have the resources on hand to pay out, either (i.e. CALPERS here in California). What you have pointed out is the macro view which is 100% valid. What I was focused on is the micro view, one person (me) and how it annoys me when people think I shouldn't take my reimbursement because I don't need it which is nonsense.

No longer true, and that's been shared here dozens of times. While workers used to pay more in than they got back, you get a lot more back than you paid in today. Social Security began paying out more than it takes in starting in 2020, or we wouldn't even be discussing reserves running out in 2034. It has been a PAYGO system from the start, it's not a defined benefit reimbursement by any stretch, and the funds are not invested so there is no investment return if you're inclined to make that argument.


https://www.msn.com/en-us/money/ret...et-on-average-for-what-you-pay-in/ar-AA1jUjtX

 

[RetiredHappy]

The perk is there for the spouse whether they have kids or not, although that's a personal decision they make, and other taxpayers shouldn't be on the hook so that the couple can double dip based on one spouse's income. I know plenty of people who are doing that.

Note, I didn't say I was against death benefit if the working spouse who actually earned benefits passes away. I do believe in that protection, just not the double dipping part while both are living.

Remember, non-working single people won't get that benefit when they didn't pay into it, even if they have a child. It's really nuts to allow a married couple to double dip on SS benefits while both are still alive when only one of them worked. This isn't going to stop the expanding population we suffer with to create more taxpayers.


It is a for some people, as I mentioned. A spouse can claim SS benefits on the other spouse's work record despite not working, or working little, regardless of kids (which shouldn't matter anyway). So some people are getting a nice payout despite not paying anything into SS. I don't know if that is the situation with your wife's benefit that you mentioned or if she paid in enough taxes to earn that much benefit. Some obviously do not. I don't support the double dipping but do support the death benefit as a form of protection/insurance after earning (or higher earning) spouse passes.

I am also in your camp where there should not be spousal benefits. If they worked their 40 quarters, they can claim in on their own record. Survivor benefits, yes. Spousal benefits, no.

 

[AudiDudi]

<snip>
I wonder though how a haircut in 10 years from now changes the calculation on when to take SS. I'd imagine that taking it sooner at a higher amount for ten years would be a better option.

My spreadsheet told me to file for spousal at FRA (66) and then file for my own at 70 - breakeven is at age 77. I found it strange that as my spouse had filed at 62, I received 50% of what she would have drawn at age 66 (FRA). Sadly Congress removed that option several yrs ago.

 

[GenXguy]

So, can either of you quantify the financial impact of non-working women getting spousal benefits?

According to BLS statistics around 65% of men 16-65 are in the labor force, and 56% of women are, so this may be a factor but it doesn’t look significant.

I don't have those statistics. It's not just about the percentage working, but how much they earn also. Someone else responded to this issue in the past saying it wasn't significant in terms of SS dollars, but I think multiple reforms will be done, not just one thing, and it seems best to include those which aren't fair to begin with, such as payout to those not contributing, even if they aren't major savers for SS dollars. Leave the death benefit for protection/insurance.

Correction: I meant up to 85% of SS benefits are taxable. I can't edit my previous post.

 

[Montecfo]

FRA increase has already been done before so another increase will likely be part of any fix. It's logical given the increase in average life span during the decades since the system began,

In fact, an acceptable reform effort would likely involve higher taxes on SS, phased deferral of full benefits, and higher payroll taxes as it did in 1983. That is, reforms would impact everyone potentially.

Oft-mentioned adjustments to the COLA computation could also be in the mix but these have not gained wide support.

Nor has a movement to increase benefits generally.

 

[Car-Guy]

I am also in your camp where there should not be spousal benefits. If they worked their 40 quarters, they can claim in on their own record. Survivor benefits, yes. Spousal benefits, no.

I don't know but I've often wondered "if" the politicians that created SS back in the mid 1930's and those who modified/amended it so many times over the years, factored in the spousal benefits in determining the payment structure. I suspect they did. So, if only the "wage earner/contributor" received benefits, would they be entitled to a lot more if there were no spousal benefits to payout?

That raises a number of other interesting scenarios.

Anyway, I'm for spousal benefits.

 

[Involuntary Retiree]

But wait, there's more!
You can pay into SS for forty years, age 20 to 60, then pass away and get nary a cent paid back to you or your estate.
The System expects that to happen to the appropriate percentage of workers...

But, let's say you were married four times during your 40 years of paying into social security, and each marriage was for 10 years and 1 day. Upon your death, you potentially have 4 ex-spouses (or maybe three exes plus one current spouse, if currently married) entitled to the entire amount of what you would have drawn at your FRA. Your "nary a cent" doesn't mean much to you or your estate, but the obligation is quadrupled to the SSA system due to the amounts owed as survivor benefits to your spouse/ex-spouses upon your death.

It's an extreme example, but there's the rub.

 

[5Miler]

So with no spousal benefit for a stay at home spouse.

Consider if you were a stay at home spouse, married for 40 years and suddenly found yourself divorced at SS age. There you sit with no SS benefit and no real hope of qualifying for one unless your ex-spouse was to pass so you could get survivors benefits.

They say life isn't fair but sheesh.

 

[MuirWannabe]

I completely disagree with eliminating spousal benefit. Basically devaluing marriage and motherhood. Not good messages for society. Both benefit society greatly imo.

 

[GenXguy]

So with no spousal benefit for a stay at home spouse.

Consider if you were a stay at home spouse, married for 40 years and suddenly found yourself divorced at SS age. There you sit with no SS benefit and no real hope of qualifying for one unless your ex-spouse was to pass so you could get survivors benefits.

They say life isn't fair but sheesh.

Easy solution. The household earned income credits for SS should be split between the couple so that they each get part of the benefit. They should NOT be able to double dip, though.

Remember, the single person who didn't contribute for 40 quarters won't get anything at all, no matter how many kids they have.

Anyway, none of us will have any input on what happens.

 

[Wile E. Coyote]

I just googled "when will social security run out?" and this was one of the first things to pop up...

"Will Social Security still be around when I retire? Yes. The Social Security taxes you now pay go into the Social Security Trust Funds and are used to pay benefits to current beneficiaries. The Social Security Board of Trustees now estimates that based on current law, in 2041, the Trust Funds will be depleted."

I haven't been paying much attention lately, but it seems like forever, that year would dance around among 2033, 2034, or 2035. So what happened, I wonder, that now they're suddenly pushing the prediction out to 2041?

And this quote comes right from the horse's mouth... https://www.ssa.gov/newsletter/Statement Insert 25+.pdf

On the bottom of the second page it says (1/09 edition). That's where you're getting 2041 (it's more like 2033 now).

 

[Wile E. Coyote]

But, let's say you were married four times during your 40 years of paying into social security, and each marriage was for 10 years and 1 day. Upon your death, you potentially have 4 ex-spouses (or maybe three exes plus one current spouse, if currently married) entitled to the entire amount of what you would have drawn at your FRA. Your "nary a cent" doesn't mean much to you or your estate, but the obligation is quadrupled to the SSA system due to the amounts owed as survivor benefits to your spouse/ex-spouses upon your death.

It's an extreme example, but there's the rub.

A person married that many times is not still eligible to collect on spouse #1. One of the rules is that you could not have remarried prior to age 60.

No one gets two benefits. They get one benefit and it's just a matter of which benefit is highest that they are actually eligible for.

It's a miniscule about 2% of people who actually get Ex Spouse survival benefit. I looked it up one time a few months ago. The qualifications are very narrow.

 

[Involuntary Retiree]

A person married that many times is not still eligible to collect on spouse #1. One of the rules is that you could not have remarried prior to age 60.

No one gets two benefits. They get one benefit and it's just a matter of which benefit is highest that they are actually eligible for.

It's a miniscule about 2% of people who actually get Ex Spouse survival benefit. I looked it up one time a few months ago. The qualifications are very narrow.

Why do you describe the ex-spouse survivor qualifications as "very narrow?" They are not.

If a subsequent marriage that occurred before age 60 ends in divorce, an ex-spouse (of the deceased spouse, in our example above) is certainly entitled to survivor benefits on account of an ex-spouse that she/he was married to for at least 10 years. It doesn't matter how many times the deceased spouse was married. Any ex-spouse that he/she was married to for at least 10 years is entitled to survivor benefits (assuming no current marriage before age 60) in the entire amount the deceased spouse could have drawn.
Maybe the number of people drawing survivor benefits on an ex-spouse are "miniscule," but this is just one example of an SSA rule that could drain benefits amounts.

 

[AudiDudi]

So with no spousal benefit for a stay at home spouse.

Consider if you were a stay at home spouse, married for 40 years and suddenly found yourself divorced at SS age. There you sit with no SS benefit and no real hope of qualifying for one unless your ex-spouse was to pass so you could get survivors benefits.

They say life isn't fair but sheesh.

If married more than 10 yrs, you can collect spousal. Not sure of you rexample of 40 yrs and not benefit. As I recal, you need to be divorced for 2 yrs.
l

 

[AudiDudi]

But, let's say you were married four times during your 40 years of paying into social security, and each marriage was for 10 years and 1 day. Upon your death, you potentially have 4 ex-spouses <snip>.

As posted above my step-mother collected a full benefit as did 2 ex wives. So maybe not too extreme.

 

[RetiredHappy]

Didn't some old age celebrity die a few years ago and it was reported that his 4 ex-wives were collecting spousal benefits?

The rules are very clearly written, it is EASY to collect spousal benefits when married for 10 years and did not re-marry before turning 60.

 

[Wile E. Coyote]

Why do you describe the ex-spouse survivor qualifications as "very narrow?" They are not.

If a subsequent marriage that occurred before age 60 ends in divorce, an ex-spouse (of the deceased spouse, in our example above) is certainly entitled to survivor benefits on account of an ex-spouse that she/he was married to for at least 10 years. It doesn't matter how many times the deceased spouse was married. Any ex-spouse that he/she was married to for at least 10 years is entitled to survivor benefits (assuming no current marriage before age 60) in the entire amount the deceased spouse could have drawn.
Maybe the number of people drawing survivor benefits on an ex-spouse are "miniscule," but this is just one example of an SSA rule that could drain benefits amounts.

...very narrow because most people remarry... Not very many people meet the criteria is the point. I believe the projection is that it goes from 2% to less than 1% due to the fact that increasingly their own benefit is higher than they would get as a survivor of the spouse.