Social Security (House) Proposal

[Alan]

For comparison the UK SS system is different as follows.

1. Each person earns benefits on their own record only, there are no spousal benefits including no survivor benefits. Maximum benefits is after 35 years of contributions and retirement age is now 67. (No early retirement)

2. There has to be at least 10 years of contributions but once you have 3 years of contributions you can make voluntary contributions each year if you are not working. This means that a household with a non-working spouse can pay into the other's account.

3. If a spouse is not working and has a child under school age they are credited with a full year of contributions.

 

[marko]

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.

I'm surprised this hasn't come up but it could be because I'm entirely out in left field here but I believe that my buddy's 3 minor children are collecting SS as well as himself. That's because it's his second family and he was 67 when he started having kids again.

Is this possible or even fair? They sure don't need the money but these kids apparently can receive benefits until they're 18.

 

[MichaelB]

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.

Fairness, like beauty, is in the eyes of the beholder. I’m not advocating for or against any specific reform, but an informed discussion here about any specific reform should include the financial impact.

 

[RetiredHappy]

I'm surprised this hasn't come up but it could be because I'm entirely out in left field here but I believe that my buddy's 3 minor children are collecting SS as well as himself. That's because it's his second family and he was 67 when he started having kids again.

Is this possible or even fair? They sure don't need the money but these kids apparently can receive benefits until they're 18.

Yep. Not fair but SS is a safety net program.

 

[marko]

Yep. Not fair but SS is a safety net program.

So now he's 71 has a 32 year old, good looking wife and collects four SS payments! What a guy!

 

[5Miler]

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

You apparently missed the context. Probably my fault as I failed to include Gen-X's reference to not wanting SS benefits to be extended to a non-working spouse.

 

[GenXguy]

Fairness, like beauty, is in the eyes of the beholder. I’m not advocating for or against any specific reform, but an informed discussion here about any specific reform should include the financial impact.

It looks it's about $24 BILLION per year paid for spousal benefits, while many single non-workers who had several kids will not qualify for any SS at all. Definitely significant when we're looking at a 25% cut to SS benefits to people who actually paid into the program if nothing is done. It makes sense and certainly more fair to get rid of benefits for people who didn't actually earn them as part of the reform.

Relevant article about reforming spousal benefits:
https://www.urban.org/urban-wire/recent-social-security-reform-doesnt-fix-unfair-spousal-benefits

For comparison the UK SS system is different as follows.

1. Each person earns benefits on their own record only, there are no spousal benefits including no survivor benefits. Maximum benefits is after 35 years of contributions and retirement age is now 67. (No early retirement)

2. There has to be at least 10 years of contributions but once you have 3 years of contributions you can make voluntary contributions each year if you are not working. This means that a household with a non-working spouse can pay into the other's account.

3. If a spouse is not working and has a child under school age they are credited with a full year of contributions.

Those are better than here in the US regarding spousal benefits, although they really shouldn't get credited with SS credit for having a child just because they are married. These programs should be based on what someone pays into them, not their life decisions on having kids in a marriage vs. single people having kids.

 

[Car-Guy]

So now he's 71 has a 32 year old, good looking wife and collects four SS payments! What a guy!

Easy to do... Just takes money... A lot of money.


a.k.a. Anna Nicole type.

 

[Midpack]

Looks like spouses and children of retired workers are only 6% of the total, and their monthly benefits are substantially less than retired workers. [-]Why do people argue without facts, especially when they’re more readily available than ever?[/-]

https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2023/fast_facts23.pdf

 

[Car-Guy]

Looks like spouses and children of retired workers are only 6% of the total, and their monthly benefits are substantially less than retired workers. [-]Why do people argue without facts, especially when they’re more readily available than ever?[/-]

https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2023/fast_facts23.pdf

[-]Because it's more fun to speculate and/or they are just lazy?[/-]

 

[GenXguy]

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.

Thanks. That seems to be more of the unbiased view of people that aren't actually taking advantage of those unearned benefits. If reforms need done, it makes sense to cut those before cutting benefits to those who actually earned them, even if it's less than 10% or under $30 BILLION of the entire program.

 

[MichaelB]

Looks like spouses and children of retired workers are only 6% of the total, and their monthly benefits are substantially less than retired workers. [-]Why do people argue without facts, especially when they’re more readily available than ever?[/-]

https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2023/fast_facts23.pdf

That’s an informative link, thanks. It always helps when we have facts.

There are many drivers causing the SS fund to run low, and people’s pet peeves tend to muddy the discussion. Fairness is always an issue but one that is near impossible to resolve fairly.

The biggest cause by far, however, is the fact that the average national wage index used by SSA to calculate benefits has risen much faster than inflation and also faster than the rate paid on Treasuries the fund invests in. In other words, after inflation, the recipients are taking out more than they put in. If the boomer generation were to fully fund its own retirement, this shortfall would probably go away or decline significantly.

The same applies to Medicare.

 

[qwerty3656]

It looks it's about $24 BILLION per year paid for spousal benefits, while many single non-workers who had several kids will not qualify for any SS at all. Definitely significant when we're looking at a 25% cut to SS benefits to people who actually paid into the program if nothing is done. It makes sense and certainly more fair to get rid of benefits for people who didn't actually earn them as part of the reform.

Relevant article about reforming spousal benefits:
https://www.urban.org/urban-wire/recent-social-security-reform-doesnt-fix-unfair-spousal-benefits
Those are better than here in the US regarding spousal benefits, although they really shouldn't get credited with SS credit for having a child just because they are married. These programs should be based on what someone pays into them, not their life decisions on having kids in a marriage vs. single people having kids.

I wonder if it is calculated correctly. The difference between my wife's spousal benefits and her own benefits is only a few thousand dollars per year. Do they just count the increase, or her full SS.

 

[Exit 2024]

Thanks. That seems to be more of the unbiased view of people that aren't actually taking advantage of those unearned benefits. If reforms need done, it makes sense to cut those before cutting benefits to those who actually earned them, even if it's less than 10% or under $30 BILLION of the entire program.

That is a bold statement
We will never claim spousal benefits as both work full time well paid jobs for 20+ years. But I still believe that if each person should get what they earn - women taking care of children should get some credits for those years too. Yes, it is their choice but it is benefit to the society as a whole. Same as we all pay for schools through the taxes independent if we have children or not, pay for disable people, not being disable ourselves and so on. Look at UK system (posted above) - they do give credits for parent that stay at home with kids under school age, it is not that unique.

PS: Found that on SSA.gov

 

[GenXguy]

That is a bold statement

Or simply a true statement. People tend to support things that benefit themselves. Duh. How many recipients of the child tax credit would like it taken away?

But I still believe that if each person should get what they earn - women taking care of children should get some credits for those years too.

As I have said... The current law isn't about "women taking care of children". Married spouses with no children are eligible, no children necessary, and single women who have children actually aren't eligible for benefits they never paid into. It's not "children" being a factor in who gets to take advantage of it.

Yes, it is their choice but it is benefit to the society as a whole.

Again, it's not just for those having children, yet if it it was about children, then the single non-working parent should get SS benefits based on that failed logic that it's better for society as a whole. I don't buy into when it comes to the limited SS fund while so many are paying into it personally and being threatened with a 25% haircut while others get a free ride.

Look at UK system (posted above) - they do give credits for parent that stay at home with kids under school age, it is not that unique.

Didn't you read my post above? I talked about that and think that's a bad idea also, but at least it's better than how the US handles it. It actually involve kids, and only while school age.

Anyway, I'm just saying if we need to make reforms to prevent cuts to SS benefits for people that actually earned them, it makes sense to completely cut benefits for those who never earned them, even if it's less than 10% or less than $30 BILLION of the annual cost. The divorce aspect can be handled by simply allocating credits to both spouses in a household if only one of them works so that they each would be eligible for part of the SS benefit actually earned by the household if they were to split up. And the death benefit could be used for protection/insurance purposes.

 

[Exit 2024]

...but at least it's better than how the US handles it...

at least we agree on that

 

[FiveDriver]

Re : Spousal Benefits --

I'm not going to denigrate the contribution of any Stay-at-Home Mom. I know what my DW did during the formative years of our daughter's life -- and that work has brought many benefits to our Family. What DW is collecting in SS is small compensation for all her efforts.

IMO, the Wage Base must be increased to keep the Fund solvent. The current cut-off is around $160K, and that is too low in today's job market. That is entry-level salary is some occupations. The cut-off for SS taxes could easily be raised to $320K. Those higher-earners are not shy about collecting their SS checks when the retire....often with good pensions and robust 401K/IRA funds to draw on.

The FRA could also be gradually raised. And the early claiming age of 62 could follow along with it. The 'discount' for early claimers could be increased also.

These are things that can all be easily accomplished without cutting Retirees off at the knees. Senior Citizens are contributing to the overall Economy too.

 

[Exit 2024]

Looks like no one posted yet, here is a different solution to the SS shortage, lets tax all robots and AIs that are taking over people jobs, trend toward automation and robotization will continue and basic income will be there eventually. Why not start taxing now to get that tax base grow with concurrent benefits to the humans

 

[GenXguy]

Re : Spousal Benefits --

I'm not going to denigrate the contribution of any Stay-at-Home Mom. I know what my DW did during the formative years of our daughter's life -- and that work has brought many benefits to our Family. What DW is collecting in SS is small compensation for all her efforts.

Indeed, she performed a wonderful service for your household and should deserved to get half your SS credits during those years, just not from other tax payers.

Looks like no one posted yet, here is a different solution to the SS shortage, lets tax all robots and AIs that are taking over people jobs, trend toward automation and robotization will continue and basic income will be there eventually. Why not start taxing now to get that tax base grow with concurrent benefits to the humans

Sounds reasonable but would be difficult to implement. When does a piece of machinery actually become a robot? And when does a application actually pass into being Ai? And then how do you determine how to tax the different ones? I would hate to see a UBI going to everyone who works, but we should always have a social safety net other than SS.

 

[Exchme]

Everyone well knows what the options are, but there is a VOCAL voting constituency for and against each of the various options, so nothing will happen. Any legislator who tries will be promptly vilified and defeated in their next election, by those against the options on the table. We have no one to blame but ourselves as voters.

It's been (pointlessly) debated here a hundred times...

Ding! Ding! Ding! Winner!

Politicians are not worried about "right/wrong", "fair/unfair", etc. The are worried about "re-elected/defeated". Adding to the deficit does not create a constituency that is so mad as to push them to "defeated". So I predict mostly inertia with only a few mildly unpleasant tweaks - perhaps raising the FRA slowly, increasing SS benefit taxation, lowering bend points for new retirees, but otherwise just writing even more hot checks.

Buzz Lightyear might have been commenting on the debt when he said:
"To infinity! And Beyond!"

 

[Midpack]

Ding! Ding! Ding! Winner!

Politicians are not worried about "right/wrong", "fair/unfair", etc. The are worried about "re-elected/defeated". Adding to the deficit does not create a constituency that is so mad as to push them to "defeated". So I predict mostly inertia with only a few mildly unpleasant tweaks - perhaps raising the FRA slowly, increasing SS benefit taxation, lowering bend points for new retirees, but otherwise just writing even more hot checks.

Minor difference. You seem to blame politicians, I blame voters. That’s never been clearer than it is today. We get what we (collectively) deserve.

 

[GenXguy]

Minor difference. You seem to blame politicians, I blame voters. That’s never been clearer than it is today. We get what we (collectively) deserve.

I blame the system and politicians since they legislate on the actual changes we live by. My vote (among many) is just for the person, who will have to address many issues besides entitlements, and the choices of who you can vote for are very limited as well.

 

[RetiredHappy]

Indeed, she performed a wonderful service for your household and should deserved to get half your SS credits during those years, just not from other tax payers.

+1 Precisely!

 

[MichaelB]

The discussion on this thread is little different from the one held among elected legislators. Someone else’s benefit should be reduced, someone else benefits unfairly, someone else should pay in more. That’s what gets in the way of effective resolution.

Problems of this magnitude require everyone to chip in, and the underlying principles should be 1) this is a program to help ensure when people reach retirement age they will avoid extreme poverty, 2) people should not get out more than what they put in, 3) social programs should be funded with general revenues.

 

[Car-Guy]

Problems of this magnitude require everyone to chip in, and the underlying principles should be 1) this is a program to help ensure when people reach retirement age they will avoid extreme poverty, 2) people should not get out more than what they put in, 3) social programs should be funded with general revenues.

Fully agree with #1