I'm probably in the minority here, but here goes. Relying on a government loophole to fund your retirement is a flawed strategy.
+1
I'm probably in the minority here, but here goes. Relying on a government loophole to fund your retirement is a flawed strategy.
I'm probably in the minority here, but here goes. Relying on a government [-]loophole[/-] [program] to fund your retirement [may be] a flawed strategy.
FTFY. This is, all in all, a small change. But, as has been the case since the 80s, we continue not to include social in our planning.... Will accept the icing and give it to our kids if it is there when we are 70.
When would the change go into effect?
An original version of the budget deal ended file and suspend in six months for everyone using the strategy. That would have abruptly cut off checks to thousands of retirees, or many more. Today the deal was amended so it affects only retirees who file for benefits in the future, and the change wouldn't go into effect for six months. That means older workers who want to use the strategy could still do so until early next year.
I'm probably in the minority here, but here goes. Relying on a government loophole to fund your retirement is a flawed strategy.
I'm probably in the minority here, but here goes. Relying on a government loophole to fund your retirement is a flawed strategy.
Originally Posted by AtlasShrugged
I'm probably in the minority here, but here goes. Relying on a government loophole to fund your retirement is a flawed strategy.
I'm not sure, but I think I will be affected by this. I am 67 and have been receiving divorced spousal social security benefits for the past year, with the understanding that my own SS is still growing until I am 70 (when I planned to switch over to it).
If my understanding is correct, this bill will mean that I will be immediately shifted over to my own benefits which right now are barely greater than my divorced spousal benefits, but less than my own benefits would be at age 70. Then they would remain at the lower ("age 67", not "age 70")
level for the rest of my life, no matter what I do.
Or worse, that that shift won't even happen unless I do it myself. This is very confusing to me and it sure happened fast.
Government over & over changes taxes & benefits. You could call anything a loophole that is subsequently changed. Being able to collect SS at all before FRA could be described a loophole. Spousal benefits could be called a loophole. Taxing some income at 10% & other at 40% could be called a loophole for the 10% stuff. Net, call all benefits or taxes loopholes or call none of them that - imo.I'm probably in the minority here, but here goes. Relying on a government loophole to fund your retirement is a flawed strategy.
Government over & over changes taxes & benefits. You could call anything a loophole that is subsequently changed. Being able to collect SS at all before FRA could be described a loophole. Spousal benefits could be called a loophole. Taxing some income at 10% & other at 40% could be called a loophole for the 10% stuff. Net, call all benefits or taxes loopholes or call none of them that - imo.
Government over & over changes taxes & benefits. You could call anything a loophole that is subsequently changed. Being able to collect SS at all before FRA could be described a loophole. Spousal benefits could be called a loophole. Taxing some income at 10% & other at 40% could be called a loophole for the 10% stuff. Net, call all benefits or taxes loopholes or call none of them that - imo.
I think you're OK as you are based on this:
"Under the bill, anyone 62 or older this year will retain the ability to file a restricted application at age 66 or older to receive only a spousal benefit. But they will be able to do this only if their spouse is already claiming a benefit, said Mr. Kitces. For those younger than 62 this year, the restricted-application strategy will no longer be available."
Key in that I think is "WILL retain the ability TO FILE"; i.e., you're older than 62 & have already filed, so it doesn't affect your existing situation (Mine too btw) the way I read it.
Budget Deal Ends Key Social Security Claim Strategies - WSJ
I don't think it is a loophole just because it is complicated.
I didn't say something was a loophole just because it is complicated. Net, you've posed a red herring.I don't think it is a loophole just because it is complicated. It's a loophole because it had an unintended effect that gave additional benefits to some. The idea of collecting SS before FRA was deliberately written in as a feature. That was the actual point of that provision. Progressive tax brackets are also a deliberate feature.
Now, if you came up with some clever way to reclassify your income so you could take millions in the lowest bracket, that would be a loophole.
+1Good, I hope you are right! I decided last night that there is no point in worrying about it anyway. I'll still have plenty to fund my retirement (since, like so many others here I planned my retirement without including ANY SS at all). But after all the years of paying into the system, it's sure nice to finally get some of that back to supplement my other retirement income, that, as planned, is coming from numerous income streams.
Speaking of that, personally I find the statement about relying on a government loophole to fund one's retirement, to be borderline insulting/demeaning and completely out of whack with anything I have read on this thread.
From years of reading and participating on this forum, I have found it is VERY rare for anyone here to rely completely on SS at all, much less relying completely on the more advanced SS strategies (oh, I forgot, now we must call them "loopholes"). My observation is that about everyone here runs FIRECalc without SS once in a while to see if they can survive without it, just in case.
That doesn't mean that everyone is going to happily surrender all or part of their SS benefits without uttering a single word of protest. Some things are right, and some things are wrong, and most of us know the difference.
Very Good! Thank You!Government over & over changes taxes & benefits. You could call anything a loophole that is subsequently changed. Being able to collect SS at all before FRA could be described a loophole. Spousal benefits could be called a loophole. Taxing some income at 10% & other at 40% could be called a loophole for the 10% stuff. Net, call all benefits or taxes loopholes or call none of them that - imo.
only 8% of those taking ss wait until 70 so it isn't going to effect a lot .
I would consider the whole spousal benefit to be a loophole. Being able to collect a larger SS benefit than a low paid worker by virtue of marrying a high earner, even if you never worked a day in your life, is quite an injustice.