Social Security Table » Retirement

Social Security Number: a Key to Identity Fraud

admin — Sat, 26 Dec 2009 23:34:16 +0000

Mary Jean Kuda asked:

Social Security has been one of the country’s most successful programs. It aids people from financial uncertainty especially in their trying times.

The program provides several protections such as:

•    progressive benefit formula

•    comprehensive insurance benefits that include disability

•    survivors and retirement benefits

•    spouses’ benefits

•    a cost of living adjustment

•    coverage until death

These protections will be placed at risk if fraud related claims continue to spoil Social Security.

Identity theft using the Social Security numbers (SSNs) is one of the common Social Security frauds that have been weakening the program.

History on the Use of Social Security Numbers

SSNs were first issued in 1936. The federal government assured the public that the use of the numbers would be restricted to Social Security programs such as calculating retirement benefits.

Today, however, SSN has become the de facto general identifier.

Government agencies and private businesses use SSNs even for a wide range of non-Social Security purposes. These purposes include:

•    employee files

•    medical records

•    health insurance accounts

•    credit and banking accounts,

•    university ID cards

•    utility accounts

The use of SSNs as both an identifier and an authenticator makes these numbers highly desirable to fraudulent acts, such as identity theft.

Social Security Fraud by Using SSN

Identity fraud is not all about money. The persistent use of SSNs as an identification mechanism gives the thieves many options.

Identity thieves seek SSNs so they can use these numbers to assume the identity of another person and commit fraud.

A thief can fraudulently use your SSN to assume your identity and gain access not only to your Social Security information but also to your bank accounts, credit accounts, utilities records, and other sources of personal information.

They can also establish new credit and bank accounts in your name, use your SSN for employment purposes or obtain medical care.

How to Prevent Identity Theft

Official efforts are under way to restrict use of SSNs. For instance, the Social Security Administration shortens SSNs on the benefit statements it mails each year.

While essential information can be acquired in credit card, bank accounts and other documents, SSNs are the most common way of getting personal information.

In California, for instance, a birth certificate (or many other types of documents) and a valid SSN are required to get driver’s license or identification card.

The following steps are essential in reducing identity theft using SSNs:

•    Protect your SSN. Provide it only when necessary such as in tax forms, employment records, most banking, stock and property transactions. The SSN is the key to your credit and banking accounts and is the prime target of thieves.

•    If business or establishment requests your SSN, ask if you can use another number instead.

•    Do not have your SSN printed on your checks. Do not let merchants write the SSN onto your checks because of the risk of fraud.

•    Do not utter your SSN aloud when you are in a public place. Speak softly or write it down on a piece of paper instead. Be sure to retrieve and shred that paper after use.

•    Check your Social Security Personal Earnings and Benefits Estimate Statement each year to check for fraud.

•    Do not carry your SSN card in your wallet except for emergencies.

•    Do not carry wallet cards that display the SSN such as insurance cards, except when needed to receive healthcare services.

Theft identity entails a lot of damage. If you are a victim of it, consult a Social Security fraud attorney to help you in your tedious legal battle ahead.

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Despite Economy, Illinois Social Security Benefits Will Increase

admin — Mon, 07 Dec 2009 07:25:43 +0000

Peter Drummond asked:

If you have been feeling the crunch of finding ways to curb your spending on an already fixed income, then you will be delighted to know that your Illinois social security benefits will increase beginning in January.

The Social Security Administration announced on Thursday, October 16 that social security benefits will increase by 5.8 percent in January 2009. It’s easy to see why most social security recipients will welcome this change. Illinois social security benefit payments have not seen an increase since 1982, well over 25 years ago. Illinois social security recipients may see as much as an additional $63 in their monthly checks. Whether retirees receive Illinois social security checks as an Electronic Funds Transfer or by a paper check, they will find it a bit easier to breathe with an added bonus.

Although many people have felt the strain of increased food and gas prices as well as gas and electricity prices, this Illinois social security increase may lessen the pain of those rising costs. Illinois social security retirees have felt the pressure of having to resort to using their savings accounts as well as reaching into their retirement funds to pay for exorbitant basic monthly bills in addition to medical bills. Retirees and those on disability have felt the pain of rising prices more than most and hopefully the Illinois social security benefit increase will offset some of that sting.

With the market’s unpredictable fluctuations and overall economic unease apparently here to stay, many Illinois social security recipients worry that their retirement plans will also be affected. Furthermore, the Congressional Budget Office predicts that Americans’ retirement plans have actually lost as much as $2 trillion over the past year and a half. This is, indeed, something to worry about and why it’s important to leave some of that 5.8 percent increase from Illinois social security paychecks in the bank.

Due to the Cost of Living Adjustment (COLA), Illinois social security retirees would have seen an even higher increase if it wasn’t for the dip in energy costs at the end of summer. Over the past 15 years, COLA has been much lower, so Illinois social security recipients should be thankful for this higher increase next year. However, the increase may not be enough to recover from recent months’ influx of daily living costs. The highest COLA occurred in 1980 with a 14.3 percent boost, which is nearly three times greater than the one beginning in January 2009. Illinois social security benefits have had an annual adjustment since 1975. If you need more information how this increase will affect your benefits, contact an Illinois social security attorney.

If you currently have Medicare, your Illinois social security benefit increase will not, for most retirees, be affected by higher premiums. However, those who are making more than $170,000 a year will see an increase in their premiums. This may be a relief to those earning below $170,000; however, if you’re in the latter category then your questions can be answered through an Illinois social security lawyer.

Whether you receive Illinois social security benefits, SSI, or disability benefits, everyone will see an increase in their monthly payments. Furthermore, if you are married you may see as much as $100 more combined a month.

Politicians and other public policy experts have predicted that social security benefits will eventually run dry and it may be sooner than the 78 million baby boomers who are soon to retire had expected. Although the social security trust fund may run out of funding by 2041, Illinois social security retirees and those who will be retiring in the next ten years will actually pay more into the fund than it collects beginning in 2017.

With nearly 170 million workers paying into the system with social security taxes next year, approximately 10 million of those workers will be paying higher taxes resulting from the COLA increase.

So does this mean that now is the right time to start receiving your Illinois social security benefits? That may depend on several things. Illinois social security recipients, along with those who are planning on starting to receive their social security payments within the next year, should ask an Illinois social security attorney any questions they have concerning their benefits, Medicare payments, social security disability payments and other factors that will affect their payments beginning in January.

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Proposals to Change Social Security Benefits

admin — Sun, 22 Nov 2009 00:45:49 +0000

Jonathan Kingsbury asked:

http://www.defendingthetruth.com/articles/4808-proposals-change-social-security-benefits.html

During many elections, we have heard proposals from politicians to alter or change Social Security benefits. In this paper, I’m going to research and analyze these proposals to find out whether or not they would be beneficial to the Social Security fund, how it will affect all of us in the future, and the current beneficiaries who receive Social Security.

“The key problem for Social Security is that, as the population ages, soon there will not be enough people paying Social Security taxes to provide benefits for every retired person.” (Dilulio & Wilson 486). This is why so many politicians have proposed changes to the current system. The people in my generation might not see any benefits when it’s our time to retire. “In 1950, there were 16 workers to support every one beneficiary of Social Security; today, there are only 3.3 workers supporting every Social Security beneficiary.” (White House). If Social Security stays unchanged at this rate, Social Security will be paying out more than it takes in. If we ever reach this stage we will be left with two problems, a lot of people paying into the system now will be cut off of Social Security, or the government will borrow more money to pay the beneficiaries, which will increase the national debt.

“Unless otherwise stated, payment levels apply equally to aged, blind, and disabled persons.” (State assistance programs for SSI recipients, 3) I believe that if the Social Security fund only funded beneficiaries who are aged, we would not have such a low number today of 3.3 workers supporting every Social Security beneficiary. “The Budget Enforcement Act, for example, excluded the receipts and disbursements of Social Security from the President’s budget and the congressional budget resolution. Programs that have been excluded like this are called “off-budget”.” (Collender 12)

Robert M. Ball has proposed a plan to alter Social Security while arguing against President Bush’s proposal of private accounts. One thing that Ball has proposed was, “Gradually raise the cap on earnings covered by Social Security so that once again 90 percent of all such earnings would be taxed and counted for benefits” (Ball 2). I believe the means of using tax to fix Social Security will work in the short run, but not in the long. If we do take this approach, should we gradually raise the cap on earnings covered by Social Security even more in the future when Social Security has gone further into debt? Another proposed change by Ball was, “An estate tax is a highly progressive way of meeting this cost, and dedicating it to Social Security would strengthen the contributory.” (Ball 3) Now an estate tax, or sometimes called a “death tax”, is a tax on a person’s estate depending on how much he or she was worth. Again, I see a problem with this proposal because Ball is suggesting that we use another means of tax to be paid into Social Security. I personally think it’s wrong to even have an estate tax because those who are taxed an estate tax were most likely small business owners. “More than 70% of family businesses do not survive the second generation; 87% do not make it to the third generation.” (Frequently Asked Questions about the “Death Tax”)

During the 2000 elections, President Bush was widely known for his proposals to privatize Social Security. Most of the Democrat’s are against Bush’s proposals to change Social Security, whereas, most Republican’s are for Bush’s proposals to change Social Security. In order to find out whether people would be better off under the current Social Security system or a privatized system, I researched the average returns among the current system and compared them to the average returns under a private investment or “private account”.

Barbara Boxer published a “Social Security to Social Insecurity calculator” (Boxer), that calculates the average return an individual will receive under the current system compared to Bush’s privatization plan. I entered many different salaries and years and at every given circumstance, Bush’s plan resulted in a loss. I found this very disturbing considering the large amounts of research I have done last year on retirement accounts.

Dave Ramsey published a ”Privatizing Social Security calculator” (Ramsey), that calculates the return you could expect depending on the type of fund you choose, your income, and your age. Compared to Barbara Boxer’s calculator, I found this calculator more accurate because you were able to choose a fund that had an average annual return, which is calculated into how much you contribute over a given amount of years. The result from Dave Ramsey’s calculator shows how much you will receive from social security and your private accounts when you retire which resulted in a much higher return than social security.

Last year I took an economics class, which covered a great deal in investing for retirement. Some people who are against Bush’s plan of private accounts state that privatizing social security is too risky for retirement. “For individual investors who have neither the time nor the inclusion to actively monitor a stock or a bong portfolio, mutual funds have an obvious appeal. Just pick a good fund and let the managers do the work for you.” (Groz 105). At the age of 19, I visited Fidelity Investments in Braintree, Massachusetts where I was able to start my own investment portfolio. They showed me many funds that ranged from aggressive growth to conservative growth funds. I then chose a couple of mutual funds that were aggressive growth because I was starting my investing at such a young age. “Many investors draw the inference that they should not invest all their money in a single stock or bond, but rather spread out their investments among a group of securities.” (Groz 106). If private accounts were an option, I would recommend people to diversify their investments into many different funds just to limit risk.

Another benefit from investing in certain types of stocks is the dividends. “Dividends, then, are a dividing up and distribution to shareholders of a portion of the corporation’s earnings.” (Groz 27). With these dividends, you can reinvest them into the stock or fund; “Compounding occurs when you get many (e.g., interest or dividends) from an investment and put it back into the portfolio, letting it grow alongside the original investment.” (Groz 183).

After doing researching and analyzing the proposals offered by many politicians, I feel that privatizing Social Security is not such a bad idea. I feel that privatizing Social Security would give people more control of their money when it comes to saving money for retirement that the government cannot touch. I understand that some people might fear the risks of investing in the stock market, but if someone diversifies and chooses funds that are somewhat conservative, there is a very small risk of having little return. Considering that Social Security today has very little return “Social Security’s inflation-adjusted rate of return is only 1.23 percent for an average household of two 30-year-old earners with children in which each parent made just under $26,000 in 1996.” (Beach), you would be better off putting your money into a savings account earning a return close to 3 percent.

“If someone’s definition of national debt excludes the debt owed to federal entities, they are not accounting for the interest on the debt owed to federal entities.” (Ruoco). Since the government’s national debt has been rising year after year which can be seen on (www.publicdebt.treas.gov/opd/opdhisto4.htm), why should I trust the government with my retirement money? This is why I support the idea of privatizing Social Security, or at least giving the American people the option to invest in private accounts.

Sources

Orr, Doug. “Social Security Q & A: separating fact from fiction.” Dollars & Sense 259 (May-June 2005): 15(6).

State assistance programs for SSI recipients. Baltimore, Md. : The Branch, 2002 Jan

Ball, Robert P (2005). “Fixing Social Security” The Century Foundation. 5/3/2005 JustFacts.com. 1 Sep 2001. 25 Nov. 2005 .

United States. A blueprint for new beginnings : a responsible budget for America’s priorities. Washington, D.C: U.S. G.P.O., 2001.

United States. “U.S. Department of the Treasury, Bureau of the Public Debt.” Historical Debt Outstanding – Annual. 25 Nov. 2005 .

White House. “Strengthening Social Security for Future Generations.” Strengthening Social Security. The White House. 25 Nov. 2005 .

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Social Security Helps Many Retirees Survive

admin — Mon, 16 Nov 2009 19:53:58 +0000

Eric Bayne asked:

The very first Social Security check was sent through the mail in 1940 even though President Roosevelt had signed the Social Security Act into law, 5 years earlier. Ever since, many American retirees have been grateful to receive that monthly financial safety net as they entered their retirement years. It’s difficult to believe that Social Security has been with us for sixty plus years.

In the original incarnation of the bill, Social Security benefits were only to be paid to the primary worker. But, before the bill went live, additional benefits for the spouse and children were added.

Quite a few folks erroneously think that the Social Security system is equivalent to an investment annuity, in which you send money to the government. They will then invest it and give you the resulting income in monthly payments for the rest of your life. In fact, however, the system is closer to a government welfare program. The collection of payroll taxes , which finances the Social Security program, is managed under the authorization of the Federal Insurance Contributions Act, better known as FICA. FICA is like the enforcement arm of the system. It ensures that every worker “contributes” his or her fair share to the government pool.

Each new generation of workers is responsible for taking care of the previous generation’s retirees. The amount of money you eventually get back from the government has only a tenuous relationship to the amount of money that was deducted from your check over the years. Since it’s inception, the system has collected from contributors and paid out over nine trillion dollars to recipients.

But the 1940 statute did not merely quit with allowing retirees to collect benefits. The law also consisted of the first incarnations of the welfare and unemployment systems which are still very much in evidence today.

Today, with millions of people losing their jobs every month, with our financial systems going into the toilet, and the housing crisis exploding around us – these safety nets are becoming more important than ever. Many retired women, especially, are just barely able to make ends meet with the help of Social Security. This is because, although gradually changing, women today are less likely than men to have additional sources of income. Partly due to working less years in the workforce because of child raising responsibilities. And partly because, even while in the work force, women typically are paid less than men.

But all families are helped by Social Security, even those that don’t need it to survive. In fact, according to independent studies, if Social Security was eliminated, many retired families would experience a drop in their living standards of 70% or more.

Many people fear that the system cannot sustain itself. In fact, there have been times in the past when the amount of money paid to recipients exceeded the amount of money collected via FICA. In these cases, Trust bonds were sold to make up the shortfall. Because of circumstances like these, Congress has occasionally upped the percentage of gross income that FICA can collect from salaries. Even these modifications, however, as the population ages and simultaneously live longer, may not be enough to sustain the system without drastic changes to the system.

The Social Security program is the largest government program of the country – constituting over twenty percent of the federal budget. As some politicians look at cutting the size and expenses of government, this program has an inviting target on its back. To many people, however, the cost of losing this critical system could ultimately be much more than the cost of running budget deficits.

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A Simple Way for Claiming Social Security Insurance Benefits

admin — Fri, 13 Nov 2009 17:46:50 +0000

FDP Inc. asked:

Social Security Disability Insurance (SSDI) or Social Security Income (SSI) is part of the Federal Social Security program that provides monthly disability payments to those who are younger than full retirement age, unable to engage in substantial employment activities. If one is applying for Social Security Disability benefits, having a lawyer, that has a good knowledge of how the Social Security Disability claims process works is critical and can improve the chances of getting the case approved in the application stage or at the hearing level.

To find the suitable lawyer www.social-security-lawyers.net – National Directory of Social Security Lawyers, launched by FDP Inc. is an ideal website to start with. A qualified and experienced social security lawyer can guide through all the process of claiming the Income and also answer the queries of Social Security. The website has a large directory of social security lawyers from all over the country, just entering the zip code, a lawyer can be easily found from a nearby area. It is a complete user friendly website, truly worth it! If one is applying for Social Security Disability benefits, having a lawyer, that has a good knowledge of how the Social Security Disability claims process works is critical and can improve the chances of getting the case approved in the application stage or at the hearing level.

Experienced and Qualified Social Security Lawyers are also invited to register at www.social-security-lawyers.net/Register.aspx , the growing network of Nationwide Social Security Lawyers. The client list of the lawyers can be improved as the site directs captured search requests from the web to the registered members. The help of a lawyer is precious as there are many search requests from all over the country through the web.

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Social Security Myths

admin — Sun, 11 Oct 2009 14:54:12 +0000

Shelley Godra asked:

Social Security Myths

Written by Shelley Godra

            Social Security was created to help finance US citizens after retirement. A portion of every worker’s paycheck assists in funding the Social Security reserve. Currently, these paycheck portions are creating a surplus in the reserve because there are more citizens employed than retired. Some spectators believe that the Social Security fund will not be available to younger US citizens once they decide to retire. Furthermore, some people believe this future crisis will be created by the retirement of the baby-boomers.

            These statements are not necessarily true. The Social Security reserve might run out by the time I am ready for retirement; however, the cause cannot entirely be blamed upon the baby-boomers. There are also several steps that can be taken in order for the Social Security reserve to still be used by my generation.

            Current statistics show that the Social Security fund, if nothing is changed, will dry up by 2040. There are several reasons for this dilemma, not just the baby-boomers retiring. The government is using the funds from Social Security to pay other federal expenditures and budgets. Thanks to medical advancements, US citizens are living longer and using more of the Social Security funds. People are putting more emphasis on their careers and putting marriage and family on hold. Since there are less children being born now, there will be less workers funding my Social Security once I am ready to retire. The final reason is that more companies are outsourcing their employment positions and less US citizens are offered jobs. Less offered jobs mean a smaller percentage funding the Social Security reserve.

            Like stated in the previous paragraph, the Social Security fund will run out if nothing is changed. The first option is to change how Social Security is looked at now and how it will be treated once the baby-boomer generation retires. Government could increase the age eligibility for retiring since people are living longer or could cease payments once a retiree reaches a certain age limit. The percentage from the paychecks currently contributing could be increased, therefore, increasing the funds. The government could be more lenient on its immigration restrictions; more immigrants would help to contribute more to the Social Security reserve.

            Changes in the government are not the only way to avoid this Social Security crisis. Proper arrangements are needed for my generation in order to retire without dependency on monthly Social Security payments. Citizens can make alternative retirement plans by investing in 401Ks and IRAs; this way people can take their own risks with their money. Unfortunately, obesity and unhealthy lifestyles might lower the longevity of some in my generation.

            In conclusion, there is a future problem concerning Social Security, however, the problem is not fully caused by the baby-boomer generation. Additionally, there are changes that can be made in order to avoid this problem. Personally, I believe that there will be no government changes and the Social Security will indeed run out by 2040. I have taken this burden onto myself by creating an alternative retirement plan. I will be in charge of my retirement.

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Introduction to Social Security

admin — Wed, 23 Sep 2009 14:45:37 +0000

Joseph Kenny asked:

In order to address the routine concerns of many, regarding the payment of bills post-retirement or disability, a federal benefits program was designed in the United States, in 1935, known as the Social Securities Act. The program known as the social security program provides disability, retirement, unemployment and survivor benefits and Medicare. The benefits offered aim at providing financial support to the citizens of the U.S., who fall under the categories specified within the paradigms of the program.

The Social Security Act of 1935 introduced the social security system in the US. The system caters to the financial needs of the retired citizens, who have contributed to the social security trust fund for at least 10 years. It also provides benefits to the survivors, in event of the employee’s death. The other benefits offered cover disability and unemployment.

It is essential for the person to make the regular required contribution to the Social Security Trust Funds through the payroll taxes, to be eligible. By virtue of the provisions of the Federal Insurance Contributions Act or FICA, every worker’s income is subject to a tax payment of 12.4% on the first $94,200 earned during the year. Half of this amount or 6.2% is paid by the employer, while the other 6.2% is deducted from the salary of the employee. The amount is given to the government. Self-employed people are responsible for paying the full 12.4%. This amount is used fund the social security system.

The system has been designed to benefit those who make the necessary contributions for a period of ten years. There is a credit system incorporated in the scheme and you can earn a maximum of four credits per year. This means that irrespective of the higher limit of your actual earnings and consequently the quantum of your contribution to the fund, your earnings would entitle you to receive four credits.

The amount of the monthly social security check that you would receive after retirement would be calculated on the basis of your 35 highest income-generating years. You need to apply, to start receiving you social security benefits. The best time to do this would be a few months before your actual retirement date.

The social security program attempts to pay the retired citizens a pre-determined sum of money, to cover their basic needs. It works as a kind of insurance for the retired people, helping them to cope with financial difficulties, post-retirement.

It is a form of insurance that covers the surviving spouse and children, in case of the employee’s death. If the spouse is between 62 to 65 years, 70 to 99 percent of the benefits are payable. Dependent parents and unmarried children under 18 years are entitled to receive the benefits too.

Disability that prevents employment opportunity is also considered for benefits under the social security system. Physical and mental disabilities are also covered and the payment starts five months after proving the disability to the authorities.

Under the social security system, unemployment benefits are available to those whose unemployment is due to circumstances beyond their control. The program is designed to provide financial relief to the citizens of the U.S. at crucial times.

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Am I Going to be Able to Retire? What to Expect From Social Security

admin — Wed, 16 Sep 2009 20:33:38 +0000

Luis R Cardenas asked:

The main idea of the social security program is people welfare. The United States created this program based in what other countries in Europe were doing for its citizens. This program has experimented many changes since its creation in 1935. When this program was signed by President Roosevelt, the idea was to provide retirement income for people 65 or older. Lately the government has made changes on the retirement age and social security income requirements. People in the US are starting to worry about the Social Security funds which they think are getting lower and lower with time. The main question could be: Is there going to be money left when you retire.

The average Social Security Check a retired person gets is around $1000.00 per month and usually does not replace more than 60% of the income they were making before retirement. The main factor that contributes to set a check figure is the average annual income the retired person was making while he/she was working. If that person was not able to save on a 401k program or any other retirement account before deciding to leave the workforce, he/she will have to considerably lower their living standards to be able to retire. But, it could get worst!

It is considered by many that if congress does not make a big injection of money to the social security funds soon, money will run out within the next 30 years. In the past few years the Social Security reforms have helped alleviate the problem but, currently, more money is been paid to retirees than what the administration is collecting. In other words, more money is going out than what is coming in. If the social security administration don’t get at least 6 trillion dollars soon, we could expect the fund to run out by the year 2041 and it considers the contribution of tax payers made during that period too. The Social security administration has considered lowering the social security payment in the future. Would you like that?

Without a doubt we need a Social Security reform soon. But we need to know where the money is going to come from. Congress can not make a good reform if it has not been studied as for its consequences. It is very difficult to consider a tax increase when the economy may not be able to support its impact. The normal citizen may be pushed to avoid paying what for others could be considered fair but some do not have. Our best option at this time could be to start preparing our selves by saving money for retirement through a retirement account or long term investments but not every person will be able to do it.

We need to make conscience that the Social Security fund may not be enough for everybody to retire unless something is done soon. Due to the actual situation some people are thinking about how to survive the moment but time does not stop and we have to get ready for the future. Our congress needs to start working on a reform and stop thinking about the next election or how to look good in the eyes of the voters. We could be sure that good ideas are welcomed by your congressman because if he/she can not come up with something we may be able to help. Think about it. We may be able to change things. The point is that we need a reform NOW!

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When to Take Social Security

admin — Tue, 01 Sep 2009 21:22:45 +0000

Shelby Smith asked:

One of the most important retirement decisions facing most Americans is: WHEN TO START SOCIAL SECURITY BENEFITS. Conventional wisdom has always been “take it as early as possible — age 62″. Why? Several reasons are given: (a) it might not be there if you wait; (b) you can take the benefits and invest them and have more money later; (c) I might die early and never get a dime.

About three-fourths of Americans have heeded this advice and for most it was, or will prove to be, a big mistake. Why? There are several reasons: spousal benefits, higher benefits for delaying, penalties for starting early, penalties if you work while drawing benefits and are less than normal retirement age, and Social Security benefits get favorable income tax treatment.

Spousal benefits: If you qualify for Social Security benefits they will last the rest of your life — what’s more, if you’re married and your spouse is entitled to a lower amount, she/he will “step up” to the higher amount at your death. The spousal benefits say a spouse gets at least 50% (even if they paid zero into their Social Security account) of what the other spouse qualifies for AND the larger amount when the first spouse passes on. So by delaying your benefits your surviving spouse could get a bigger Social Security check every month for the rest of her/his life. Since “break-even” is about age 80 and joint life expectancy is closer to 90 for a married couple age 62, the odds of getting more are overwhelming. In fact, if Las Vegas gave the same odds you’d be booking reservations today.

For every year you delay taking Social Security benefits beyond age 62, your benefits grow between 7.5% and 8.0% annually PLUS a cost of living adjustment (COLA) based on inflation. In the past 30 years inflation has averaged over 3% annually…so your Social Security benefits will grow by over 10% a year. Where else can you get an investment backed by the U.S. Government and pay you over 10% annually? Stop looking, they don’t exist unless you want to take loads of risks. So if you are healthy, married and can afford to wait, postponing Social Security until age 70 will pay great dividends. Social Security will be there because with 50 million current getting benefits and another 76 million (the boomers) coming of age, politicians who vote to do away with Social Security will be unemployed.

If you start benefits at age 62 (the earliest time possible) you get about 25% less than if you wait until your normal retirement age (age 66 for most 62-year olds). This 25% less is for the rest of your life AND COLA is applied to a lower amount to compound the injury. Again, postponing make a great deal of sense.

If you start Social Security before normal retirement age and continue to work, your benefits will be reduced $1 for every $2 you make over about $13,000 annually. Yes, you’ll get this back later but when you consider taxes and the time value of money you’ll be worse off.

The big reason to delay is because Social Security benefits are taxed differently than other income: it is never 100% taxed and it is easy to manage the taxes on your Social Security benefits. PLUS, if taxes rise you’ll want to have as much of your retirement money in tax advantaged places (like larger SS benefits) as possible. Which way to you think income taxes are headed? Let’s see: record federal deficits, fighting terrorism, rebuilding our highways, bridges & infrastructures, an aging population, cleaning up the environment, etc. which must be financed by the federal government with income taxes. No doubt in my mind…how about you?

If you’d like to make sure you get Social Security right — and also take your qualified money (IRA, 401(k), 403(b), TSP, etc.) at the right time and use your other savings & investments wisely, I invite you to read my Guide to Social Security…and a Better Retirement by going to www.theretirementpros.com/eReport_Social_Security.php

You’ll have one chance to get Social Security right, so get all the info you can to make a good decision — most Americans haven’t and they’ll pay a lot more in taxes on their retirement money. Less money in retirement means less of a retirement. For more info on Retirement Planning, go to the Retirement Pros website at www.theretirementpros.com/

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Saving Social Security-The Future Of A Historical Piece Of Legislation

admin — Tue, 01 Sep 2009 16:02:52 +0000

G. White asked:

Social security and its future are one of the most controversial issues discussed in politics today, with many different views and outlooks taking center stage. The law that was designed by Franklin D. Roosevelt to protect the elderly and provide services and compensation to them in retirement finds itself in a completely different context today than it was seventy years ago.

Yet, change is nothing new-it is a daily occurrence that has affected social security before, and that will continue to affect social security in the future. Understanding both sides of the issue of social security is vital to ensuring a positive future for this country.

Briefings On The Beginning

The beginnings of social security can be traced back to the tragedy of the nineteen thirties-the Great Depression. It was passed as part of the New Deal, and was very controversial at the time because it was believed that it would lead to a loss of jobs. Yet, the program prevailed. Payroll taxes were first collected in 1937, and retirement benefits were paid that same year.

Changes Throughout The Years

The Social Security Act has proven to be a very flexible program, as it has been altered and changed several times over the years. This is not surprising when taking into consideration the dramatic changes that have occurred in the workforce since its original implementation. The act was expanded in 1939 to encompass farmers and to provide benefits to spouses. Medicare was added in the 1960s. More changes were made in the seventies and eighties. If it was changed in the past, what is stopping it from being changed to meet the needs of the future?

The Problem Of People

Currently, 163 million workers are earning Social Security protection, and Social Security provides benefits to about 50 million people. The future problems associated with Social Security revolve around changing demographics. While the average remaining life span of a 65 year old in 1935 was about 12 years, it is currently 18 years. This increase in average life span is one of the major factors contributing to the uncertainty of the future of Social Security.

Another factor is the retirement of the baby boomer’s. The fifties and early sixties saw a huge increase in reproduction, and it is these offspring who will be retiring beginning in the next several years. At the same time that Social Security will need to accommodate more retirees, the amount of people paying taxes on Social Security will decrease from 3.3 people per retiree today to 2.1 people per retiree in 2032. It is the combination of these problems that is causing the panic regarding Social Security’s future.

Solving The Problem

There are many solutions being discussed regarding the Social Security program, and each of them would mean a trade off for Americans. Two of the solutions are somewhat obvious: increase the payroll tax, and decrease the amount of services provided to beneficiaries. These solutions would have obvious ramifications, and might only cause more problems for the future of Social Security than they would solve.

Another possible solution is to allow for early investment in Social Security in the form of a “pre funding” voluntary Social Security savings account. Although workers are currently unable to contribute to their Social Security funds before they retire, this proposal would allow them to do so. Critics say this plan would be expensive to manage, and it would be risky for beneficiaries as well.

A Middle Ground

Just as with any important issue, it would be nearly impossible to find a solution that would please everyone. Yet, the past of Social Security gives some hope for its future. If Social Security was fluid enough to be changed in the past, then we can have faith that it will be strong enough to handle any future changes.

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