I called this Redux because I wrote this one, Social Security less than a year ago. Government programs that you thought you could rely upon are really at the whim of whoever is in office at the time.
The other day I received the most interesting notification from the Social Security Administration (SSA). Entitled “Important Information,” it first announced that I got a raise, albeit a 1.5% raise. [sigh] From there it went on with the following question:
What If I Worked in 2013?
- If you were “full” retirement age (currently age 66) or older throughout the year, you may keep all of your benefits no matter how much you earn. But, if you were younger than full retirement age at any time during the year, there is a limit to how much you can earn before your benefits are reduced.
- If you were younger than full retirement age all year in 2013, the earnings limit was $15,120. We must deduct $1 from your benefits for each $2 you earned over $15,120.
- If you reached full retirement age during 2013, the earnings limit was $40,080. We must deduct $1 from your benefits for every $3 you earned over $40,080 until the month you turned age 66.
- The earnings your employer reports are the amount that will be on the W-2 you will receive.
As you night expect if you have read any of my essays, I have some serious problems with this. Let’s march on through them one by one, shall we?
- December 15 is a hell of a time to be notifying someone about their earning limitations for 2013. By now, they’ve already earned it according to the old rule of $30,000. Now the SSA puts in a retroactive rule that cuts their earnings allowance in half, and as a result of their following the old rule, their social security check(s) for 2014 will be cut by 70%. I always thought retroactive laws were unconstitutional, but apparently not when it benefits the Government.
- The word “earn” bothers me. What they really mean is “earned income,” that is, getting a paycheck from a regular job. As an example, you turn 62 in 2012 and you find out that you are eligible for the average social security benefit of $1000 a month. You currently make $15 an hour which is in line with what you’re allowed to earn. Your eyes get really big at this point. You just realized that you can get an extra $1000 from the Government and finally pay some bills, buy food, buy clothes for your family, and put gas in your car. Then after you’ve done all that, the SSA comes along with this retroactive announcement.
- The word “earn” does not mean “unearned income.” Unearned income is dividends, interest on bank deposits, etc. You can receive all of that you want without penalty. I had to read this part several times to bring myself to actually believe it!
- Now, if you worked hard your whole life, put some money away every month, put some money in an IRA or 401k at work every month, and invested reasonably well, you might have saved $500,000. If you were getting an average of 5% dividends or bank interest (that’s pretty good these days) then you would be retiring on $25,000 a year before taxes. If you are lucky enough to be receiving even a small pension, say $6000 a year, it would bring you to $31,000 a year. An additional $12,000 a year in social security would be a big help. This scenario would mean you could live out your days with an annual income of at least $43,000 before taxes.
- Let’s say you’ve “put away” $20 million over your working lifetime. At 5% (and I’m sure you’re getting more than that) you would have unearned income of $1 million per year. SSA says, “no problem, you get your full benefit.” An extra $36,000 – $48,000 a year in social security is meaningless to you but there are enough of those examples to be a drain on an already strained trust fund.
- Every President from Roosevelt to Reagan has said publicly and loudly that “the social security system is not intended to make people rich, it is intended to help people live an acceptably normal life throughout their retirement years.” So, what the hell happened?
- To provide social security in any amount to someone with unearned income of $1 million per year is ethically and morally reprehensible. What can the current President and Congress be thinking to allow such a thing to happen? Have they completely lost sight of Roosevelt’s original intent of the system? Have they fallen prey to the argument that everyone should get out of the system what they put in?
Here’s my solution to the social security “problem.”
- Everyone pays 6% social security contributions on every dollar they earn. That’s earned income, unearned income, $10,000 a year, or $100 million a year. Everyone!
- Everyone who is retired with income of $100,000 (COLA adjusted every year) or more does not qualify for social security. That’s earned income, unearned income, it doesn’t matter. You don’t need the money and there are many people who do.
- The Government needs to stop playing with the COLA formula. It’s been working fine for 50 years. The cost of hamburger and the cost of gasoline is what it is. Get over it! We live with it every day. Stop trying to balance your budget with this accounting trick.
You see, that wasn’t hard now was it.
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The wife turned 62 in October, and noticed last month that her pension dropped about $500. After calling her pension-plan’s office, she was told that her pension went down because she was now eligible to file for SS. What if she’d rather wait until 65 to file for SS? Oh, she can do that if she wants….but of course she is still out the money each month.
Would have been nice to know that before.
I think that’s relatively new. A neighbor has 35 yrs at GSA and has been telling us how her pension has been systematically robbed by Government tweaks. The promises you got when you started are worthless now. Thanks for stopping by Dave. I appreciate it.
I hate those letters but I believe they go out every year. I have several people on staff who are senior working to supplement their Social Security income and it always gets them when those letters come out.
This was my first one since I am now just finishing my first year on social security. Usually [sigh] when congress says “let’s pass THIS bill and it will solve problem X,” we all get a sense of what they were trying to do. Since everything about this makes things worse, I just can’t figure out what they were trying to do.
I have been saying for a long time that the goal is centralized control of all social welfare programs and that used to seem very “conspiracy theory” to most people so I tend to keep my opinions to myself and just let things play out. Basically if we hate the programs we have we will welcome the “Federal government savior program” when it arrives. The trick is to get people to sufficiently hate what they have. We are getting very close. (No, I don’t have the aluminum hat yet)
Reminds me of the movie “V for Vendetta.”
Hmmm I suppose I need to go watch that movie now? Sighhhh another one for my list of maybe I’ll watch these someday when I have time to breathe.
I, also, live on Social Security Disability and just got a whole 14.00/mo. increase. After I pay for my Cobra insurance, until the end of January, I have 14.00/mo. left for the month. Now with this new so called affordable care act I don’t get a reduced rate on my premium because I live in the state of Kansas and Kansas Medicaid didn’t do their extension, I believe it’s called, so I make too much to receive Medicaid. LOL and through the Healthcare Market Place if I earned 1000.00 more a month I would get a reduced rate on my premium. 1000.00 up to 49,000 more per year will get a reduced rate and I won’t. Now what kind of crap is that? Seriously? I’m nowhere near retirement age, so I have to be on disability for 2 years before I can qualify for Medicare. What kind of system is this, anyway?????????????????????????????????????????????That is just down right crazy!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Of course, I won’t have any insurance if the website continues to be down all the time. I spent all day yesterday and today sitting on that website because I chose the plan I wanted, got all enrolled, over the phone with a representative walking me through it because if you make one mistake, it’s as if they never received your application, wasn’t risking that. So, I’m all enrolled and I go to “hit” the “review and confirm” button and it says please wait with the little circle going around and won’t let me finalize it with that very last step and of course, the deadline in order to have insurance starting Jan. 1st is the 23rd of December. How convenient, the website doesn’t work. I spent all day yesterday, hours on the phone, hours on the website and I’ve been sitting on the website since noon today and it still says please wait. Last night, after over 2 hours of being on the phone for the 3rd or 4th time, the gentleman that was trying to help me, by trying to get to tech support, kept me on hold and kept coming back every few minutes to tell me he was still on hold with them and to assure me he hadn’t hung up on me, finally came back and said, I’m sorry mam, after an hour they just hung up on me and I received a notice that the website would be shut down from 1:00 a.m. till 5:00 a.m. to get the problem corrected and I would just have to try again today. I’ve now been on the website sitting and waiting for another 14 hours straight, today. Looks like they really fixed the problem, huh? Gotta love our Government!
Oh my, I knew there were problems, but this is the first real-life story I’ve heard. Wow, just wow! Hang in there sweetheart. This must be a test to see who perseveres. Not sure why we need such a test though.
Sunday night I, finally, got a hold of a representative, after being on hold for over 2 hours just to get to a representative, after being told the estimated wait time was 30 minutes. She said she was going to just redo my application, which made me very nervous because I was already enrolled, just needed to confirm it to finalize it, she said that sometimes there’s a glitch in the system that prevents you from getting all the way through the process. She now says it went through and I have insurance with the company and plan I chose. I kept asking her for my new application ID# and she said I would receive an email with that information. So, I get the email that says the healthcare market place has a message for me and to click on the link, so I click on the link and it asked for my application ID#. I was just like you have got to be kidding me. I about blew a gasket at that point. I then had to call back, was told the estimated wait time was 30 min., again. I was on hold, waiting for a representative for another 2 hours. The gentleman I was now talking to couldn’t believe the woman before didn’t give me the ID#. I called BC/BS today, as instructed, to find out about how I was to go about paying. Would they be sending me an invoice, or am I supposed to call them and make a payment over the phone. I call and they don’t show my information in their system yet. I was told it takes about 72 hours for them to get it. She told me to call back then. So, until I talk to someone and they can verify that I am, in fact, enrolled and confirmed, I’m not believing anything. Let’s just say the last few people that had the pleasure of talking to me, now know all about what I think about the whole darn system. I know it’s not the representatives fault, and I told them that, but I also let them know just exactly what I’ve been through and what I thought about it all. I’ve got plenty of other tests, I’m being tested with at this time. That is one test I could have done without. I still don’t know if I actually will have coverage starting on the 1st of January. I guess, we’ll see. Happy Holidays to you and your family.
Wow! and thank you and Merry Christmas to to you as well.
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They’ll take away $30 a month from widow Mrs. Willaims to reduce the deficit but corporate welfare continues to expand.
Someday I hope to understand the “logic” if any, behind this stupidity. Thanks for stopping by Carl. I appreciate it.
“You didn’t build that.” Says it all, really.
Thanks. I appreciate it.
I had to take early SS in 2012 when I lost my job. I say I “had” to because, honestly, who wants to hire someone just shy of retirement age anyway. My blood boils when I think about all the money the govt TOOK (I certainly didn’t volunteer it) for 40 years. It wouldn’t have been so bad if it had been invested in something that would have given me even just a fair return. And now that basically all I have to live on is SS, I feel like I have to fight tooth and nail for every penny. Of course, they’re making me pay back the first month I received because they say I made too much that month (the month I lost my job). Not even going to go into how I spent hours on the phone with a SS rep hearing them say “Gosh, I just don’t know what they’re saying to you in these letters.” Just proves to me that nobody knows what they’re doing. With this government, if you’ve been an honest, hard-working, tax paying citizen your whole adult life, you might as well give it up. This admin. is too busy giving money away to those who never earned it or certainly don’t legally qualify. Yes, this is a touchy subject for me, so I’ll stop now. You can delete this if you so choose. Thanks for letting me vent!
You can come by and vent any time you want. I’m glad to hear from you.
I live on Social Security Disability, and I just got the same letter. Every year I get these letters, and every year I just sit and look at them and the meager amount of money I receive each month even though I have been paying into it for 26 years. You are right, everything about governmental social programs are at the whim of the leaders at the time. I mean, what am I going to do with $16.00 extra every month. Oh, and due to COLA, I have had my food stamps adjusted.
I agree that people earning $100,000 and up per year based on income, dividends, investments, etc. should not receive Social Security income. I live next door to a woman who gets by on about $200 per month because she only qualifies for Supplemental Income. How is that fair?
I once broke down my net income after medicare, and I “earn” about $6.00 an hour. That isn’t even minimum wage. But, if I work, they can take it away. For me, it is a catch-22. I really would like to work as much as I am able, but I run the risk of the house of cards that I have built for my healthcare falling down, and being mentally “interesting” (I have Manic Depression, and my medications run about $1200 a month), I can’t risk that. It really does one in an awkward position: you want to be productive, but if you are, everything comes crashing down. It is a huge dilemma.
So true. Thanks for your story. I just don’t know what they’re thinking.
I don’t know either……