Social Security Trustees Report: 2019 Will Be Last Year for Balanced Budget

Over the years the age to collect the full retirement amount from SS has gone up but the age to start collecting the reduced amount (62) hasn't changed. Moving the earliest date back as the full retirement age goes up makes sense. Also, I think a long term plan to phase out SS for younger people is absolutely needed. It would require everyone (and employers) to contribute a minimum amount into an instrument that is a combination 401k/life ins/long term disability ins but would be under the control of the individual with the rules for withdrawal or putting claims to the insurance parts being similar to the rules for SS. To cover current and those close to retirement, remove the cap on how much income is subject to FIA taxes and increase penalties for those fraudulently collecting disability. It is really wrong to talk about an "investment tax", people should be ENCOURGARED to invest not discouraged and as they say, you want people to do something less, tax them you want them to do it more, dont tax!

In America where throwing billions of dollars to rich farmers, ballooning entitlements to the military, billions on a phony Wall! The richest people in America pay zero tax we can fully fund Social Security and Medicare forever! Do not allow greedy politicians to rob us of this very needed and well monitored program! America must refocus on its people instead of wealthy greedy corporations!

Perhaps disability Social Security claims are declining because our economy has transitioned from hard manual labor to more office jobs and service industry and professional positions. In addition, the number of people who smoke and abuse alcohol has declined. That may be offset by opiod addiction however. I think Federal and state regulatory agencies have also contributed to cleaning up the toxic and dangerous environments that workers used to have to endure.

My father was a blue collar factory worker and his body was worn out by his late fifties. He applied several times for disability Social Security before he was finally approved. It is not easy to be approved. You pretty much have to be unable to do any kind of work and, unless you qualify for one of the exceptions, you have to be unemployed for at least a year before they will approve the claim. My father only completed 8th grade and was unskilled. His options for alternate employment in the 1960's were very limited. Today's workers are more educated and can find alternative employment easier, although often at a lower pay rate. They are also more healthy, in general, than their parents and can continue working until they are eligible for regular Social Security retirement benefits.

If we are able to gain control of the obesity epidemic, that plagues all ages, we may be able to extend the solvency of the disability component of social security further into the future.

I do not agree with Jean--April 26, 2019 in regard to " Also, I think a long term plan to phase out SS for younger people is absolutely needed." I assume she is referring to the earliest age you can apply to receive Social Security benefits as age 62.

Not all people are able to physically work past age 62. Many have medical issues. They might be able to work but may need medical treatments and they feel sick all the time. Plus, they may need to miss time at work getting these treatments. Not all employers tolerate a lot of time off. Some people lose jobs in their mid 50's and can't find suitable employment so they take some mindless job till eligible for SS. Some are taking care of their elderly parents. There are many situations that make it very difficult to work beyond age 62. We all know people who seem to age faster than others. How many times have you met someone who is 55 years old and look as if they are 85 years old. Those who choose to take SS before Full Retirement Age are taking a shellacking as it is getting smaller checks. If they live long enough it all equals out in the end.

We have all paid into SS and when the time comes whether it is age 62, 66 or 70 that is our right. The government takes enough from us. The government can do plenty of other things to fix SS if they would just take their heads out of the sand.

For those who are healthy and want to keep working they will reap the rewards of bigger checks at age 70. For those who want to take SS at 62 so be it. That is the beauty of SS is that there are options to take it early or take it late. What fits you might not fit me.

Then another point if the cap is removed and higher earning people continue to pay, they should also be entitled to a larger SS check when they are eligible.

Louise, I couldn't have said it better!!!

This was an interesting article, from US News & World Report, about what ages most people take their Soc.Sec. benefit. Another reason NOT to mess with "early claims" at age 62 - too many people plan to use that option.

"Age 62. The most popular age to claim Social Security payments is age 62, the earliest possible age you can sign up. However, the proportion of people signing up for Social Security at age 62 has been declining since the mid-1990s, according to the Center for Retirement Research at Boston College analysis of Social Security Administration data. Some 48 percent of women and 42 percent of men signed up for Social Security at age 62 in 2013, down from around 60 percent of women and 55 percent of men in 2005, CRR found"

https://money.usnews.com/money/retirement/articles/2015/06/01/the-most-popular-ages-to-sign-up-for-social-security

I wanted to add that many people want to keep working past the age of 62 and not collect Social Security early but life happens. A lot of people get laid off, get a 'golden handshake', a buy out to get rid of higher paid employees that are 50+. It happened to me twice in my 50's. Once at age 51 and the second time at 58. Most people can never find another job that is equivalent to the one they were laid off from. Many people end up taking minimum wage jobs just for the health insurance and barely get by. Some people continue the minimum wage jobs and collect SS just to survive. I know a woman who is in her 80's and is still working in retail just to get by while collecting SS. She isn't working because she loves working in a deli, she is doing it to keep food on the table and a roof over her head. So, SS at 62 is sometimes a lifesaver and was always mean to be a supplement, not meant to be a single source of income.

Louise described things so well! I worked until 65, but it was very difficult. At 62, I was required to relocate with a 3-year commitment. I believe they thought I'd quit -- the company was laying off older employees for various reasons, and I think the relocation offer was a pretext to show they didn't discriminate. I surprised them and took the relocation offer, planning to keep going as long as possible. Each year was harder. If I was so tired, stressed and achy from work in an office, I can't imagine how people in more physical jobs keep going in their 60s! I retired after my relocation commitment was met at 65, when I qualified for Medicare. Trying to work another year or two would have been better financially, but it would it have years off my life.

Louise, Your assumption is wrong! ( ” Also, I think a long term plan to phase out SS for younger people is absolutely needed.” I assume she is referring to the earliest age you can apply to receive Social Security benefits as age 62.) My idea is to move people in their 20s and early 30s (and anyone older who wishes to sign up) out of ss and onto a plan they manage themselves but requires contributions for the person and their employer and includes both investments and Life and disability insurance to provide the benefits ss currently does. For those within 15 years or so of full retirement age, nothing will change. For those in between, a sort of hybrid might work - start contributing into the new program but also collect a small ss stipend consistent with the contribution to date. As for pushing the min age back, it just makes sense. The same logic that makes the full retirement age be pushed back should apply to the minimum age and BTW, also the age when you stop increasing the payment, why not let a person who is happy to keep working past 70 or have assets to tide them over be allowed to continue to defer with the promise of a higher payment if they ever need it?
The company I retired from had a major downsizing and moved to the other coast. Many friends and former colleagues who were in their 50s and 60s were given a package and let go so I do understand the issue of people loosing jobs late in their careers and the difficulty in finding similar positions. But with us Boomers retiring and living a lot longer than people did when the Townsend Act was passed, adjustments need to be made. Yes, SS was a promise that we all paid into but when it started we were also supposed to die at 65; most of us aren't upholding our side of the bargain either (thank goodness!) ;)

Well said Louise! I was let go at age 61 after 22 years with a small company. No serverance pay - I left with a modest 401K that I rolled into an IRA. My husband age 59 was just laid off (again) last month. Fortunately, he got a severance payment plus 401k to roll over to his IRA. I took my social security at age 62 due to prior health issues (cancer). It is critical that my husband now find another job (no doubt it will be lower paying). We still have a mortgage and need health coverage as I am too young for Medicare. It was NOT our choice to stop working - we had no say in our employment status. If allowed we would both still be working at our jobs. The fact is older employees with higher pays are laid off - then many or us end up with low paying jobs to survive, IF we are lucky to find employment. That is the reality of many older employees - not all employers value us for our experience and expertise.

My Job in a Church was eliminated in November of 2017. I was given only two months of severance and health insurance. At Christmas that year, it was very hard as I was looking for fulltime employment again with benefits, which did not happen. In March 2018, I was forced to take my SS benefits at 63.5 years of age and using my nursing background I work three days a week for an Oral Surgeon/Dental Practice. I have to pay my own health insurance since I am not 65 and I live in NW Washington, DC which is not cheap. I will soon qualify for Medicare and once I get beyond the income limits set by SS, (January will begin my FRA year), I will increase my income. We are not just penalized with lower benefits by taking SS early, there ire the income limits PLUS we often have to pay for health insurance--it does not seem fair for those who are 62-64. I was lucky that I had not experienced job elimination in my fifties. Even so, at 65 in September, if I wanted to work fulltime--the selections would be limited and I have an education in nursing as well as solid current Admin skills. Congress needs to enforce the law in age discrimination..it is too easy for employers for find a way to get rid of older people. The job I was forced to leave has had three people in it and is now searching for a fourth as they keep leaving. Oh well... At 62, for some people enough is enough.

Age discrimination in the US starts early and affects people in their 50s. They are perceived as too costly because of higher earnings. People in their fifties and sixties have a more difficult time finding jobs should they lose a job. In many cases folks retire early because of this kind of discrimination. Most have paid well beyond the minimum required to receive social security so should be able to claim it. There was a plan to allow folks into Medicare at an earlier age. This would go a long way towards helping folks who, through no fault of their own, "age" out of the workforce. Removing the income cap on high earners could go a long way towards helping to keep this important program solvent. Charging more to lower income people should not happen.

Maybe admin can do an article on age discrimination of people age 50 and older. I have seen it for years and it affected me and people I know. What gets me at my last job it was such an obvious case of discrimination. There were 5 of us selected for lay off. Four of us were between 50-64 and one part time 20 year old college kid.. They threw in the kid to say "hey, we laid off a young person too".

I do wish they would lower the age for Medicare to age 62 to coincide with Social Security. I was on Obamacare with my husband who retired at age 63. We had to be on Obamacare till we both turned 65. The Hub went on Medicare a year and a half before me However, we are now on traditional Medicare and with the supplement it is costing a small fortune. So Medicare Plan B, Plan D and Medicare supplement is very expensive. Many people think Medicare is free but only the hospital portion is free if you have worked enough years. Everything else costs money!

The politicians are talking about Medicare for all. They are not talking about cost. It is not going to be free. I think people think it is going to be a free program.

Louise
Just wondering what you mean by a small fortune? My coverage is similar to what I had when employed and about the same price. So far have I have been pleased.

FYI....I also was laid off at the age of 58 and have been on Extended Medicaid health coverage of California for the past 4 years and my husband and I will continue until we qualify for Medicare. Thats one reason we are staying in CA. We will be retiring closer to the desert towns of S CA where its more cheaper to live. Also, if you are a couple earning less than $1800 per month you qualify for help in paying for your Medicare premiums and prescription costs. Each state is different so you really need to do your research before relocating to another state. We thought we would be leaving California but in the long run we are better off staying because we will be saving $500 per month. I know most people here are in a higher income bracket but sometimes it's better to claim SS earlier so you can qualify for these discounts. I learned this while being a caregiver for my mother who earned $100 per month too much to qualify for any of these benefits.

Staci, I live in CT and Medicare supplement plans are more expensive than other parts of the country. My husband and I have Plan F (Medicare supplement) which pays for almost everything but it is the most costly plan. For the two of us that costs $463.73 a month, Part B (doctors) Medicare costs us each $134 per month and Plan D (prescriptions) costs us each $72 a month.

So in total, it cost us $875.72 a month or $10,508.64 a year. To me that is a small fortune! However, no one is forcing us to buy Plan F but my husband underwent some serious medical issues and once he was on Medicare and Plan F we received no extra medical bills. I do believe his treatments were over $100,000+ so the money we spend for Plan F is just a drop in the bucket.

We have a question someone might know the answer to.
I'm turning 62 this May and was planning to start my SS benefit claim.
My MIL just passed and we think that there may be about a 20k inheritance payment to our household income this year. Will that require a tax implication so that it may be better for me to wait?
Hubby is 65 and already receives benefits.

Cap - generally, inheritances are not subject to any income tax on the recipient. If you have a tax preparer, ask her or him. An internet search on “are inheritances taxable” could give you some helpful information.

I still do not agree with Jean-April 28, 2019. The SS system works and like any government program requires tweaks over time. The beauty of the SS system is that people cannot touch their money until retirement age or a disability occurs. People cannot typically keep their hands off money such as 401k's and IRA's. People have so many excuses to borrow against it to put a down payment on a house, buy a car, pay off bills, emergencies. SS is a safety net guaranteed to be there when a person retires. Too many people squander their money and have nothing in the end. People already have the means to save in 401k's with most employers or IRA's. Yes, maybe SS could expand on some types of saving choices in addition to traditional SS. There are lots of things to improve on what we currently have but I do think the current model should remain. Why reinvent the wheel? Improve it!

Louise, I also agree with you. Many people who do save also have a hard time choosing investment vehicles--not everyone is a financial wizard. I like that Social Security is there when needed as we have aged. The system does work and by allowing the income cap to rise more money would be in the system for the future. It does need to be tweaked and will be by 2021. I am hoping for the best.

Social Security will never be fixed as long as it remains a partisan issue. As soon as recommendations are made to make the program more viable, one political party starts running ads about how the other party wants to push Granny off a cliff. The insanity in DC and the misinformation we get in the biased press make solving these problems impossible. We are a country hopelessly divided.

As a long time reader and occasional contributor to the blogs on topretirements.com, I can say that nothing gets the blood flowing among the TR.com-ers quite like social security related topics. Maimi, I agree with your sentiment, but I really hope we are not "hopelessly" divided. I hold out hope that some way, we can start coming together. I really think there are some core shared beliefs that we can come together on; at least I sincerely hope so. That said, I think it is important to bring some facts to the discussion. There have been some comments made about the richest Americans paying zero taxes, intimating that if paid, could be used to fund SS & Medicare, and eliminating the income cap for social security taxes providing solvency for the program.

First, the top1% of wage earners in the US pay almost 40% of federal income taxes. To say that the richest Americans pay zero taxes is wrong. That is just a variation on the meme that "the rich need to pay their fair share" that some politicians love to pronounce, no matter how inaccurate it is. Second, and you will find this right on the social security website, social security was never meant to be retirees' only source of income. The idea is that folks will use savings, investments, pensions, etc to provide for their retirement as well. Next, social security benefits are skewed towards lower-earning beneficiaries. That is to say, lower income beneficiaries receive more of a benefit relative to their contributions than do higher income beneficiaries. Finally, and I believe Louise made this point earlier, if you eliminate the income cap for paying SS taxes, then you have to raise the benefits paid to higher contributors. Remember, social security isn't supposed to be a welfare program, but rather more of a delayed-benefits plan. You contribute throughout your life time, and after 40 or 50 years, you receive a benefit based on your contributions. If contribute more, you receive more. So eliminating the income cap is not going to have the impact on program solvency that some think.

Partagas, I wish I shared your optimism about the ability of the current political parties to come together to solve problems in SS. Right now, I do not see it.
I agree with you about the myths regarding “the rich paying their fair share”. Unfortunately, people today have accepted that rhetoric coming from one political party. I hear it over and over again and if I try to correct it, I learn quickly that facts no longer matter to many. I don’t know how the current situation can be overcome. It seems the current climate of class warfare views successful high earners as enemies. I live in a state where 1/3 of the population is on Medicaid and receive some government assistance due to poverty. We are also a sanctuary state currently overwhelmed with the cost of educating newcomers with so many needs.

Partagas, of course we cannot totally soak the rich. However pensions should not really be mentioned in relation to Social Security because they are now virtually non existent except for a very small percentage of Americans. So, one of the so called legs is gone. Savings is something that one must do for retirement or for just living, however some people make so little money it goes all to just getting by. My ex-husband was a very successful surgeon and we had homes here in the USA and abroad and I can tell you that giving a bit more money in social security taxes would not have hurt our standard of living and would barely have been noticed. The higher earners, if they are taxed more, should get a bit more back in benefits and that is what is being considered here in DC as I write this and both Democrats and Republicans are working together on the changes that will come to pass in 2021. Lets hope for the best. Those with higher incomes could be the first to migrate right out of the USA if they felt they were being treated unfairly.

Jennifer, as I will agree that pensions are not as prevalent as in days past, but many teachers, state workers still receive them. My company still provides a pension and believes to this day of there importance, which is not the norm. Some issues with pensions is they are not funded properly and can disappear later in retirement. The leg may be weak, but it is not gone.

Group - 'blather' is now meaningless.

Social Security Administration (SSA) has said that they need a MINIMUM of 2.8 workers paying into the system for every one retiree collecting benefits. Next year there will be just 2.7 workers paying into Social Security for each retiree-- below the minimum necessary to sustain the program. After that, it will keep falling.

Their figures ... their published notices ... the math don't lie, regardless as to one's hopeful emotions.

Ru READY????

Bruce is correct, most, if not all, public employees get very generous pensions (it's one the biggest reasons so many states are now facing huge financial problems) AND they also can contribute to 403B plans. Most companies transitions from defined benefit pensions to defined contribution plan (401k) in the 1980s. The 401k plans normal have a company match. If anyone chooses not to participate in their companies 401K (or if the company doesn't have one and they dont start an IRA) they should NOT expect the tax payers to provide for them. There's lots of stuff to spend money on these days but people need to put saving for their retirement at the top - way before a bigger home/apt/ in a better neighborhood, way before a vacation trip, way before dining out or shopping at high end store, etc. etc. etc. For those approaching retirement, extra money (catch-up) can be put into 401Ks.

I also know of very few pension plans being offered to their employees. Also in the case of my sister in law in Mass. the educators do get a pension but they do not have the social security option (they don't pay in thus do not collect, not an option) & they also can not collect on the spouse's social security when they pass which isn't right. A lot of hospitals did have pension plans but those also have been stopped & offer various 401 plans. Myself as a Government worker a pension plan was in place that you contributed to & also they collect social security from my check which when I retired the two made a nice monthly retirement. They also offered deferred comp & other various 'savings' but unlike the pension those could be tapped into. I feel fortunate to have my pension & it is sad so many companies etc. are doing away with them, it is hard for people to save these days too many things happen & before you know it life moves on & they would like to retire, enjoy life but are not able to. Sad!

Rich is right. We need more workers in the system to keep SS afloat. Many countries are experiencing the same problems and are offering incentives to promote childbirth. We should consider fast tracking immigrants too to become citizens. More people in the work force not only helps SS but helps the economy with consumer purchases, taxes, infrastructure.

Bruce and Jean are right. According to the Bureau of Labor statistics, 13% of private employees receive a pension. In addition, 78% of public sector employees and 67% of unionized workers receive pensions. To say that pensions are "virtually non existent" is not correct. Social security is there to supplement other sources of retirement, as Jean mentions. To say that people will migrate to mitigate the effects of taxes is true, although I think it is more likely they would move within the US vs. overseas. Remember all those Hollywood types who said they would leave the country if Pres Bush was elected? Near as I can tell, they're all still around in the good old US of A. On the other hand, NY state lost $3billion in tax revenue last year, which Gov Cuomo attributes to the SALT (state and local tax) deduction limitation put in place by the 2017 tax reform law inducing high earners to leave the state. Taxes have consequences, and people will alter their behavior to accommodate. But why move to Italy or France or wherever, unless you really want to, when you can move to Florida or Texas or Wyoming and pay no state income tax?

Social security, and its cost, has increased significantly since it was introduced. When SS payments first started in 1940, full retirement age was 65 and the average life expectancy was less than 62. Today, you can start receiving benefits at age 62 and the average life expectancy is approaching 80. So when the program first started, the "average person" never lived long enough to receive benefits, whereas today the "average person" could be on it for 17 or 18 years. In addition, when SS initially started, it was strictly a retirement program. Then in the 1950's the government added disability benefits to workers starting at age 50. Then they eliminated the age limit. So now you have individuals collecting benefits who did not contribute as long or as much (or at all) into the program as individuals collecting retirement benefits who often had contributed for 4 or 5 decades. The government addresses this problem by "reallocating" funds from the retirement trust fund to the disability trust fund. Interestingly, there was recently as article in the Wall Street Journal noting that with lower unemployment and increased labor force participation, SS disability claims are also being reduced, which the article attributed to reduced fraudulent disability claims. This points to another expense for this, and just about every other government welfare or benefit program: corruption.

In the late 70's-early 80's SS expenditures exceeded revenues. So in 1983 Congress passed an amendment to address the long-term solvency of SS. There were 2 main components: 1) SS benefits were made eligible for taxation, and 2) they gradually extended full retirement age from 65 to 67 for individuals born after 1938. The combination of increased tax revenue (at beneficiaries expense) and actuarial adjustments from increasing full retirement age put the program on better footing. Currently, SS can fully fund retirement obligations until 2034, at which point it is projected that benefits will have to be cut by approximately 25% assuming no other changes are made. We are at another inflection point where it is vital to make adjustments to the program to ensure solvency and minimizing the impact on benefits. Given our ever increasing longevity, and the demonstrated beneficial impact of increasing full retirement age, it seems that extending full retirement age past 67 is a logical component of this change.

Dear All:

There is a very small segment of the population that receives a pension. Obviously these are the people who may have replied. Most of the retirees in the USA do not get a pension, and many of the teacher pensions are underfunded. Those of you who have them are blessed. We will see even less of them in the future. It is obvious that we would need more workers, but that takes time that we may not have. The more workers the more viable SS will be, no matter how it happens. In the meantime other alternatives are being considered.

Louise, Most Legal immigrants do pay into SS. It's the low skilled immigrants (legal and not) who work "under the table" who do not pay into the system (and those who hire them do not pay the employer part). Automation is and will continue to replace human workers and with medical advances people will be living much longer (and sucking $$$$ out of the system). That is why the entire SS system need to be phased out ( not for those currently collecting or within a decade or so of retiring). The plan made in 1934 when people died a year or two after retirement (or before retirement) and people were having lots of babies and there was very little automation in any jobs simply doesn't make sense for the world as it is today and for the one futurists describe as coming soon.

Partagas, I live in a state which is a sanctuary state and primarily blue collar and heavily Democrat controlled. The taxes here are very high and the state usually makes the “worst places to retire in”. When I moved here, I was shocked at the number of able bodied people I met who were on “disability”. In my experience, the Wall Street Journal is correct. When the economy is better and there are jobs available, those fraudulent claims go down. Since Trump was elected, the unemployment rate has plummeted here, but people have left the state in droves and most retirees leave id they can. There are people who brag about knowing how to work the system to get as many government benefits as they can, which really bothers me because it is not the way I was raised. There will always be people who take far more than they ever put into the system, and those who put more in and never take it all. I do think something needs to be done to reduce the fraud in the SS and Medicaid system. Soaking the financially successful is not the answer.

I found out today that an inheritance does not affect a SS benefit claim. However , I was told that it may affect your payment for Medicare supplement , when the amount of your AGI is recalculated every 2 years.

Vtretiree - you are correct that teachers who receive a state pension will not receive SS based on THAT income as well. That is fair. What is NOT fair is that we teachers from only 14 states who worked at other jobs before, during the summers, or after our public education careers, AND paid into SS enough to qualify for a monthly benefit in retirement, will NOT receive that benefit nor the survivor benefits from our spouse. I am a victim of that law, and lost my estimated SS benefit upon retirement. The SS estimated that I had paid enough into the system to earn $845.00 in a monthly benefit, but since I was a retired teacher from X state, I would receive $25.26 instead! And attached a letter stating that since I was one of those teachers, I would also not qualify for the survivor benefits that my husband worked so hard for all of his life in the private sector! Many years my own of hard work supplementing a small teaching salary and paying my fair share into the system are totally negated by SS...so many of us also pay for future benefits during our careers that others collect and we will never see!

Group, sorry 2 sound caustic but I’m an Octo(genarian) that vividly remembers Moynihan and Kennedy’s mantra’s about the SSA being the “3rd rail” of American politics … way back then in the days of the Nixon era. https://en.wikipedia.org/wiki/Daniel_Patrick_Moynihan ... of which now the Boomer crowd will be paying the price for as it seems because they then believed the soothing voice of politicians and ‘reporters’ actings? SSA will never ever be phased out. It’s a government cost accounting plus for the book’s folks. This whole system has evolved into a sham type system, similar to where the starry-eyed 18YO HS grad asks a hardened combat veteran to reaffirm all the glorious things the military recruiter promised to the 18 YO for the 18 YO’s then joining. In NYC street parlance the whole thing was a “3-card Monty game” where YOU were the mark. Just live as long as you can. Remember, a Congressperson is eligible to retire after 5 years of ‘service’ and receives theirs.

Editor's note: Social Security is complex and it stirs up a lot of feelings. There is also a tremendous amount of misinformation out there on the topic, and we try to do our best to snuff it out. Just like other workers, members of Congress have been paying into the Social Security system since 1984, and receiving the same benefits. Members are also entitled to a pension with 5 years of service, starting at age 62. The benefit is scaled to years of service and age. They also pay a percentage of salary into the FERS system (4.4% of pay if hired after Dec. 31, 2013, but less if hired before then.) See https://www.senate.gov/CRSpubs/ac0d1dd5-7316-4390-87e6-353589586a89.pdf

Sandy,z, wow. That just does not seem right. What is the rationale behind that rule? On the other hand, I taught for a long time before I changed careers because it was not enough money to support my family as a single Mom. I forfeited a pension because I needed to earn more. The school system I worked for did not pay into SS, so I had 12 zeros, which lowered my benefit. Some game the system and benefit from it and some pay far more than they ever collect. I guess that is the point of a social program meant to benefit the greater good. I do not support socialism, but there it is. I think most educated people would do better investing on their own, but glad SS exists for those who need it.,

Re teachers' (and other public sector employees) pensions and SS, the WEP (Windfall Elimination Provision_ was enacted in 1983, so this is hardly new - or something unknown to public school teachers who are covered by pensions. The purpose of the law was to curb the double-dipping of two public retirement benefits.

The amount of SS benefit reduction is based on a complicated formula that includes how much the retiree is receiving in pension benefits.

When states passed WEP legislation, it was astonishing to learn how much teachers were collecting between their SS and public pensions.

Just saw this article on msnbc.com that suggests the human lifespan is rapidly approaching 100 years. How is SS that allows people to start collecting at age 62 or even 66 after contributing only 7% of wages for 30 years going to pay out a benefit (that amount to way more than was ever put in) for 37 more years ?

Carol,

I think astonishing is an interesting word. Let me put it in perspective for you. If a person spent time in the private sector and had the necessary quarters to qualify and also had the long number of years to qualify for a pension, it is interesting for persons to say they are getting a windfall. The teaching pension is based on a percentage of average salary, not their full salary. This typically equates to between $2,000 and $3,000 per month for most retired teachers. Add to that the SS benefits and they might have enough money, after a career of public service, to maybe live without having to get yet another job to survive. I was in education when the provision was passed and we had a huge exodus from teaching by teachers who had to retire or lose their RIGHT do draw both if they qualified. No one ever ask to be GIVEN anything. Both were EARNED. If this same event had happened that affected other groups of people with advanced degrees like doctors, engineers, lawyers, they would have come unglued and lobbied Congress to not allow this to happen. Teachers just hunkered down and took it. There is a push to repeal the windfall provision and allow people who have EARNED their pension and SS to be able to draw both as should be the case. Trust me none of these people will be purchasing a new mansion or a yacht. What it will do is allow them to feel appreciated for at least 30 years of public service and SS, if they qualified. Teachers choose their profession because they have a passion for kids. How about we let them live a few years after their career without having to worry if they can pay for their basic living expenses? Yep, I am a recently retired high school principal and will defend the hundreds of dedicated professionals I worked with until I draw my last breath.

I fail to understand how collecting SS & a pension is called double dipping & in the case of educators they don't collect SS, because in some States SS is not collected. I agree you don't collect if you don't pay in, BUT if your spouse paid in SS & was collecting before passing away then you should be able to collect on that. My State pension is setup so when filling out the paperwork you can elect to have it so in the case of your death the spouse gets part of your pension, the amount has several options up to half & if your spouse passes first then you revert to the full monthly amount. Yes you get less money each month but it isn't that much (half benefit is not you getting half monthly) & a great feeling to know your loved one has that source each month. SS could be set the same way, this getting the death benefit of $255 is crap that amount as far as I know never changed, in all honesty what part of a funeral etc. does that pay for? The bottom line for getting SS should be if you or your spouse paid in, then you should receive a month benefit, no one is going to get rich but they might not need a low paying job to support them self!

Christopher, when I taught, they did not take out Social Security. Any amount that was not withdrawn for SS could be invested on their own. Also, the WEP law does not apply exclusively to teachers. It applies to any government employee who receives a government pension, that includes doctors and lawyers. I might add that there is just no comparison between teachers and doctors and lawyers. Teachers work 180 days a year and the day is very short. I taught for many years and know the difference in work load. I left teaching, not because I didn’t love it, but because I needed to support a family. Most teachers are married and it is a great job for married parents, because they get so much time off, unlike any other profession.
Also, teachers I know retired after 20 years, in their early 40’s and were then able to pursue another career. They had the choice to retire and collect a good pension with full benefits. No other profession in the private sector has that choice.

Exactly.
The government knows this is wrong. They are stealing millions from public service workers who earned SS thru work before and after their tenures.
They claim double-dipping. Not so. Two separate contracts. I work for you for x amount of years and you give me a pension.
I pay into SS from other jobs that give me enough credits then you pay me back on that as well. Simple math to me....lol

My husband also had the option of drawing a large amount from his company pension for around 11 years and then when he went on SS that check would stop. They called it a bridge. He was also offered a Chinese menu of other options. He ended up choosing taking a much lower amount that would pay him for his entire life and if I should outlive him, it will continue for the rest of my life. If one of us lives long enough it should be equivalent to the larger payout.

I'm a little confused & shocked by the government pension exemption mentioned above. One of my kids recently accepted a federal job, and a close friend of my kids works for the FBI. They both are professionals who had jobs in the private sector for several years before starting work for the government. Did they just forfeit a SS benefit relating to those years in the private sector, by accepting government jobs? After paying SS taxes for years, that seems very harsh.

Maimin - Most teachers that I worked with and know devoted far more than 20 years to careers that they loved! I would not trade my 34 years for anything- no other job gives one the satisfaction of impacting so many lives. But, in order to supplement the low salary, summer employment in the private sector was a given for most. In addition, for those who did work before or after their teaching careers, as did those you knew who “left after 20 years”, all of that employment compensation required paycheck contributions to SS. It is only fair that in ALL 50 states, contributions that meet the requirements for a benefit based on private sector employment be paid to the beneficiary. I can assure you that it amounts to little compared to the golden parachutes being awarded to some in the corporate world! An education pension places most retired teachers squarely in the poverty level - to receive the SS benefits that they earned through other employment contributions might be enough to keep them from having to substitute teach at 80 years old!

Jean, in addition to the 7+% the employee puts in, the employer must also put in 7+% for the employee’s SS account. So it’s actually a little higher than 15% that is put into an employee’s SS account each year. If you’re self-employed, you’ll pay the full 15% yourself. Whether even the 15% is enough to keep SS funded is not clear. However, it’s a good political bet that those who already receive SS, or are close to it will always get their current or expected SS benefits, probably with COLAs. Those younger may need t have it as well.

Sandyz, I taught for 14 years before I left. Yes, I cherish those years, but when I became a single Mom, I had to earn more. I can tell you that the quality of life as a teacher was great, but there is no comparison in the work load in the corporate world. Teaching was comparable to a part time job compared to work in the private sector.

Re-posting a link to how Congressional visitors voted on these issues last time, worth knowing!
https://retiredamericans.org/wp-content/uploads/2019/06/AFRA-Voting-Record-2018-UPDATE-2.pdf

The New York TImes just published an article about the coming cuts to Social Security we have been warning about for years, "Social Security Staring at Shortfall".
Congress continues to refuse to address the problem as time draws shorter to fix it.
See also https://www.topretirements.com/blog/financial/finally-somebody-in-congress-wants-to-fix-social-security.html/