The shame of social security

[bytor2112]

My mother is 63 years old and in poor health. She has just had two back surgeries, paid for by Vocational Rehab., but, she will not be able to work anymore. For the past year she has been receiving her deceased husbands social security, because it is more than her check would be. After, she pays her bills, she has about $70.00 a month to live on.

Here is the shame. My mother (and this is true for everyone with a deceased spouse) cannot receive her social security check and her late husbands. Only the higher of the two. So, all the years that she paid into the system, all of that money is......GONE. While our government wastes billions, people like my mother will struggle for the rest of her life. It is appropriate to note that my mother and her late husband failed to plan for the future and now she is facing the results of those decisions. Life insurance and long term savings/investments would have changed her retirement years drastically. She may live another 20 years or more on....$860.00 per month. Not likely.

This should be changed. There is not a good reason for it. Had her husband lived, they would have both received social security income. Now that he is dead, it's the greater of the two....not both.

I will of course help my mother, BUT, how freaking angry this makes me. Hundreds of thousands of retirees with deceased spouses could and should be receiving more income and they should...they paid for it and so did there employers. If not, it is just a tax.

Edited February 4, 2010 by bytor2112

[Moksha]

On a brighter note, Social Security payments have been tied to the cost of living index. When it goes up, so does Social Security on an annual basis. The index did not rise this year so Social Security stayed the same.

[Guest]

Well, the premise of the US Social Security Program is that you receive pension until you die. After that you get $250 to help with your burial and that's it. Since your father passed away, that's the end of his SS benefits. SS doesn't pass on to heirs. Otherwise, SS will be even more bankrupt than it is today having to pay benefits to people who are already dead. SS like any pension fund, works by using statistical data on the average lifespan of people. That's why you have to wait until you are 65 (is it higher now?) to claim it because that's the average lifespan of contributors in the SS math - you die before 65, SS gains money, you live past 65, SS loses money. It's a bit more complicated than that, of course - I mean, this is the government we are talking about - but the premise is that simple, and in the end, the number of early deaths balance out the number of late deaths so it all evens out.

The thing is, SS is mis-managed. Instead of investing SS contributions so that what you put in gains money when you take it out (more and more people start claiming as the population get older, and then the money has to be adjusted for inflation), the government instead "borrows" the money for some other government program and pays it back without interest. So, you are lucky if you get 2% gains on SS contributions!

So, my advice to all of you. Treat SS as part of Federal Income Tax. Pay it and forget it. Don't rely on that money for retirement. Invest money for your retirement in other channels. Any private banking institution, insured and protected, will give you much more than 2% gains on your investment if invested for longer than 10 years. And the next time SS gets put on the ballot - vote for the guy who will give you the option of taking control of that money.

Edited February 4, 2010 by anatess

[Tarnished]

I agree with anatess here, by the time I get to the age where I will need SS there will be no more left to give. As I see it, SS is a tax that I have to pay, because I will never really see the benefit of it in my later years. I agree that it is a shame how your mother is being treated Bytor, but it comes back to how the government has run the SS program. They messed it up so badly that it doesn't work the way it should.

[talisyn]

Social Security got its start when women did not often work outside the home, and widows getting their deceased spouse's SS benefits was a pretty radical idea. I think the system needs to be updated to reflect the new reality of both parties working. Bytor, I'm sorry your mom is going through such a rough time, but I'm glad this safety net is in place. After all, without SS she'd be getting a big fat nothing. For most people the amount they get in benefits is much greater than the amount they paid into it during their working life.

[Jbs2763]

when SS was put in, and the 'retirement' age set at 65, average life expectancy was 63 yrs...so the odds were you'd be dead before you got it...nowdays avg life expectacy is 78...so for SS to keep up 'retirement' age needs to be bumped to 80

this aint my idea...it was Mitt Romneys...he said it on Glenn Beck couple years back

[jadams_4040]

My mother is 63 years old and in poor health. She has just had two back surgeries, paid for by Vocational Rehab., but, she will not be able to work anymore. For the past year she has been receiving her deceased husbands social security, because it is more than her check would be. After, she pays her bills, she has about $70.00 a month to live on.

Here is the shame. My mother (and this is true for everyone with a deceased spouse) cannot receive her social security check and her late husbands. Only the higher of the two. So, all the years that she paid into the system, all of that money is......GONE. While our government wastes billions, people like my mother will struggle for the rest of her life. It is appropriate to note that my mother and her late husband failed to plan for the future and now she is facing the results of those decisions. Life insurance and long term savings/investments would have changed her retirement years drastically. She may live another 20 years or more on....$860.00 per month. Not likely.

This should be changed. There is not a good reason for it. Had her husband lived, they would have both received social security income. Now that he is dead, it's the greater of the two....not both.

I will of course help my mother, BUT, how freaking angry this makes me. Hundreds of thousands of retirees with deceased spouses could and should be receiving more income and they should...they paid for it and so did there employers. If not, it is just a tax.

Well kinda makes one rethink when we speak badly of governments role in intitlement programs, bigger government getting involved with welfare issues, health insurance by government, and so on doesnt it? sometimes we talk how bad,evil and intrusive our government is until it strikes home in our own back yard and someone we love really needs help from all the things we stand against.

[talisyn]

when SS was put in, and the 'retirement' age set at 65, average life expectancy was 63 yrs...so the odds were you'd be dead before you got it...nowdays avg life expectacy is 78...so for SS to keep up 'retirement' age needs to be bumped to 80

this aint my idea...it was Mitt Romneys...he said it on Glenn Beck couple years back

According to my birthday SS statement I get to retire with full benefits at 70 years. I don't think my odds are that good

[Elphaba]

I couldn't agree with your more, bytor. It's ridiculous to have put that money in, and to not be getting it back, and as Talisyn explained, it's usually the wife who is not getting the entire amount she should be.

There's another rule of Social Security called the pension offshoot which also usually ends up penalizing the wife. Diane Feinstein was working on having that rule repealed, but I haven't followed it forever. As of today, I don't think it has been.

It's heartbreaking to hear about your mother. A clarification though, Vocational Rehabilitation is not part of Social Security, or at least it's not in Utah. Is it different in Florida?

I understand people's opposition to Social Security, but I thank Zeus for it every day as I am disabled. I am very happy with the benefits I receive, and can't imagine where I'd be without them. I am extremely fortunate.

Good luck to you and your mom.

Elphaba

[Jbs2763]

I'm 30 yrs old...aint no way in heck it'll be around when i get that old

[Guest]

Well kinda makes one rethink when we speak badly of governments role in intitlement programs, bigger government getting involved with welfare issues, health insurance by government, and so on doesnt it? sometimes we talk how bad,evil and intrusive our government is until it strikes home in our own back yard and someone we love really needs help from all the things we stand against.

I don't understand this post. Jadams... are you saying that we should expand SS?

If that's what you're saying, then you're not seeing the big picture. Government takes that money from the people so they can manage it and give it back to them for their retirement. It's a big goverment FAIL in my opinion, because any sane investment broker can make a lot more money than 2% on that SS money that people put in so that the retirement fund would have a lot more to give each retiree than the measly amount Bytor's mom is getting.

And with this track record, you want them to manage health insurance as well? Scary!

[Just_A_Guy]

Social Security got its start when women did not often work outside the home, and widows getting their deceased spouse's SS benefits was a pretty radical idea. I think the system needs to be updated to reflect the new reality of both parties working.

I'm inclined to agree.

It sounds heartless, but Social Security was conceived as insurance. Most of us are comfortable with the general principle that if you don't use insurance, you lose the money you've paid into it. That's how the system stays solvent--the ones who don't use it subsidize the ones who do.

Where a spouse has elected to stay home to raise the children and therefore has accrued no benefits under her (or his) own name, it makes sense that she should be allowed to claim her spouse's benefits in the event of his death. But where a widow has been in the workforce long enough to accrue full benefits for herself, then--provided the benefits are sufficient to attain the purposes for which the program was instituted (which is debatable, I suppose)--I find it difficult to justify allowing one person to claim the benefits of two. That's how programs go broke.

[talisyn]

Well, let's look at it this way. You get about $180 taken out every payday for SS+Medicare. That's $360/month. When you turn 70 you can get SS for at least $800/month. I don't know what the Medicare insurance would come out to, let's say $200, so that's $1000. So you'd be getting $640 basically free. Isn't that a good rate of return?

[personne]

Bonsoir, votre histoire m'émeut..Je ne sais comment fonctionne le système de santé chez vous, mais il me semble qu'il y a là un soucis. Je ne peux que vous souhaiter bon courage dans vos décisions et vos démarches, à vous deux.

[Just_A_Guy]

Not compared to what you could get in the private sector, no.

I'm not a whiz at the compound interest formula, so I'll use this calculator. $360 per month equals $4320 per year. Let's say, over the next thirty years, instead of paying my Social Security I take that same amount of money and put it into a 401(k) that's invested in conservative-ish mutuals averaging 8% per year over the long run. Thirty years later I'll have $528,534.15, which could be paid out at $1468.15 per month over the next thirty years. If my fund averages 12% instead of 8%, I'll retire a millionaire.

That's why the Bushies wanted to partially privatize the system. The status quo does not give you $640 per month; it blows $468 per month of what you could have been getting if government had just trusted you to manage your own money in the first place. But when Bush circulated the idea, people just latched onto the words "Wall Street" and they quit using their math skills.

Edited February 4, 2010 by Just_A_Guy

[Guest]

Well, let's look at it this way. You get about $180 taken out every payday for SS+Medicare. That's $360/month. When you turn 70 you can get SS for at least $800/month. I don't know what the Medicare insurance would come out to, let's say $200, so that's $1000. So you'd be getting $640 basically free. Isn't that a good rate of return?

No. Because, if you put that same exact money on a regular pension fund - plain vanilla, no bells and whistles, set it and forget it kind of pension fund.

Watch carefully...

- Say you are turning 30 years old next month.

- Say you start putting $360/month starting next month into a simple pension fund

- Say you don't intend to retire until you are 65

- Say you won't die until you are 90 years old... that's 25 years of retirement living

- Say the fund only made a measly 6% annual fund return (the current fund returns are at least 8%, but since you're going to be starting on a recession year, I'll give you 2% mark down just to be on the super conservative side)

- When you turn 65, your fund would have ~$500,000 give or take a few dollars.

- Divide that number by 300 months (25 years x 12 months), that will give you....

DRUM ROLL PLEASE...

~$1,600 per month

And guess what. If you die, you can will that money to your spouse or kids!

I love compounding interest when it's working for you instead of for some tax agency!

[Palerider]

Well kinda makes one rethink when we speak badly of governments role in intitlement programs, bigger government getting involved with welfare issues, health insurance by government, and so on doesnt it? sometimes we talk how bad,evil and intrusive our government is until it strikes home in our own back yard and someone we love really needs help from all the things we stand against.

what?????? :confused:

[Palerider]

I couldn't agree with your more, bytor. It's ridiculous to have put that money in, and to not be getting it back, and as Talisyn explained, it's usually the wife who is not getting the entire amount she should be.

There's another rule of Social Security called the pension offshoot which also usually ends up penalizing the wife. Diane Feinstein was working on having that rule repealed, but I haven't followed it forever. As of today, I don't think it has been.

It's heartbreaking to hear about your mother. A clarification though, Vocational Rehabilitation is not part of Social Security, or at least it's not in Utah. Is it different in Florida?

I understand people's opposition to Social Security, but I thank Zeus for it every day as I am disabled. I am very happy with the benefits I receive, and can't imagine where I'd be without them. I am extremely fortunate.

Good luck to you and your mom.

Elphaba

Zeus.....is that the atheist God???? I didn't think atheist believed in anything...:D:D:D

[WillowTheWhisp]

I'm having difficulty understanding why one person should be entitled to two pensions.

[miztrniceguy]

C'mon Pale...you know she's not really an Atheist. She's one of us, just in denial!!

[Palerider]

C'mon Pale...you know she's not really an Atheist. She's one of us, just in denial!!

I have told her that several times....she doesn't believe anything I tell her....:lol:

[miztrniceguy]

well...considering the source......lol. :) :) :)

[Palerider]

well...considering the source......lol. :) :) :)

I just considered the atheist.....they don't believe anything...

[Moksha]

Social Security got its start when women did not often work outside the home, and widows getting their deceased spouse's SS benefits was a pretty radical idea.

Additionally, Kaiser Wilhelm who first instituted such an idea, thought of it as a means to retire superannuated workers so that younger workers would have a job. This would also mean they did not have Wal-Marts in Germany back then who would have just fired higher salaried workers for those just starting out at a lower wage.

For most people the amount they get in benefits is much greater than the amount they paid into it during their working life.

Pretty good incentive to survive, eh? Time for us to wiggle our mouse in circle eights for the exercise.

[Moksha]

Pension funds sure can take a hit when the market crashes. I remember some years ago when the Orange County employees fund lost $8 billion, never to be returned. The Teamsters also took a big hit when millions of dollars mysteriously disappeared and the secret to that is swimming with the fishes.