Gertrude Weaver and her 6,500,000 "peers"

IG Audit: 6.5 Million People With Active Social Security Numbers Are 112 or Older

Excerpt:

Many people are living longer, but not to age 112 or beyond -- except in the records of the Social Security Administration. The SSA's inspector general has identified 6.5 million number-holders age 112 -- or older -- for whom no death date has been entered in the main electronic file, called Numident. The audit, dated March 4, 2015, concluded that SSA lacks the controls necessary to annote death information on the records of number-holders who exceed "maximum reasonable life expectancies." "We obtained Numident data that identified approximately 6.5 million numberholders born before June 16, 1901 who did not have a date of death on their record," the report states. Some of the numbers assigned to long-dead people were used fraudulently to open bank accounts. And thousands of those numbers apparently were used by illegal immigrants to apply for work: "During Calendar Years 2008 through 2011, SSA received 4,024 E-Verify inquiries using the SSNs of 3,873 numberholders born before June 16, 1901," the report said. "These inquiries indicate individuals' attempts to use the SSNs to apply for work." “It is incredible that the Social Security Administration in 2015 does not have the technical sophistication to ensure that people they know to be deceased are actually noted as dead,” said Sen. Ron Johnson (R-Wis.), chairman of the Homeland Security and Governmental Affairs Committee. “Tens of thousands of these numbers are currently being used to report wages to the Social Security Administration and to the IRS. People are fraudulently, but successfully, applying for jobs and benefits with these numbers. Making sure Social Security cleans up its death master file to prevent future errors and fraud is a good government reform we can all agree on,” Johnson said.

Comment: Of course the problem is that there are just a handful of Americans over the age of 112. Wiki list. Also see the Social Security Actuarial Life Table. Wiki on Gertrude Weaver. Image source.

Optimizing Social Security Benefits

Free Online Tools for Optimizing Social Security Benefits
 Excerpt:

... your benefit will rise by 6% to 8% for every year you delay claiming between the ages of 62 and 70, those who file early may reduce the lifetime benefits they (and their surviving spouses) stand to receive by "tens of thousands of dollars," says Christopher Jones, chief investment officer at Financial Engines in Sunnyvale, Calif

Comment: Links to two tools below (Three more in the article). I haven't tried any yet. At first look I think I will start at 66 but it may pay to delay until 70. Image above: Poster from 1936. Could really be "Join the March to the Grave!" Ha!

• aarp.com (type "Social Security calculator" into the search window)
• bedrockcapital.com (click on "SSAnalyze)

Comments: Yet to figure out:

• When to take Social Security?
• What is the asset class to draw from first (IRA's? Brokerage that has already taxed money invested?). If we drew from this (and I think we could for 4 years - in essence we would have no taxable income except long capital gains from the sale of equities and dividends (which are taxed at a 15% rate).

The best time to begin taking Social Security

At what age should you start claiming Social Security?

Excerpt:

"Most people take it at 62," he says. "They end up losing in the long run. If they delay it till 70, they will get 30% more. Unfortunately," he says, "most Americans can't do that." Improper timing can cost you $100,000 to $150,000 over a lifetime, says John Gajkowski, of Money Managers Financial Group in Chicago. When should you take it? If you delay taking Social Security, it increases your monthly benefit about 8% a year until you're eligible for the maximum at 70. Most financial planners pretty much recommend that you do that if you can, or delay at least until age 66. But most people can't delay.

Comment: Obviously we have not taken it at 62. Kathee is 63 and I am 65. Image of "gramps": "(1939). poster of old man smoking pipe. This poster announces the passage of the 1939 Social Security Amendments." Source. (many cool retro posters here!)

What You Don't Know About Social Security—but Should - A Look at Claiming Strategies, Tax Angles and More to Help You Make Sense of a Complicated Program

Excerpt:

You may have heard the advice countless times: Minimize (or avoid) withdrawals from your nest egg (401(k), individual retirement accounts, etc.) for as long as possible to take advantage of tax-deferred growth. Many investors who follow that advice grab Social Security benefits, typically at age 62, to help pay the bills. But that advice ignores the possible tax benefits associated with following the opposite course: accelerating withdrawals from savings early in retirement so that you can hold off on claiming Social Security. The thinking here is tied to the fact that Social Security benefits are taxable. As much as 85% of a married couple's benefits are subject to tax when their income exceeds $44,000 ($34,000 for individuals); as much as 50% of benefits are taxable at lower income levels. If you delay claiming Social Security and, as a result, end up with larger benefits, future withdrawals from savings will likely be smaller—a recipe for lower levels of taxable income. (For a detailed discussion of these tax issues, see "Innovative Strategies to Help Maximize Social Security Benefits," from James Mahaney, vice president at Prudential Financial Inc. "Many retirees don't consider the impact of their withdrawal strategy on how their Social Security is taxed," says Mr. Meyer, the SocialSecuritySolutions.com founder. "Missteps in tapping the wrong account and investments to generate income can significantly increase your taxes."

Helpful 16 page guide from Prudential: INNOVATIVE STRATEGIES TO HELP MAXIMIZE SOCIAL SECURITY BENEFITS



93

Social Security at 62?

Social Security at 62? Let’s Run the Numbers

Excerpt:

By receiving Social Security at 62, you take a haircut on potential future payments of 30 percent compared with a 6.7 percent reduction at 67. For those waiting until age 70, Social Security offers an 8 percent yearly rate of increase in payments (not including cost-of-living adjustments) over taking benefits at 62. That easily beats what you would earn in government bonds these days.

Comment: Image source. Kathee and I have been having these discussions. Both of us are past 62 and we have not opted to receive social security at this time. I expect we will wait until at least 65 for Kathee and 66 for me. Mentioned in the article: maximizemysocialsecurity.com.

Social Security optimization

New Services Help Boomers Max Out Social Security

 Excerpt:

It is no surprise that as the baby boom approaches its Social Security years, it is turning the decision about when to start collecting benefits from an automatic move into a major planning and research opportunity.

Having intensively looked into car seats and college admissions for their kids and tried to map out careers and 401(k) plans, boomers now will focus attention on squeezing Social Security for all it is worth.

"Baby boomers are the first generation that isn't going to put up with crappy advice," says William Meyer, chief executive officer of Social Security Solutions Inc , one of a number of new companies selling Social Security strategic planning to future recipients. "They are the generation that demands more."

Comment: Websites listed:

• Social Security Solutions
• Social Security Choices
• AARP SOCIAL SECURITY BENEFITS CALCULATOR

Here's the key:

... optimize Social Security by not filing for it until you are 70.

To do that one must either keep working or have other assets.

Relying on Social Security

Social Security Becoming Bigger Source of Retirement Income

Excerpt:

MSN/Money reported recently in “More Rely on Social Security” that in 1962 social security represented 30% of people over 65′s income – in 2010 it had grown to 38%. Today more than 66% of retirees get 50% or more of their income from this source, and 35% rely on it for 90% of their income. Income from investments has declined in recent years, which now makes up only 11% of retiree income.

Comment: My calculation is that Social Security will be 31% of our aggregate retirement income.

Social Security - the One-Legged Stool

Lack of retirement savings makes entitlements sacrosanct

Excerpt:

Social Security and Medicare are emerging once again as seemingly untouchable third rails of politics despite their looming insolvency, and economists say the reason is obvious.

Surveys show that a majority of Americans will rely solely or mostly on the programs for support in their retirement because they have not saved adequately.

That was not the way it was supposed to be. Social Security originally was intended as a supplement to retirement income such as corporate pensions and personal savings — one leg of a so-called “three-legged stool” of retirement support.

For most Americans, however, it’s the only leg of the stool left standing because of paltry personal savings and depleted corporate pension plans, prompting people to reflexively oppose any changes in the social programs.

More than half of all workers in the United States have less than $25,000 in total savings and investments, according to Federal Reserve surveys, and the average balance for someone approaching retirement was just $78,000. That amount leaves the average retiree with about $3,100 a year or a little more than $250 per month — not enough for even basic expenses.

The average Social Security check, by contrast, is about $1,200 a month.

“Most households have no retirement plan other than Social Security, and the average American family has not saved enough to maintain its standard of living in retirement,” said David Wyss, chief economist at Standard & Poor’s Corp.

Comment: There actually is a one-legged stool (image above). Few workers have the pension leg any more. My company no longer offers pensions for new workers. I am grandfathered in so I should have something there. Better to have 4 legs: Savings, 401K, Social Security, and Investments

When Should You Start Taking Your Social Security Benefits?

When Should You Start Taking Your Social Security Benefits?

Excerpt:

If your quick response to this question was 62, you might want to think a little harder. More and more information is coming out that supports the idea that you should wait as long as possible, particularly if you or your spouse had a high earning career. If you responded that you weren’t sure, that was a good answer, because the question is a surprisingly complex one and highly personal too. This article will review some of the key considerations you need to take into account before reaching your decision.

Comment: Interesting read. Comments are interesting too. One is (and I think this is valid): "that there is no “one size fits all” regarding when to start your benefits".

Feds close door on Social Security Payback Option

Social Security Payback Option Eliminated

Excerpt:

Retirees will no longer be able to get an interest-free loan from the Social Security trust fund, the Social Security Administration announced today. Effective on December 8, retirees will not be able to pay back benefits already received in exchange for higher Social Security payments going forward. Here's a look at how the new Social Security rules could impact your checks.

Little-known provisions of Social Security law previously allowed individuals to begin payments at age 62, pay back all the benefits received at age 70 without interest, and then reclaim at a higher rate due to delayed claiming. However, this claiming strategy, which is employed primarily by affluent households, costs the federal government and Social Security trust fund money. "The processing of these withdrawal applications is also a poor use of the agency's limited administrative resources in a time of fiscal austerity -- resources that could be better used to serve the millions of Americans who need Social Security's services," says the SSA in a statement. The Center for Retirement Research at Boston College calculated that if all the American workers with enough liquid assets to repay their Social Security benefits utilized this strategy it would cost the system $5.5 billion.

Under the new rules, Social Security beneficiaries may withdraw an application for retirement benefits only within 12 months of their first Social Security payment and are limited to one withdrawal per lifetime. "There is little to be gained by investing benefits for only 12 months," notes the SSA in the rule.

Comment: I first heard of the Social Security payback option two or three years ago from one of my Brother-in-Laws. Makes sense to close this door. Our own strategy is to delay receiving benefits until each of us are 66. One of my Brother-in-Laws delayed his completely (did not use the payback option) until he turned 70 (he's now 73)

Social Security turns 75

10 Things You Didn't Know About Social Security

Excerpt:

The Social Security program turns 75 this week. Since Franklin Delano Roosevelt signed the Social Security Act on August 14, 1935, few workers have not been impacted by the social program. Almost all Americans pay into the system, and Social Security is the largest source of income for citizens age 65 and older. Yet this huge entitlement has many facets, some of which are not widely known. Here are 10 things you may not know about Social Security:

Comment: Interesting

“When the level of the trust fund gets to zero, you have to cut benefits”

Social Security to See Payout Exceed Pay-In

Excerpt:

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.

The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.

Analysts have long tried to predict the year when Social Security would pay out more than it took in because they view it as a tipping point — the first step of a long, slow march to insolvency, unless Congress strengthens the program’s finances.

Comment: At the fiscal tipping point!

Social Security: Take it now or wait

Collect Now, or Later? Timing Your Social Security Benefits

Excerpt:

You can claim Social Security any time from age 62 to 70, but the longer you wait, the larger your monthly check. And many people come out ahead if they wait at least until their full retirement age, which is different from the day you stop working for good. For people born 1943 to 1954, full retirement age is 66, and it creeps up for younger people.

What do you stand to lose by taking benefits early? Take those who are set to receive $1,000 a month at their full retirement age. If they sign up for benefits at age 62, they will collect only $750. But if they wait until 70, they will earn extra credit and receive up to $1,320 a month — nearly a third more.

At first glance, it seems that everyone should wait until they are 70. But that is not the case. The answer depends on many factors, including when you stop working, how much you have in savings, whether you are healthy, whether you are married or single and whether your spouse earns more — or less.

Comment: Nice graphic with the article. More on issue below:

Paying Back Social Security: Does It Make Sense?

It sounds far-fetched, but repaying the government for the Social Security benefits you’ve already received may boost your monthly income. Here’s how it works:

Say you retired and began receiving Social Security benefits at age 62. You’re now 70. You can repay the money you’ve already received and then reapply for Social Security. Because you’re older, your new checks will be larger every month.

For example, say you’ve been receiving $13,250 annually. You’ll have to repay $94,556, but your yearly benefit would rise by $7,443 to $20,693. You’d recoup your initial outlay just before you turn 83.

Moreover, you’re not required to pay any interest on the benefits you’ve already received. “That’s the key,” says Larry Kotlikoff, professor of economics at Boston University. Paying back the government and restarting your Social Security is similar to purchasing an annuity—spending a sum of money now for guaranteed income in the future. However, because you don’t have to repay interest on the benefits you’ve received, and there are no fees, this tends to be less expensive than buying an annuity.

Comment: The above idea was the discussion among my retirement aged relatives this week. Interesting ... take a benefit at 62 .... if you can pay it back at 66, do it and get a higher benefit.

The Biggest Ponzi Scheme Ever?

Social Security: The Biggest Ponzi Scheme Ever?

Excerpt:

Jim Cramer of CNBC points out that Social Security is really nothing but a big Ponzi scheme.

Comment: HT Darrell Dow

Fred touches the "third rail"

Comment: Fred Thompson addresses what no other politician running for President has addressed! This takes courage! Social Security is often called "the third rail" of politics. The issue is so sensitive that few dare address the looming problems. I commend Senator Thompson for laying out a plan!

Here is the complete reference guide to the Thompson Social Security Plan