I remember my mom and dad talking about having to make a choice to participate in Social Security. Now that seemed like a pretty cool idea. It was a choice. Kinda like free enterprise and freedom of speech. But somewhere along the way it became a mandate to almost everyone in America. There are exceptions which I will not go into. Anyway it amazes me how many folks and especially politicians talk like it is a government program or benefit. It seems to me that when you pay for something every month of your working life that it is NOT a benefit but getting back what you paid for. I suppose using the word benefit is OK but SSN is like an insurance policy in that if you don't use it you will lose it and typically that happens if you die.
Well here is my point for writing about SSN. Some folks need it and use it because they lost a spouse and it helps financially to take care of the kids and of course the surviving spouse. Sometimes it is used if a child or adult person is handicapped to help them make it financially. But what the normal idea is that it is a retirement income source to give a person or couple a minimum amount of income they can depend on. But and I do mean a big BUT not BUTT is that you need to know the options. That is kind of like in poker you need to know when to show-em and you need to know when to fold-em. I was talking to someone the other day who was getting ready to retire at 62 years old and start taking SSN. He was going to get another job with less stress for about $36,000 per year. The problem is that if he takes his SSN at 62 he gets about 70% of what he would get if he waited until normal retirement age. The second issue is for every dollar over $18,000 per year he makes he loses 50 cents in SSN. What that means is if he makes $18,000 more than the base of 18,000 he loses $9,000 in SSN. Third, in his case he could defer SSN until he is 67 or even later and since his wife is 62 she can draw half of his SSN and his SSN will still grow to 100% at normal retirement age and an extra 8% for each year after retirement age while his wife still receives half of his SSN. And there is no loss for how much money he makes at another job or if he keeps the same job he was doing.
Well there are a lot of options and we all need to know our options. What frustrates the heck out of me is that it is so complex it is hard to find a government employee who understands it or you have to hire someone who can interpret it for you. If it is such a great deal then why doesn't every politician have to participate and every government employee have to participate like all the rest of us? I think that is a good question to ask our representative.
So what do you learn in the Osage?
Well here is my point for writing about SSN. Some folks need it and use it because they lost a spouse and it helps financially to take care of the kids and of course the surviving spouse. Sometimes it is used if a child or adult person is handicapped to help them make it financially. But what the normal idea is that it is a retirement income source to give a person or couple a minimum amount of income they can depend on. But and I do mean a big BUT not BUTT is that you need to know the options. That is kind of like in poker you need to know when to show-em and you need to know when to fold-em. I was talking to someone the other day who was getting ready to retire at 62 years old and start taking SSN. He was going to get another job with less stress for about $36,000 per year. The problem is that if he takes his SSN at 62 he gets about 70% of what he would get if he waited until normal retirement age. The second issue is for every dollar over $18,000 per year he makes he loses 50 cents in SSN. What that means is if he makes $18,000 more than the base of 18,000 he loses $9,000 in SSN. Third, in his case he could defer SSN until he is 67 or even later and since his wife is 62 she can draw half of his SSN and his SSN will still grow to 100% at normal retirement age and an extra 8% for each year after retirement age while his wife still receives half of his SSN. And there is no loss for how much money he makes at another job or if he keeps the same job he was doing.
Well there are a lot of options and we all need to know our options. What frustrates the heck out of me is that it is so complex it is hard to find a government employee who understands it or you have to hire someone who can interpret it for you. If it is such a great deal then why doesn't every politician have to participate and every government employee have to participate like all the rest of us? I think that is a good question to ask our representative.
So what do you learn in the Osage?
- if it is good for the goose it is good for the gander
- if it is too hard to explain then it would be best if it was changed or eliminated
- life is simplier if the government does not touch it
Thanks for listening,
gary@thepioneerman.com
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