EARLY Retirement - Auxilliary Benefits

[GailL1]

Should this rule be changed?  

One of the new proposals for fixing the Social Security Trust Funds financial problems involves doing away with this provision.

What it does in essence if that it STOP people who are filing for early retirement benefit to also file to get benefits for their children and wife, if she is applicable.  These are called auxilliary benefits and are applicable to Social Security Retirement and Social Security Disability benefits.

I would continue to support the use of these auxilliary benefits for those who file for Retirement at their FRA and after and also for SSDI but they should be stopped for those filing for EARLY retirement benefits.

The proposal is in Section 9 of this analysis from the SS Chief Actuary.

SSA.gov- Steny Hoyer, Wendell Primus, 01/03/2025 - Estimates of the Financial Effects on Social Secu... 

[Tonster521]

@GailL1 I reviewed the link that you included with your posting. There are three (3) sections that appear to be auxiliary benefits; namely, Sections 9, 11, and 16. Two of the Sections (9 and 16) address child benefits and Section 11 address Spousal Benefits. With regard to the Child Benefits developed on a Worker's Earnings, I think the Worker needs to be at least age 62 unless disabled before age 62. Your suggestion to eliminate such coverage unless the person begins SS Benefits at FRA (aka NRA) will contribute to the overall Plan to fund the SS program, but how much? The SS Actuary developed a reduction of .03 percent of the deficit by completely eliminating Child Benefits with certain exceptions (disabled, adopted, and grandchildren). I would guess that the savings would be less using your approach inasmuch as Child Benefits would still be payable at FRA/NRA. With your approach, would Child Benefits be available after the Worker attains FRA/NRA even though they may have started SS Benefits before FRA?NRA? If so, I suspect savings will be reduced further and it may add administrative costs. It should be noted that Section 16 adds Child Benefits to the SS program payable to grandparents or relatives who have custody (legal custody?) and provide 1/2 financial support. Without legal custody are the grandparents babysitters while the parents work or live other lifestyles? If  parents are divorced, who has financial responsibility and may claim the Child Tax Credit on the FIT Returns? There are many more issues to address. Section 16 is a welfare benefit that has no place in the SS program. It should be funded by the General Fund wherein all taxpayers contribute. Maybe adding a Federal Sales Tax of a few cents to all purchases so even the folks who do not pay FIT contribute to the "greater good". At any rate, the SS Actuary estimates that this provision will increase the deficit by .04 per cent which will eliminate any savings obtained by Section 9. With regard to Section 11, Spousal Benefits were initially created for the Homemaker which back in the day was, for the most, a female who did everything from "soup to nuts" while the male worked generally in a factory, steel, construction, auto assembly,coal, oil, etc.,jobs that required physical abilities and harsh working conditions. It made sense to create a Spousal Benefit for such Homemaker who,generally, earned a six figure income, all six figures were zeroes. Today, it is a different world. The BLS reports that there are approx. 75 million females in the workforce representing about 47% of the workers. Many of the female workers exceed male workers in fields such as Medical/Dental (i.e., speech pathology, physical therapy, occupational therapy, nursing, dental hygiene, various technicians), Pharmacy Social Work. Other fields such as Accounting, Education, Financial, Human Resources,Insurance, Law, Real Estate,and Tax Preparation just to name a few have a significant percentage of female workers usually earning more than their male husbands. So, in many cases Spousal Benefits are zero because Worker Benefits offsets Spousal Benefits. There is one exception which is that government pensions based on non-covered earnings which means folks that do not pay FICA taxes (OASDI payroll taxes) get paid full SS Benefits without any offset for their government pension. So, eliminating Spousal Benefits would make financial sense in most cases. For the Spouses (male and female) that do not have 40 quarters for their own SS Benefit, Workers should be required to contribute to a Spousal IRA or another type of deferred tax plan for their spouse or even provide an option with their SS Benefit to carve out a Spousal Benefit. I hope more give your posting some thought and provide their comments/reply.