Share your concerns about Social Security

[AARPMiller]

1)     In the article,  Social Security Fears, many Social Security myths are addressed. What concerns you the most about Social Security? 

[JerryC389490]

I am retired postal employee from the old days I started with USPS back when I was paid $1.25 per hour. We did not pay into SSA at that time therefore I understand being non eligible for Soc Sec benefits for that employment. However, I worked and paid into SSA for 20 years not related to USPS and during that time based on my income and how much I paid into Social Security I received annual notice from SSA what my benefit would be upon age 66 or 70 and it’s was always listed as $1200 or$1500 as the years went by. When I became 66 and applied for Soc Sec I was told “Oh no sir, you’re retired USPS and are only entitled to $600 per month max no matter how long or how much you paid in, It’s the law.” I asked how much would a foreign born person who arrived here at age 46 and became a citizen and worked for 20 years at same rate of any I made and paid into SSA how much would their benefit be. I was told $1500.00 per month. But that person’s benefit is not regulated or reduced by Federal law for being a retired postal employee. 

This is unfair and I want AARP to fight for all of us retired postal employees to be allowed SSA benefits at least equal to what any other person would be entitled to for how much we paid in excluding the ancient USPS employment when we did not pay in. We know we deserve nothing for not paying into SSA, but we sure as heck should be treated equal to all other citizens for amount we did pay in. 

willAARP go to bat for us? 

[Tonster521]

@JerryC389490 I found information on the SSA website that may be helpful.https://www.ssa.gov/policy/docs/program-explainers/windfall-elimination-provision.html I did not add to my previous reply. 

[Tonster521]

@JerryC389490 Based on the information you provided, it appears that you need to review how one's Primary Insurance Amount (PIA) pursuant to Social Security is developed. In the past, many of us have posted links to the PIA  formula at the SSA website. So, I suggest you google "Primary Insurance Amount Social Security" and carefully review the math. You will find that you need 35 years (420 months) of FICA taxed Earnings to develop your Average Indexed Monthly Earnings (AIME). Zeroes are entered for each month less than 420 months. So, with only 240 months (20 years) of FICA taxed Earnings, you received 180 months (15 years) at zero. This reduces your AIME significantly. Initially, you appear to the SS System as a long term low income person hovering close to poverty. The SS System does not have a way of knowing that you worked (my best guess) 30 or more years with non-covered earnings (not subject to FICA taxes) as a Postal Employee. Over the years,  your annual SS Estimates provided amounts developed mostly at the first "Bend Point" (90%) and some at the second "Bend Point (32%) of the PIA formula. The PIA formula is designed to keep long term low income folks above the poverty level. As you may not know, without this support from the SS Program, 4 out of 10 seniors (about 38% statistical studies) would be below the poverty level.This is the SS Benefit you are trying to obtain. Even if you did not read or comprehend the disclosures on the Annual SS Estimates and/or SSA website, it should have been abundantly clear that the SS Program could not pay $1,500/month or $18,000 /year based on only 240 months of Earnings wherein very little was paid in FICA taxes. Without providing exact numbers, I estimated that you only paid about $48,000 in FICA taxes over 20 years and are expecting $18,000/year plus Spousal and Survivor Benefits, if married. Did you think you won the lottery?

Prior to 1984, many government retirees covered by the Civil Service Retirement System (CSRS) or other government pension programs not participating in the SS Program, "won the lottery" if they subsequently obtained SS covered FICA taxed employment for at least 40 quarters. The SS Program paid SS Benefits as if they were long term low income folks. In 1983, the SS Trust was almost depleted. It was in worst shape compared to today. A number of changes were implemented. The Windfall Elimination Provision (WEP) was enacted to essentially stop overpaying these government retirees who, in reality , were not at poverty level. Gail has provided a link for the WEP. The WEP limits one's PIA to 40% at 20 years. So, your $1,500 SS Benefit is limited to 40% or $600. Many folks in the SS Program have replacement percentages less than 40% even with 35 years or more of Earnings.

When you started working as a Postal Employee, you were covered by the Civil Service Retirement System (CSRS) and did not participate in the SS Program (and pay FICA taxes). This was a "Gold Plated" pension program for certain government entities. As I recall, the Federal Government stopped CSRS eligibility in for new employees in 1984 and instead offered the Federal Employee Retirement System (FERS) along with participation in the SS Program. Existing employees covered by CSRS had the option to drop CSRS and become covered by FERS and the SS Program. I suspect you stayed with the 'Gold Plated" CSRS which was underfunded and still is to this day. Such underfunding is being covered by the taxpayers.

In summary, the 40% limit established by the WEP is more than fair. As I previously indicated, many folks have Earnings replacement ratios of less than 40% because the PIA formula is regressive. It provides benefits at 90%, 32%, and 15% based on "Bend Points" that may change from year to year. The SSA informs us that the average is approximately 33.33% or 1/3rd.

.

[JerryC389490]

Thank you so very much for giving a much more informative and detailed explanation to something that was not only confusing to me but apparently the SSA employee trying to assist me. Your information gleaned from my inquiry is fairly accurate, prior to my retirement from USPS I had been U.S. Army in the 60s so had some SSA credits, I also had some credit paid into SSA near end of my postal service career as I retired on their first offer early out with only 25 years not 30 plus. From then forward my employment was professional high level investigator earning in the $75,000.00 range therefore the higher anticipated SSA benefit that never became reality. Total of close to 32 years work paying into SSA. 
You explained it quit3 well but not sure why the SSA agent said had I not been USPS retiree I would have been receiving approx $1500 monthly at that time in 2013 

thanks again

[Tonster521]

@JerryC389490 I appreciate your reply. I guessed at 30 years plus based on the minimum wage rate of $1.25/hr. That rate had to be around 1965. I remember applying for part time work after 1965 when the rate was $1.40/hr. As I recall, the State's followed the Federal rate. Today, there is a difference from State to State. I think California has a $15.00/hr. minimum rate compared to the Federal minimum which has not been increased in decades and hovers around $7.50/hr.  Anyway, I suspect the SS Rep. was reading off a computer screen and probably was born well after 1984 when many major changes were implemented to fund the almost depleted SS Trust. The economy was in recession (1981 thru 1982) and unemployment was well into double digits. I worked in the private sector (manufacturing) wherein over 4,000 folks out of 6,000 were laid off, retired, and/or severed from the Plant were I worked. It was the same for other Plants throughout the USA. Approximately, 75,000 employees were affected coast to coast. During this time of "gloom and doom", I learned that most private sector pension plans as well as almost all government plans such as the Civil Service Retirement System (CSRS) were underfunded. Depending on the amount of unfunded liability, many Employers including government entities needed to contribute amounts equal to 20% to 25% of senior employees' pay (salaried or wage) to keep these defined benefit pension plans a going concern. From an economic view, it was cost effective to offer early retirements with incentives to the senior employees and avoid significant funding requirements. The private sector went a step further and replaced these defined benefit plans with defined contribution plans such as 401 K, 403 B, 457,etc. The government entities were slow to react,but eventually froze most of their "gold plated" plans such as the CSRS and replaced with less costly approaches such as FERS and Social Security. I will "skate out to thin ice" and say that most SS Reps.do not know the above history. So, it is not that you worked fro the USPS. In fact, most folks hired after 1984 at USPS are retiring with a FERS pension and SS Benefits not affected by the WEP (there may be a few exceptions). The SS Rep should have explained the WEP is due to the CSRS pension and your Earnings were not taxed by FICA.  Nevertheless, your retirement benefit from the CSRS is a greater benefit than FERS and Social Security. Moreover, the CSRS allowed folks to retire earlier than age 62.. 

[GailL1]

Here is how your benefit is figured and the reduction table based on other years where you worked and paid into the SS system.

Edited to add the link

SSA.gov - 2024 - Windfall Elimination Provision

They figure it like this for everybody.  It also explains why.  

Social Security benefits give as higher return of benefits to LOW INCOME earners - at the time your benefit statements were pulled that is what they were considering you because they did not know that you had employment where you were not paying into the SS system.  If you didn’t pay into the system under the government job the SSA did not know this was the case until you filed for benefits.  

I am pretty sure that those old benefits statements give a caveat about how benefits are figured and since the change in computation in 198?, they mention the WEP.  

It doesn’t matter WHO the person is - they pay in what they pay in over the life of their career, their salary is what it is from year to year, the benefits are figured using the same formula as everybody else - with WEP and GPO included if that is the case.  Low income earners get the increased benefit.

If you had worked those 10 more years and paid into the SS system, your WEP would be lower or disappeared all together.  It is the same for everybody - My neighbor worked for a school system for 25+ year - earned a great pension and also had a side job (self-employed plummer) for 30 years which he paid his taxes and both parts of the SS & Medicare contributions - employee and employee part.  He came out real nice.  He planned this.

Maybe the SSA should give people in your situation the option of paying back the SS withholding on their government salary - employee and employer part + interest too for the number of years that they need to get rid of the WEP deduction.  it would be quite a chunk.  

The only reason for this WEP reduction is to remove/reduce the effects of this low income worker computation in the benefit in the fairest way they can.  Is it right, I don’t know - but probably pretty close.  

We SHOULD have everybody paying into the SS system - no more government job exclusions - even today, we have them in state government - you know why right ?  Cause those governments don’t want to pay the matched portion.  Or they would have to reduce the part going towards the employees pension.  

[gh5733]

I was just reading about SS being that it is going broke. I think it is time people on SS need to along with AARP members file a suit against the government. Have our lobbyist to get on politicians to go back to REPAY money taken by the Bush Administration to the tune of 1.7trillion dollars. Giving away so much money to other places time to give the people there money back. That amount would keep SS solvent for many years. When will they pay back with interest like was agreed to.

[TomH634732]

I strongly agree with you and collect fica on all earnings and don’t let the high earners stop paying at the government set amount. This is so simple but our politicians don’t understand or know how to do it. SS would never be in trouble if this would become.law. If they won’t fix it then we the people will have to petition to get it on the national ballot and vote on it. Congress can’t get anything done anymore so we might have to do it the hard way.

[AeF427816]

I am a Senior 71 and have a Social Security account but I am unable to sign in to the account because I never receive a text message on my phone to confirm entry and access to the account. A message never arrives on my phone and I have a good connection and this Text confirmation issue only happens with SS.

Additionally, I am entitled to a stimulus check and never received #1  one and all my tax returns are current and I qualify. I am still working and contributing to SS and do not understand why this is happening if it is only me or happening elsewhere. Thanks.

[jimh197745]

RE Current Social Security Advocacy email Campaign:

I support Social Security BUT your advocacy email form/software requires the full 9 digit zip code!

I know you provide a link to USPS but NOBODY WANTS TO GO TO THAT TROUBLE!

THE 9 DIGIT ZIP IS NOT THAT IMPORTANT!!!

YOU ARE LOSING A HUGE POPULATION OF SUPPORTERS AND RESPONSES OUT OF FRUSTRATION!

YOU THINK 119,524 IS A GOOD RESPONSE OUT OF 38 MILLION MEMBERS? THAT'S 0.314% 

THAT IS A COMPLETE FAILURE & A WASTE OF OUR MEMBERSHIP DOLLARS AND OUR MEMBERS!

Please contact the AARP Grassroots Advocacy team to correct this problem.

PLEASE CHANGE YOUR SOFTWARE TO ASK FOR ONLY THE STANDARD 5 DIGIT ZIP ASAP!!! YOU WILL INCREASE RESPONSES 100 FOLD! THANKS

[MaureenL7403]

I see AARP sent a letter to President Trump on August 13, 2020 asking for details on his plan to eliminate payroll tax which for 85 years has funded our Social Security benefits. Has there been a response from the White House? How will AARP advocate for us on this important topic?

[ChristopherS744798]

I have a daily fear that my SSDI. benefits will be stopped or reduced for no valid medical explanation  .Just the government trying to terminate deserving recipients benefits .

[ChristopherS744798]

I am a 56 year old  who is currently going through my first CDR. I   have been receiving SSDI benefits since 2014 and am wondering if any AARP members  have been through a CDR and what was their experience with the process.

[GailL1]

@ChristopherS744798 

Hopefully, I can ease your anxiety over this.

CDR's are a normal course of reviews for many on SSDI unless their condition is deemed terminal or is one of the many listed on the Compassionate Allowance list - which are incurable and very debilitating.  For each of the major body systems, the Compassionate Allowance and other diagnosis lists considers maladies so severe that it prevents a person from completing substantial gainful activity. If your condition is not on the list, they have to decide if it is as severe as a medical condition that is on the list. If it is, They will find that you are disabled.

Your condition must significantly limit your ability to do basic work such as lifting, standing, walking, sitting, and remembering – for at least 12 months.  But since many conditions aren't life threatening or completely debilitating,  The use of CDR's is used to determine improvement or not.    The medical CDR's.  gives you the chance to document further your disability.  I believe there are also financial CDR's but that may be just for SSI beneficiaries.

If you have been on SSDI or even SSI for and this is the 1st one that you have gotten then it is most likely rated as a severe condition,

Social Security uses this as a guidance on scheduling CDR's:

The SSA assigns individual review schedules ranging from every six months to every seven years based on the likelihood that you will experience medical improvement. If medical improvement is:

• “Expected,” the case will normally be reviewed within six to 18 months after benefits start.
• “Possible,” a case will normally be reviewed no sooner than three years.
• “Not expected,” the cases will normally be reviewed no sooner than five to seven years.

:You seem to be in the "not expected" measure.

Read over this and if you have more questions, I will try to help you.

ALLSUP: Ten Key Facts You Need to Know About Continuing Disability Reviews 

Once you turn in your CDR - you will be advised if a true physical for medical review is necessary - probably not in you case. 

[DeborahW748656]

Ok. I read that getting royalty checks from music is ok but if you go on vacation or basically have to pay 700 dollars for a clutch they'll take your check. I mean imagine always being broke and a song fixed it to where you're not rich but you have some extra money. I don't feel you should lose your check just because you basically had to get a car repair and probably had been driving it without a clutch for 2 years. I know I'm not allowed to save but 7 grand. So what if I took the royalty checks and just saved them. Not spend tons of money and once I got enough then I could make it. But it's like you can't get ahead. So I'm trying to figure out what to do when I start getting paid.. I'm not gonna lie. I'll report it if it 10 thousand or more. Isn't that the rule? But if I get 10 thousand dollar checks 12 months in a row I'd have to split that up into monthly payments if I'm smart and it wouldn't last me 7 years due to inflation. Now I don't count on getting much. Maybe a couple of hundred but if I get enough I'll keep what I worked for as long as I can. I paid in every time to draw what I draw. Nobody is giving it to me. The govt takes that out and uses it interest free but always want reasons to take it. So how do I avoid losing my check if I start seeing some good money off of my songs. People recorded them for free and did videos for free cause they knew I didn't have any money. But this money coming back would be a ret urn on what I did have to pay for and also updating. So technically I'd be getting money back that I invested. So there would be no profit to it. Singing a 3 minute song is a lot different than gruelling in a factory 60 hours a week. If a car has ball joints that go bad you just replace them. When that stuff happens to a person their lives are changed forever. Thank you for reading. 

[AimeeV753757]

I have an issue with social security saying i owe an overpsyment and i have asked for an appeal. They havent gave me my date yet but they took my tax refund. I am found guilty and punished without the chance to defend myself is this correct?

[GailL1]

---

@AimeeV753757 wrote:

I have an issue with social security saying i owe an overpsyment and i have asked for an appeal. They havent gave me my date yet but they took my tax refund. I am found guilty and punished without the chance to defend myself is this correct?

---

Did you file form SSA -632 and were clear about your reasons?  Did you hear back from them on any reconsideration?

Social Security Admin - Publication - OVERPAYMENT

[lurixrich]

Sounds like Social Security overpaid you in prior months and IRS is paying itback  from your tax refund. 

Why is SS claiming they overpaid you?  You should have gotten letter explaining what you owe back , how its was computed, and why.  If you are talking a few hundred dollars,  can't SS take it out of you future checks assuming SS is right.  Or if you are fraudulently getting SS, (say $10-20K in past payments), you need a lawyer to defend you cuz you willingly committed fraud.  Some people dont tell SS when a parent died, still getting monthly SS checks (and cashing them)  for deceased.  They think SS and US wont find out...WRONG!!!

[KathleenC719125]

No concerns at all. Everything is awesome.

[k212924s]

I received a back award of 35000, on my social security disability ward plus my monthly payment. I am being taxed on $ 55000. I'm scared to death to get my taxes done. I wasn't aware that I would have to pay taxes on this income

[GailL1]

---

@k212924swrote:

I received a back award of 35000, on my social security disability ward plus my monthly payment. I am being taxed on $ 55000. I'm scared to death to get my taxes done. I wasn't aware that I would have to pay taxes on this income

---

I came back to tell you specifically what the IRS says about your problem and the options they give you to figure any tax that might be due, if any.

IRS - FAQ on Taxing of Back Payments of Social Security benefits

You DO NOT have to file amended returns but you must use the LUMP SUM ELECTIONS method of figuring any tax is due.

Go to IRS Publication 915 and then scroll down to the highlighted term LUMP SUM ELECTION for complete instructions on completing the worksheet.

IRS - Publication 915 - Social Security Benefit (Taxation Worksheets)

[GailL1]

---

@k212924swrote:

I received a back award of 35000, on my social security disability ward plus my monthly payment. I am being taxed on $ 55000. I'm scared to death to get my taxes done. I wasn't aware that I would have to pay taxes on this income

---

In a nutshell - you may or may not be taxed on some or all of your SSDI benefit because the the amount of your benefit that is taxable depends on how much you have in other income.

However, in your case since it was a back award - did this amount cover several years?  You may have to go back and amend old returns - consult an IRS Certified Enrolled Agent or a Tax Professional.

IRS - Regular Social Security and Social Security Disability Income - FAQ

Social security benefits include monthly retirement, survivor and disability benefits.

The net amount of social security benefits that you receive from the Social Security Administration is reported in Box 5 of Form SSA-1099, Social Security Benefit Statement, and you report that amount on your income tax return (Form 1040, line 20a or Form 1040A, Line 14a).

The taxable portion of the benefits that's included in your income and used to calculate your income tax liability depends on the total amount of your income and benefits for the taxable year. You report the taxable portion of your social security benefits on Form 1040, line 20b or Form 1040A, line 14b.

To find out whether any of your benefits may be taxable, compare the base amount for your filing status with the total of:

• One-half of your benefits; plus
• All of your other income, including tax-exempt interest.

The base amount for your filing status is:

• $25,000 if you're single, head of household, or qualifying widow(er),
• $25,000 if you're married filing separately and lived apart from your spouse for the entire year,
• $32,000 if you're married filing jointly,
• $0 if you're married filing separately and lived with your spouse at any time during the tax year.

If you're married and file a joint return, you and your spouse must combine your incomes and social security benefits when figuring the taxable portion of your benefits. Even if your spouse didn't receive any benefits, you must add your spouse's income to yours when figuring on a joint return if any of your benefits are taxable.

[cat0w]

@k212924s

I suggest you visit the IRS web site and look at, Social Security Benefits Worksheet. Use this link below. 

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf   (See Page 30)

IRS   https://www.irs.gov/

[kleino]

My concern is that people don't understand it, espouse lies and fallacies and think that someone has stolen their money. I hate to tell these folks that they live in a fantasy but the facts do matter:

1. no one has stolen their money

2. the average retiree gets payments that FAR EXCEED what they put in - so in fact, Social Security IS an entitlement program.  If you have been collecting social security more than 5 years, your payments are likely funded out of the checks of your children and grandchildren, NOT money you put in

3. The ONLY way to make Social Security better is to take MORE MONEY out of the checks of your children and grandchildren as you quickly exhaust the money you have contributed (usually within 5 years of receiving benefits).

Money does not come out of nowhere.  Someone pays it and it is the younger generations supporting the SS system.

This post will anger some people as they would rather hold on to their beliefs and fantasies rather than accept the facts.  Note that all of these facts can be verified by reading the Social Security Annual Trustee Report. Additionally, I show you my Social Security Benefit Statement and explain what it really means.

I realized in my 30s that Social Security, as constructed, would not be available when I reached full retirement age. Those who are now collecting should be VERY grateful for the entitlement and never ever complain.  This is the 6th year that Social Security will be cash negative (pays out more than it takes in).

Please, if you do not know the facts, please do not reply with opinions or misperceptions. I have been a CPA for 40 years and have an MBA from a top school so I am very good at math, interpreting the facts and staying clear of opinions not supported by facts.

I am not stating that recipients should not get more or that the Social WSecuity is good or bad.  I am making no judgements but merely explaining what is true.

[NOTHAPPENING]

The proper way to figure if Social Security is a good deal or not is to take the money they put in, plus the money their employer put in, and now comes the hard part.  Look at the S&P500 and look at the average growth during those years.  Now it gets really complicated since you and your employer put money into the SS fund each month so you are really compounding the amounts along with the S&P500 growth.  Anyone doing the detail math will find out soon that they are getting shortchanged by the Government and in reality this is a transfer of wealth to others and NOT an entitlement program (like welfare).

If you neglect the growth of your money, then it looks like the Government is GIVING you a generous amount.

[ls7857134]

Social Security has been robbed by governments and replaced by IOUs. I believe the government owes 1 trillion. Why are we in a bind.

[GailL1]

---

@ls7857134 wrote:
Social Security has been robbed by governments and replaced by IOUs. I believe the government owes 1 trillion. Why are we in a bind.

---

All Social Security funds NOT used to pay current benefits are placed in special treasuries and are paid interest by the government (us) until they have to be used to pay benefits. 

That's one of the problems - paying benefits has taken over just about all of the current collections, so we aren't socking away enough to cover those who are retiring at the current baby boomer rate of 10,000 a day.

Social Security benefits have always been paid by those currently working.

But once we had about 16 people working for each person receiving Social Security benefits - now it is down to, I think, about three and is now on its way down to two, then maybe one.  Automation is taking its tole here.

[kleino]

You say "paying benefits has taken over just about all of the current collections, so we aren't socking away enough to cover those who are retiring at the current baby boomer rate of 10,000 a day."

This is accurate and in fact, social security has been cash negative since 2011.  For some reason (laziness?) people form opinions while taking no time to get the facts.  And the facts are, as you state:

The federal government has taken the cash from the social security fund and replaced it with Treasury Securities.  However, if Social Security is cash negative (pays out more than it takes in) and the US Government as a whole is cash negative (i.e. budget deficits year after year), my pencil cannot figure where the cash will come from to redeem the Treasury securities.  Perhaps we will borrow more from the Chinese, if they are willing to lend.
Larry Klein CPA,retired

[GailL1]

Yep, you are right, kleino, we are just flat broke - but what do numbers matter? !?

We could have a real lockbox for an account for each person that has ever paid a nickel into the SS system with all the numbers of contributions and any earnings but if there is no money anywhere to back it up -'is it really there at all?

Social Security Trust Fund Data

In 2016,  we collected ( in millions) 

we collected from payroll tax contributions . . . . . . . . .  836, 178

we collected from taxes on benefits . . . . . . . . . . . . . . . . 32, 817

we collected from net interest on spec. Treasuries . . . .  88, 356

we collected from Gen. Fund reimbursements . . . . . . . . . .  102

Total income going into SS in 2016 . . . . . . . . . . . . . . . .957, 453

In 2016, we paid out (in millions )

We paid out in benefits paid during 2016 . . . . . . . . . . . 911, 384

we transferred to the railroad retirement . . . . . . . . . . . . .  4, 663

we paid out in administrative cost . . . . . . . . . . . . . . . . . .  6, 229

Total Expenses coming out of SS in 2016 . . . . . . . . . . . 922, 276

So that everybody understands your comment about it paying out more than it is taking in,  as the SS Actuaries talk about it, this means that payroll tax contributions do not fully cover the benefits being paid out.  Now we are relying upon the other income coming into the program yearly to make up the difference and add a very small amount to the Trust Fund reserve.  We use to buy these special treasuries for excessive income into the program to earn interest, but now we have to use this income from these treasuries to meet the benefits.

But again you are right, these are only numbers in a specific account when in reality the U.S. Is surviving off debt.  Let's just hope the creditors don't come to collect.