Social Security - 62, 66 or 70?

[fishheadbob]

It seems like I am a magnet for the problems with the system. . I had to get my Congressman in the act on that one. The letter he wrote to them was not pretty, and he sent a copy to the Head of SS. All was peaches and cream, a lot of yes sirs, they called me for the first time, and fast action (for them).

I know it is a long story, but hopefully it will help some other soul avoid or have insight to the process. With all government programs during a dispute you have to have good irrefutable records, persistence, and the patience of Job. I have won against IRS through the same process.

I certainly do not wish to imply Fish Head Bob is one of the type SS agents I encountered. He would have handled my case at the local office level with his vast knowledge of the system and his strong work ethic; to bring the SS bureaucracy down to a face to face level.

Bob if I have stated something wrong here or in previous posts please bring it to my attention as I don't want to unknowing or through ignorance mislead someone. Sometimes memories of us old farts get us in trouble we do not intend.

Ron[/QUOTE]

You did a good job of sticking with it. Your description of the Congressional Inquiries Unit and the way we handle Congressional inquiries is pretty much on. Some of them are folks squawking because their disability claim was denied; nobody applies for any benefit expecting to get turned down, but it sure happens. Your congressman can't help you much with that, the lawyers who advertise on TV are the answer for that. Know that they screen their claimants pretty good; if a case isn't money in the bank a lot of them won't touch it.
You and a prior poster touched on something I observed over and over. Most SS claims are very quiet. People come on the roles in their mid 60s, move once or twice, and die 20 or 30 years later. Even the conversion of the spouse to widow or widowers benefit is pretty automated, in fact it's called an auto conversion. Kind of like being an undertaker, we do it on a daily basis even though it's a cataclysmic event for those involved.
The more important thing you touched on was the same people have problems over and over and over. Social Security's computer systems aren't Steve Jobs and Bill Gates at their best. It's more a case of the lowest bidder at his worst. Most every time a record needs substantial redoing it has to be taken apart and manually reconstructed in whats always a most bizarre and illogical way. The odds on getting all the little subtleties right so every thing works smoothly for the next 30 years are long odds.
Most of us are old enough to remember Fess Parker as Davey Crockett saying "Be sure you're right, then go ahead". If you're pretty sure you're right then pursue any wrong as you did. Problems arise for everyone when some knucklehead firmly believes that the Social Security moon is in fact made of green cheese and pursues that position for a long time tying up a lot of diminished resources for way too long. When I started with SSA there were 80,000 of us paying 35 million people. Now there are slightly over 40,000 of us paying 55 or 60 million folks. Glad I'm out. Someone else's turn to be polite to_____ (your turn to fill in the blank).
Let them believe whatever they want to believe; they're never going to change their minds.

 

[RedNeckGeek]

In a recent article on the Motley Fool investing web site, Dan Dzombak claims "When Social Security became law under President Roosevelt in 1935, it was envisioned as a way to provide for Americans who lived past the average life expectancy. At the time, that age was roughly 65. This is one of the reasons why the age at which you can take Social Security without penalty is around that age."

He goes on that the eligibility age has changed very little since, even though the average life expectancy has gone up. His solution to the SS trust fund going bust, among others in the article, is to raise the eligibility age to match current life expectancies. However, this solution ignores all the other payout reasons that have been invented since 1935, many of which require no pay in. I'm no economist, but it doesn't take a financial genius to figure out that when more is taken out than can be kept up with from contributions and profitably investing the principle, sooner or later you'll run out of money. Unfortunately what ever solution is put into law will be arrived at by a political, not an economic, process. Having seen already the economic mess this country is in, arrived at by the same political process, I think it prudent, at least for me, to take the money and run ASAP.

I also went up to the Social Security web site and was able to see a complete record of my earnings and calculate the monthly benefit if I were to collect starting at 62, 66, and 70 years of age. I had to create an account for myself first, which took a few minutes of answering questions, none of which I had to look up answers.

In my case, according to the SS web site benefits calculator, my benefit at age 62 would be 74% of my age 66 benefit and 57% of my age 70 benefit. If I go to meet my maker at age 82 (family history indicates I'll pass much sooner than that), I'll collect 92% of my age 70 benefit if I start at 62, and 95% of my age 70 benefit if I start at 66. Age 75 is a more realistic for my age at death, and in that case the numbers are 148% for an age 62 start and 139% for an age 66 start. When I die I'll have no survivors, so that's not a factor. It would seem, then, that by starting to collect my benefits at age 62 I'm risking an 8% loss against a 48% gain if I die at 82 vs. a more realistic 75.

The most revealing figure I learned is that if I lived to age 82 and started collecting at 66 (which gave me my highest total payout), I would collect only 34% of what I had contributed, and 17% of the amount my employer and I combined have contributed. I've had worse losses on individual stocks and bonds over the years, but few even came close to these numbers. Even more revealing is how long I'd have to live just to collect back all of my contributions. If I start at age 62, I'd have to live 'till I'm 126.36, at 66 it's 113.47 and at 70 it's 106.39. Clearly there's no way to break even, let alone come out ahead!!!

It's an understatement to say that I'm absolutely outraged that Social Security has been managed in such a fashion.

I realize all of this could tip into a cocked hat at any moment between now and when I'm actually eligible to collect benefits, and this is a relatively simple analysis.

What, if anything, am I missing, fishheadbob?:confused3:

 

[JDgreen227]

I retired at 50 and will start collecting SS in a few months at 62. Doing the math.......if I waited to 66.....it would take me 12 years to break even not considering interest/investment. I don't need the money but heck......it's gonna feel good to be on government aid like so many other fine Americans!!:laughing:

That is EXACTLY what I said in my earlier post...12 years additional to break even if you wait until age 66 versus starting at 62...AND we don't know what to expect from SS is a few more years. HEY...like you I retired early (age 51) and don't really need the money BUT...we paid into SS without having an option and were mandated to contribute. Look at me...during my working career I paid just under $45,000 into SS and my employers contributed about that much. Who knows how much that 90 grand would be worth today HAD WE been able to invest it? We MIGHT have a lot more, or we MIGHT have a lot less. Hard to say.

And there are those who feel if our employers had not been mandated to contribute to SS on our behalf, we would have gotten compensation from them. that could have been worth more than what they had to contribute.

jerrybob...don't take my opinion the wrong way, but to me collecting SS is NOT GOVERNMENT AID. You paid into the fund with a reasonable expectation you would get your contributions back and to me, if your contributions were mandatory they are NOT AID when you collect them. As for me, I began collecting SS 15 months ago and I know if I am still collecting at age 67 I will have gotten back my 45 grand and a few bucks of interest...anything after that is pure gravy but given the short lifespan mailes in my family tend to have I wonder if I will see age 67.

oldpilgrim says it well...you are collecting YOUR MONEY....and in most cases you will have to pay tax on it !!!

Time to get off my soapbox and sit down and shut up. Thanks for letting me have my say.

 

[Travelover]

My year long ordeal with SS, referenced above, went like this.

All SS drones hide behind one 800 phone number. So, you call the the number and speak to Drone #1. They listen to your whole story and promise to do something in say, 30 days. Of course, nothing happens and you call the 800 number in 60 days and ask for Drone #1. Drone #2 says he is unavailable but says, "tell me your whole story". You go through the whole bit and Drone #2 promises to do something in, say, 30 days.

After 60 days, nothing has happened and you call the 800 number. Drone #3 answers and, of course, cannot connect you with Drone #1 or #2, but offers to listen to your whole story. By this time, you are getting a little pi$$ed, so you ask for Drone #3's phone extension so you can at least talk to the same person if nothing happens. "Sorry, we don't have a personal phone number, call the 800 number". "Uh, OK let me talk to a supervisor". So, you repeat the whole deal to Drone Supervisor#4 and they promise to do something in, say, 30 days.......

Repeat until the caller gives up or dies. :laughing:

I only got any action by writing a terse letter to the Director.

 

[oldpilgrim]

I had a real issue with the VA back in the 70's. I was hospitalized for 3 months and they wouldn't recognize it as service connected, even though they were sending me a check every month for the same service connected condition! I went to every branch in New England and they all told me to go to another. They were all messed up with my info.

I finally wrote a letter to my Congress Critter who happened to be on the Veteran's Appropriation Committee. She returned my letter promptly and said she'd look into it. Shortly I received several letters from several VA reps apologizing and telling me all was straightened out.

It's amazing how fast gov agencies can fix things when Congress gets on their back.

Sorry to derail from the SSA topic but I want to encourage those who have issues with any gov agency to remember that Congress Critters sometimes can actually do what they're paid to do.....sometimes.

 

[MacLawn]

Well boys, I have it on good authority that the gubmint is going belly up in about 3 weeks. Floating on the river I tell ye. How do I know? ye might ask? Because me very first gubmint check is supposed to come by the second Wednesday in February, so look for a total gubmint failure before that time. Heheheheheeeee...

Anyway, I've had me SS card since I was 12, 54 years ago, been paying for other geezers' SS every since. I'll still even be paying for mine since I'll still keep working a while longer. Seems to me, all in all, it's better for most people to wait for SS until Medicare kicks in, at 65. Even though I'm a service connected disabled Vietnam vet and can use VA for 100% of my medical mess, I still want to be covered good for insurance. Also, for me wife, I waited so she can get a bit more if I kick off first.

 

[jeff9366]

Social Security was not subject to Income Tax until the Vietnam War, when LBJ made Social Security 85% taxable.

RE Quote: What the government promises, the government often takes away.


I am no fan of George W. Bush, but during his first presidential term Bush proposed privatizing SS so contributors would control their accounts, not the government. There was a huge uproar and his proposal was Dead On Arrival. Most people hate change. A lot of people trust the government more than they trust themselves. Very few people realize the enormity of the federal debt and near insolvency of our federal government.

(The citizens of Greece, Portugal, Spain, Argentina and Ireland did not realize the enormous indebtness of their governments until too late. Now they have youth unemployment of 50%.)

I would have privatized my SS account in ONE heartbeat.

The next generation, our kids, are going to be shortchanged. Fewer contributors, more withdrawers.

 

[Travelover]

I am no fan of George W. Bush, but during his first presidential term Bush proposed privatizing SS so contributors would control their accounts, not the government. There was a huge uproar and his proposal was Dead On Arrival. Most people hate change. A lot of people trust the government more than they trust themselves. Very few people realize the enormity of the federal debt and near insolvency of the government. (Same for the citizens of Greece, Portugal, Spain and Ireland.)

I would have privatized my account in ONE heartbeat.

I hear ya, but my observation of how many people handle their investments makes me think they'd pee away their accounts and be back with their hands out before long. And you and me would have to pay their keep. Plus I'm not real happy with the way the financial industry behaved before the big crash. Give them trillions more dollars to play with and next time the government won't be big enough to bail them (us) out. So, IMHO, SS is a necessary evil.

 

[JDgreen227]

I hear ya, but my observation of how many people handle their investments makes me think they'd pee away their accounts and be back with their hands out before long. And you and me would have to pay their keep. Plus I'm not real happy with the way the financial industry behaved before the big crash. Give them trillions more dollars to play with and next time the government won't be big enough to bail them (us) out. So, IMHO, SS is a necessary evil.

Well stated...and I think that was part of the original concept to begin SS...to give the American population at least a pittance of a safety net. I have a good friend who had to retire from teaching at age 57 for health reasons...she didn't work in one place long enough to get a pension...if not for SS she would be homeless or on public assistance...she paid into SS for 36 years and I am glad she is getting part of her contributions back.

 

[ultrarunner]

Enjoyed the Fess Parker reference... met him as a child.

Also... nice to know there are at least a few other like me that started paying in at age 12...

Know so many today that are late teens and even past that have never earned W2 wages... never.

I've been told it is illegal for kids to work and so on... makes me really wonder because as a child I was paying in and many young adults today have not even started.

I was stocking shelves at 1.65 an hour Saturdays and made almost a hundred dollars my first year...

At this point I really have no idea when I will apply... everyone has always waited for 70 and kept working confident in knowing the wife would have a little boost...

Maybe, being 10 years older on average for the men in my family is the reason why.

In the old days, a man was not marriage material until he had established himself... think my Grandfather was 29 when he married my Grandmother who was 19... and so on.