<p>NotRichEnough - I understand the theory but the hypothetical couple lived on only one income for their entire lives. The system is very beneficial to one-earner couples. </p>
<p>Classof2015 - you are correct that the payments have no relationship to an individuals actual pre-retirement income. I think, though, that the original design for payments did have some proportion to average country-wide pre-retirement income.</p>
<p>Poorly worded on my part… Your benefit is based on your best 35 years of earning prior to retirement, adjusted for inflation, subject to a maximum.</p>
<p>If you’ve been earning exactly at the maximum your whole career, and retire at your full retirement range, your benefit will be around 28% of your final year’s earnings, if I am reading the tables on the SSA web site correctly.</p>
<p>Your percentage will be higher if you have earned less, because the formulas use a higher percentage at the low end of the scale.</p>
<p>mncollegemom: my BIL gets social security disability; he has never paid in. He’s not getting it on anyone’s “account.”</p>
<p>My proposal is to continue taxation of payrolls with no top limit, just as medicare is currently paid for. That doesn’t mean there’s no cap on payouts. Very few small businesses are paying any employee more than $107K. Many large businesses are.</p>
<p>Let’s not forget that SS is also a pretty racist system. If you are a person of color, your lifetime payout will be far less (on average) than the average white person, regardless of amount paid in—just because you don’t live as long. You could even look at SS as a way to transfer money from black men (lowest payout) to white women (highest payout).</p>
<p>Age of eligibility will have to be raised more. SS was never intended to be provided for 20 - 25 or so years. With longer life expectencies and fewer workers supporting more retirees, the math just does not work.</p>
<p>dmd77–SSDI is completely different and for the rest of your post, WHAT???</p>
<p>Yeah, I’m sure the creators of Social Security were sitting around the table discussing “how can we screw over black people and give all their money to white people”.</p>
<p>By your criteria, SS is also sexist, since women live longer. Although I doubt women get higher payouts then men, because they don’t earn as much. Maybe that is SS’s fault too.</p>
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How is it completely different? Benefits are paid from the same pool of FICA taxes that are collected.</p>
<p>In fact, only 2/3 of the people receiving benefits these days are getting them because they retired.</p>
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<p>LOL! Well you COULD look at it that way, but it seems fairly absurd to me. Maybe those dying younger are just trying to escape paying taxes? Makes about as much sense.</p>
<p>Well, I’m not sure I’d actually “laugh out loud” about the fact that Social Security does, in fact, pay more to people with longer life expectancies, which tends to be women and non-minorities, and less to minorities and men, because it is, after all, “true.” It’s not the intent, but it’s not “absurd”, either. If you’re talking about what’s 'fair" it “makes sense” to recognize how the system actually operates.</p>
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dmd77, I suspect you and notrichenough are confused by the difference between SSI and SSDI:</p>
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[Benefits</a> for People with Disabilities](<a href=“http://www.ssa.gov/disability/]Benefits”>Disability | SSA)</p>
<p>Although both are administered by the Social Security Administration, SSDI is funded from FICA taxes, but SSI is funded from general tax revenues. [Difference</a> between Social Security disability and SSI disability](<a href=“http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/245/~/difference-between-social-security-disability-and-ssi-disability]Difference”>http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/245/~/difference-between-social-security-disability-and-ssi-disability)</p>
<p>What did I say that is wrong? My statement about SSDI that “Benefits are paid from the same pool of FICA taxes that are collected” exactly matches your statement that “SSDI is funded from FICA taxes”.</p>
<p>Anyway, SSI is only something like 7% of the benefits the SSA administers every month.</p>
<p>NRE, there was a string of posts referring to “social security disability” which conflated SSI and SSDI. dmd77’s post appears to refer to SSI. CollegemomMN responded to dmd77 with a post referencing SSDI and then you chimed in in response to CmMN. I’m just pointing out that they are two different programs; one is entitlement based due to SS contributions, the other is a need-based welfare program paid out of general revenues.</p>
<p>Social Security deals with two type of benefits.</p>
<p>Social Security which is retirement, disability, survivors, etc. This comes from you paying into Social Security for a minimum of 10 years.</p>
<p>Then there is SSI, which is Supplemental Security Income. This comes partially from Social Security but is mixed in with state funds. These guidelines are determined individually by the state. Certain states are more generous than other ones. This is usually for people that did not pay into Social Security or receive to little in Social Security that they receive additional from SSI. This benefits is eligible to low income disabled or aged individuals. This also usually qualifies you for Medicaid. Medicare is Social Security only.</p>
<p>Example You collect $1000 in SSA, you would not be eligible for any SSI. But if you drew $200 in SSA you could potentially be eligible for around $600 in SSI if your disabled or low income aged.</p>
<p>If I remember correctly CA and NY are the most generous but have made drastic cuts over the years.</p>
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<p>I thought that was true for my wife too. It’s only true if two-thirds of your pension attributable to not paying into SS is greater than half your husband’s SS payment at retirement age. I recently figured my wife will get a SS benefit much bigger that I was planning (original plan had $0). </p>
<p>From an earlier post, it sounds like you won’t have enough quarters in to qualify for SS on your own record, 8 years when 10 are needed. Even if you did qualify, you’d then fall under WEP (Windfall Elimination Provision), which reduces your benefit.</p>
<p>Akck I think your post is directed at me. I DO have 10 years in SS contributions. They were the first years I worked (combo of hs and college jobs AND my first seven years of teaching). I had 32 years as a teacher who did NOT contribute to SS. My $300 SS benefit is reduced to $110. I cannot collect a benefit based on my husband’s earnings.</p>
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<p>Small actuarial nit, but when SS was started, the life expectancy for America was 62. (Yes, life expectancy of minorities was lower.) But the point is that when the “creators were sitting around a table,” they designed a system to start paying out about the time that many people started to die. Indeed, the increased life expectancy since then is what is causing a problem, as well as the fact that we have fewer workers paying into the system relative to those receiving benefits. </p>
<p>SS also was originally “created” to only pay benefits to the wage earner. Spousal and survivor benefits were added later.</p>
<p>And just an FYI…I honestly do not care about the spousal benefit (well…it would be nice…but it is NOT money <em>I</em> contributed…or earned…so I totally understand why I can’t collect that). I DO care about my $300 benefit being reduced to $110. I DID contribute to the SS system for the equivalent of 10 years. But whatever…I know this is what it is for the six states in which teachers do NOT contribute to SS…and I knew it when I took a teaching job here many moons ago.</p>
<p>I’m happy I qualify for medicare. Many teachers in this state retire, and do NOT qualify for it. And NO…teachers in this state do NOT get medical benefits free for life. They CAN buy (at the group rate) their policies from their school districts. An individual policy is about $7000 a year…state contributes $110 a month.</p>
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Wow. Just wow. </p>
<p>I know this thread is a few months old, but I just came across it. Good to know.</p>
<p>Well, as a non working spouse I will tell you that I worked side by side my husband so that we could succeed as a family. Old fashioned…yes I know. I was one ot those mothers who picked up everyone else’s child, worked for free in the classroom, entertained my husband’s clients…Yes, very MadMen but these are the facts.</p>
<p>I think that the hours I (and many other stay at home moms and dads) donated to our schools, communities and country would have cost far more if someone else was hired to do it. If one added at a set low rate how much we should have been paid…heck I might have taken away someone’s paying job(s). </p>
<p>I do think that this goes back to the “just a mother” cliche.</p>
<p>ellebud, I could ditto just about everything you said. I now do work, part time, (have since my youngest was in HS), but walked away from a career to be mom to my three kids and part-time assistant to all their friends through the years. I was blessed and happy to do it, as I am sure you were. </p>
<p>So, no, I do not consider myself EVER to have been a “non-working” spouse. </p>
<p>End of speech. Carry on.</p>
<p>My H has a pension and fortunately, I will be able to collect 55% of it if he dies. I have never worked full-time long enough to vest in any pension, but do qualify for SS & Medicare on my own. Since H’s pension is higher than 50% of my miniscule SS, we are relieved we have his pension. My willingness and ability to take serial part-time jobs has allowed him to pursue his full-time position, often working 60-80 hours/week, plus travel which would NOT have worked well at all if I worked long hours at a demanding job.</p>