@notrichenough : I try to speak in the vernacular at this site. Mea culpa if I was not sufficiently precise. There in fact is a pool of money, It’s the amount that comes in each year. If it it is not sufficient to pay the benefits owed, then there is a deficit (because SS is not an actuarial sound system and was not intended to be and let’s not go there). If someone is required by circumstances to take lower benefits early, then the “hypothetical” pool of money is affected by the lower draw. That does not mean that any given person’s benefits are affected, but the system as a whole is.
The benefit vs. claiming age trade-off is intended to be actuarily (is that a word?) neutral - that is, on average someone claiming at 62 will receive the same lifetime benefit as someone who waits until 70. Obviously your individual circumstance determines whether you “win” or “lose” by claiming earlier or later. But overall, on average, the “hypothetical pool of money” is not affected by when you claim.
True, but if someone is in the lowest income bracket, they don’t have an average life expectancy-- it’s lower. Likewise, if someone is in the highest income bracket, they don’t have the average life expectancy-- it’s higher.
@notrichenough : Where on earth do you have a basis for the assertion that “The benefit vs. claiming age trade-off is intended to be actuarily (is that a word?) neutral”? [i"m happy to accept “actuarily” as a word although I think I would prefer “actuarially”].
You have so many posts with so many wrong (in my opinion) ideas. For example. you said: “You are not forced to wait until FRA to start collecting benefits.” That was not the poster’s point. S/he was talking about what happens if the FRA rises. I do not have the time or interest to deal with your posts, but I would ask you to be more accurate.
It’s true that the benefit vs. claiming age is intended to be actuarily neutral, and this can be easily discovered with a little Googling. But it’s actuarily neutral over the population, not over individuals.
If I want to know how many years I have left, I can make a better guess than just guessing the average life expectancy of someone my age. I’m a woman, so already I have a higher life expectancy than average. I’m in good shape. My female relatives on both sides lived into their 90s. So, when I’m making a spreadsheet to figure out whether to start claiming at age 62 or wait, I should not just stick in the average life expectancy. The average for people of my age is in the mid-80s, but I should reasonably expect to live well into my 90s. And I should therefore delay claiming, because I’d expect a good 20 years with the higher benefits I’d get at age 70.
Suppose, on the other hand, I were a diabetic with heart disease and cancer. I’d have one foot in the grave. It would make sense for diabetic cancer-ridden heart patient me to delay claiming-- I’d be dead before I saw a penny of Social Security if I waited until I was 70.
@AboutTheSame: It is widely accepted that SS is roughly actuarially neutral. Google around, you will see it in lots of places.
It is not to the penny of course, that would require tweaking benefit amounts every month as real interest rates fluctuate and life expectancy change, and this would be politically unacceptable because (for example) waiting an extra year could actually result in a lower benefit. But is it reasonably close. If it wasn’t, it would be obvious for most people when to claim, and you wouldn’t see a zillion articles debating about what the best age to claim was. From what I have read it is currently a little biased towards delaying as long as possible because real interest rates are zero or negative.
The original statement was “I still think that raising the retirement age is just making full SS for the rich.”, sorry, I don’t agree with this. I am entitled to my opinion. If you think it is wrong, explain your point of view. But calling me out for being “inaccurate” and then saying “I do not have the time or interest to deal with your posts” is not very helpful or useful.
When Social Security was instituted in 1935, the average person could expect to collect nothing at all, since the average life expectancy was 61.
The purpose was not to provide retirement income for everyone, but to keep those who did reach what was then a very old age, from being impoverished.
I am going to agree with CF because as usual…CF is correct.
https://www.ssa.gov/history/lifeexpect.html
Yeah, because a lot of people died as babies or children. But an adult in 1935 could expect to collect Social Security.
I’ve been collecting SS for almost three years. I’m going to check my online statements going back a few months. Heck…I can check all three years, it’s direct deposit so the exact date will show.
When you compare the monthly payout to the amount of money contributed, someone in the lower income bracket get a higher percentage - someone with an inflation adjusted income of a hundred grand/year doesn’t receive four times as much as someone who made $25K a year if they claim SS at the same age. So different factors benefit different groups.
@TatinG, CF is correct. 61 was never a “very old age”. I run into this myth in genealogy, with newbies being amazed their uncle Everard lived all the way to 85 back in the 1700s. Even in the Middle Ages, once you made it through childhood, many people lived into their 80s, enough that people didn’t even make note of it. Just look at any actuarial table, and you’ll see that the “average life expectancy” changes dramatically. 75 may be the average overall at birth, but once you pass childhood, life expectancy increases.
@thumper1 For us the check comes at a different date every month. Something to do with the person’s birthdate/day. If you were born 1/10 which was Monday, you will receive the check on the first monday after the tenth of each month. I get that they want to spread out when the check is going out but you’d think there’s a better way.
Never mind.
There was a higher infant mortality rate in 1935 which skews the life expectancy tables. The better measure would be how many adults who worked for some period of time contributing to SS could expect to collect. The problem now for the program is not only longer life expectancy but that there are fewer younger workers supporting more retirees.
@Iglooo my BD is the second of the month.
I’ll check the dates and let you all know.
There are times when checks aren’t on the exact date, though two weeks seems long.
Everything i see says that if your birthday is: 1 – 10th of the month, expect your Social Security check to be deposited on the 2nd Wednesday of each month
Does it include SSI?
No SSI for me. Just my $166 SS deposit. Second Wednesday was the 14th…so about right.
A longer average life expectancy doesn’t mean that people are able to remain employed longer. On the contrary, one reason for a longer life expectancy is that we have gotten better at treating various illnesses that might have caused early death, but the life-preserving treatment does not necessarily mean that the person is capable of working and sustaining employment.
They should either save more while they’re working or manage to live with less after they’re retired. Taking from their grandchildren shouldn’t be an option. The concept of a group of people having a pooled saving is good because everyone doesn’t need to save as though he’ll live till he’s a hundred, but this is only if the system is actuarially sound. Maybe it’s time that the withholding rate varies with the employee’s DOB but NOT so that the kid’s money is used to pay grandpa.