Social Security Benefit Formula Robs Older Workers

[Happyhorn52]

Interesting read.

 

http://www.forbes.com/sites/baldwin/2016/10/23/social-security-benefit-formula-robs-older-workers/#2d6a9aa65eca

Edited October 23, 2016 by Happyhorn52

[chris49]

What did you find interesting about it?

You work longer. You pay more SS but your benefit only rises slightly.

In the case cited the individual was quite close to the SS maximum. So their benefit only rose slightly. But the individual must be gaining because from 60-66 he's still earning.

Since you can't go over the SS maximum what is the point?

[Old55]

It's a cost of living adjustment. Not a rase.

[scott h]

3 hours ago, chris49 said:

You work longer.

This kind of reminds me of something from my teenage years. I once commented to an older man about the hours we were working for the money we made. He turned and said to me: "when you get your money, and its in your hand, does it really matter that much how long it took you to earn it?"

This stuck with me the rest of my life, (never stopped me from complaining though )

But for me the bottom line is, in my whole life I never actually HELD any of the money that they continually deducted from my pay over 40 years, so when I do reach the age (knock on wood) I look at it in a raise to my pension.

Simplistic view? Most likely, is my stress level low? You bet! Will my pension go up in a couple of years? Oh YEAAAAH

[OnMyWay]

It is a valid article but mainly applies to wealthier people who make / made near or above the maximum. It is Forbes, so that could be expected. The vast majority of people don't, and people who do should be slamming money into a 401k and they will not be worried about $9 a month.  They are still working for reasons other than increasing their SS a little bit.

I recently made my own SS calculation spreadsheet, just for fun, and the payment did match what SS says what I will get.  It is interesting to look at your annual earnings after you apply the indexing.  Some years might be better than you think.

[Nephi]

Has anyone heard yet if there will be a raise in Social Security benefits in 2017? If so, what percentage will it go up?

[AlwaysRt]

3 hours ago, Nephi said:

Has anyone heard yet if there will be a raise in Social Security benefits in 2017? If so, what percentage will it go up?

I believe I saw a whopping 0.3%

[Nephi]

34 minutes ago, AlwaysRt said:

I believe I saw a whopping 0.3%

Lousy thing. Just about enough extra to go outo to Jollibee----once..

[OnMyWay]

SS uses CPI-W to determine the COLA amount, and CPI-W includes energy and food.  Energy is what made the COLA 0 this year and a measly .3 % this next year.

https://www.ssa.gov/oact/cola/latestCOLA.html

[davewe]

Just had a beer or two with my buddy yesterday. He's 62 and was recently "retired" by our company. They paid him a nice severance so he is good this year, but is debating over what to do next year - try to get work or completely retire and collect SS.

Everyone and every expert tells him, "work till 70 to maximize your SS." He knows what his approx. benefit will be at 70. The problem, as I reminded him, is that Social Security bases that figure on the notion that you will earn what you have been earning until you retire. He realized that even if he can get a decent job it's unlikely he will ever make close to the money he made at our employer, so that age 70 number will end up lower than anticipated.

I guess my point is that there appears to be a real strategy to encourage people to wait till they are flat out old and I have to wonder who that strategy benefits - the worker or the government.