No. 40: Boomers and Social Security
May 21st 2009 16:28
How Do I Fuel Up?
This is an opinion post about turning age 62 and the options presented to us relative to Social Security. Please remember that we have been given no choices prior to age 62 (unless disabled) as to when we receive the payments, or how our contributions have been invested or allocated. We have been forced to contribute with the threat of losing all assets if we do not comply.
Most every American knows that one can begin receiving Social Security payments at age 62 albeit at a discounted rate. For each month one does not begin receiving payments after the 62nd birthday, one will receive a bigger monthly payment. The result is that the older we begin receiving payments, the higher each respective payment will be.
With this in mind, I had originally intended to wait until at least age 70 in the hope that my check would grow much larger should I die unexpectedly. This would provide a much higher income for my surviving wife. ALONG CAME ECONOMIC HARDSHIPS...
Now I am not alone here. Hundreds of thousands, if not millions, of Americans are now seeing either their jobs or businesses disappearing at a time when we should all be celebrating and reaping the result of our hard labors. This is forcing many to begin receiving their Social Security payments earlier than planned. We can discuss the other investments later, but here is what will happen if you continue working once you have informed the government you are ready to receive payments.
Until age 70, you will be punished if you make more than the government allows you. This punishment is exacted by the government withholding $1.00 for every $2.00 you earn over what THEY consider to be appropriate for you based on your prior contributions and reported income. If you happen to wait, and not list these earnings until tax reporting time, you will have to pay back this money.
I can understand the position that we need to move older workers out of the way for younger workers to take their places in the workforce. I do not always agree that this can be legislated for every situation, but it has its merits. The problem is more profound, however. At a time when our nation has seen millions of jobs transferred overseas, and our schools are decrying their abilities in discouraging students from early dropout, and also at a time when plants and businesses are closing at an alarming rate, we need ALL the experience, knowledge and capabilities this nation can garner. This means we need not have such a brain drain as discouraging our most knowledgable and experienced people from remaining in the workforce--as long as they can contribute sufficiently to their jobs and the overall economy. We should be contacting our Congressional representatives right now informing them that many Social Security regulations discourage production and are just adding stress to the system and to the individual recipients.
The timing of our economic downturn could not have come at a better time for those who administer our Social Security. After all, we have been concerned for years about just how long the Federal government could continue with Social Security payments. Prognosticators peering through ever-shorter telescopic lenses have predicted the demise of Social Security for decades as they studied the aging boomer population. But now, more and more boomers will have to continue working and delaying receipt of their Social Security payments.
First of all, one way Social Security has benefited is by delaying an additional month, after initial application, before sending our checks. In past generations, one usually received his or her first check the month following the respective birthday, if application had been made early enough. In the future, will the first check arrive later and later? Who knows?
Then we need to look at those who are forced to do their commerce and labor underground. Every American can see what is going on here. Far too many older Americans are being forced to either run yard sales, do neighborhood lawn mowing, buy low and sell higher from yard or flea market sales, or other ways of doing a "cash only" business. Also, we should consider those who are forced to work only part of the time in order to avoid facing a dwindling and diminished Social Security check.
Due to the economic downturn and other reasons, many now need to pay off past debts, we are faced with taking our Social Security earlier than planned. This means we are forced to keep an ever-vigilant eye open to monitor our receipts. If we make over the alloted amount, we then face a smaller Social Security check, more taxes, and more Social Security and Medicare deductions from what we earn. All of this will make the journey to freedom more difficult, and force us to work longer, if not the rest of our lives.
Now there will be those reading this who have been more fortunate. Due to timing, fate and some good planning (not necessarily education), they may still be on a better track to avoid much of these problems. Some of these people may look down from their towers stating that if we had planned better we would not be looking to Social Security so much. Thousands, if not millions of us, can respond by replying that we did plan, we did contribute and we did work just as hard, and now we have to look more to Social Security because our economy let us down, not our abilities. If you are one of the more fortunate, we are happy for you--just do not look down on us.
Please keep it between the lines.
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