Job Discussion Forums

[Tiger Beer]

[johnslat]

It's not currently SS policy to average zeroes - it's only one proposal:

"A large number of plans have been developed over the years to solve Social Security's anticipated financial crisis. While none of these is likely to be enacted into law any time soon, many of the provisions would have disproportionate effects on women. Two examples, which have appeared in several plans, deserve some scrutiny.

The first is increasing the computation period (that is, the number of years of earnings used to compute benefits) from 35 to some higher number, like 38 or 40. Proposals of this type would reduce Social Security benefits for all workers, because the average of the highest 38 years of earnings is always lower than the average of the highest 35 years (unless all years of earnings are equal, which is almost never true). Still, the greatest reductions would be to the benefits paid to women, because they are less likely than men to even have 38 or 40 years of earnings, in which case they would have to include zeroes in their averages. For women who can receive larger benefits as spouses or widows, the reductions in their worker's benefits may not be important, but the majority of women will not be able to receive larger spouse's benefits in the future, and widow's benefits are usually not payable until rather late in life.

The second proposal that would have a disproportionate effect on women is to reduce the spouse's benefit percentage from 50 percent of the other spouse's PIA to 33 percent. In situations where women receive larger benefits as workers, this reduction is irrelevant, but in other cases, the reduction can be dramatic. Because the vast majority of people receiving spouse's benefits are women, this proposal obviously affects them much more than men."

http://www.newyorklife.com/nyl/v/index.jsp?vgnextoid=107ca2b3019d2210a2b3019d221024301cacRCRD

Regards,
John

[Zero]

[johnslat]

Dear Zero,

You're right - my mistake. I should have known a user named Zero would know about zeros.

Regards,
John

[naturegirl321]

If it's 35 years, I don't think that I can make it. I DID work in the summers during HS and PT during uni, but I always got my taxes back. Does that even count towards SS?

I'm 28 now, going on 29, yikes! So if I went back now, I'd have to stay int he US and work there until retirement age. I just don't think that's doable.

Hopefully, medical reasons will keep me in Korea for a bit longer.

My father, for example, never worked overseas. If he waits until age 70 to take SS, then he' gets 3K a month. NOt heaps, but enough to live on in the US, and more than enough if he retired overseas to Thailand for example. The good thing is taht my mom would get the benefits if he died.

I honestly don't know what I'm going to do. Open a private plan and get into property. That's about all I have planned. SS is out for me.

[Perilla]

I'm not gloating (because my wife's American ) but I have to say the US tax/NI system is lousy for US citizens abroad. We Brits don't have to file taxes while overseas and we can make voluntary NI contributions, so assuming we make them we still get to pick up our state pension. Admittedly it won't be much, but it'll help (if the ship stays afloat that is!).

[naturegirl321]

Yeah, I wonder why we can't make voluntary contributions.

[Zero]

[Denizen]

I believe Social Security will never go bust, but the eventual value of the money (fiat, since it isn't backed by gold or silver) will fall significantly, resulting in your retirement funds not buying very much when the time comes. Consider buying gold and silver bullion coins from a reliable source (be careful, those of you in China) and sock them away. It may sound a little crazy to some, but history has shown that all countries suffer the pains of inflation that make all paper money virtually worthless. (35 years ago, a Big Mac was 65c; now, it's over $3.25.)

Take a good part of your retirement into your own hands. Keep it safe. Try to avoid the paper gamble.

Just my two cents worth.

[Zero]

[mspxlation]

There's a lot of nonsense about Social Security being circulated by ideologues who just plain don't like any government programs.

The foremost right-wing lie is that Social Security contributes to the deficit. That is an accounting fiction. SS is a pay-as-you-go system, and that is supposed to be sustainable with no changes whatsoever till 2037. After that, lifting the cap on FICA assessments (even raising it to 4 times the average household income as opposed to twice the average household income, where it is now) would solve the problem in perpetuity, helped by an absolute ban on raiding the SS trust fund. But the ideologues don't want you to know it. They're itching to convert SS to private accounts so Wall Street can play games with it, as they played games with our housing market.

Ask Chile how an entirely privatized retirement system worked out.

Meanwhile, if you are exempt from FICA due to residence overseas, there is NOTHING preventing you from saving and investing on your own.

[fladude]

I don't see any point in doing SS. I've spent most of life working for myself and never paid into it (not a great idea, but it is what it is) and I spent the last few years working for teaching in a district that has neither a pension nor SS just a 401k (I don't know how they get away with that). But anyway, I only have 5 or 6 years paid in. Trying to get 35 would be useless. It is probably an ok program for some people, but many of Americans don't have any SS.

I also do not believe that it will keep up with inflation. The inflation figures used by the Federal Government are a joke. The Gov does not factor in food prices, gasoline, energy or the price of housing into the inflation index, which is why core inflation ofter runs at 1-3 percent, while real inflation is at 4 or 5 percent. The so called CORE index specifically excludes those elements, even though most people are deeply affected by the cost of food and energy. A 3 percent difference may not sound like a big deal, but factor it out over 35 years....

So my belief that SS will not keep up with inflation is not just a theory, its a fact. Because SS has not kept up with real inflation in the past. It has only kept up with CORE inflation.

That difference is also becoming more pronounced. Food and energy inflation are real and will become larger and larger cost factors in the lives of most Americans as the world population and world urbanization continue to drive up the price of food and energy. As those prices increase, but continue to be excluded from the CORE index, then difference between real inflation and CORE will be even more distorted. A 3 percent difference over 35 years is a big deal, but now imagine a 7 or even 10 percent difference every year for 35 years.....

You might be wondering how you could have such a large difference. The possibility is continued globalization and unemployment. Moving jobs overseas and keeping the unemployment rates high will block wage inflation. So even though people are having to pay a lot more for food and energy, they won't be able to get a better paying job. So the CORE inflation, which looks heavily at wage inflation, will remain static. While real inflation will be running away and SS will not keep up with inflation without serious government intervention.

[Zero]

I forgot to mention one thing, you actually can (and are supposed to) contribute to SS from abroad, if you have self-employment overseas. So part-time private lessons and such are supposed to count toward SS, even if your full-time job does not.

[naturegirl321]

[Zero]