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View Full Version : How Can Someone Only Work 10 Years And Get Full Social Security Benefits?


shifrbv
01-25-06, 03:57 PM
Everyone knows social security will need a major overhaul if it is to ever survive the retirement of the baby boomers. Many aren't even sure if it can be saved.

My question, I know some immigrants who came to this country in the eearly 90's. One only has 10 years of work and will qualify for full benefits next year (this person is currently laid off so hasn't even contributed in 2005). Another worked even less (has been laid off for the past 3 years) and only needs 6 months more of work to receive full credit.

How can this be possible? I thought social security was supposed to be a safety net for a lifetime's worth of work. Why are people being allowed to work such a short time and receive full benefits?

Ranger
01-25-06, 04:04 PM
Some people can suffer from serious disabilities early in their life and can claim disability benefits through social security. Other than that, I don't know how individuals can claim ss so early.

classicman2
01-25-06, 04:06 PM
Assuming we're talking retirement benefits - if you were born after 1929, you need 40 quarters of coverage to qualify for retirement benefits - 10 years if you would like.

The comp years for social security benefits are from 1951 thru the year before you retire. It's called 'new start.'

I don't know what you mean by 'full benefits.' Let me assure you, a person who has paid the maximum into social security for 20 years will receive a greater benefit at retirement than those who paid maximum into social security for 20 years.

I worked a number of years for social security. I don't know how many times (hundreds) I heard the same argument that you put forth above. It wasn't true then. It's not true now.

Disability is computed differently from retirement.

CRM114
01-25-06, 04:10 PM
Yeah, its related to how much you earned. My mother gets benefits based on how much my father earned. They owned small businesses and she never claimed any income herself. Since they are divorced, the benefit is miniscule.

OldDude
01-25-06, 04:18 PM
I think you are wrong about the word "full." You need 10 years (or 40 quarters) to get ANY benefit.

However, the benefit is computed as an average over a 35 year history, of the Social Security wage for the year (the amount of wages taxed by SS), multiplied by a COLA adjustment factor. Any years of the 35 not worked count as zero, so working 10 years of 35 results in 10/35 the benefit. Also the benefit is affected by taxable wages (up to the wage cutoff, higher wages aren't taxed by SS, and don't count towards benefit). If you worked more than 35, they use the 35 best (after adjustment).

The COLA adjustment is complex and you need to download a calculator from SSA to get a close estimate. Currently, you have to be 66 to get the full benefit computed by above, there is another reduction for early retirement. Under current law, that eventually works up to age 67 for people with later birthdates, and will probably have to go higher.

If you want to know how SS works, just ask the "old farts" here. :lol:

classicman2
01-25-06, 04:23 PM
Small correction: You don't necessarily need 40 quarters to receive disability benefits. You only need to be fully and currently insured. It's commonly called 20/40; but it may very well not be 20/40 that's required.

Ranger
01-25-06, 04:23 PM
How are ss benefits calculated for working married couples when they retire?

classicman2
01-25-06, 04:26 PM
If both were fully insured, they can each receive social security retirement benefits based on their (each's) own record. There's no maximum 'couple' amount.

Ranger
01-25-06, 04:31 PM
insured as in life insurance?

OldDude
01-25-06, 04:32 PM
And if one earned A LOT less, resulting in a small benefit, that person is eligible for 50% of the benefit of the higher earning spouse (that is additional, it doesn't reduce the higher earner's benefit). The lower earning spouse gets whichever is higher, either their own, or 50% of spouse's.

For my wife, it will clearly be 50% of mine. (I'm not eligible even for early benefits yet and haven't completely decided 62 vs 66)

OldDude
01-25-06, 04:34 PM
insured as in life insurance?

C-man views it as insurance. I view it as MANDATORY contributory pension plan. (The disability is insurance, I agree to that) But don't get he and I started on that or it will be a long thread.

Ranger
01-25-06, 04:36 PM
What does "fully" insured mean then?

OldDude
01-25-06, 04:42 PM
I'm not sure what he meant, but I think the lower paid spouse needs 40 quarters to be eligible for their own benefit calculated on their wages, but not for benefit based on spouse's. (I'm trying to avoid sexist he/she language)

classicman2
01-25-06, 04:49 PM
Fully insured means the number of quarters that are required to receive a benefit - whether it be retirement or disability.

Currently insured means that least 1/2 of the number of quarters that are required to be fully insured be obtained before the onset of disability. Therefore, if 40 quarters are required to be fully insured, you must have worked and paid into social security for at least 20 of those quarters before you became disabled.

grundle
01-25-06, 05:08 PM
Everyone knows social security will need a major overhaul if it is to ever survive the retirement of the baby boomers. Many aren't even sure if it can be saved.

My question, I know some immigrants who came to this country in the eearly 90's. One only has 10 years of work and will qualify for full benefits next year (this person is currently laid off so hasn't even contributed in 2005). Another worked even less (has been laid off for the past 3 years) and only needs 6 months more of work to receive full credit.

How can this be possible? I thought social security was supposed to be a safety net for a lifetime's worth of work. Why are people being allowed to work such a short time and receive full benefits?
Because Social Security is a government spending plan, not a private savings plan.

classicman2
01-25-06, 05:17 PM
Again - you don't know what you're talking about.

Tommy Ceez
01-25-06, 06:56 PM
You think thats bad...My great-Grandmother came to the US at age 60, 1 year before her husband died...he worked here for 10 years while she stayed in Italy and tended the farm...having never worked an actual job in her life, she collected his benifits for the next 39 YEARS!

grundle
01-25-06, 07:35 PM
Again - you don't know what you're talking about.
Exactly.

crazyronin
01-25-06, 08:14 PM
C-man views it as insurance. I view it as MANDATORY contributory pension plan. (The disability is insurance, I agree to that) But don't get he and I started on that or it will be a long thread.

Funny, I always thought of it as a mandatory, government enforces Ponzi scheme.

Already working on my third 40! :banana:

classicman2
01-25-06, 08:33 PM
You think thats bad...My great-Grandmother came to the US at age 60, 1 year before her husband died...he worked here for 10 years while she stayed in Italy and tended the farm...having never worked an actual job in her life, she collected his benifits for the next 39 YEARS!

Once again - for the 100th time - social security is not merely a retirement program. It's a disability program. It's a survivor's program.

If your great-grandfather had purhcased a life annuity program, wouldn' t you expect that annuity program to pay monthly benefits to the widow as long she lived.

OldDude
01-25-06, 08:57 PM
Funny, I always thought of it as a mandatory, government enforces Ponzi scheme.

Already working on my third 40! :banana:

Well, yes, the funding is a Ponzi scheme. But they promise you a future benefit that allows a rate of return to be calculated (not very good) but of course, since it is a Ponzi scheme, they aren't actually investing your money, and eventually should have troubles paying off..

classicman2
01-25-06, 10:00 PM
Have you noticed that people who know little about the program use words like Ponzi Scheme?

The Bus
01-25-06, 10:07 PM
I refuse to discuss it or learn abouit until I am 65, which means I don't need to pay attention to it until 2045.

Sdallnct
01-26-06, 12:14 AM
Our work has a calculator that help figure retirement benefits. It is mainly used to figure company retirement benefits, but it also figures aprox SS benefits. I was surprised how much I would get from SS. Could I do better on my own? Yea, probably. But the way people talked, I figured it would be penney's. But it appears to (if still there when I do retire) ok money.

Course my goal is to ignore SS all together and have enough 100% on my own to retire. Then any SS is just a bonus.

grundle
01-26-06, 05:54 AM
Have you noticed that people who know little about the program use words like Ponzi Scheme?
When social security was new, the ration of workers to retirees was 42 to 1.

By 1950, it was 15 to 1.

Today, it's 3 to 1.

By the time all the baby boomers are retired, it will be 2 to 1.

The first person who participated in Social Security paid $10 in social security taxes, and collected $80,000 in benefits.

It's illegal for any private organization to use the same kinds of funding and accounting methods.

How is that not a Ponzi scheme?

Tracer Bullet
01-26-06, 08:30 AM
I refuse to discuss it or learn abouit until I am 65, which means I don't need to pay attention to it until 2045.

By the time 2045 rolls around, I'm sure the age will have been raised to 87. See you in 2067!

shifrbv
01-26-06, 08:31 AM
The benefit this person will receive is $600 a month (that I know). His wife will also receive some benefit, but not as much because he had a higher wage job. It doesn't seem like alot, but when you figure that the max this person could have contributed each year is approximately $5K (which I don't believe he did contribute the max but may have contributed a high amount), in the first year alone he will be drawing $7200!!! He'll also likely be collecting benefits for 20 or more years because his health is good! It's the ultimate windfall.

If he put the max in for 10 years (50K), he'll receive most likely a minimum of $72K or could even see up to $144K!

I receive statements from SS telling me that only 70% of my benefits will be available by the time I retire (which will probably be much less by the time is actually arrives). Well, no wonder, when you have someone overdrawing by 30% each month and for many more years than they ever contributed, it doesn't take a genius to figure out that the fund will go broke in a short time. They have to short me by 30% because they're paying it to some boomer!

Compound this by millions of people and the problem seems to me to be staggering. Why younger people resign themselves to saying things like "SS won't be there for me, so who cares" is just terrible. Boomers should be ashamed of themselves.

classicman2
01-26-06, 08:37 AM
The 70% figure is based on the assumption that nothing will be done to fix the problem that Social Security will face. Even the figure (70%) is in dispute. The CBO, Brookings Institute, etc. don't agree with that figure.

There's a simple fix. 1. Do not renew the income tax cut for the top 1%; 2. Remove the earnings cap which you pay FICA taxes.

shifrbv
01-26-06, 08:44 AM
There's a simple fix. 1. Do not renew the income tax cut for the top 1%; 2. Remove the earnings cap which you pay FICA taxes.

How about revamping the number of credits it takes to get benefits? No man should be able to get benefits like the case I described above. They should require at least 15-20 years of work to ensure they have paid into the systme adequately. For women, if they can prove they have had children during that time period,then they could be allowed 10 years of work history.

I'm not opposed to your solutions either, but they will never fly unless the burden is spread around a little.

classicman2
01-26-06, 08:47 AM
With a Democratic congress and a Democratic president they most assuredly will fly.

grundle
01-26-06, 11:16 AM
With a Democratic congress and a Democratic president they most assuredly will fly.
You mean like this?

These two paragraphs were written by the Democrats during the beginning of the Social Security program. Please look at the promise that is made in the last sentence of the second paragraph:



http://www.ssa.gov/history/ssn/ssb36.html

The taxes called for in this law will be paid both by your employer and by you. For the next 3 years you will pay maybe 15 cents a week, maybe 25 cents a week, maybe 30 cents or more, according to what you earn. That is to say, during the next 3 years, beginning January 1, 1937, you will pay 1 cent for every dollar you earn, and at the same time your employer will pay 1 cent for every dollar you earn, up to $3,000 a year. Twenty-six million other workers and their employers will be paying at the same time.

After the first 3 year--that is to say, beginning in 1940--you will pay, and your employer will pay, 1.5 cents for each dollar you earn, up to $3,000 a year. This will be the tax for 3 years, and then, beginning in 1943, you will pay 2 cents, and so will your employer, for every dollar you earn for the next 3 years. After that, you and your employer will each pay half a cent more for 3 years, and finally, beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year. That is the most you will ever pay.



So the Democrats promised that the maximum tax would be $90 in 1949 dollars.

Using an online inflation calculator, that is less than $700 in today's dollars.

However, today, the maximum social security tax is 6.2% of $90,000 in today's dollars. That equals $5,580 in today's dollars.

Thus, the $5,580 of today is more than 7 times what the original promise was, even when you factor in inflation.

So the Democrats lied.

Why should I trust the Democrats now?

OldDude
01-26-06, 11:29 AM
Have you noticed that people who know little about the program use words like Ponzi Scheme?

If you mean a deep, philosophical understanding of how wonderful it all is, I don't understand it for shit.

If you mean can I calculate what I paid, and what I will get back in benefits, I understand it down to the penny. YMMV.

classicman2
01-26-06, 11:30 AM
Please! Will you try to join us in the real world?

RunBandoRun
01-27-06, 03:52 PM
The first person who participated in Social Security paid $10 in social security taxes, and collected $80,000 in benefits.

From the Social Security Admin website at http://www.ssa.gov/history/idapayroll.html

On January 31, 1940, the first monthly retirement check was issued to Ida May Fuller of Ludlow, Vermont, in the amount of $22.54. Miss Fuller, a Legal Secretary, retired in November 1939. She started collecting benefits in January 1940 at age 65 and lived to be 100 years old, dying in 1975.

Ida May Fuller worked for three years under the Social Security program. The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. During her lifetime she collected a total of $22,888.92 in Social Security benefits.

* * * * * * * * *

I am 40 years old. I will never be able to count on having Social Security and I know it. That's why people need to stop depending on it, even as a supplemental cushion.

My dad retired in 1982 when he was 56. He is now 80. In the last fifteen years he's probably drawn two or more times what he put into Social Security. My mom died in 2004, and she drew even more of a surplus because she worked far fewer years than my dad had.

Even though I don't think Social Security works the way it is, I'm not smart enough to suggest an alternative -- other than each of us squirreling away every nickel we can while we're working and making money.

classicman2
01-27-06, 04:14 PM
I am 40 years old. I will never be able to count on having Social Security and I know it.

Do you know how long people have been saying that?

The Social Security Trust Fund has a surplus.

grundle
01-27-06, 05:13 PM
From the Social Security Admin website at http://www.ssa.gov/history/idapayroll.html

On January 31, 1940, the first monthly retirement check was issued to Ida May Fuller of Ludlow, Vermont, in the amount of $22.54. Miss Fuller, a Legal Secretary, retired in November 1939. She started collecting benefits in January 1940 at age 65 and lived to be 100 years old, dying in 1975.

Ida May Fuller worked for three years under the Social Security program. The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. During her lifetime she collected a total of $22,888.92 in Social Security benefits.


Thanks for the exact numbers.

My numbers weren't exact. But at least I was correct to within an order of magnitude.

grundle
01-27-06, 05:16 PM
The Social Security Trust Fund has a surplus.
What assets does the government have to back that up?

classicman2
01-27-06, 05:28 PM
What assets does the government have to back that up?

:hscratch:

Y2K Falcon
01-27-06, 05:50 PM
Let me assure you, a person who has paid the maximum into social security for 20 years will receive a greater benefit at retirement than those who paid maximum into social security for 20 years.
I must be too young to understand social security, since this assuring statement is giving me a headache.

Then again, I thought Ohio State could win. :lol:

DVD Polizei
01-27-06, 05:52 PM
US Gov Credit Card. Charge It, Baby!

classicman2
01-27-06, 05:53 PM
What assets do you have when you buy stock in a corporation - a piece of paper?

crazyronin
01-27-06, 06:40 PM
Have you noticed that people who know little about the program use words like Ponzi Scheme?

Lets see, at its conception it was 16 workers supporting one retiree, now it is 3 workers supporting one retiree...Yep, thats the prime example of a Ponzi pyramid scheme right before the collapse.

Don't tell me you actually believe in "the lock-box" idea too.

sash
01-27-06, 08:24 PM
Let me assure you, a person who has paid the maximum into social security for 20 years will receive a greater benefit at retirement than those who paid maximum into social security for 20 years.


How is said person different than the others you are comparing him/her to, other than the supposed "greater benefit"?

grundle
01-27-06, 09:39 PM
:hscratch:
You said the social security trust fund has a surplus. What kinds of assets make up that surplus?

grundle
01-27-06, 09:40 PM
What assets do you have when you buy stock in a corporation - a piece of paper?
You own a piece of the corporation.

classicman2
01-27-06, 10:33 PM
You own a piece of the corporation.

No, you don't. You own a piece of paper.

What happens if the company folds?

Behind the paper the government issues is the full faith and credit of the United States - a little bit more reliable than a stock certficate from XYZ corporation, wouldn't you say?