There Goes My retirement Plan!

[Jason245]

Stay at home parents are working for themselves, their spouse and children. Why should society pay for them when they are not contributing outside of their own family circle? Marriage penalty hits 2-income family especially when both are equal income earners. No fair.

PS. I hate the word entitlement. That is living in CA for too long... it is the State of entitlement. Don't start me...

They are providing the support role needed for their partner to be successful. .

Marriage penalty sux.. it hits hard when there are two income households. .benefits one income households (the traditional family ).

Just to be clear, you are for those people getting Nothing and living on the street begging for handouts when their partner of 50 years dies?

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[tompalm]

Huh, we the taxpayers (SS contributors) are supposed to pay someone SS who has chosen not to work? Somone who has not contributed into SS and gets to collect "extra" does not bode well with alot of us. It needs to be fixed in the next round of SS tweaks, only if politicians don't worry about pissing off the homemaker voters.

This is such a minor issue compared to how the politicans already spent our money or how we paid in 2 or 3 times more than we will ever receive. There are such bigger issues to worry about like the cost of Medicare or how the next generation will pay off or down the debt this country has built up. Now that is something to be angry about. This thread started because of cutbacks. Stand by for more.

My father used to say "cheer up, things could always be worse". We could have been born in a third world country with nothing, or North Korea, Iran, Iraq, Syria, etc... Everyday I wake up and thank God I was born in America. The government has made a lot of mistakes, but we are still better off than 90 percent of other people in the world.

 

[am1]

My father used to say "cheer up, things could always be worse". We could have been born in a third world country with nothing, or North Korea, Iran, Iraq, Syria, etc... Everyday I wake up and thank God I was born in America. The government has made a lot of mistakes, but we are still better off than 90 percent of other people in the world.

Insulting to compare all 3rd world countries to the other 4 you mentioned here.

You may be right that it could always be worse off but the world is changing. Better off than 90% is going to get lower. For sure not happier than 90% now.

 

[tompalm]

Insulting to compare all 3rd world countries to the other 4 you mentioned here.

You may be right that it could always be worse off but the world is changing. Better off than 90% is going to get lower. For sure not happier than 90% now.

Nobody is comparing third world countries to the other four I mentioned. You are making things up. The point was we are better off than any of those. Being content and happy is a better way of life than being angry all the time. Let it go and move on.

 

[dsmrp]

Nobody is comparing third world countries to the other four I mentioned. You are making things up. The point was we are better off than any of those. Being content and happy is a better way of life than being angry all the time. Let it go and move on.

Totally agree!
IMO dissatisfaction and unhappiness occurs when reality does not meet our expectations. The only things we can change are ourselves, our behavior and our expectations. And doing that sometimes can affect others. I know... easier said than done...moving on.

 

[Fern Modena]

You want to be ticked about Social Security? Here's one...

I worked with a May --> December couple. When he was 65, he retired. She was 35, and had been working about ten years. She continued to work. He was able to collect Social Security, not only for himself, but for "the minor child." Somehow I don't think that was the original intent of Social Security.

Fern

 

[VacationForever]

They are providing the support role needed for their partner to be successful. .

Marriage penalty sux.. it hits hard when there are two income households. .benefits one income households (the traditional family ).

Just to be clear, you are for those people getting Nothing and living on the street begging for handouts when their partner of 50 years dies?

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No, I believe in widow/widower benefits. Just not the 50% additional SS that is not earned.

 

[tompalm]

No, I believe in widow/widower benefits. Just not the 50% additional SS that is not earned.

The number of people that have never worked is pretty small. Most people work a few years here or there and obtained some benefit. All you have to do is work 40 quarters to qualify for your own benefit. My wife worked eight years before we were married and latter worked three years after our son was grown. So she met the minimum requirements and is egilible for $1150 at age 65. Her spouse benefit will be a little more than $1250. The max spouse benefit might be $1300. So in most cases, it doesn't cost much for the government to pay the spouse benefit.

The ones that lived off welfare probably married others on welfare and never achieved much of a benefit. The minimum benefit for low wage earners that worked 40 quarters is less than $1000. So the spouse benefit is less than $500.

There will be more cutbacks coming as the government tries to balance the budget. The cutbacks will not be to those people that have low income. The cutbacks will be for those that already paid the most and still have high income from investments or those that have a large amount of wealth. I just hope the government can balance the budget. The Paper money will be worthless soon if it doesn't.

 

[Jason245]

No, I believe in widow/widower benefits. Just not the 50% additional SS that is not earned.

So you believe that two people who didn't save enough should live off of 1 social security check and collect other government benefits (food stamps ) instead of 2 checks..

Ultimately, a whole generation in this country thought that they would win the lotto, only to find themselves overweight and broke and having destroyed the environment. This type of Change won't impact the boomers since they are already at or near retirement and instead will screw the melenials or Gen x ers.. sounds like a fantastic plan.. when in doubt screw the younger generation, which has been the mantra for the last 30 years anyway.

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[bogey21]

A private pension and a divorce settlement are different animals from a SS check.

No kidding. The point I was trying to make (inarticularly I guess) was that allowing surviving spouses to collect on husbands Social Security is appropriate when the surviving spouse's job was to stay at home,take care of the home front and take care of the kids. This was the model when Social Security was implemented and still holds true for families that follow the old model.

George

 

[vacationtime1]

No kidding. The point I was trying to make (inarticularly I guess) was that allowing surviving spouses to collect on husbands Social Security is appropriate when the surviving spouse's job was to stay at home,take care of the home front and take care of the kids. This was the model when Social Security was implemented and still holds true for families that follow the old model.

George

I don't think anyone questions the propriety of a widow collecting a survivor's pension based on the deceased spouse's social security contributions.

The difference is that "file and suspend" allows a spouse in an intact marriage to collect a survivor's pension while the other spouse is alive.

 

[VacationForever]

So you believe that two people who didn't save enough should live off of 1 social security check and collect other government benefits (food stamps ) instead of 2 checks..

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Yes, because they come from separate accounts. Food stamps, at least in California, comes from the general fund and it comes out of a "balanced" budget each year. No borrowing from the future or hiding the problem. Plus it is needs based, as opposed to stroke of a brush in SS in claiming 50 percent.

 

[WinniWoman]

No kidding. The point I was trying to make (inarticularly I guess) was that allowing surviving spouses to collect on husbands Social Security is appropriate when the surviving spouse's job was to stay at home,take care of the home front and take care of the kids. This was the model when Social Security was implemented and still holds true for families that follow the old model.

George

Surviving- yes. I agree. But not when the working spouse is alive and collecting his or her's SS. That's what my beef is. In effect, that couple gets two checks when only one worked.

Not for nothing- I would have liked to stay home. Instead I roll my butt out of bed every day at 4am- had to take care of my house and kid and everything else anyway- while the stay at home spouse (mom, dad. or not. Why does everyone think a stay at home spouses are always parents?) can take their time in the am, go to their yoga class while the kids (if they have them) are in school, have lunch out with a friend and do their hobbies, shopping or whatever else they want to do. So that non working person should collect in many cases the same SS benefit as me in addition to his/her spouse's SS check? If you think that is fair I don't know what else to say...

 

[am1]

Surviving- yes. I agree. But not when the working spouse is alive and collecting his or her's SS. That's what my beef is. In effect, that couple gets two checks when only one worked.

Even 65 and 28? How much social security should the surviving spouse get in that case? There really is nothing fair about social security.

Or what about someone that just works the minimum amount of quarters at the minimum amount of pay at the tail end of their working career? Their payments are going to be a lot better then someone who paid for 45 years. The first person may already be collecting a pension from a different country.

 

[VacationForever]

Even 65 and 28? How much social security should the surviving spouse get in that case? There really is nothing fair about social security.

Or what about someone that just works the minimum amount of quarters at the minimum amount of pay at the tail end of their working career? Their payments are going to be a lot better then someone who paid for 45 years. The first person may already be collecting a pension from a different country.

Surviving spouse can only start collecting at 60.

The first person will collect waaaay less from the SS system. It averages income/SS contributions from the highest 35 years of contribution. No work equals zero for that year. There is a formula that gets applied, with greater weightage given to the lower brackets (grouped into 3 brackets) after the average is derived.

 

[Conan]

I don't think anyone questions the propriety of a widow collecting a survivor's pension based on the deceased spouse's social security contributions.

The difference is that "file and suspend" allows a spouse in an intact marriage to collect a survivor's pension while the other spouse is alive.

The new budget deal ends file and suspend as a means to get additional spousal benefits.

The perceived inequality is something else: A spouse who never worked collects an extra 50% in every year of their retirement for which no social security taxes were ever paid. In contrast to the second-earner spouse who paid taxes every year and in most cases gets not a penny more than a spouse who never worked.

If the sole earner/higher earner in the couple then dies, the surviving spouse in both cases steps up to 100%. Most people wouldn't deny that to the spouse who never worked, but again the surviving spouse who did work gets not a penny more.

 

[geekette]

Full disclosure, I am retired with a Pension (Defined Benefit Plan) from my last employer. However, IMO the problem started with Employers being incented to first create, then switch to Defined Contribution Plans. Yes, I know it facilitates employee mobility, etc. but it puts too much pressure on Social Security (which should be a back-up) and is going to cause a train wreck down the road when younger generations reach retirement age. Many in this generation are unwilling or unable to save for retirement partially because they will spend much of their lives paying off Student Debt. In addition allowing employees to borrow against or close out 401ks for instant gratification should never have been allowed. Thus, although well intended authorizing 401ks in their current form and facilitating the expansion of student debt are doing more damage than good.

George

Disagree on a few small points.

Part of contributing to 401k is understanding that it is My Money. Over-contributing with the knowledge I could take a loan out worked well for me. I otherwise might not have put so much away, would have kept more in savings account so I could get to it when crap happens. Of course I should be allowed to use my money for whatever I want. It is not advantageous to cash out but sometimes people lose their jobs and I would rather allow them to cash out THEIR MONEY than live on the street. Note also that people don't always have one giant 401k. For a while, I had 5. Recently I had 3 until old one rolled into main nest egg while new job starts new 401k at $0. cashing out that last one might have helped me in a few ways with current problems but rolling it over serves my retirement. There is no reason why govt should forbid me from taking my 3 year old 401k, paying the taxes and penalties and using it however I want. It is My Money.

The max contributions on IRAs needs to be raised, significantly, to about same as 401k because not everyone has a 401k and why should a person without a 401k not be allowed to contribute as much? This single thing could help a lot but IRA limits remain pitifully low.

-- previous poster said 401k is tax deductible, this is incorrect, it is pre-tax. IRA can be tax deductible, or not, depending on your situation.

 

[geekette]

Taxes by state

Friend of mine made a spreadsheet of all the states to find the cheaper ones for retirees to live in. There were some online articles on the same thing.
She quit working nearly 20 years ago before her first child was born, and they lived off her husband's salary. They made some good stock investments and he retired early last year, and their eldest is still a senior in high school. I don't know how else they can afford it. But they live semi-frugally.

I never thought when I was younger, that the last 10+ years before retirement was going to feel as LONG as it does

http://www.kiplinger.com/tool/retir...by-state-guide-to-taxes-on-retirees/index.php

IMO, best of its kind for figuring out what taxes you will Really face in different states.

 

[klpca]

This thread started because of cutbacks. Stand by for more.

This.

It helps to look at SS in the context of when it was created. There weren't a lot of two earner families then, and I imagine that the numbers at that time were worked in a way that allowed for a benefit to be paid for the non-working spouse. Times and attitudes have, and continue, to change. Once the politicians feel that they can tinker with SS and not face any repercussions at the ballot box, they will make changes. They will probably have to, to keep the program afloat. My understanding was that SS was supposed to be a safety net. I think that we are headed back to that model.

My husband and I have never, ever had a pension plan. We started saving for retirement when we were in our early 20's (always a 401(k)). We started out saving 2% and bumped up that percentage whenever we received a raise. It took a few years, but lo and behold, eventually we were saving 15% of our salary. You never even miss it if you do it gradually. We have been lucky and have never had any job layoffs. But we have also lived frugally - still in the same house after nearly 30 years, drive "regular" cars - which we drive until they fall apart, we camped with our kids when we were younger - because we couldn't afford anything else. We stayed out of credit card debt. We paid off our student loans.

I have always worked part time because it was what worked best for our family, and also because I watched my mom struggle after my dad left our family. She had no skill, no degree, and no credit. I was determined to not wind up in that situation. But I certainly don't begrudge anything to those people who stayed home instead of working. It's just not for me.

Just read what Geekette wrote and I agree about the IRA limits, but if you are in that situation, put in the max and then save the rest in a regular account. I realize that you miss out on the tax benefit (and that is a shame) but it's not an excuse for not having enough retirement savings. If you don't have enough to retire on when you turn 65 (or whatever - my FRA is 67+ yay ) then you will have to dial back your lifestyle.

Edit - not going to take this out because that would be a chickensh!t move, but I want to clarify that the earlier part of my post is not directed at you (OP). I used to hate (HATE!) my job too. Sometimes you have to make a change even if it seems impossible. There are better things out there. OP - you need to make a change in your life. You aren't as stuck as you think you are. Trust me, if you were diagnosed with cancer tomorrow you would suddenly be able to see your options quite clearly. You have lived in your home for a long time - surely you can sell for enough to payoff your loan? Then move somewhere cheap and rent. There are places that have a very low cost of living. Life is too short.

 

[geekette]

I grew up wanting to work, very happy that I worked and thank goodness I worked. I would go stark crazy being a homemaker. Homemaker work never ends, cleaning, cooking, baby talking when kids are young, talking to walls instead of people during the day. I enjoy the socialization and the challenge of the grey matter up there. It is not feminists who ruin for women, it is the recognition that women are smart and "we can do everything that men can do, and more".

Two sides to the coin.

I also would go nuts "staying home" and doing housework and play dates, etc. But the fact of the matter is that for the propagation of the species, there will be pregnant females, and there will be young to raise. Society needs this. Starving the widowed females that brought up the youth is not an idea I would support, even tho I never had any interest in having children.

Females are already mommy-tracked on the basis of being female and we earn less, on the basis of being female, so we can save less, on the basis of being female since price of milk is not modified to female pay. To further punish the only gender that can bear children by not allowing them to stay home and raise their own children would be fairly devastating and we would have a lot more very poor women and kids bringing themselves up because Mommy has to work, too.

I could have chosen to be a housewife and pop out kids as my life's work and get old age pay on the basis of spousehood. None of this is perfect, but denying females some kind of widow offset is very important to people like my mother, who already is barely making it on Dad's pension and SS. She raised me to be a productive citizen so in some ways, she paid her debt to society, it's just that society didn't value it in dollars and cents. And never will.

 

[geekette]

Do most people nearing retirement feel this way? Posts on this thread are good reason not to hire people nearly retirement or to keep them employed.

Not sure what "near" means, but I'm within 10 years and I am ready to retire today. Too much of my life spent on call, fouling My Time. It's simply too many hours out of my life spent at someone elses direction, while I want control of my waking hours.

I have enjoyed my career but have hit burnout a few times and this time it is really enduring. Humans weren't meant to "be on" 24x7. I need more downtime that Sat and Sun provide.

 

[geekette]

Does anyone have any low cost Roth IRA to invest with. I have one that I don't want to put any more money into as the fees nickle and dime me

Sharebuilder.com (now Capital One Investing). There are fund families with no transaction fees, plenty of index funds in those families, and you can also invest in stocks. Sometimes you can find a special promo where transferring your existing account in gains $ or free trades.

 

[geekette]

RE. women having to work---even for those with high incomes and professional degrees, many now HAVE to work b/c of student loans. My niece graduated from an Ivy law school with $200K in loans. She's 28 now. Even if she wanted to, she does not have the option of being a home-maker or even taking a significant break to raise kids, as she has to repay her loans. And pretty much all of her peers are in the same boat.
I went to a state law school 3 decades ago--a decision I made b/cof the costs--I couldn't imagine having $40K in student loans from a private shcool. I didn't get the prestige, but I did get the luxury of having no debt and being able to do whatever I wanted. I now see this thinking coming back into fashion.

yeah, but.... why would someone that doesn't want a career rack up giant student loans anyway??? Really, if you don't want to work, don't run up a multi hundred thousand dollar tab.

 

[geekette]

Just read what Geekette wrote and I agree about the IRA limits, but if you are in that situation, put in the max and then save the rest in a regular account. I realize that you miss out on the tax benefit (and that is a shame) but it's not an excuse for not having enough retirement savings. If you don't have enough to retire on when you turn 65 (or whatever - my FRA is 67+ yay ) then you will have to dial back your lifestyle.

Thanks for adding that point. Because I want to quit working before age 59.5 I have begun saving a lot more in my taxable portfolio, whether or not I've hit max on retirement shelters.

I am averse to paying 10% penalty to get at retirement savings below 59.5 but also do not want to raid Roth. If I can't make it on taxable savings, will go ahead and take from Roth, but problem is, you can't put the money back!

 

[Blues]

I am sorry. I am still not understanding. I admit, I am not the sharpest tool in the shed.

You said in the first paragraph that you are not talking about a payback of benefits and that they are restricted to one year and possibly 6 months now, but in the second paragraph you are stating that you would would get back- benefits from age 66 to whatever age you un suspend.

Which is it?

OK, I'll try one more time, then give up. We're talking about two completely different things.

1. You've been talking about payback of benefits -- a strategy that used to work, but is now severely restricted. When it was possible, you'd file for bennies at FRA (66 in my case), and then at age 70, pay back everything you had collected (pocketing any interest you earned). The government would then act like you had never filed at all. You'd then file for increased benefits at age 70.

2. I'm talking about something totally different -- file and suspend. You file and suspend at age 66, thus putting a stake in the sand about your normal retirement bennies. You intend to not file for real until 70, when your bennies will be higher. But then, you get a bad health diagnosis. You're not gonna live long enough to make the increased bennies pay off. What do you do? You tell the government "Just kidding! I wanted to start bennies at age 66 after all! Please give me all the bennies I've been passing up the last 4 years, retroactivley. Thank you."

Case 1 - you take smaller bennies now, but pay them back to get bigger bennies later.

Case 2 - you pass up on the smaller bennies now, but then learn that your health is bad so you really should have taken them. The government lets you do that, as long as you had done a "file and suspend" at FRA.