It Might Be Better to Take Social Security at 66 Instead of 70. Here's Why

[PigsDad]

The change I would make is to have the SS Tax apply to all income, not cut it off at some arbitrary amount. This would be a good step to ensure the Program's solvency.

Currently the contributions are capped at a certain income level, but the benefits are also capped. If the income level cap was removed, would you still cap the benefits?

Kurt

 

[bluehende]

Currently the contributions are capped at a certain income level, but the benefits are also capped. If the income level cap was removed, would you still cap the benefits?

Kurt

The answer to your question depends on how you look at SS.

If it is an account you feel your depositing into for a future withdrawal then certainly not. This is how many look at it and how it is portrayed.

If you see your SS deductions from your paycheck as a tax to pay for current outlays of the government then you would. Paying more taxes does not obligate the government to spend more on you. This is how it actually works.

I have no idea which is correct.

 

[TravelTime]

Is it possible that the first 5 words of your comment has a lot to do with the rest of it.

One thing that irks me to no end is how the pregnancy laws hurt small businesses. I feel like my company has become a maternity ward. I am supposed to accommodate everyone’s needs yet no one accommodates my needs. Two more years and I am closing my doors. The laws have a lot to do with why being a small business owner is hard.

 

[am1]

One thing that irks me to no end is how the pregnancy laws hurt small businesses. I feel like my company has become a maternity ward. I am supposed to accommodate everyone’s needs yet no one accommodates my needs. Two more years and I am closing my doors. The laws have a lot to do with why being a small business owner is hard.

My guess is it hurts young women as well as anyone doing the hiring knows in the back of their mind they could get pregnant at any time or currently are pregnant. Laws can only regulate so much. Unintended consequences.

 

[bluehende]

One thing that irks me to no end is how the pregnancy laws hurt small businesses. I feel like my company has become a maternity ward. I am supposed to accommodate everyone’s needs yet no one accommodates my needs. Two more years and I am closing my doors. The laws have a lot to do with why being a small business owner is hard.

Yeah the continuation of the species can be inconvenient.

 

[TravelTime]

My guess is it hurts young women as well as anyone doing the hiring knows in the back of their mind they could get pregnant at any time or currently are pregnant. Laws can only regulate so much. Unintended consequences.

This is true. Now that I have had 3 women in my small business go on six maternity leaves, I have seen how expensive this is and how it has hurt my business. I need to over hire to cover the revenue when they are away to make sure we can pay the overhead. The overhead does not change when someone is out for 5-6 months but the revenue goes way down.

 

[TravelTime]

Yeah the continuation of the species can be inconvenient.

It is very inconvenient. Glad you agree. The worst part is they do not tell me until the last minute when if they told me sooner, I could plan better. Also one took leave and is not coming back. She knew she would not come back but lied in order to get disability benefits from the state. As soon as the payments stopped, she resigned.

 

[bogey21]

Currently the contributions are capped at a certain income level, but the benefits are also capped. If the income level cap was removed, would you still cap the benefits?

Yes. I would leave the benefits capped. I see the extra revenue going toward making Social Security more solvent. Trust me. I'm not a soak the rich kind of guy but the money has to come from somewhere to keep the Program solvent...

George

 

[klpca]

It is very inconvenient. Glad you agree. The worst part is they do not tell me until the last minute when if they told me sooner, I could plan better. Also one took leave and is not coming back. She knew she would not come back but lied in order to get disability benefits from the state. As soon as the payments stopped, she resigned.

No one knows how they will feel about parenting until after the baby is home. Some moms just can't leave their babies. Either that or they discovered the true cost of daycare and decided that it wasn't worth it financially to work.

Why did I leave my full time job? The powers-that-be who were running the firm told me that if they let me come back part time at first, then going to full time in 6 months, they would have to let everyone do that. So I left and went to another firm who let me work permanent part time. I am still working for the same people (firm has gone through some changes) over 30 years later. How stupid to spend the time training someone then let all of that investment walk right out the door. Life is full of give and take. I paid my dues and worked my 65+ hour weeks (no overtime for exempt employees back then either) for four years. To be unwilling to be flexible for a relatively short time was pretty shortsighted, if you ask me. No surprise that the firm eventually imploded. Everyone went and formed their own firms and took the clients with them.

 

[WinniWoman]

It is very inconvenient. Glad you agree. The worst part is they do not tell me until the last minute when if they told me sooner, I could plan better. Also one took leave and is not coming back. She knew she would not come back but lied in order to get disability benefits from the state. As soon as the payments stopped, she resigned.

Yes. That is a very common strategy. They pretend they are coming back and are then entitled to SS. Then after the leave and collecting all their checks, they resign.

 

[TravelTime]

No one knows how they will feel about parenting until after the baby is home. Some moms just can't leave their babies. Either that or they discovered the true cost of daycare and decided that it wasn't worth it financially to work.

Why did I leave my full time job? The powers-that-be who were running the firm told me that if they let me come back part time at first, then going to full time in 6 months, they would have to let everyone do that. So I left and went to another firm who let me work permanent part time. I am still working for the same people (firm has gone through some changes) over 30 years later. How stupid to spend the time training someone then let all of that investment walk right out the door. Life is full of give and take. I paid my dues and worked my 65+ hour weeks (no overtime for exempt employees back then either) for four years. To be unwilling to be flexible for a relatively short time was pretty shortsighted, if you ask me. No surprise that the firm eventually imploded. Everyone went and formed their own firms and took the clients with them.

Yes but you went back. You wanted to work full-time. I have bent over backwards to accommodate my employees and I feel they do not reciprocate. She told another employee 2 months before the baby was born that she was not coming back and to keep it a secret.

 

[TravelTime]

Yes. That is a very common strategy. They pretend they are coming back and are then entitled to SS. Then after the leave and collecting all their checks, they resign.

Yes it is common. If women are lying and sneaking around then how can employers have respect?

 

[klpca]

Yes but you went back. You wanted to work full-time. I have bent over backwards to accommodate my employees and I feel they do not reciprocate. She told another employee 2 months before the baby was born that she was not coming back and to keep it a secret.

They wouldn't let me come back part time during our slow season. I had to go somewhere else to get that benefit.

Sorry that those women took advantage of you. It's better when everyone feels like they are in the same team, and it seems like they aren't playing fair with you.

On the other side, I know how betrayed I felt after sacrificing for 4 years for nothing. Obviously I'm still a bit salty about it.

 

[geekette]

Yes it is common. If women are lying and sneaking around then how can employers have respect?

whoa, hold on! If THOSE women were lying and sneaking around... do not extrapolate this to All Women. Please also do not assume that all women want babies because some of us do not ever want babies. Deal with the problem employees or perhaps evaluate why they didn't feel safe in telling you the truth. Sometimes women get fired for being pregnant. In an at will state, that can happen and very difficult to prove it was pregnancy-related.

If I were a young lady planning a family, I would definitely look at how other women were treated during and after their pregnancies. Some places are not at all friendly, but exactly what would you change to enable a woman that is going to have 3 babies during her career with you Stay? Perhaps be A Lifer for you. What does she need and what does your business need to gain a 20-30 year service?

It is not the fault of women that we are the child bearers, but people need to make a living, and businesses need continuity. Let's try for solutions and not further punishment.

 

[Tia]

This is a new one for me, the part where if I'm reading right someone on maternity leave can collect disability pay while off? Is this certain states or every where and since when?

It is very inconvenient. Glad you agree. The worst part is they do not tell me until the last minute when if they told me sooner, I could plan better. Also one took leave and is not coming back. She knew she would not come back but lied in order to get disability benefits from the state. As soon as the payments stopped, she resigned.

 

[Luanne]

This is a new one for me, the part where if I'm reading right someone on maternity leave can collect disability pay while off? Is this certain states or every where and since when?

I did this. My company paid for 6 weeks maternity leave, and I took an additional 6 weeks using disability pay.

 

[VacationForever]

This is a new one for me, the part where if I'm reading right someone on maternity leave can collect disability pay while off? Is this certain states or every where and since when?

In CA, one can collect disability pay while off.

 

[TravelTime]

This is a new one for me, the part where if I'm reading right someone on maternity leave can collect disability pay while off? Is this certain states or every where and since when?

Yes in California women can get disability leave for pregnancy. I have had 3 women take 6 leaves between them all.

PS The law is fine. My problem is when people lie and/or abuse the system.

 

[Luanne]

In CA, one can collect disability pay while off.

And it is short term disability. I don't remember how long it lasted, but I couldn't have stayed off forever and collected.

 

[rapmarks]

Yes. That is a very common strategy. They pretend they are coming back and are then entitled to SS. Then after the leave and collecting all their checks, they resign.

I don’t understand, I got nothing when I took maternity leave. What are they getting? I suppose they can use sick days, but those are limited. Why do they get SS?

 

[WinniWoman]

This is a new one for me, the part where if I'm reading right someone on maternity leave can collect disability pay while off? Is this certain states or every where and since when?

In NY you could take 3 months on short term disability for maternity. You take your sick time first then the Disability kicks in. You have to file for it through your employer. Now there is a paid family leave law in the state so not sure how that works. I just know they take money out of your paycheck for it also. Was a long time ago for me so not sure how it all works now.

 

[VacationForever]

I don’t understand, I got nothing when I took maternity leave. What are they getting? I suppose they can use sick days, but those are limited. Why do they get SS?

In CA, the employee has to apply for it directly through the government agency. The employer receives a form from the agency and complete for verification purposes.

 

[VacationForever]

In NY you could take 3 months on short term disability for maternity. You take your sick time first then the Disability kicks in. You have to file for it through your employer. Now there is a paid family leave law in the state so not sure how that works. I just know they take money out of your paycheck for it also. Was a long time ago for me so not sure how it all works now.

In CA, employee does not file through the employer.

 

[ThatGuyOverThere]

I don’t understand, I got nothing when I took maternity leave. What are they getting? I suppose they can use sick days, but those are limited. Why do they get SS?

I think the misunderstanding here is where it was said to be Social Security, it isnt. This would be some sort of state law that allows for Pregnancy Pay/Workers Comp or it could be a Short Term Disability policy by the employer/employee.

Social Security Disabilty does not allow payments for being "pregnant".

I had to go through this article here and also read some comments and just to keep in mind for anyone/everyone. There is no specific age that guarantees you make the most of social security everyone's life expectancy rate, income, and retirement planning is completely different.

 

[capjak]

Getting back to SS optimization this calculator is supposed to help identify the best strategies built by an FA:
Open Social Security is a free, open-source Social Security strategy calculator.

The calculator runs the math for each possible claiming age (or, if you're married, each possible combination of claiming ages) and reports back, telling you which strategy is expected to provide the most total spendable dollars over your lifetime.

Please note that this calculator should not be the only analysis you do, as there are various factors that it does not consider, such as:

• The fact that delaying benefits reduces longevity risk and therefore may be preferable even in some cases in which it is not the strategy that maximizes expected total spending, or
• Tax planning reasons or other unrelated reasons why it might be better for you to file earlier or later than the calculator suggests.

About the Author (Mike Piper)
I am a CPA in St. Louis, Missouri. I'm the author of nine financial books, as well as the popular blog "Oblivious Investor." I am an occasional public speaker (usually about Social Security or tax planning), and I have been quoted as a Social Security expert in numerous publications (e.g., Wall Street Journal, AARP, Kiplinger, and several others).

http://opensocialsecurity.com/