Social Security's Earnings Test is Public Policy at Its Most Malevolent. It Recklessly Endangers the Financial Welfare of Early "Retirees," With No Gain to the Government.
Great analysis of a dilemma with Social Security. But I believe I have found another punitive sexist discriminatory action on the part Social Security. Looking at two workers -- let's work on the assumption that both have forty (40) quarters of earned social security -- and have paid in the same exact amount. Person A was a Federal Employee covered under the "old" Federal Retirement system (CSRS) and whose 40 quarters of SS payments were made AFTER leaving Federal Service. He also receives a Federal Pension based upon his contribution to the CSRS Program -- and the Government's Promised amount. Person A's wife did not work throughout her life -- a stay at home mom and caregiver for aged family members. Person B worked only for commercial activities paying to SS. Person B's wife also did not work, and also a stay at home mom and caregiver for aged family members.
At Full Retirement Age Person A's SS is REDUCED under what is referred to as the WINDFALL ELIMINATION PROVISION.
At Full Retirement Age Person B receives a full SS Payment.
So, I understand the reduction for person A.
But the crux of the matter is -- the amount the SPOUSES receive.
Both spouses are the same age -- say full retirement age under SS.
Because Person A's amount of SS Payment is reduced his wife's amount is ALSO Reduced.
Person B's Wife's amount is the full entitled amount without a reduction.
So, my hypothesis is - -as a woman, the two equivalent spouses -- females in this case -- are inequitably treated PURELY because of who they were married to where their husbands' were employed.
In this day and age of equity -- it appears that some women are treated unfairly -- again!
I would appreciate hearing Mr. Kotlikoff's reasoning as to why Wife A receives less than Wife B.
The earnings test has always struck me as nonsense and as usual Larry puts flesh on the meager bones of my analysis. One addition to Larry's thoughts that I think is correct. Most people who are dinged by the earnings test recover the reduction through future higher benefits (the ARF) but I think not all. If a retiree later changes to a benefit based on another's record (survivor for example) their ARF disappears. (Hope Larry vets this for accuracy).
Yes, Social Security will give you that information. best, Larry
Great analysis of a dilemma with Social Security. But I believe I have found another punitive sexist discriminatory action on the part Social Security. Looking at two workers -- let's work on the assumption that both have forty (40) quarters of earned social security -- and have paid in the same exact amount. Person A was a Federal Employee covered under the "old" Federal Retirement system (CSRS) and whose 40 quarters of SS payments were made AFTER leaving Federal Service. He also receives a Federal Pension based upon his contribution to the CSRS Program -- and the Government's Promised amount. Person A's wife did not work throughout her life -- a stay at home mom and caregiver for aged family members. Person B worked only for commercial activities paying to SS. Person B's wife also did not work, and also a stay at home mom and caregiver for aged family members.
At Full Retirement Age Person A's SS is REDUCED under what is referred to as the WINDFALL ELIMINATION PROVISION.
At Full Retirement Age Person B receives a full SS Payment.
So, I understand the reduction for person A.
But the crux of the matter is -- the amount the SPOUSES receive.
Both spouses are the same age -- say full retirement age under SS.
Because Person A's amount of SS Payment is reduced his wife's amount is ALSO Reduced.
Person B's Wife's amount is the full entitled amount without a reduction.
So, my hypothesis is - -as a woman, the two equivalent spouses -- females in this case -- are inequitably treated PURELY because of who they were married to where their husbands' were employed.
In this day and age of equity -- it appears that some women are treated unfairly -- again!
I would appreciate hearing Mr. Kotlikoff's reasoning as to why Wife A receives less than Wife B.
Thanking you in advance!
I’m interested in using your software but I have no idea what my husband’s benefit is. Will Social Security give me that information.?
The earnings test has always struck me as nonsense and as usual Larry puts flesh on the meager bones of my analysis. One addition to Larry's thoughts that I think is correct. Most people who are dinged by the earnings test recover the reduction through future higher benefits (the ARF) but I think not all. If a retiree later changes to a benefit based on another's record (survivor for example) their ARF disappears. (Hope Larry vets this for accuracy).
You're correct! best, Larry