Tom Margenau is a retired Social Security manager who writes a syndicated column on Social Security matters. He has a column out recommending a simple change in the laws that would end most overpayments — eliminating the retirement earnings test. If you go on Social Security retirement benefits before full retirement age you can only earn so much money each year, currently $24,480, before you lose at least part of your Social Security retirement benefits. That’s the retirement earnings test. This provision is difficult to administer. Retirees end up earning more money than they expected, sometimes late in the year. Think Christmas associated overtime and end of year bonuses, for instance. Retirees get confused because they think of their take home pay rather than their gross income. Eliminate the retirement earnings test and the many overpayments associated with it disappear. However, the number of people retiring at age 62 would soar.
What do you think?
We need people working longer, not less.
ReplyDeleteIt's a retirement program. Maybe even an ease into retirement program. It's not an additional source of income for people working full time that you get just because you turned 62. Maybe it's become that at age 70, and maybe that needs adjusting upward given how we keep being told work later, work later. OK, so maybe the program needs to rethink it's actual purpose, income for retirement or not. But bot one odd piece at a time. Yeah, like that will happen.
ReplyDeleteIf they're "retiring" at age 62 (collecting early RIB), but still working full-time, they're really not retiring, are they? That said, the idea to eliminate complicated overpayment processing is a good one. Maybe just boost the FICA rate to, e.g., 20% if you earn more than the limit, until you reach FRA. I'm sure the actuary has done studies.
ReplyDeleteNo.
ReplyDeleteIt is not hard or complicated to administer. Enter dollar amount. Verify dollar amount with W2 following year.
Retirement benefits are an income replacement when you STOP working. Hence retire.
Merriam Webster defines:
1: to withdraw from one's position or occupation : conclude one's working or professional career
Yes please. I believe a study years ago said it would reduce administrative cost AND be good for the trust fund assuming more folks decide to take a reduced benefit. If they continue to work, their higher earnings continue to be taxed into the fund.
ReplyDeleteEliminate it or raise the amount you can earn by 100% ($48,960) and then raise that amount each year like they do benefits with COLA.
ReplyDelete