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Figuring out Social Security

By Staff | Feb 25, 2011

Social Security – in particularly Law 1-800829-040, administered largely by the Internal Revenue Service – has problems. For 16 years, since retirement, I’ve taught evenings for $2000 to $4000 annually for 1-4 classes.

Since 1995, about $150 a month has been withheld for FICA/medicare – even though I retired and began drawing a small Social Security benefit in 1992 at age 60. I’ve unsuccessfully been trying to find out why.

Today, following 40 or more inquiries to various experts – I learned why. You receive SSA benefits whenever you retire from your primary job, but IF you continue to work for pay – you keep playing social security/medicare as long as you work – those these payments will never increase your SSA benefits.

These payments go to the Internal Revenue Service – not Social Security. While there’s considerable worry about keeping SSA’s fund viable, ALL money paid by retired personnel already receiving SSA benefits apparently does not go to SSA to help keep this fund solvent. (Social Security has a means of reviewing past contributions, and revising payments if justified. But apparently NOT with funds paid into SSA after one has retired.)

Many older people, say perky Betty White, receive social security benefits – but at her current salary, she no doubt pays more INTO social security than she receives. One would suspect farmers, top executives. doctors, owners of large businesses and other S may do the same.

The primary error is lack of public understanding of this apparently unusual situation. I suspect there may be a few instances of unfairness particularly since these provisions seem understood by so few.

I know as a Federal retiree under CSRS (different now under FERS), I had only 18 “High years” SSA earnings of at least $5,000 a year. (I began paying into SSA at age 14, and back then $5,000 was a high year.) Consequently, instead of earning SSA return of money I paid in from age 14 to 44 for 20 years – which would allow me to receive most money I paid into SSA – the fact that I’d only 18 years high earnings – not the 20 required, meant my annual SSA has been closer to $500 than the $1,200 two more years of high earnings allowed. In other words, had I known waiting two years to become a Federal civil servant — I could’ve received more than twice my SSA benefits.

It would seem a first step to benefit ALL of us, might be to have these quirks in the SSA/IRS law explained more widely, so citizens can make knowledgeable decisions. It might also be better if sizable post-retirement payments could help SSA funds last longer for benefit of all US citizens.

In any event, it would seem our nation would benefit if SSA and IRS at least were able to discuss collection and use of post-retirement SSA payments made by so many, but understood by so few.