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Retire Early In Self Defense Could Be A Mistake – Update

July 15, 2009

DollarsAndSense.org

DollarsAndSense.org

Collect Now, or Later? Timing Your Social Security Benefits

With the current state of US and world economy, the alternative to jumping out a window, GENERAL-DELIVERY-743290committing a heinous crime or planting your pup tent under an overpass, is retire early  and collect your meager social  security check at general delivery.  Yes, the post office still has General Delivery.

Have you made the right choice?  Maybe you are desperate, you see no options and you are hungry and scared. If early retirement is really your only option because you are really no longer capable of work, get it while you can.  But, if you have just collected your last unemployment check, early retirement may not be your best choice.  You are diluting your benefits.

0711-biz-webRETIRE_pop

NY TIMES

Social Security prefers to make a direct deposit of your benefits, but then, you will need to have a bank account.  If you need a check, you need an address.  Social Security does not have that little plastic card to load your payment on … yet.  That should help homeless recipients.  When that little card finally happens, but, it will be just as dangerous as carrying a roll of cash.  By retiring early you are locking yourself in to a reduced benefit for the rest of your days, unless of course you win the lottery … but that’s not how you should spend your benefit check, anyway. This is not your parent’s Social Security anymore.  This safety net has so many holes in it that it won’t fly anymore.  Congress can’t agree on “the fix”.  With all the brains in Washington working at odds with each other for so long, any good idea was lost long ago.  The pocket has a hole in it and no one has the guts to fix it.  Everything must have a political party stamp on it.  Whatever fix is offered must make a Republican or a Democrat look like a hero.  That is pure bullshit!  Who cares which party gets the gold medal, this is not a partisan problem.  I am not alone being totally disgusted with the constant bickering and game playing that accompanies watered down legislation to patch a broken system.  How dare they toss a totally unrelated provisions of law onto serious legislation meant to regulate greedy behavior by Credit Card companies.   GunRights

House Approves Measure to Allow Guns Into National Parks The bill to grant the District of Columbia a voting member in the House remains stalled after Senate Republicans attached a provision to the legislation that effectively would repeal many of Washington’s gun restrictions.   Yesterday’s provision, originally sponsored by Sen. Tom Coburn (R-Okla.), would allow gun owners to bring the weapons into national parks and wildlife refuges as long as they are permitted by the laws of the state in which the park is located. The bill codifies a change the Bush administration had sought in its final months, but a federal judge blocked the effort in March.   Obama administration officials had not sought to overturn the judge’s ruling.  But Coburn, who had long sought the change, inserted his amendment this month on credit card legislation that is one of Obama’s top priorities. The move effectively forced Democrats to vote on the gun provision if they wanted to pass the credit card bill.  Democrats feel pressure to back bills on gun legislation or face political heat from the National Rifle Association, particularly in more rural districts.

This behavior is despicable.  The NRA can get it’s own legislation without sleazy tactics like this.  Does the NRA really expect an armed insurgency, or fear Democrats so much that they have to pressure their congressional puppets to sneak a law in between the sheets.  The NRA has demonstrated unrealistic paranoia and fuels equal paranoia among it’s rural base of gun advocates.

The US economy is no longer a partisan problem … not going into the sordid history about how this all happened.  But, with more “Baby Boomers” entering retirement age, the piggy bank is too low to sustain the load.  Those fortunate enough to have invested in great pension plans were also robbed, their piggy bank is also broken.  This formula is bad enough without historic job losses, too.  Boomers hit with job loss are not at the most desirable age to start over.  So, the formula is broken.  We have elected a bunch of ball players, not superbowl quality, instead of representatives for the US public. You can always get a menial job to supplement your benefit, but you can only make a certain amount before your benefits are reduced and your benefits become taxable.

Over 50s ‘needing to work longer’

A man in his 50s

The report says many over 50s will now have to work longer

Almost two thirds of over 50s fear they may have to work longer than planned as their savings and pensions have been hit by the recession, a study claims.

Base amount you can earn:

  • $25,000 if you are single, head of household, or qualifying widow(er),
  • $25,000 if you are married filing separately and lived apart from your spouse for all of 2008,
  • $32,000 if you are married filing jointly, or
  • $-0- if you are married filing separately and lived with your spouse at any time during 2008.     If the only income you received during 2008 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable.

inspire-retirementMore U.S. workers retiring early

WASHINGTON, May 24 (UPI) — A larger than expected number of U.S. residents are retiring early, many of them believed to be laid-off workers, analysts said.

Early retirement claims are up 25 percent from last year with more people choosing to retire at age 62 instead of 66, said Stephen C. Goss, chief actuary for the U.S. Social Security Administration.    Early retirement reduces Social Security benefits

by as much as 25 percent, a loss that comes on top of the stock market decline and a drop in home values.    The surge in younger retirees dispels expectations that older people who suffered financial losses in the recession would work longer to rebuild their assets, the Los Angeles Times reported Sunday. In a poll sponsored in December by CareerBuilder, 60 percent of workers older than age 60 said they planned to postpone retirement.    Another wave of laid-off older workers could choose early retirement when their unemployment benefits run out late this year and next year, Goss said.   The trend means many early retirees may outlast their financial assets,   said Alicia H. Munnell, director of the Center for Retirement Research at Boston College.    “As they get into their 70s and 80s, it will be increasingly inadequate,” Munnell said.

Instead of working longer as the economy worsens, more Americans are calling it quits before age 66. The ramifications could be profound for the retirees, families, government and social institutions.  On top of savings ravaged by the stock market decline and the loss of home equity, many retirees now must make do with Social Security benefits reduced by as much as 25% if they retire at age 62 instead of 66.”When the recession ends and the economy bounces back, there may be a band of people for whom things will never be the same again. They’ll still be paying the price for 10, 20, 30 years down the road,” said Cristina Martin Firvida, director of economic security for AARP, the nation’s largest membership organization for people 50 and older.

Full Retirement and Age 62 Benefit By Year Of Birth

65
36
$800
20.00%
$375
25.00%
65 and 2 months
38
$791
20.83%
$370
25.83%
65 and 4 months
40
$783
21.67%
$366
26.67%
65 and 6 months
42
$775
22.50%
$362
27.50%
65 and 8 months
44
$766
23.33%
$358
28.33%
65 and 10 months
46
$758
24.17%
$354
29.17%
66
48
$750
25.00%
$350
30.00%
66 and 2 months
50
$741
25.83%
$345
30.83%
66 and 4 months
52
$733
26.67%
$341
31.67%
66 and 6 months
54
$725
27.50%
$337
32.50%
66 and 8 months
56
$716
28.33%
$333
33.33%
66 and 10 months
58
$708
29.17%
$329
34.17%
67
60
$700
30.00%
$325
35.00%

Pros and Cons

As a general rule, early or late retirement will give you about the same total Social Security benefits over your lifetime. If you retire early, the monthly benefit amounts will be smaller to take into account the longer period you will receive them. If you retire late, you will get benefits for a shorter period of time but the monthly amounts will be larger to make up for the months when you did not receive anything.

There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit is permanently reduced. Each person’s situation is different, so

* remember that, if you delay your benefits until after full retirement age, you may be eligible for delayed retirement credits that would increase your monthly benefit;
* keep in mind that there are other things to consider when making the correct decision about your retirement benefits and
* contact Social Security before you decide when to retire.CB033389

Clock ticks louder on Medicare and Social Security

2:02 PM, May 12, 2009

The deep recession will mean a faster road to insolvency for Medicare and Social Security, the programs’ trustees warn today in their annual reports on the plans.    Their findings won’t shock anyone, and we’ve all been reading the same grim headlines about Medicare and Social Security for decades, to the point of numbness. The only difference is that the day the money theoretically runs out is getting ever closer — particularly for Medicare.    Social Security now is expected to begin paying out more in benefits than it collects in taxes in 2016, one year sooner than projected last year, and the trust fund will be empty by 2037, four years sooner.    As for Medicare, it’s already paying out more in benefits than it collects in taxes, and the trustees estimate the program will be insolvent by 2017, two years sooner than projected in last year’s report.

social_security_logoRead the summary of the trustees’ reports here.

With the government already racking up unprecedented budget deficits to bail out the economy and the financial system, the prospect of funding shortfalls in Medicare and Social Security becomes even more daunting. Will the Chinese pay for our retirement, too?

Unless some huge portion of the 76 million aging baby boomers decide to leave the country (for, say, Canada?), the options for keeping the programs solvent aren’t going to change: raise taxes or cut benefits spending, or both. In a statement, Treasury Secretary Timothy F. Geithner said President Obama “explicitly rejects the notion that Social Security is an untouchable politically and instead believes there is opportunity for a new consensus on Social Security reform.”

As the trustees’ report notes:

Social Security could be brought into actuarial balance over the next 75 years with changes equivalent to an immediate 16% increase in the payroll tax (from a rate of 12.4% to 14.4%) or an immediate reduction in benefits of 13%, or some combination of the two.    Ensuring that the system remains solvent on a sustainable basis beyond the next 75 years would require larger changes because increasing longevity will result in people receiving benefits for ever longer periods of retirement.

10 Things You Need to Know to Live on the Streets

By Walter Mosley and Rae Gomes, The Nation. Posted July 28, 2009.

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