I've been a good kid this year. Well, I've occasionally been naughty. For example, I was a bit of an impish bad boy when I penned last week's open letter to President Trump. But if the emails I get from readers telling me that they appreciate the information and advice I dispense in this column are any indication, I think I should be pretty high up on your list of good little boys and girls.
So that's why I am sending you this last-minute wish list of what I'd like to see changed about Social Security next year. I'm not talking about big reforms to the program. Instead, I'm talking about changing people's misperceptions. Here's an example.
Could you please get people to stop confusing Social Security with the Supplemental Security Income program? I'd guess that about half the emails I get from readers start with something like this: "My wife and I are getting SSI," or "I have a question about my SSI benefits." But what they really mean is that they are getting, or have a question about, Social Security benefits.
Many people think that SSI stands for Social Security income. Rather, SSI is short for Supplemental Security Income. SSI is a federal welfare program managed by the Social Security Administration. But it is not a Social Security benefit, and the money used to make SSI payments comes out of the general government coffers, not the Social Security trust funds.
Here is another way to think of it. You can get Social Security if you are rich or poor. For example, Warren Buffet qualifies for Social Security. But Warren Buffet will never qualify for SSI. For that matter, neither will most of the readers of this column. You would have to be really down on your luck to get SSI. You must be over 65 or disabled, have less than $2,000 in liquid assets, and less than about $750 in monthly income before you will be eligible for an SSI check.
Here is another wish. Please help women understand that they do not necessarily qualify for half of their husband's (or ex-husband's) Social Security. I probably get a dozen letters per week from women complaining that they are not getting what they think they are due. A woman qualifies for up to half of her spouse's Social Security only if she waits until age 66 to claim such benefits. If she takes benefits before age 66, the amount is reduced — down to about 30 percent at age 62. (Information for widows is coming up in the fourth wish.)
This is wish number three. Please tell people that they can NOT file for reduced benefits on one Social Security record and then later switch to higher benefits on another account. For example, millions of seniors think they can take benefits on a spouse's record at age 62, and then at age 66 or 70, switch to higher benefits on their own work records. They can't do that. The law says if you file for any Social Security benefits before age 66, you must file for any and all benefits you are due at the same time. The flip side to that coin is the fact that a person who turns 66 before January 2020 can file for spousal benefits at full retirement age and then at 70, switch to 132 percent of her own benefit. (That so-called "maximizing strategy" is being phased out. That's why there is the January 2020 deadline.)
As I mentioned above, my fourth wish has to do with widows. You can tell them to ignore what I just wrote in the last paragraph. And that's because widows have always had the option of playing the benefit-switching game. For example, assuming she is not working, a woman could file for reduced widow's benefits at 60 and then, at age 66, switch to full benefits on her own work record. Or she can wait until age 70 and get 132 percent of her full retirement benefit.
My fifth wish is asking a lot. Please help people understand that Social Security and Medicare are two entirely separate government programs. I know most people on Social Security eventually end up on Medicare — and their Part B medical insurance premiums come out of their Social Security checks. And that latter point causes almost everyone to complain when any Social Security cost-of-living increase they get is swallowed up by increases in their Part B premiums. Folks need to understand that Social Security benefits go up using a national inflation index. But Medicare premiums go up because of a law that says those premiums must be set at a point that pays for 25 percent of the cost of running the Part B program. And speaking of that, please tell seniors to be grateful that working taxpayers are picking up 75 percent of the tab for their Medicare medical insurance.
And if that last wish was asking a lot, this final one is asking for the moon. Please get Congress to start talking about some serious long-range reforms to Social Security. That's going to be tough for two reasons. 1) No member of Congress likes messing around with grandma's Social Security check. 2) Each political party must be willing to compromise. Republicans normally would never vote for any Social Security reform package that includes a tax increase. And Democrats normally would never vote for a plan that includes cuts in benefits. But here is the deal: Social Security can be made financially secure for generations to come with some relatively modest changes that include both. For example, if the Social Security payroll tax was raised by one half of 1 percent (the rate hasn't changed in 30 years) and if Social Security cost-of-living increases were cut by one half of 1 percent (basic benefits haven't been cut in 80 years), then the program would be solvent until the year 2100. Thanks for listening, Santa.
Your good little boy,
If you have a Social Security question, Tom Margenau has the answer. Contact him at [email protected] To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.