Saturday, November 17, 2012

How Social Security Cheats Retirees -- And It's Legal!

by Sunnyjane


This year, thirty-six million retired American workers are receiving Social Security benefits totaling almost forty-five billion dollars.  And unless they've done a lot of research on the subject, or experienced the shock of finding out the truth, they probably don't know they're being swindled -- lawfully.

There has been the usual election campaign chatter this year about the necessary evil of entitlement reform, but no one on either side dared be too specific on the issue.  In 2011, however, we got the full force of Republican plans on cutting Social Security, Medicare, and Medicaid, thanks to Paul Ryan's Path to Disparity Prosperity: A Blueprint for American Renewal.  [Excuse me a moment while I hurl.]

One of the shiniest jewels in this piece of twaddle legislation is to privatize Social Security, i.e., put your Social Security premiums (which come out of your check every pay day) in the hands of private insurance companies so they can make more money.  Of course, that means Wall Street would end up with forty-five billion dollars to fiddle with every year.  That's called a Path to Poverty: A Blueprint for Middle-Class Disaster.   And, of course, he'd like to send retirees a voucher for their health care to do away with Medicare.  More than likely the same insurance company would take care of that, as your Medicare premium (oh, yes, you continue to pay for Medicare after retirement), is taken out of your Social Security check before you ever see it.

But this post is not about lowering benefits or raising the age of retirement eligibility.  This is how we're getting cheated now, and will continue to be cheated unless these little known laws are changed. 

Retiring Too Early

I'm not talking about taking early retirement or waiting several years to get the maximum benefit.  This is not about years, it's about days.  Social Security will not pay you for the month in which you retire.  So, if you retire on the 15th day of April, you get nothing from Social Security for the remainder of April.  It's best to continue working until the last day of April, regardless of what day that falls on.  Should April 30 fall on a Monday, retire that day; do not work out the week, because then you will not be paid anything for May.  At least you're getting a paycheck for the rest of April.

Hint: If your employer allows you to accumulate vacation days for which you can receive cash when you retire, start doing that immediately.  As you'll see going forward, you'll need it.  Just remember that a vacation lump sum is taxed just like salary, so your bundle will be reduced accordingly.

I'm Retired!  Now, Where's My Check?

So you retired at the end of April and should get your check at the beginning of May, right?  Not so fast, dear readers!  The Social Security Administration pays retirees for the previous month, which means you will not receive May's payment until June.  And, adding insult to injury, your SS check is scheduled according to the date of the birth date on which you were born; it does not automatically appear on June 1.  If you were born between the 1st and the 10th of the month, your check will arrive on the second Wednesday of June; this is irritating.  If you were born between the 11th and the 20th, you will receive a check on the third Wednesday of June; you could be reaching desperation point by now.  If you were born between the 21st and the 31st, you can expect your check on the fourth Wednesday; by now, you may be shit out of luck on the bill-paying side of things!

Hint: Since there's absolutely nothing you can do about the day on which you were born, this is where your vacation dollars would come in handy.  By now you have missed out on money in May and, perhaps, a lot of money in June.  Since fifty percent of retirees depend solely on Social Security to live, they're already in the hole, and they will never recoup that loss.  Utility providers have no empathy for your plight, nor do mortgage companies or landlords.

Even in Death, You Get Ripped Off
There's even more indignity when you shuffle off this mortal coil.  Why?  Because Social Security pays you nothing for the month in which you die.  There's a nice little paragraph for survivors and/or executors of your will.
If the deceased was receiving Social Security benefits, you must return the benefit received for the month of death or any later months. For example, if the person dies in July, you must return the benefit paid in August.

I suppose the lawmakers just assumed that you didn't accumulate any bills during that month.  Surely this law was made by a Republican congress, don't you think?

Hint:  Don't die.

OK, perhaps that's not reasonable.  But your heirs will be responsible for paying for your funeral -- and for all your bills -- if you have not saved an adequate amount to cover those expenses.  Don't think they can just snub their noses at these bills; your estate can be sued for outstanding liabilities.

Dinosaurus Republicanus

You philosophically oppose government welfare plans, but you cash your Social Security checks religiously.

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