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Idea for saving Social Security

By Jennie L. Phipps · Bankrate.com
Monday, February 4, 2013
Posted: 3 pm ET

As Congress struggles with ways to manage the rising cost of Social Security without cutting payments that are vital to millions, some people are offering suggestions that sound like they might be worth a second look.

Try this on for size: Would you delay claiming Social Security -- saving the federal government money in the process -- if it meant Uncle Sam would give you a cash bonus? The bonus would be equal to the amount that your Social Security payment would increase by delayed claiming -- about 8 percent of your potential payment for every year you delay.

Economic theorists at the University of Pennsylvania Wharton School of Business, who came up with this idea, calculated that workers given the chance to receive their delayed retirement credit as a lump-sum payment would, on average, delay their retirement for a year and a half to two years. This raises the probability that people younger than 60 would work beyond the normal retirement age from 29 percent to 86 percent, and it ups the likelihood 60-year-olds would work beyond 65 from 4 percent to 49 percent.

The report says this plan is a good deal for Social Security because it continues to collect wage taxes and can delay paying a participant's benefit for however many additional years he chooses to work. It is a good retirement planning deal for recipients because it front-loads payments during the early years of retirement when most people need more money. Participants also could invest this lump sum and potentially build a bigger nest egg for their later years or leave it to their heirs.

What do you think? Would you vote for making a partial lump-sum payment a Social Security option?

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301 Comments
Dee H.
February 08, 2013 at 7:00 pm

If we clean up government and all of its wasteful practices, secure our borders, halt the fraud in the social security system (which includes those illegally drawing funds), remove unions from public jobs and make those employees contribute to their own retirement and healthcare needs like private industry does, and hold our government fiscally accountable, then we might just see some progress towards sustainability.

Dee H.
February 08, 2013 at 6:51 pm

To the person that is the government worker, I say this; if you do your job, as I'm sure many (probably most) do, and it is a "necessary" job; then I don't have any problem with it. The problem is, government is so layered with many unneeded positions. What other entity would be set up where people could give themselves raises by creating jobs underneath themselves? Certainly not any in the private sector, they would go out of business. The government is the only "business" that doesn't actually make anything or contribute anything tangible to society. Granted, it serves a needed purpose in many areas and workers are needed for those positions, and are justified. Don't forget though, that when you pay into the tax kitty, it is different than private industries contribution because "your" wages (and so your taxes), are actually paid by the taxpayers in the first place. That is why it is so necessary to clean up wasteful government. If we don't, there will never be enough taxes because the need is continually growing. Look no further than the public retirement system (PERS), it is a glaringly corrupt and unsustainable system, yet people are in denial. I would like to know why they were given a guaranteed return amount and don't have to contribute a dime. That is what happens when the "recipients" can craft the legislation themselves. How is that even legal?

c. mike russo
February 08, 2013 at 6:32 pm

I agree elected officials should not get pensions,they should pay into ss and collect the same as ordinary citizens. They make a lot more than most working folks and should be able to set up their own retirement fund.I also agree that Washington should keep its hands off ss and start to pay back the money that was taken from the fund,by the way how much was taken,TRILLIONS.I agree that there should be no ss until age 65. I agree the taxable income on ss should be raised to $200,000. Thank you JEAN,MIKE,BC and PAT

Art DiGiacomo
February 08, 2013 at 6:11 pm

1.Everyone should pay into ss until the time they retire, no cap.
2.Once you receive ss, it should be tax free.
3.Raise early retirement age to 65 Based on health and type of
work
4. Full retirement at age 70.
5.Must have paid into ss, with some reasonable,legitiment
exception.
6. Must be a legal U.S. citizen
7 ALL elected or appointed officials must pay into ss Except the
President of the USA.

Jean Ann Nyman
February 08, 2013 at 4:19 pm

Thank you Pat Elliott...you are absolutely correct and this country truly needs to wise up and revolt.

Michael
February 08, 2013 at 4:16 pm

Is there a residency requirement in the USA to qualify for SS benefits? If someone has not lived in the USA for at least five years and contributed to the SS fund then they shouldn't qualify for SS benefits. That includes people here on refugee status. They already receive all kinds of benefits..e.g.housing,medication,food. Are any illegals receiving any SS benefits? So many people come here to the USA and receive benefits and have not contributed in any way to support these programs. It's seems we always go after the working man for more $$ because it's the easy way out instead of finding out who is receiving benefits who really does not qualify for them. Also treat the politicians the same as the average working Joe. No special treatment after leaving office. Also shame on the politicians who thought of touching the SS fund for reasons other than retirement benefits to the people who contributed to the fund. In my mind this was criminal.....tantamount to raiding our personal savings accounts.

JeanAnn Nyman
February 08, 2013 at 4:14 pm

Stop taking our money out of the SS Fund. That money is intended for those of us who have worked all our lives and paid into it. Put back the money that was "borrowed" and never put back during the Bush Administration. The fund was stable at the end of the Clinton presidency. I agree with the Penny sales tax across the nation to be put into the fund and no money should be taken out of that fund except for those who have worked all their lives and paid into it. And AGAIN, PUT BACK THE MONEY THAT HAS BEEN BORROWED FROM THE FUND DURING THE BUSH AMINISTRATION. That money was not yours to take. And I agree with others that Congress should collect Social Security when they leave office instead of collect huge salaries that they don't deserve. They are overpaid and don't give a hoot about any of us and think nothing of taking away everything we worked so hard for. See if any of them could live on $20,000 or less a year. Shame on all of them for stealing our money out of the Social Security Fund and now trying to do away with it so they don't have to pay it back. SHAME ON THEM....

BC
February 08, 2013 at 4:08 pm

How about raising the taxable income to $200000 ?

christine filas
February 08, 2013 at 4:06 pm

Thank you Pat I agree one hundred percent.It is time for the sheeple of this country to wake up.Revolution time!

Pat Elliott
February 08, 2013 at 3:55 pm

None of the elected officials in Washington pay into social security. They have their own, taxpayer funded retirement program, which they control and increase at their hearts desire. Make it mandatory for all elected officials to be a part of social security for their retirements and take away their pensions after serving only one term in office. We should not "let them eat cake" while they are being fed bonbons and sucking our retirement funds dry. We do need a French revolution. We also need a law forbidding them from robbing any more of the social security funds to pay for anything but what it was intended for. If the funds had not been hijacked, there would be plenty to pay the real working people in this country