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Idea for saving Social Security

By Jennie L. Phipps ·
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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February 09, 2013 at 1:35 pm


D Farmer
February 09, 2013 at 12:57 pm

Create Soilent Green. Takes care of two problems, old age and hunger

February 09, 2013 at 12:55 pm

I say eliminate the limit so as long as you work you pay into the SS system. All the high earners would pay all year long. They would not miss it anyways. This would fix the issue.

thomas donahue
February 09, 2013 at 12:50 pm

The lawmakers, that includes the entire congress, have dipped in it with not even an IOU since it was started in 1937 and now they say its going broke. Let all them take a pay cut(most make over 25000,00 a year plus perks of more than that) and there medical is better than any one else (and its for life) for them and there family. Not one of them even brought up a pay freeze for a short time to help out. They don't work for us any more, they just in it for themselves and don't care about us as tax payers!

Andrew Faith
February 09, 2013 at 12:40 pm

I wonder how many people actually get to work as long as they want to. My own experience tells me this is a fantasy solution that academics might have. Most private businesses seem to start trying to get you off the payroll when you reach 55, and they are determined to do it by the time you reach 62. Seems to me the quickest way to make it solvent would be to make the contribution period for full benefits something like 25 years instead of 10. I doubt that very many people who work in actual jobs qualify for full pensions after 10 years.

February 08, 2013 at 10:36 pm

cut off all retired congressman salaries and medical benefits problem solve.

February 08, 2013 at 9:41 pm

See who else besides individual tax payers are dipping into Social Security Funds, like say multiple state agencies of all 50 states. Yeah, they are already funded by the feds and then when they do certain things they are asking for social security reimbursements and getting the money. I this was our individual taxpayer entitlement money but the states are using it too!!! Wake up America...this is Trillions of dollars!!!! No wonder SSA is going broke, and you and I are losing out!!!

Dee H.
February 08, 2013 at 7:53 pm

I'll say it again...

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.

Richard B.
February 08, 2013 at 7:49 pm

Its really not going to do any good for those of us who have paid into the system for years to take the attitude that the government owes us. If the money is not there its not there! I will have paid into the system for over 50 years by the time I retire. I would fully support a delayed retirement if it will help keep Social Security viable and give me a partial lump sum payment.

Dee H.
February 08, 2013 at 7:04 pm

Social security is there for all of those that have contributed over the years. If those funds have been misused by those in charge, then that is not the problem of the people who are counting on the promise of those funds being available. We could have invested ourselves if it wasn't taken from us in the first place. Unless the government plans on reimbursing the public for all of the contributions from said employees and their employers, on their behalf; then they had better figure something out, and soon!