SteveR Loc: Michigan

My wife works with a nurse who filed early for her Social Security benefits. Since her husband is not retired and therefore not receiving his own retirement, he has been receiving half her S.S. benefit since she filed for her benefits. As a result they're getting 1 1/2 times her benefit until he retires and starts receiving his own retirement. Also, they're receiving all of this money while both of them are working and bringing home big bucks. They own a $700,000 condo in Fla., and intend to keep their Texas home, which is no slouch, either, when they finally retire. She drives a Mercedes. They're smart....they know how to work the system. It's the system, in the meantime, which suffers.

tramsey Loc: Texas

Ahh yes the people will figure out ways to take advantage of the system. Is that bad people or a system with too many holes. Don't forget LBJ and his sticky fingers and all the rest who went dipping into what was a convenient piggy bank. Just the regular crooks but instead of being in an alley ready to mug you, they do it from The Hill. Is there any difference in the two besides the location?

SteveR Loc: Michigan

Hey, I would have done it, too, but it's why the money is vanishing.

repleo Loc: Boston

There is nothing crooked about what they did. They didn't write the rules, the Government did. That strategy doesn't work for every couple, but there is no reason not to do it if it works for you. They are probably giving back a third of the money in taxes anyway. For most people, taking early Social Security is a bad idea.

TriX Loc: Raleigh, NC

So I'm guessing that by early, you mean she hasn't reached her full retirement age but is at least 62 and her husband is at least 62 also. Of course by so doing, she's permanently reduced the benefit she will be paid as long as she lives compared to what she would have received if she had waited until full retirement age or later. So in the end, depending on the numbers, the total amount paid out of the system to her will be similar to what it would have been if she had waited until full retirement age or later, so no harm to the system by her starting early. Whether it works out better or worse for her (and the system) depends on low long she lives - everyone has to make that judgement based on their own situation. Now her husband, who must be at least 62 to receive benefits, could either claim his own (in which case they would be hitting the system for 2x), or half hers (hitting the system for 1.5x as you mentioned), letting his mature until he starts taking his own (which would then be higher than if he took his own starting at 62. That can work to their advantage depending on their respective salaries. If her income is much higher, then he may always be better taking half hers. That's the way the benefit was written, but not sure if that strategy is still available or will continue to be in the future - I'm sure we have at least one CPA on the forum that can comment.

Regarding their net worth, their SS benefit is determined by how much they paid into the system and when they begin taking benefits and has nothing to do with their accumulated wealth. If you think about it, that's fair. SS isn't a gift or designed only as a safety net for the poor, it's an investment fund like a 401K that you're forced to pay into as long as you work, and what you get out depends on what you pay in and how long you live. It's your money, and many would be better off if they had been allowed to invest it privately rather than into SS. The people that really make out are the ones that live to very old age and draw the benefit for many years, like an annuity. Can't blame them for living a long time.

rmorrison1116 Loc: Near Valley Forge, Pennsylvania

Sure, there are people who have figured out how to benefit from the system but that's not why social security is running out of funds. First, the funds should only be used for what they were originally intended for; they're not. Second, the funds are managed by the government and the government isn't in the business of growing funds. A minimum of 50% of the monies collected should be farmed out to reputable private sector investment companies that are in the business of growing other people's money. Case in point, I've been contributing to social security all my working life and I've been contributing to a 401K plan for less time. I've paid more in social security tax than I've contributed to the 401K, including employer match. Why is it I have way more money in my 401K account than I do in my social security account!? Because the 401K monies have been invested wisely. But no, if the government did that, they wouldn't have access to the funds they shouldn't have access to.

jim quist Loc: Missouri

With both of our pension plans and social security we end up with a pay increase after retirement.

SteveR Loc: Michigan

That's nice, jim....but you earned them and paid into both of them. In the cases of my friend's husband, he works for a governmental agency and did not pay into Social Security.

SteveR Loc: Michigan

I didn't say that they had done anything wrong. She may have filed for her benefits at 65 rather than 66, as well. Either way, her husband was pulling in a pretty good income as an IT professional and didn't need a Social Security check. My entire point, in case you missed it, is that the Social Security Trust is in trouble, yet money is being given to people who don't need or deserve it and that may be why the Trust is being drained.

Croce Loc: Earth

I understand your point Steve. Don't know why some feel you should be corrected as if you were blaming the couple.
The system, the law, is what is unfair. Your point, I am in agreement with but the government cares not what they do. Hell, it's not their money. It's what they steal from us to buy v**es for themselves in many cases.