Thoughts 4: 10/4

I received a letter the other day from the Social Security Administration. It was a helpful six page statement explaining social security, and the particular benefits I would receive at full retirement age. I was a bit surprised, and wondered if they regularly send these to who have recently turned 29 ½.

As I read the pamphlet, there was something which caught my attention. How the SSA determines the value I'll receive at retirement. I suppose I had always assumed the amount one receives from social security is the same for everyone. Or if not that, then more goes to people who have less.

But it's the opposite.

A person's monthly payment upon retirement is based on their pay during their life. Specifically, SSA accounts the 35 highest yearly salaries of a person's lifetime. It adjusts those numbers for inflation and then runs them through a special formula. For every year short of the 35 required, the SSA inserts a nice round 0 into the average!

In a county where a quarter of mothers care for children at home (and an increasing number of fathers), it's incredible there isn't a provision which sufficiently fixes this problem. The only solution offered to parents who provide their own childcare, is the spousal benefit. This rule is only applicable for spouses, and allows a person (fortunately man or woman) to collect either their own benefits, or half their spouse's benefits, but only after their spouse has started to collect. Th

Until recently there was provision allowing the 50% spouse to take her amount when the household earned reached retirement age, but put off his collection. Unfortunately, while this would have been beneficial for those who needed it, those who didn't took advantage of it, and it was removed in 2015.

Together, these demonstrates the lack of regard the United States for families dedicated to personally caring for their children. Instead it induces parents to stuff their kids into daycare as soon as possible, and get back to work. If anyone doesn't believe stay at home parents deserve better, they probably should stop reading this blog.

Even the concept that social security is determined by how much one has earned, doesn't make sense. The more one has earned (and presumably saved), the less one should need the safety net to secure their retirement. As of 2015, if one earned a salary of 118,500 for 35 years, they would receive the maximum monthly benefit of $2,663. Someone who earns that amount shouldn't be collecting the same as someone who has struggled through low wage jobs their entire life.

Of course, maybe we won't be able to retire until we're 90 anyways.

Comments