Means Tested Retirement

Social Security Means Testing has meant different things at different times in our history. At one point you weren’t allowed to earn any income and receive SS benefits. "If one received any income from employment covered by the Social Security Act, one would lose his entire benefit for each month in which this occurred. This very stringent provision, known as the "retirement earnings test," is, of course, the same thing as a means test."

There were several changes over the years. In 1950, "Suddenly the self-employed elderly found their Social Security benefits suspended if they earned more than $75 in a given month – proof that the retirement earnings test functioned just like a means test." "By 1978 the test merely reduced benefits by $1 for every $2 of earnings above $4,000 for beneficiaries aged 65". Once SS benefits were not taxed, that changed, "In the 1983 legislation rescuing Social Security from financial crisis, Congress made benefits subject to taxation for the first time".

"Ten years later, the benefit tax screw got turned again. In 1993 Congress increased the share of benefits subject to taxation, from 50 percent to 85 percent for single beneficiaries who had "combined incomes" above $34,000, and for married couples filing joint returns with "combined incomes" exceeding $44,000. Below these levels, the share subject to tax remained at 50 percent. This, of course, makes benefit taxation more progressive, therefore ever more like a means test. The higher your income, the more benefit you lose." No Social Security Means Test, Eh? Guess What? by John Attarian

http://www.lewrockwell.com/http://www.lewrockwell.com/

Full retirement is inching its way up and soon could be 67 years old or more. We were told that SS was a retirement plan. It has turned into another tax bucket for the government to reach into.

Something unexpected happened along the way. Life expectancy was under 65 when the SS bill was put into effect. The writers couldn’t foresee that so many people would not only live past sixty-five, they didn’t realize that the life expectancy in 2005 would be 77.8 years old. That fact is what is causing the problem with SS solvency. They never expected people to live long enough to collect what they paid in, let along outlive their deposits.
http://www.cdc.gov/nchs/fastats/lifexpec.htm

As a concerned citizen speeding rapidly towards retirement, I have a little "means testing" that I feel should be enacted. It is time to bring federal and state employees including governmental politicians in line with the private sector.

When employed in the private you can retire before you turn 65 years of age but your benefits are cut drastically. One case that I am familiar with cut the benefit 50% if you retired at age 55. Why should non-military federal and state employees be able to retire at age 40 and draw a full pension and then become employed full time to earn another retirement package? If a federal or state employee wants to retire after 20 years of service, they should have two choices. Take payment at severely reduced rates, the same as in the private sector or wait until 65 to receive their full retirement amount.

Why should politicians be able to collect a retirement payment for the rest of their lives when the public has voted them out of office? It shouldn’t matter if the politician was voted out of office or retired. He/she should have the same option, accept a reduced retirement payment or wait until they turn 65 to receive their full payment. Politicians shouldn’t be eligible for retirement until after three terms as senator, nine terms as representative or a combine time of eighteen years in office.

Let’s take a look at the office of the President of the United States. When the benefit plan was first set up, it was expected that the ex-president might live ten years after retiring from office. As it is now, a person could get elected and live thirty-forty years after serving.
When taught in school about what the presidents received after they served. I was told that you didn’t want a past president living on welfare. You don’t want the past presidents to have to go out and work for a living.

I am for means testing the office of president to be, if he/she has the means, they may get testy but they don’t get the money. I don’t care if the outgoing president is Republican, Democrat or Independent, if they have a net worth of 1 or 2 million dollars I have lived through nine past presidents and not a one of them were ever hurting for money. Not a one of them felt it below themselves to go out and "work" by giving speeches or making a book deal.

I don’t know how much money this would save. It may not be billions but it would be hundreds of millions. It’s time that public servants start living a little more like the citizens that pay their wages and retirement benefits.