Using the S-Words

Ever since its birth in the 1930s Social Security has been the 800 pound gorilla in politics. In Congress they say Social Security is like the third rail on the subway line: Touch it and you are dead!

Half the calls, letters and e-mails to congressional offices are about Social Security. Half!

I once did a Saturday radio show. Before each show the producer would hold up a large sign — for me and any guests — which said: Don’t use the words Social Security.

His point was that people who were half-listening would hear the words Social Security and either panic or get mad.

They would assume the worst — it was being cut or cancelled — and call in derailing the show. He was right.

• “I read your article on taking SS at age 62, then possibly paying it back when you reach your Minimum Retirement Age (MRA).

  “That doesn’t ring true with me, as we’d be hearing a lot about those well-off enough taking it at 62, banking the money, then paying the principle back interest-free at their MRA and applying for full benefits. Why not . . . it’s risk-free!

  “I just can’t believe that’s kosher and accepted by both the SSA and the IRS.

  “Something stinks in Denmark.”
  Rich Miglietta

• “For those of us CSRSers who can start drawing Social Security at age 62 but are still working, it doesn’t make sense to wait. It makes sense to draw as much SS between age 62 and ? because as soon as I start drawing my CSRS pension you know what happens. The annual introduction of the repeal of the “double dip” penalty will probably never happen until all CSRSers on pension are dead. One size does not fit all.
  Doug in Denver
• “The point often missed when this comparison is given is the difference between the retirement benefits for a FERS retiree and a CSRS retiree.

  “Social Security, along with the FERS annuity and the TSP, is a major component of the FERS retirement. Many FERS retirees can not wait until the full retirement age under Social Security before drawing their Social Security. The Office of Personnel Management recognizes that and supplements a FERS retiree’s annuity with the FERS Retirement Supplement BUT only until age 62.

  “I am sure that I am one of thousands of FERS retirees who received the FERS Retirement Supplement and who could not afford a substantial reduction in their monthly retirement income while waiting for their full retirement age under Social Security — four years in my case. So where it would be great to wait and receive a larger Social Security benefit — it is not always as easy as it sound on paper!”
  Retired In Nebraska

Evil Twins All Over Again

“Mike: Explain the Evil Twins (WEP & GPO) again. Has there been any changes? If so, what?”
Harvey D. Gold, Boynton Beach, Fl.

The “evil twins” is my nickname for two formulas Congress imposed on the Social Security system in the 1980s.

The first, called the windfall elimination provision (WEP) limits the amount of Social Security an individual can draw if they also qualify for a pension (like the CSRS system) that is not covered by Social Security. Social Security was intended for people who paid into it for a full career (i.e. 30 plus years). People who qualify for Social Security (by getting 40 quarters of coverage) but who otherwise get an outside annuity are limited in the Social Security benefit they can draw. In the most extreme case WEP can reduce that anticipated monthly Social Security benefit by more than $260 per month.

The other “evil twin” is the Offset Rule. It is harsher in that it can wipe out the spousal or survivor benefit someone expected to collect from Social Security if that person also gets a pension (again like CSRS) not covered by Social Security.

Bills are pending in Congress to modify or eliminate the evil twins. But there won’t be any action this election year.

To reach me: mcausey@federalnewsradio.com

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