Social Security Benefits under Attack

By Bill Moore

Many false statements have been made over Social Security benefits.  In discussion with close friends of mine the facts began to unfold.  Let me explain what has and is continuing to happen to a couple who are friends of mine.  For discussion purpose I will call them John and Marie, and that is not their real names.

Like most couples John and Marie worked hard most of their lives and raised a family in a middle class area in the North East.  They took few vacations, as they had a mortgage, car payments, kids in school and kids going to college.  However, since they lived in the North East their salaries were high as was the cost of living.  Based on that, they each paid the maximum to Social Security.  Upon retirement they received their first surprise about Social Security.

It turns out there is a maximum a couple can receive from Social Security regardless of what they made. Since he was older he retired and drew maximum benefits.  Upon her retirement, Marie found that she was earning significantly less than her husband on a monthly basis.  Though she had maxed out her payments like her husband, she was not allowed to draw full benefits because of the caps on what a couple can draw. Divorced they could both draw the max but married they were subject to the cap.  So in effect Social Security is Means tested.

Their second surprise just happened.  As you are aware, any IRA accounts must start to be taken at the age of 70 ½.  John started to draw the Mandatory Minimum last year.  He had withholding for Federal and State taxes taken out at the max rate of 25%.  Again no complaint since that is what is required.  He and his wife just received their new social security amounts to be paid monthly in 2018.  To his surprise, though  the forms indicated a 2% rise in benefits, he and his wife had a major reduction in their monthly benefits.

John called Social Security to find out the money he was forced to take from his IRA was added to his income as reported by the IRS.  Social Security reduced his benefits accordingly.  So instead of a 2% raise their monthly benefits were reduced by well over $100 total.  Knowing his wife started drawing this year, John asked if filing separately would help.  He was told NO.  For Benefit Calculation, they would be treated as a couple.

They were not done being surprised yet.  They also noted that each had a $13.00 a month deduction for Medicare Part D.  John again contacted Social Security stating that they did not use Medicare Part D and in fact have a plan provided by their former employer.  They questioned why the charge for something they were not using.  In a Government response, as a result of the Affordable Care Act (ACA), these additional taxes were mandated.  The fact that they did not use Medicare Part D was not good enough. Since the Private Insurance provided by John’s former employer provided a plan like Part D, they had to pay the tax.  Another $26.00 total taken out of their monthly benefit.

We need to protect our Seniors.  If this keeps up, Seniors will not be able to live independently and might become a burden unnecessarily on their families.  We must contact our Congressman and Senators and tell them not to penalize benefits when they force seniors to withdraw their IRA money.  In addition Congress must repeal all taxes in the ACA.  In addition, they must stop Social Security from being means tested.  This has become a Marriage Penalty in a time when marriage is constantly under attack.