Opt out of social security?

Discussion in 'Financial Cents' started by oil pan 4, Dec 29, 2016.

  1. oil pan 4

    oil pan 4 Monkey+++

    Reason I ask is when my dad died he had been paying into social security for about 45 years, was forced to retire then only drew social security for 9 months or less, then dead...
    From about 2005 to 2013 my dad earned near 100,000, so he paid in a lot.
    No one else can claim his Social security.
    Since there is a fair chance the exact same thing could happen to me I figure why let the government take it all.
    Or social security may collapse.
    With my luck at least one of those will surely happen.

    I have been paying into it for almost 20 years now.
    The compensation I would get if I became disabled tomorrow is IMO kind of a lot, probably the reason why the system is broken.

    Does any one know if I opted out if what I put in so far would vanish, or would it have the same effect if I just stopped working?

    I ask because I would actually save that money and the investing I have done since 2003 has done pretty well and those years weren't exactly the best for markets and growth. So I think I could do better with my money than the government.

    My tax situation has become very complicated in 2016 so i will be seeking a CPA this time around. Would they know about this?
  2. Thunder5Ranch

    Thunder5Ranch Monkey+++

    Unless you belong to some very specific groups you can't opt out of Social Security, participation is mandatory outside of a very few exemptions.
    Ganado likes this.
  3. stg58

    stg58 Monkey+++ Founding Member

    SS is a pyramid ponzi scheme if you ran a business like SS you would be at club fed with Bernie Madoff, if they allow some to opt out the whole thing collapses.
    The only income I know of that is exempt from SS is income from rental properties.

    Damn it keep paying I will be collecting soon..:LOL:
  4. Tully Mars

    Tully Mars Metal weldin' monkey

    They should.

    On a side note, I haven't paid anything in since I became self-employed back in the late 80's. Nothing's ever been said about it. I just figured I can decide my future better than the .gov. NOT saying anyone should follow my lead, it's just what I've done.
    Last edited: Dec 29, 2016
    Yard Dart and stg58 like this.
  5. Tevin

    Tevin Monkey+++

    I don't know much about the legalities, but I do know that Social Security is a tax, and hardly anyone is off the hook for paying tax.

    If getting out of it were easy, everyone would be doing it.
  6. Pax Mentis

    Pax Mentis Philosopher King |RIP 11-4-2017

    Some facts:

    1. Only income for which you work in a given year is taxed...investment income of any kind is exempt, as are royalties unless they are for things you made or somehow created that year.
    2. If you are self employed you are legally required to pay it, but many get away without by showing their income as return on investment rather than taking a salary from their business.
    3. As an employee, one cannot declare themselves exempt unless it is income as a minister or a few other categories (this is as of about 20 years ago, and I am unsure whether those exemptions still exist).
    4. SS benefit amounts are based on one's income from their top 40 years of SS taxed wages divided by 40...unless one is disabled, in which case it is based on the average of the number of years past the age 20 that you became disabled minus 5. Years in which you do not pay SS taxes count as zero income years in the average.

    Not sure if any of that will be helpful because I don't know what you do or how you receive money, but these are things I happen to know that I thought might be helpful if shared.
  7. SB21

    SB21 Monkey+++

    I've been self employed since '91 , and my tax guys have always had my SS taxes figured into what I owed . I asked him about it one year and he said he had been figuring that into what I owed. So you may have been paying into it and not even knowing it . Ask your tax preparer next time , if you use one . Other than that , I thought it was a law you had to pay into it .
  8. DKR

    DKR Raconteur of the first stripe

    SS is a hidden income tax. You should ask why was the retirement age set @65 when SS first started.

    The avg life expectancy in the '30s was....wait for it...65 Y/O.
  9. Bandit99

    Bandit99 Monkey+++ Site Supporter+

    Yes, it was 65 but has since been increased to 66 and hopefully I will get to collect it prior to them changing it yet again to probably something like 70+.

    "Workers can begin receiving benefits at age 62, but your benefit will be greater if you wait until your full retirement age (currently 66) or later. Widows, widowers, surviving children, the disabled and children of the disabled can start collecting earlier."
    Ganado likes this.
  10. BTPost

    BTPost Stumpy Old Fart Snow Monkey Moderator

    Us OLD Farts need you youngsters, to keep paying in, so we can get ours OUT, before we Crock Off... Otherwise, because the Congress has Raided the SS Fund, with IOUs, to the Point of Insolvency, to pay for all kinds of Fell Good Programs, there isn't enough Cash, to keep up with our Payments....
  11. Idahoser

    Idahoser Monkey+++ Founding Member

    it will be much easier to picture how all this works if you give up the fallacious idea that it was "his" in the first place. I admit it would be impossible to stop people expecting to get that money "back" as if they were putting it in an account, but that's never been true.
    So what needs to happen is right now, today, stop making a promise that can not be kept - stop issuing SS numbers. We'll find a way to deal with the mess already made, if we can stop digging.

    Back in high school I had a teacher that claimed he had posted a bond and opted out of SS, but I believe somewhere along the years since I found out that the option he'd exercised had been closed. Wouldn't have mattered anyway, I never had the discipline before now to do it, but it was nice knowing it could be done... but no longer.
  12. BTPost

    BTPost Stumpy Old Fart Snow Monkey Moderator

    In Alaska, our Public Employees, are in the State PURS Program, that replaces Social Security... AlaskaChick gets paid by both, PURS for the 10 years she spent working in the local Hospital & as a School Nurse, and SS for all the other Employment she worked... Makes a nice income for her, for the rest of her life... Me, I get SS, and my small Paycheck, from the Cannery....
  13. duane

    duane Monkey+++

    Social security is indeed a Ponzi scheme, but so is our present financing of government. Problem with Social security is that they stole the money and put all of the crazies, mentally challenged, disabled, etc on it and closed the state institutions, homes, etc, and pay with it with our social security and not the general tax funds. Haven't done well with IRA and 401K plans, banks and stock market made out real well though. Lost all of in back in 1980's when the Real estate trust I had invested in went under, it was guaranteed, yep the money is gone and there was no fraud involved so its gone. Lost money in stocks in 2000 and 2008, took what we had left and put in bank on CDs, were paying 6 % and although less than 1/3 rd what the pension it replaced would have paid, was still something. Now paying .5 % and a years payout is about equal to 3/4 of a month payout on the pension it improved on. Most people who work for a living will never have any money to retire on other than their house. Do away with social security and we will either be paying some other assistance to the elderly or they will be dying in the streets. We don't die at 55 anymore and with 2 + % inflation, you would need 200,000 to last from 65 to 85., and that is only 10,000 a year, about half of what most people get for social security..
  14. oil pan 4

    oil pan 4 Monkey+++

    When social security reaches its only logical conclusion and is cut off we will have old people dieing in the streets.
  15. natshare

    natshare Monkey+++

    Besides which, if you're earning a goodly sum of money now, you'll probably need that SS, to help pay your rip-off Medicare coverage you'll get, around that same time frame.

    Friends of mine just found messaged this to me, today. He's retired Navy, who came in the same time I did, back when we were promised "lifetime free medical", if we did 20 years and retired. This is his wife's message:
    "2017 I have to sign up for Medicare a and b. Totally flippin' out. We currently pay $580/annually for family heath plan. When I turn 65, the payment drops to half what we pay now, but my medicare b payment, which is based off our joint income, will be over $1700/annually. When he turns 65 the same thing happens. Also if any VA facility is used for anything other than service related injury, we would pay 100%."

    So much for "lifetime" and "free", huh?? SMDH :mad:
    Yard Dart likes this.
  16. stg58

    stg58 Monkey+++ Founding Member

    I have looked at my retirement as a three legged milk stool.
    1) My fully vested non-union pension
    2) 401K
    3) SS
    1 & 2 are very healthy SS not as healthy but as long as we get something it should work.


    This is not in our plans.
    Adjustable Strap-On Milk Stool
  17. Pax Mentis

    Pax Mentis Philosopher King |RIP 11-4-2017

    Triple dipper here...PERS, SS and VA Disability Comp for 100% service connected disability...the really fun part is that most of the disability, while it was caused by my time in Vietnam (Agent Orange exposure) didn't actually start until I was already retired on a disability. Not to mention that I wasn't expecting the disability so I had made other plans anyway. And people wonder why the federal budgets are so crazy.

    stg58 likes this.
  18. TnAndy

    TnAndy Senior Member Founding Member

    No, you were right the first time....it's always been a Ponzi scheme.

    Very first person to get benefits under the program was Ida Mae Fuller. Retired late 1939. Paid in $24.75 in SS taxes, lived to be 100, died in 1975, and collected $22,888.92 in Social Security benefits over the course of her retired years. Her first check for $22. By the 2nd check, she was paid back all she paid in, and from then on, it was OPM...other people's money. Same today. The average retiree gets back all they paid in plus a reasonable rate of return in a few years, and from then on, OPM.
    The real problem was when Ida Mae retired, there were 16 people working to support each retiree......now it's close to 2.

    All Ponzi schemes fail when there aren't enough coming in the bottom to support those taking out the top. This one would have too, but for the general tax money, lately created largely by printing, being paid out. Alan Greenspan testified before Congress 20+ years ago that "The checks we can guarantee indefinitely.......but not purchasing power".......meaning they can pay you, but good luck buying anything with it.
    Homer Simpson, 3cyl and VisuTrac like this.
  19. ghrit

    ghrit Bad company Administrator Founding Member

    In the long haul, SS cannot carry itself. To do so requires that the population expands continuously, exactly as Ponzi schemes (and certain sales schemes) depend on new blood. If the fund had been left alone to grow as intended, it MAY have stood a chance, but when the actual funds were rolled into the general fund and replaced by IOUs, the whole deal is doomed to collapse of its own weight. It helped not at all that the coverage was expanded to deal with other things as well as provide a retirement income survival MINIMUM. The whining has not begun ---
  20. oil pan 4

    oil pan 4 Monkey+++

    Yeah in the not to distant future a loaf of bread will cost $100 and social security checks will still be in the $1,000 to $2,000 per month rangel for most people which won't even pay the power bill.

    Supposedly if you believe the congressional budget office, when you average everyones who has paid in, collected and died they earn about 3% over what they paid in.
    That's if you believe the house of professional liars, thieves, con men and drug addicts.
    I can do better than 3% if the only time I ever work on my investment portfolio is when I'm taking a shit.
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