Oh, and by the way, it is funded by your contributions, not your income tax. So cutting Social Security won't cut your income taxes one bit. And it certainly won't cut the taxes of the Billionaire Republicans who keep proposing we cut it. So why is it they want it cut? Simple. Desperately poor people are people you can easily manipulate. Every dictator in history came into power when people became financially desperate. And some made sure people became desperate, just to gain power. But I digress.
As I noted in another posting, the amount the "average" person gets out of Social Security is indeed more than they pay in. But it is also, in a manner of speaking, about what they paid in, and about 4% interest. In other words, Uncle Sam is borrowing money from us, and paying us back at savings bond rates.
But there is another group of people who also might not collect Social Security - or not much of it - and that is spouses. According to one source, a spouse has to be married for 40 quarters (10 years) to collect on her husband's Social Security (even if they later divorce). Serial divorcees may be out of luck.
If a spouse doesn't work, they don't get Social Security on their own. You might get it, of course, but when you die, your spouse may only get a pro-rata share of your monthly payment. And this can vary wildly based on when you decide to take Social Security. Often a spouse is shocked to discover, after the death of their husband, for example, that they now have to get by on less than 3/4 of what they were receiving before. And yet their monthly expenses haven't dropped that much.
There are - or were - games one could play to maximize Social Security for married couples. One game was called "file and suspend" which, like the drinking age laws, was changed just before I could take advantage of the situation:
"Here is an illustration. Suppose a married couple, Ken and Lois, have just turned 66. Lois wants to retire at 66, while Ken wants to work until 70. Ken's monthly Social Security retirement benefit would be $2000 if he claimed them at age 66. Lois' monthly retirement benefit at age 66 is $900. If she could claim spousal benefits, her monthly check would be $1000, one-half of her husband's age-66 benefit, but Lois cannot claim a spousal benefit unless Ken files for his own retirement benefits. Ken wants to let his Social Security benefits continue to grow until age 70, when his benefits will grow to $2640 per month (This increase comes from Ken's "delayed retirement credits.")
Taking advantage of the file and suspend option, Ken can file for benefits at age 66 and then immediately suspend receipt of those benefits. His monthly benefits will, as a result, continue to grow, so that he can get the delayed retirement credits and receive at least $2640 a month when he claims benefits at age 70. With Ken "filing and suspending," Lois can now claim spousal benefits of $1,000 a month while letting her own retirement benefits grow until age 70. At age 70 her monthly retirement benefits, which will grow because of delayed retirement credits, will be $1188 (=$900×1.32). At age 70 she can claim the higher retirement benefits on her own record."The odd thing is that these kinds of schemes were often recommended by the Social Security Administration, not some crafty lawyers. But like all good things, it has largely come to an end, although the original purpose (suspending benefits because you go back to work) is still in place.
Sadly, these kinds of strategies illustrate how many in the middle-class end up taking more out of Social Security than perhaps they need. Social Security is less of a "safety net" than an adjunct to regular retirement planning these days.
And many folks think that maybe Social Security should be made optional, or privatized. And these arguments are compelling when you are 25 years old and 9% of your paycheck is being taken out in Social Security taxes - and you are told again and again by Republicans that "you will never collect Social Security", which likely isn't true.
The reality is, many people find ways to opt out of the system - and then later regret doing so. Once you start getting close to retirement age, Social Security doesn't seem like such a bad thing. If only someone else would pay for it!