Is there any wonder Social Security is in trouble? It’s too complicated for most people to understand, even the people running it in some cases. You have to be a strategic mastermind to maximize your earned benefits. And now some politicians seek to make it worse.
Look up income in America and typically you will see household income. Household income is a measure of the combined incomes of all people sharing a particular household or place of residence. It includes every form of income, e.g., salaries and wages, retirement income, near cash government transfers like food stamps, and investment gains. Not all of these are subject to Social Security taxes.
The median household income was 53,657 U.S. dollars in 2014. However, this is heavily distorted by the oldest and youngest segments of the population as you can see below:
What has this to do with Social Security? Many of those on the left see “fixing” Social Security as having the “wealthy” paying their fair share (it doesn’t fix SS, but that another issue). To do that they would eliminate the cap on taxable wages. So, if you earn $135,000 a year and are single or the sole earner in your family, you would pay Social Security taxes on 100% of your income (and under some proposals receive no additional future benefits)… because you are wealthy‼️
However, if you and your spouse each earn $118,000 a year for a household income of $236,000, you pay no additional taxes because apparently you are not wealthy, but you may receive the same benefit as the person paying taxes on 100% of his or her income
If you earn $110,000 and your spouse earns $35,000, again no one is wealthy except on a combined basis, but your combined benefit in retirement will be your earned benefit and your spouse will received the higher of half of your benefit or her earned benefit and upon your death she will receive the greater of her benefit or 100% of your benefit as a survivor.
Now, if you are that poor wealthy single person paying Social Security taxes on 100% of your income, it’s easy to get even. Get married‼️
If you are married for just nine months, your new spouse can qualify for survivor benefits. And you only need to be married for one year to permit your new spouse to qualify for spousal benefits. Get married one year before you collect benefits and boost your household income … ta da‼️🤑