I was responding to OldGuy just above me talking about what CurtC had said in the post both OldGuy and you have quoted. Which post referenced Jinx’s money.
I now see Jinx isn’t involved further upthread. I blame CurtC. 
Although in his defense, the idea that SS is a personal savings account and you get your own money back with interest accrued is something I could readily imagine Jinx believing and posting.
However that law doesn’t produce actual money. When the time comes to redeem those bonds for real actual spendable money to send to old folks, the real actual spendable money will either come from tax revenue, from more borrowing, or from the printing press.
The rate at which those bonds will need to be redeemed to pay planned benefits would require a truly huge bump in tax revenue to simply retire all the debt on schedule. A bump that far exceeds political doability. So that won’t happen. That reality will override any dusty old words on a constitution.
They can / will bump taxes some. For whatever shortfall remains either they print the money, borrow it from China / Wall Street, or come up with a way to de facto, if not de jure, default on some of it. Or else simply not pay some of the promised benefits and tear up the bonds which represent those benefits not paid.
Bottom line: IMO you’re speaking legal technical facts. You’re 10% right in that. As far as that goes.
But you’re not speaking practical politically and economically doable facts. When the law collides with reality, the law bends, not reality.
It doesn’t make an exception since it’s a very silly thing to consider as a “real thing.” No one thought that later legislators would try to pull a trick like this.
It isn’t a debt. It’s a nothing. An IOU from yourself to yourself is meaningless. It cannot be considered a debt in any way shape or form.
I’m always a tad surprised when folk pose questions like this to a MB, when there are literally thousands of folk at the end of a 1-800 line and in hundreds of local offices, who are expert in this and whom you are already paying to answer exactly this sort of question with specific reference to your individual account.
Government pension offsets are a real thing. Many (most?) other pensions are not considered earned income. Yes there are limits on earned income for many types of SS benefits. Also, mailed notices from SS are often HORRIBLY confusing - even to SS employees.
Give them a call, or set up an appt to go in and speak to someone who will answer all of your questions. That’s what they are there for.
Quoting myself for a late edit.
The bolded above should read “100% right”. That *should *be obvious, but better safe than sorry.
Yes, it was my fault. I thought I recalled that the OP was by Jinx for some reason instead of JillGat.
To Mr. Tad Surprised, I tried calling Social Security. Not gonna wait on hold forever. That’s why I posted here… for the discussion.
Many responses here are about earned income from work. My question was about income from pensions.
The amount you receive from SS is determined by your wages before you retire. SS is different from insurance in a number of ways. It isn’t for a contingency (unless surviving beyond 62 is a considered a contingency). It sounds, from responses here, like SS doesn’t penalize you for collecting a pension. That’s good, because I don’t think your pension should be relevant to SS.
As an aside, apparently the government dips into the Social Security fund on occasion, such as to help pay for their pointless wars.
Edit: PS, I like the name Jinx
I’m 55 and looking at retirement in the next five years or so, so I’m starting to look harder at this stuff. I have a pension coming, although I’m planning to take it as a lump sum, I think the pension that you take is considered income by the SS. When I take the lump sum, I will roll it over into an IRA account so that I won’t owe income tax all at once.
But there is one other factor that hasn’t been discussed here. The CPAs can correct me if I’m mistaken, but even after full retirement age, your income from pensions and distributions from your IRA won’t reduce the gross amount of your SS check, but if you make too much, a portion of the SS will be subject to income tax, taking maybe 25% from the amount you can actually get (for lower income people, the SS check is tax-free). At moderately higher income (which I expect to have after I have to take IRA distributions), up to 85% (IIRC) of your SS amount will be subject to income tax.
The system has always invested surpluses in US-backed securities. From day one. I’m sorry, but you really are missing basic facts here.
ETA: and the securities held in the trust fund are counted in the intragovernmental debt figures that are always reported as the total of our national debt, so it is quite clear that they are instruments of debt. You clearly do not agree, but the law is clear.
So once I reach full retirement age, I can collect my full SS amount while continuing to work, with no limit on my earnings with regard to affecting my SS amounts?
In other words, I could continue working at my full time job and, one day, begin collecting SS payments as well?
Am I understanding this correctly?
mmm
That is my understanding.
That’s my understanding as well. But …
Beyond a certain total gross income some or all of the SS payments become subject to income tax. Which some people twist into saying that you’re losing part of your SS payments. Not really. You still receive 100% of your SS payments. Just like you receive 100% of what you withdraw from your IRA. But as a conseqeunce some money must be sent to the IRS as income tax. Money which may or may not have come from either of those sources.
https://www.irs.gov/uac/are-your-social-security-benefits-taxable is a quick ref. It’s from 2010, but other than the dollar thresholds the rules are the same today. That link also has a ref to the relevant IRS pub for more details.
And what do you want SS to do with the surplus $ they collect?
People seem to believe the propaganda that Congress just swings by the vault whenever they want to and scoops out an armload of cash. Of course, it doesn’t work that way.
The SS trust fund is required by law to invest it’s surplus funds only in special available only to the SS US Gov’t bonds which pay, I believe, 2.75%. These bonds are special in that the Gov’t is required to redeem these bonds before any other Govn’t debt. As I understand it, they are the most “senior” debt instruments possible.
The alternative I get from people complaining that the Gov’t is stealing their social security $ is for SS to invest in the private market where a) companies currently pay less than what SS gets from the federal government and b) may default on their debt at any time. Or, the SS Trust fund could invest in the stock market and really go for the return. And oh by the way, talk about being able to move the market. Such a pot of money, in the control of the Government, would be an ideal way to pick winners and losers. I leave it to you as taxpayers and citizens to guess who would be the losers…
Close enough for jazz. Right now the weighted average return on the SS Trust Fund investments - end of November - is 3.042%. That beats inflation by a bit, at least core inflation.
Otherwise, Colibri et al, you’re right. Once you hit your full retirement age you may work to your hearts content and not have your SS benefits reduced.
Info for 2017
Allowable income (pre-FRA): $16,920 without reducing SS income
If you turn 66 in 2017 your earning limit will be $44,880
Here’s the formula for whether you will be taxed:
AGI+(0.5*SS Benefits)+Tax free bond income=Provisional Income
Filing singly…
Income SS Benefit Taxation
25-34K Up to 50%
34+ Up to 85%
Filing Jointly
Income SS Benefit Taxation
32-44K Up to 50%
44K+ Up to 85%