Jack Welch collects over $1000 a month in Social Security benefits.

I worry about Jack Welch.

The former CEO of General Electric is going through a divorce. According to info on the front page of the Wall Street Journal yesterday, the man has two homes in Connecticut, two in Florida, and two in Mass. (Nantucket and Lenox). He has personal assets of a mere 456 million, and his current income from consulting is a paltry 1.4 mllion a month! The poor dear is shelling out $5480 a month on country club memberships! He spends $1482 a month on vacations, alone!

Luckily, though, he collects Social Security. Yep, that’s right. If you are a working American and contributing to SS, your money in part is going to keep this nice multizillionaire from sliding out of the ranks of the ridiculously rich down into the ranks of the merely filthy rich.

It says he collects about $1000/month, after taxes, which admittedly are probably sizable. I figure that amount of money just about covers polish for the front door knob of the house in Nantucket, which would make me proud every time I went past it, if I could afford to take my wife and young son out there for vacation.

Seriously, I am not normally much for class warfare, and I don’t blame Mr. Welch personally, I mean the checks show up with his name on them, what is he supposed to do, not cash them? He also has a charitable foundation that contributed 3.1 million last year, to unidentified causes. But is it time yet for “means testing” for Social Security? Was it really intended as an income supplement for super-wealthy Americans in an opulent retirement? How about if you are a 65 year old male and have a net worth of over, say, 5 million dollars you don’t get any benefits?

Comments?

Well, if not for the Social Security income Jack might be forced to serve cat food pate at some of his parties. Now wouldn’t you feel badly about that?

How can you claim social security while still employed?

Could we see a cite confirming how much SS he’s claiming?

Sorry Francesca, I haven’t found this info online yet. It was in the print version of the US edition of the WSJ yesterday, front page first section, fourth column. The title of the article is “Here’s the Retirement Jack Welch Built: $1.4 million a Month”. The writer of the article is Rachel Emma Silverman. The Social Security figure is near the bottom of the page: “He (Welch) also gets $1,000 a month, after taxes, in Social Security.”

I will try to find this info online today, but I am “firewalled” out of the SDMB at work, so it will be a while.

Sorry Francesca, I haven’t found this info online yet. It was in the print version of the US edition of the WSJ yesterday, front page first section, fourth column. The title of the article is “Here’s the Retirement Jack Welch Built: $1.4 million a Month”. The writer of the article is Rachel Emma Silverman. The Social Security figure is near the bottom of the page: “He (Welch) also gets $1,000 a month, after taxes, in Social Security.”

I will try to find this info online today, but I am blocked out of the SDMB at work, so it will be a while.

There’s one basic problem with trying to “means test” Social Security, in other words, treat it like normal insurance, where the benefits go only to those who need them. The problem is that it would reward the spendthrifts, and discourage saving.

Say I scrimp and save all my life, and build up a nice nest egg. My neighbor blows all his income on expensive vacations, fast cars, and wild women. Now we both retire. Since he’s now broke, he gets a nice, whopping Social Security check. Since I have some money, I get much less. Does that seem fair?

Maybe there’s some other way to do it, but every scheme I can think of quickly produces an instance of The Law of Unintended Consequences.

As much as I hate the situation and think it sucks rocks, the fact is, the guy paid into SS with his paychecks all his life and thus gets to collect on it at a certain point. The deal with SS isn’t that you get it if you need it, the deal is that you pay it and then you get it. Is that fair? Sure, as in, it follows the same rules for everyone.

Personally, if it were up to me, I would make Social Security opt-out, so that I could remove myself from the process, not pay into it, and then could choose to do with that money as I saw fit - buying a lot of gum, investing it in the stock market, or putting it under my mattress, and I forfeit the right to bitch when I’m 70 years old and only own gum or worthless stock. But until that day, the rules seem to work this way, and that means multi-millionaires get the same SS that dear old Aunt Mabel gets.

“Since he’s now broke, he gets a nice, whopping Social Security check.”

Ask an elderly person if $1,000/month after taxes is “whopping”? :rolleyes:

Lagomorph: You’re complaining about this but not of the other, far more wrong, inequities of the Social Security (SS) system?

For example, women are punished for being housewives. Under the current rules, a married woman is not entitled to her benefits if her husbands scheduled SS benefits (or overall salary average, I can’t remember which) is at least 2X hers. For example, if I were to receive $800/mo. from SS and my wife were to receive $350, we would only receive $800. Then, if I die, under the current system my wife would not get my $800 but would then start collecting on her $350.

Frankly, it is truly nothing but a transfer program that benefits middle and upper class white women the most, very likely the class of people less needy of SS. In short, it is a pension plan for the middle class/rich and of the white. Do you realize that the avg. lifespan of a black male in the US did not even reach 65 until the late 1980’s? Of what benefit is SS to the black community if over 50% of the principle wage earners (and therefore the bigger SS checks) die before they can start collecting? How much SS money is a black female, who has worked for cash the majority of her working life (and there are a lot of people like that out there, trust me), going to collect?

Plus, the SS tax is severly regressive, possibly the most regressive tax in the country. It is a terrible burden upon the poor and middle class, taking over 12% of their income (with medicare taxes adding another 4-odd% on top of that). There is a cap on the wages that are subject to the cap, somewhere around $75-80,000. Anything above and beyond that is not taxed for SS purposes. This means that George Lucas (who made over $100 million a year over the last two years) paid off his social security taxes around 12:22am, January 1st.

SS is an increasingly bad investment as time passes, and we have actually passed the point where children born today will actually gain a negative rate of return on their SS money!! I cranked out the numbers a few years ago, and the ROR on SS has taken a big dive since about 1981. Back in 1997, I remember that a child born then would get back 101.7% of the money they paid in - if you paid in $100,000, you will get back $101,700 over the course of your retirement (and back then I assumed that the retirement age would be 65, which is wrong today, and which skews the numbers even more in favor of the government and against the taxpayer).

What most people don’t understand is this: SS is a TAX, and the payments are an ENTITLEMENT. It is not an INVESTMENT, nor is the money GUARANTEED. So, so many people don’t get that the only reason they get money is because Congress votes the money to them. There is nothing that is preventing Congress from stopping payments whilst continuing with the taxes other than fear of public riots.

The Supreme Court ruled as such in a famous 1960s case (Nestor vs. Fleming, here’s the ruling if you want to read it) where a Bulgarian Communist sued the SS Administration (SSA) for his funds. The court ruled that there is no property rights in regards to SS, and that it is an entitlement, not something that is owned. They even went so far as to make the government stop selling SS as a pension/insurance-type plan, and to stop referring to the tax as a contribution.

So, honestly, complaining that Jack Welch gets what is rightfully his, both by law and by public sentiment, kind of ignores the real problems with SS.

Oops. My link didn’t work. Let me try again:

Nestor vs. Fleming

Could you clarify what you mean? If a woman has been a housewife all her life, she has never paid any money into social security and has $0 benefit on her own. If she has worked, she gets her own benefit entirely independent of her husband’s benefit. Perhaps you are referring to disability benefits? Even so, I would like a cite (the horse’s mouth is www.ssa.gov) to the particular rule you have in mind so I can figure out what you mean.

SS provides survivor and disability benefits so that upon an early death benefits go to the survivors. These “transfers” of survivor benefits go to widows of all races and economic levels. Your argument seems to be that the benefit is disproportionate.

I agree that is is difficult to keep the terminology straight; in my view, this is because the ss program is a hybrid between a tax program and a pension plan.

According to the ssa website, the maximum monthly retirement benefit (for someone retiring at age 70 who has worked continually at compensation levels above the annual ss tax max-out point) is about $2,100, so this is the most Jack Welch would be getting. Survivor with children benefits can go higher.

I thought once you were eligble for SS you still had to sign up for it and it did not come automatically.

Art

Who are you mad at?

Jack Welsh for taking the money that is owed to him? He paid into SS his whole working life. He probably donates more money to charity a month then he gets from SS. Hell, if he is still working then he is probably paying half of that back in SS taxes in his paycheck.

The United States government for allowing anyone who paid into SS to collect benefits? SS money was suppose to be in addition to your personal retirement savings. You can’t encourage people to save for retirement by telling them if they do too good of a job then they will lose the benefit. They could change the laws, but I doubt that will happen with out a lot of public protest.

P.S. In response to TwistofFate’s question.

A few years ago you could not collect SS benefit if you were working and making more then a certain amount of money. The amount of money you could make and still collect benefits was very low causing some seniors to not be able to work very much.

Now, once you reach full retirement age you can collect full benefits and work as much as you want. However, SS tax is still collected from your paycheck.

Ea

I’ll complain about what I want, you complain about what you want. Deal?

In conceivable, I’m not necessarily “mad” at anyone, I just think the situation is bizarre. It seems like we are already into Early Out’s unintended consequences. You can’t tell me SS was implemented with this kind of situation in mind. And I don’t see what is so inconceivable about people paying a tax without necessarily getting the money back later. Most taxes work this way

It seems to me that SS is more of a Ponzi scheme than anything else. It depends on the people just entering the program to pay off those leaving the program, correct?

I’m probably going to regret mentioning this, but I work for Social Security. Under regulations which went into effect in 2000, as In Conceivable pointed out, once you reach age 65 you can collect your full monthly benefit regardless of your wages. Prior to that, there were two separate earnings tests to determine how much Social Security you could collect; if you were 65 or older you could earn more than if you were under 65 before it affected your benefit payments. At one time, there was also a monthly earnings test, which allowed a person to collect benefits in any month they earned under a certain amount; a change in the law restricted the applicability of this monthly test to your first year of entitlement after it became apparent that too many people who were in a position to control their income were taking advantage of this rule to do things like receive their annual salary in a single month and then collect Social Security benefits for the other eleven months.

On the subject of benefits being paid disproportionately to the taxes paid in, I can offer two contrasting examples:
When my mother died she was under age sixty and my youngest brother was over 18. Of all the money she had paid in Social Security taxes, nobody will ever collect one penny in benefits.
I once processed a case in which paternity was established for a child which was born after the father’s death. The father had been around twenty years old and his total lifetime wages had been about $20,000.00. The child was entitled to a monthly benefit of several hundred dollars which, assuming the child collected benefits for the full eighteen years, meant a total lifetime benefit of $60,000-$100,000.

Finally, I have a question for JohnT: where are you getting your figures in this statement:

The current Social Security tax rate on wages is 7.65%, with 6.2% going to retirement and disability benefits (and subject to a earnings cap) and 1.45% going to medicare benefits (and not subject to any cap).

One problem is that you only pay on the first xxxx.xx dollars of income (I’m not sure of the current number) and that hasn’t kept up with inflation.

But of course this method has been tried over and over, and is still used in places around the world. It was the method in place in the US at the time of the depression starting in the 1930’s and it just couldn’t be maintained. People demanded that something be done.

Most people today have never experienced and cannot conceive of an economic depression like that of the 1930’s and the political effects of an unemployment rate of 25%.

Well, yes, but your employer has to match that contribution dollar for dollar. The employer simply passes on that tax to the employees by paying him less per hour. It’s an indirect hit, but a hit nonetheless.

Only $1000 per month? My father should get about that & he worked for only $444 or so per month. It seems to me welsh should have a higher payment.

This happens with military too. I know some old officers who get around $7000 per month in pension & get SS on top of that. They don’t need it but they get it…sigh