Seniors are not getting the Social Security benefits they deserve after years of working and paying taxes. Because of bad and misleading information from Social Security itself:

• • The typical retiree is leaving $182,370 (in present-value terms) on the table by claiming benefits too soon.
  •  13,000 plus widow(er)s collectively have lost $130 million in Social Security benefits because of mistakes in claiming spousal benefits. (Apparently, Social Security routinely gives out bad information.)
  • Married couples also lose thousands of dollars because they make mistakes in claiming spousal benefits.

If retirees make a mistake in filing for benefits, they usually cannot correct the mistake – even if it was based on bad advice from SS personnel. But if SS makes a mistake, it can insist on getting its money back decades after the mistake was made. Examples:

• Social Security Sues 32-Year-Old for Benefits He Received 21 Years Ago, at Age 11.
• Social Security Demands Widow Repay $300,000 for Its Own Mistakes
• Social Security Claws Back an 81-YearOld Widow for Benefits Allegedly Received 45 Years Ago
• Social Security Demands $24,436.60 from Retiree. Cuts Off Monthly Benefits When He Doesn’t Pay

Social Security sends about two million beneficiaries “clawback letters” every year, trying to reclaim $21.5 billion in overpayments.

Social Security takes as much as 50 cents out of every $1 of benefits when early retirees return to the labor market – even though the economy needs their services. When this tax on earnings is added to income, payroll, and Social Security benefit taxes, middle-income seniors can face a 90% marginal tax rate.

The Social Security benefits tax along with taxes on IRA withdrawals and pension income are not indexed for inflation. As a result, taxation by inflation hurts seniors more than any other demographic group.

The required distributions from tax deferred accounts is actually bad for the rest of the population. They force seniors to take money out of the capital market (where it is creating jobs and contributing to economic growth) and entices them to spend on personal consumption instead.

Medicare enrollees should be able to have Roth Health Savings Accounts. Enrollees in Medicare Advantage plans should be able to switch plans whenever their health condition or their provider network changes. MA enrollees should be able to return to Medicare without financial penalty.

References:

Agenda for Seniors