An Overview of Social Security Disability Insurance

The annual report from the Trustees for the Social Security program indicates that this fund is starting to show deficits. The main cause of the problem is the "baby boomers" effect. In 2004, the annual deficit for the year 2033 was $300 billion, so it is projected to exhaust Social Security reserves in 2041. This issue has became "The Third Rail of American Politics," in other words, if they touch it they are considered dead. Some presidential candidates offered during their campaigns to solve this problem, but it looks like their proposals did not take into account the current crises in Wall Street and in the housing market.

I never worked but want to apply for early retirement benefits (age 62) on my husband's account. My husband says he is going to continue working. Is this a problem?
Yes. Generally, a spouse cannot collect on their spouse's account until their spouse begins collecting. There is an exception, however. The working spouse can "file and suspend" (apply for Social Security benefits and then immediately apply to suspend collecting benefits). I intend on applying for early retirement (age 62) but I will work part-time. Do I have to pay Social Security tax on my earnings?
Yes. Everyone who works, even those collecting Social Security benefits, must pay Social Security tax on their earnings. The maximum amount of your benefits subject to income tax is 85%. It may be lower, depending on your Modified Adjusted Gross Income.

Taxpaying workers feeding the Social Security tax are declining as qualified recipients increase. Additionally, the elite sophisticated citizens have used legal means to opt out of paying the Social Security tax. Social Security is not an iceberg waiting to financially sink our economic system. It is an illusion, because entitlements are void of any guarantee of future benefits.

One idea was to increase the payroll taxes by 2% and over a 75 year period, the deficit problem was expected to be resolved. However, the future deficits are growing so large that this modest tax increase will still leave a large shortfall. Social Security's impending crisis cannot be resolved with this small tax increase.

The government also claims to provide for the medical care. But that does not cover everything. There are certain tests like the blood test every month or six month for a diabetic for which the individuals have to pay form their own savings.
Recent developments in media raised another concern. The media and politicians are concerned that the social security will become insolvent in near future and therefore to meet such challenges the government should either increase payroll taxes or decrease the benefits that it extends to the retirees.

In a summary of the CBO's findings, the credit crunch and subsequent "Great Correction" moved a future Social Security crisis into the present tense. In fact, the whole issue is now worse. Stock market crashes and unemployment plights, like those we've suffered lately, have long term, arguably irreversible effects on wages, income inequalities, retirement plans and tax revenues. All of these negative effects will pile on top of Social Security at a time when it's already bearing a heavy load.

I will continue to provide examples of things we need to learn, the secrets of the insiders, as part of being savvy with our money, and introduce alternative wealth creating strategies, in future articles and updates at my blog over the next few weeks.

For in a long time now, the payments given by the social security programs were free of tax. This was the setup since for the most part of the grantees life, the grantees were paying for their social security record.

So why aren't they talking about this plan? Because it does two things they hope you never learn: 1) it exposes the truth about the financial problems of Social Security (and in the process their lies); and 2) it shuts the door on their continued mis-use of your future benefits for their pet projects...projects that often times do little more than to line the pockets of many of their biggest campaign contributors (like the bridge to nowhere).

The minimum contribution is mandated for all employed persons, but anyone with a Social Security number can have a SSRIA.