Opting out of Social Security... sort of - Tilted Forum Project Discussion Community

braisler · 02-25-2009, 08:56 AM

So here is the scenario, dear friends. I received a Social Security statement in the mail recently that said that I have 0 recorded income for the past 2 years (2006, 2007). I've been working during that time as a university professor, so I was a bit surprised. So I called the 1-800 number on the form to find out why this might be the case. Sure enough, they have me listed as not having any income for SS. I asked why this would be the case and the SS representative on the phone said that many state universities like mine don't pay into social security because they have their own independent pension systems. Not the case with mine.

After the phone conversation, I looked into it further and found that the line items for SSI payment are indeed missing from my paystubs. I know that I maybe should have looked at this earlier, but not missing any money from my check wasn't a cause for me to inspect it quite closely. To be clear, federal withholding is still taken out of my pay, just the SSI is missing. What I believe happened is that I was previously employed here, at this same university, as a Post-Doctoral Fellow. Post-Docs are considered to still be 'in training' and aren't subject to SSI withholding. Somehow when I got hired as faculty, the SSI never got added back into my pay structure. I've talked with other staff and one other faculty member at work and verified that they are having SSI removed from their paychecks. So it seems to be isolated to just me.

The first question that comes to mind is what should I do about this? I already talked with SS directly on the phone, and they seem to assume that the money is not due them due to some state vs. federal pension arrangement that I'm pretty sure doesn't exist. My feeling is to avoid rocking the boat and just let it slide along under the radar. If it were to ever come to the surface, I would just claim ignorance of the whole situation.

I have very strong feelings about Social Security in general and if I could opt out of it, I would not hesitate. Social Security is a scam, a fraud founded in another era when people rarely lived past 65. The government made the promise of social support to aging workers with the then current actuarial tables to show that payments out of the system would be quite minimal. That is, most people would be dead before 65 or so soon after that payments would be for 1-5 years. Now people are often living to 70, 75, 85 and the whole system has failed. Modern Social Security is a pyramid scheme where the working youth pay for the retired workers of one to two generations ago. I do not believe for one second that Social Security will be around when I am ready to retire. In effect, the government is stealing my money with no intent of ever giving it back.

I guess my concern in all of this is the potential for government penalties and back payment of large lump sums if this does ever come to light. My employer, the University, is the one that made the error, but does that protect me from liability. (This post not withstanding, I could claim no knowledge of the issue). The university is also required to pay in for my employment to SS, so they have a financial liability here as well. Anyone here with experience or knowledge in this area?

An additional slight complication is that I discussed this with one of my co-workers... she was one of the people I compared paystubs with to see if she had SSI deduction when I didn't. In retrospect, this was a mistake. She is a gossip and very nosy. Since I brought this up last week, she has asked me what I am going to do about it maybe 6 times. And she has voiced the opinion that I better get it straightened out right away or there might be bad consequences. Not that she is going to outright turn me in or anything, but she is the type to relate my 'problems' to all of the people she gossips with. So, what, if anything do I tell her? I've already pretty much told her that I've taken care of it, which was my way of telling her that I'm handling things and she should buzz off. But she has pressed for details about what I did, and what the university did, and how they handled the back payments due, etc. Do I construct a lie to hand her that the University is adding back payment to my SSI monthly now and the problem is fixed? Do I outright tell her to mind her own business about it?

Grancey · 02-25-2009, 09:16 AM

Lie to her. The SSI line item is on your paystub now, and everything is fixed. Tell her you got burned by all the back payments you had to make, and that will make her feel better and she will go away. Otherwise, she will hound you. I despise people like that. And, don't ever confide in her again. Now, as to the SS. I agree with you that it is a scam. We will never see it. You could pretend not to have noticed, but, ignorance does not make you innocent. So, if the government finds out that you are not paying in when you should be, then they will come after you. The penalties will be horrendous. I suggest you fix it now. It is a no win situation. This is just my opinion. I have no real knowledge in this area, only fear of what the government can do.

braisler · 02-25-2009, 09:25 AM

Isn't it terrible that we live in fear of what our government will do if we don't actively allow them to steal our money?!?!

Iliftrocks · 02-27-2009, 04:47 AM

It is terrible, but they can screw you over pretty good. I'd try to get it straightened out, myself. Possibly pose a question to a lawyer or something.

Since your benefits out are supposedly based on what you pay in, it might just be that you would just have to start making your payments, or just never get any benefits. But I would be worried about what the feds will think about you "cheating" their big cash cow out of its feed.

ASU2003 · 02-27-2009, 05:32 AM

I would talk with some real financial lawyer or auditor of sorts. I don't really know.

The big issue with the stock market getting cut in half is the realiazation that it can happen. 401ks and IRAs do lose value, and you can't always assume the 8-11% historical growth will happen.

But yeah, social security does need some fixing. Both in raising the mminimum age and the payment amount based on how much you have put into the system. There also needs to be a means testing part to it based on if you have over $10 million or something.

eribrav · 02-27-2009, 04:02 PM

I'm 39 and have already paid a shitload of money to Social Security.

If they came along and said : "Hey, we're keeping all the dough you already paid in, but we're kicking you out now. So long as you agree to waive benefits we won't take any more of your pay."

I would agree in a heartbeat. Even with everything I've already paid in I'm sure I will be better off in the future by just walking away from those contributions.

thingstodo · 03-01-2009, 05:00 AM

I would be careful. Most entities take it out as a requirement. You might make it as long as you don't change employers - until your currrent employer has an internal audit and the discrepency is noticed. Go anywhere else to work and it will be taken out.

02-25-2009, 08:56 AM	#1 (permalink)
braisler Addict Location: Midway, KY	Opting out of Social Security... sort of So here is the scenario, dear friends. I received a Social Security statement in the mail recently that said that I have 0 recorded income for the past 2 years (2006, 2007). I've been working during that time as a university professor, so I was a bit surprised. So I called the 1-800 number on the form to find out why this might be the case. Sure enough, they have me listed as not having any income for SS. I asked why this would be the case and the SS representative on the phone said that many state universities like mine don't pay into social security because they have their own independent pension systems. Not the case with mine. After the phone conversation, I looked into it further and found that the line items for SSI payment are indeed missing from my paystubs. I know that I maybe should have looked at this earlier, but not missing any money from my check wasn't a cause for me to inspect it quite closely. To be clear, federal withholding is still taken out of my pay, just the SSI is missing. What I believe happened is that I was previously employed here, at this same university, as a Post-Doctoral Fellow. Post-Docs are considered to still be 'in training' and aren't subject to SSI withholding. Somehow when I got hired as faculty, the SSI never got added back into my pay structure. I've talked with other staff and one other faculty member at work and verified that they are having SSI removed from their paychecks. So it seems to be isolated to just me. The first question that comes to mind is what should I do about this? I already talked with SS directly on the phone, and they seem to assume that the money is not due them due to some state vs. federal pension arrangement that I'm pretty sure doesn't exist. My feeling is to avoid rocking the boat and just let it slide along under the radar. If it were to ever come to the surface, I would just claim ignorance of the whole situation. I have very strong feelings about Social Security in general and if I could opt out of it, I would not hesitate. Social Security is a scam, a fraud founded in another era when people rarely lived past 65. The government made the promise of social support to aging workers with the then current actuarial tables to show that payments out of the system would be quite minimal. That is, most people would be dead before 65 or so soon after that payments would be for 1-5 years. Now people are often living to 70, 75, 85 and the whole system has failed. Modern Social Security is a pyramid scheme where the working youth pay for the retired workers of one to two generations ago. I do not believe for one second that Social Security will be around when I am ready to retire. In effect, the government is stealing my money with no intent of ever giving it back. I guess my concern in all of this is the potential for government penalties and back payment of large lump sums if this does ever come to light. My employer, the University, is the one that made the error, but does that protect me from liability. (This post not withstanding, I could claim no knowledge of the issue). The university is also required to pay in for my employment to SS, so they have a financial liability here as well. Anyone here with experience or knowledge in this area? An additional slight complication is that I discussed this with one of my co-workers... she was one of the people I compared paystubs with to see if she had SSI deduction when I didn't. In retrospect, this was a mistake. She is a gossip and very nosy. Since I brought this up last week, she has asked me what I am going to do about it maybe 6 times. And she has voiced the opinion that I better get it straightened out right away or there might be bad consequences. Not that she is going to outright turn me in or anything, but she is the type to relate my 'problems' to all of the people she gossips with. So, what, if anything do I tell her? I've already pretty much told her that I've taken care of it, which was my way of telling her that I'm handling things and she should buzz off. But she has pressed for details about what I did, and what the university did, and how they handled the back payments due, etc. Do I construct a lie to hand her that the University is adding back payment to my SSI monthly now and the problem is fixed? Do I outright tell her to mind her own business about it? __________________ --- You do not really understand something unless you can explain it to your grandmother. - Albert Einstein ---

02-25-2009, 09:16 AM	#2 (permalink)
Grancey Life's short, gotta hurry... Location: land of pit vipers	Lie to her. The SSI line item is on your paystub now, and everything is fixed. Tell her you got burned by all the back payments you had to make, and that will make her feel better and she will go away. Otherwise, she will hound you. I despise people like that. And, don't ever confide in her again. Now, as to the SS. I agree with you that it is a scam. We will never see it. You could pretend not to have noticed, but, ignorance does not make you innocent. So, if the government finds out that you are not paying in when you should be, then they will come after you. The penalties will be horrendous. I suggest you fix it now. It is a no win situation. This is just my opinion. I have no real knowledge in this area, only fear of what the government can do. __________________ Quiet, mild-mannered souls might just turn out to be roaring lions of two-fisted cool.

02-25-2009, 09:25 AM	#3 (permalink)
braisler Addict Location: Midway, KY	Isn't it terrible that we live in fear of what our government will do if we don't actively allow them to steal our money?!?! __________________ --- You do not really understand something unless you can explain it to your grandmother. - Albert Einstein ---

02-27-2009, 04:47 AM	#4 (permalink)
Iliftrocks Junkie Location: Near Raleigh, NC	It is terrible, but they can screw you over pretty good. I'd try to get it straightened out, myself. Possibly pose a question to a lawyer or something. Since your benefits out are supposedly based on what you pay in, it might just be that you would just have to start making your payments, or just never get any benefits. But I would be worried about what the feds will think about you "cheating" their big cash cow out of its feed. __________________ bill hicks - "I don't mean to sound bitter, cold, or cruel, but I am, so that's how it comes out."

03-01-2009, 05:00 AM	#7 (permalink)
thingstodo A Storm Is Coming Location: The Great White North	I would be careful. Most entities take it out as a requirement. You might make it as long as you don't change employers - until your currrent employer has an internal audit and the discrepency is noticed. Go anywhere else to work and it will be taken out. __________________ If you're wringing your hands you can't roll up your shirt sleeves. Stangers have the best candy.

02-27-2009, 05:32 AM	#5 (permalink)
ASU2003 immoral minority Location: Back in Ohio	I would talk with some real financial lawyer or auditor of sorts. I don't really know. The big issue with the stock market getting cut in half is the realiazation that it can happen. 401ks and IRAs do lose value, and you can't always assume the 8-11% historical growth will happen. But yeah, social security does need some fixing. Both in raising the mminimum age and the payment amount based on how much you have put into the system. There also needs to be a means testing part to it based on if you have over $10 million or something.

02-27-2009, 04:02 PM	#6 (permalink)
eribrav Junkie Location: upstate NY	I'm 39 and have already paid a shitload of money to Social Security. If they came along and said : "Hey, we're keeping all the dough you already paid in, but we're kicking you out now. So long as you agree to waive benefits we won't take any more of your pay." I would agree in a heartbeat. Even with everything I've already paid in I'm sure I will be better off in the future by just walking away from those contributions.