DOASKDOTELL BOOK REVIEWs of Tomkiel’s Social Security Handbook; Stein and DeMuth: Yes, You Can Still Retire Comfortably! ; Damp: The Book of U.S. Government Jobs; Lynch: But I Don't Want Eldercare


Author (or Editor):  Stanley A. Tomkiel, III

Title:  The Social Security Handbook (Version 4)

Fiction? N

Publisher: SphinxLegal (Chicago) 

Date:  2004

ISBN:  1-57248-395-4

Series Name:

Physical description: paper, 342 pgs, indexed

Relevance to DOASKDOTELL: social security, government benefits, “socialism”


This book is intended to help any person intending to apply for social security retirement or disability benefits. (It has a brief section on Supplementary Security Income, SSI, which is a tax-funded welfare program administered by SSA but not funded by FICA taxes). It is well laid out in chapters and sections, although at first glance the reader may think that the book section numbers correspond to SSA rules. Apparently do not.

The most “controversial” area of the book deals with the earnings limits for persons who start SSA benefits between age 62 (the earliest possible age) and full retirement age, which increases with birthdate. (For me, born in 1943, it will be 66.)

The benefit is reduced by an actuarial formula (which Tomkiel explains in detail) intended to reflect the longer payout period with the same expected value of benefits. One would ask, then, why are benefits reduced if your earnings go over a certain amount for a year? If you put in the contributions, why aren’t they yours?

That sounds like an ideological question. President Bush would like it to work that way, with privatization. But Tomkiel stays with how the system works now. The basic concept is that the retirement program is viewed as a kind of unemployment “insurance.” Between ages 62 and FRA, public policy recognizes that a senior will have a harder time working, but it would like him or her to have an incentive to practice good faith in work attempts. Remember that when Social Security was invented, it was viewed as a pseudo-welfare program, where working people support the aged. The problem is, then, demographics, as the pool of beneficiaries increases and workers, relatively speaking, is smaller.

There are some particular problems and ambiguities with self-employment. Income from self-employment is counted against limits when it is paid. But a beneficiary younger than FRA is not allowed to “hide” compensation by shifting it to family members, hiding it as investment income, or asking clients to postpone payment. A self-employed retiree should not start offering services “for free” just to stay within limits. SSA is especially picky with the issue of business ownership, particularly when the business is a partnership or corporation. (Technically, any self-employment endeavor would at least be a proprietorship.)

Tomkiel explains the concept of “grace year” and non-work month, which is not clear on the SSA website. A non-work month is a month during the grace year where the recipient earns less than a set maximum (so he can get paid for that month) and stays within the 15-45 hour self-employment rule. (It is not necessarily a month with no work.)

Tomkiel does list the kinds of income that do not count against limits. He adds “hobby” income which the SSA simply lists as “other” on its site. (The IRS describes a “hobby” as ordinary income unless the taxpayer takes business deductions for the hobby and can show an accounting profit for three out of five years—I don’t seen that Tomkiel mentions that point explicitly. Any self-employment income including “hobby” income is subject to self-employment FICA tax if it generates more than $400 in income in a year.) I don’t see that Tomkiel mentions IRA withdrawals (after age 59-1/2 there is no penalty but they are usually taxed by the IRS as ordinary income) as a non-work income item; The SSA website definitely does mention this.

There is a theoretical issue for writers who self-publish and set up at least a proprietorship in order to get ISBN numbers from Books in Print (or similar numbers for magazines or movie DVD’s or for songs). I don’t see much about this in the literature or in Tomkien’s book. It seems to me that the income from this would be subject to earnings limits in the same way as self-employment. If the income level is very small before the person starts benefits and if the benefits claim is largely based on FICA-covered earnings from conventional employment over the years, I do not believe that this presents problems as long as no money is “laundered.” A writer in such a position is, however, announcing publicly that he or she would probably like to work again and earn more, which might in the future exceed earnings limits. He or she should keep careful records of time spent and funds received even for a very small business activity. It does seem to me that it is acceptable for the below 62 retiree to re-enter the workforce with a new career or with self-employment (freelance writing, renovating property for resale, cooking or gardening, sports, leisure businesses, any activities that often attract seniors).

There is not enough attention to the issue of senior employment, even with the efforts of the AARP.  Sometimes “retired” seniors, because of a combination of varied experiences, may suddenly be approached by an employer or company that would need someone who can connect the dots among normally unrelated but specific activities, because of sudden changes in the legal, technological, political or international climate. 

Tomkiel does give a lot of details about complex family situations involving spouses, widow(er)s, dependent children, eligibility on more that one account, disability, and family maximums, and these do not apply to me personally. From all that I see, however, it seems always true that every worker has his or her own eligibility first.

Link to social security discussion    social security retirement notes (has many SSA links)

Ben Stein and Phil DeMuth. Yes, You Can Still Retire Comfortably! The Baby Boom Retirement Crisis and How to Beat It. Carlsbad, CA, New Beginnings Press, 2007. Paper, 220 pages, indexed. ISBN 1-4019-0318-5. 11 Chapters.  The authors start out with 21 basic rules, and these include saving, home ownership, and getting and staying married. In time, they drop much concern with family values as such (although the tone of the book is certainly conservative) and give increasingly detailed advice on how to build and maintain retirement nest eggs. One of the biggest points is to save more than others do (if everyone did, the strategy wouldn’t work). The authors talk askance about not only the current situation with social security and Medicare but the neo-conservative plans to privatize it. They think real cuts and means testing are likely eventually. They also talk about living abroad in retirement, which may be much more feasible and desirable than many people realize, although the falling dollar raises questions about that. The book appears to have been written before the severity of the current subprime mortgage crisis was appreciated. It's interesting to me that the authors don't mention filial responsibility laws (an approaching political time bomb on the social issues side) and only trivial mention of long term care insurance. Blogger discussion is here.

Dennis V. Damp. The Book of U.S. Government Jobs: Where They Are, What's Available, & How to Get One. 1986-2008. Brookhaven Press. ISBN 0-943641-26-8. Paper, 338 pages, 12 chapters.. A handbook, with full-sized pages. The most useful section is about the KSA's (or KSAO's), "Knowledge, Skills, and Abilities".  Blogger.

Terry Lynch. But I Don't Want Eldercare: Helping Your Parents Stay As Strong As They Can As Long As They Can.  Denver: Legal Center for People With Disabilities and Older People. 2008. ISBN 978-0-9970179-6-6 308 pages, paper. Although the title of the book suggests "optimism" in encouraging seniors to be as independent as possible, most of it is very sobering as to the social demands on "adult child" caregivers. Blogger.







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