Social Security Benefits

BOSTON -- We may be about to rid ourselves of the Social Security earnings penalty -- and it's about time. Congress is supposed to consider eliminating it this year, and President Clinton has said he favors eliminating it. Opposition to the proposal has yet to surface. And the budgetary arguments against it, always based on suspicious economics, have been weakened by a surging economy. The earnings penalty applies only to wage income. In other words, if you're over 65 years old and not yet 70, you can earn thousands or millions of dollars from your investments and still draw full Social Security benefits.

Baltimoresun.com's tax advice column features three experts from the Hunt Valley accounting firm SC&H Group answering questions about preparing your return. Here is an edited excerpt of this week's column: In 2005, I had less income and more deductions than usual. The results were a bottom-line deficit, even after including my [self-employment] tax. The [self-employment] tax was $1,802. I am in my 70s and collect Social Security, even though I am still working full time. Nowhere does it say that I still need to pay the $1,802 [self-employment]

Last week, Social Security beneficiaries learned their benefits would go up 3.6 percent next year. That's about $43 a month for the typical check of $1,186, according to the National Committee to Preserve Social Security & Medicare. But the concern was that increases in Medicare Part B premiums would eat up that raise in benefits. The Department of Health and Human Services announced today that the premium would only go up by $3.50. That means, according to the national committee, seniors over the age of 65 who paid $96.40 a month for Medicare Part B will pay $99.90 next year.

WITH Social Security reform drawing ever nearer, you need to give some thought to how it might change your life.Nothing certain can be said until a program has actually passed. But a few general principles permeate all the plans for change. Here's the state of play:Social Security won't be allowed to die or be turned into a purely private program. It's the most popular government benefit ever, and will be retained.But it will change. The current system of taxes and benefits cannot support all the boomer retirees, and everyone knows it.The time for fantasy and denial has just about run out. Under current law, the first of the boomers will start drawing early retirement benefits just 10 years from now, when they turn 62. Soon after that, the trickle will turn into a flood.

WHEN Barry Goldwater floated out the notion that Social Security should be made voluntary, he put the fear of destitution into his most dedicated supporters and doomed his 1964 campaign. Ross Perot may have just done the same thing.It began innocently enough, with his seemingly generous suggestion that "people like me" should pay taxes on Social Security benefits. Apparently he was ignorant of the fact that the highest earners over 65 have, for the past eight years, been paying taxes on half their Social Security benefits.

WASHINGTON -- Deficit-reduction proposals being discussed by the Clinton administration, especially those curtailing Social Security benefits, are finding plenty of congressional critics.A senior Treasury official said yesterday that the administration will propose reductions in the rate of growth of Social Security benefits, but the Senate's chief tax writer, Daniel Patrick Moynihan, D-N.Y., said that freezing the benefits would be a political "death wish."Deputy Secretary of the Treasury Roger Altman said in a television interview aired yesterday that eliminating the annual cost-of-living raise in Social Security payments is under consideration as the White House puts together its economic plan.

Washington. It now seems certain, no matter who wins the presidency in November, that affluent older people are going to contribute a lot more money for Medicare, and pay more taxes on their Social Security payments.That is as it should be. Aged citizens fortunate enough to have large incomes in their retirement should eschew greed and welcome changes that take economic burdens off their children and grandchildren.Democrat Bill Clinton said Tuesday on NBC's ''Today'' show that he wants to raise the portion of Social Security benefits (now 50 percent)

The trustees of the Social Security Administration really started something with their recent warning that the system could run out of money in 2029, seven years earlier than projected only a year ago. For fortysomething Baby Boomers, loudly worried about their Golden Years, this sounds a warning for their middle-Seventies. For twentysomething Baby Busters, this enlarges alarums that there may be nothing left at the trough when they retire. As for real single-digit Babies, we're talking about their whole financial future.

WASHINGTON - President Bush lashes his presumed Democratic challenger as a proponent of taxing Social Security benefits and raising gasoline taxes in a new television commercial, released yesterday, that underscores the increasingly acrid tone of the presidential race. The president's advertisement, expected to target 18 key states, is the fourth to attack John Kerry by name since the Bush campaign went on air three weeks ago. Its central premise, expanding on recent Republican attacks, is that Kerry's record shows him in favor of raising taxes in a variety of ways - pointing to what Kerry would do if elected president, Bush aides said.

Washington. -- Here you only get in trouble for telling the truth.I have on my desk the infamous Clinton budget memorandum citing the Social Security, Medicare and other government cuts that would meet Bill Clinton's promises. Prepared by budget director Alice Rivlin, and leaked to the press, it's an extraordinary public document.What it does is take voters to where no politician had ever led them before: to the truth. The president talks often of ''deficit reduction,'' of ''reforming welfare as we know it,'' of middle-class tax relief, of ''investments'' in people through Head Start and an expanded national-service program.