Next Question:
“My wife just started receiving her social security check … Social Security ‘rounds down’ the amount she will receive … I do not know why Social Security takes any of the money she should receive … What does Social Security do with this money? AND how can they keep your money?”
That was sent into Next from a guy named Bob Booze. Yep. That’s his real name.
It’s awesome, and fitting, since his question surrounds something that could really amount to beer money.
Bob’s wife got a letter from Social Security about the monthly benefits she’s about to start collecting. According to the Social Security Administration, Mrs. Booze’s benefits equal $637.90.
But below that benefit is another line. It reads: “rounding (we must round down to a whole dollar).”
In the end, Mrs. Booze will receive $637.00. He did the math and says 62 million people were expected to collect Social Security benefits last year. If each of the checks was rounded down, on average of 50 cents a month, it'd end up being more than $31 million, according to his calculations.
So, Mr. Booze contacted Next, and we looked it up. It all has to do with a federal budget bill that passed in the 80s, when lawmakers were working to shore up social security.
It appears they changed policy, which used to be to round calculations to the nearest penny, to round down to the nearest dime in their calculations, and the nearest dollar in the final benefit.
The effort, according to reporting at the time, was to save money in the Social Security trust.
The money they save from rounding down goes back to Social Security.
Next contacted the local communications director at the Social Security Administration for further clarification. Like many things related to Social Security, the response is taking longer than expected. We'll let you know if we hear anything.
Have a question you'd like Next to find an answer for? Email next@9news.com.
