Interesting post today over at Home Biz Notes called More Enlightenment on Social Security for the Home Business Owner.
I have always been of the mindset that I would never see my own Social Security benefits. I certainly don’t think we should have this be our only safety net for retirement. If there is one disadvantage to being a home office based business, it is the fact we have to do the double whammy withholding for SS.
I’m pleased you found my posts about Social Security at Home Biz Notes of interest. This definitely is a topic that requires much thought and planning.
True, the disadvantage of what is known as the “self-employment tax” (essentially paying both halves of the 15%+ of withholding - half of which is paid by employers in the non-home business workplace) is only exacerbated by the realization that by the time I’m in my 60s, the Federal Government will have boosted the retirements/benefits age to 70 or so. And even by that time, the cupboard will be bare and I’ll be living with my kids (so THAT’s why I treat them so kindly today ;-).
But in all seriousness, for about the past 10-12 years, I’ve had money directly withdrawn from my business checking account and deposited into my SEP IRA. It’s tax deductable today, and funds my peace of mind for tomorrow. I/we cannot rely on Uncle Sam to provide for me/us. The only people we home officers can rely upon are ourselves. Isn’t that why we started working from home in the first place…?
Grant, I wrote a lengthy post last month on the effect of Baby Boomer retirements on Social Security benefits. You can see it at http://www.pissd.com/2008/01/baby-boomer-ret.html. It might make you feel a little better about receiving your Social Security retirement benefits, but worse about getting Medicare.
Bob Kraft
Grant, you’re probably okay for Social Security. From what I can see, most of the Boomers will probably keep working as long as they can. That’s one of the things about our dynamic economy - it allows rapid adaptation. But make sure that your kids plan early - I’m not sure that there will be any safety net for them.