Most people see Social Security as a contract between you and the government. You pay money into the system and they pay it back at a later date.
Guaranteed by law.
But nothing could be further from the truth…
You have no choice when it comes to paying your Social Security taxes. It comes out of your paycheck automatically.
But did you know the government isn’t under the same rigid contract?
In fact, by ruling of the United States Supreme Court, the federal government is under no obligation to pay you a Social Security check.
They can decide to spend the money on something else at any time.
This is the clear precedent set in the case of Flemming v. Nestor.
Ephram Nestor was an immigrant from Bulgaria. He moved here in 1918 and paid Social Security taxes from the very beginning of the program, 1936.
In 1955, when he retired, Nestor began receiving Social Security checks for $55.60 per month.
But just one year later, Nestor was deported. Turns out, he’d been an active member of the Communist Party in the 1930s, giving the U.S. government grounds to kick him out.
When he was deported, his Social Security checks stopped. Nestor sued the U.S. government, arguing that since he had paid money into the program, he had a right to those benefits.
The Supreme Court ruled against Nestor, saying the government had the right to terminate Social Security at any time.
Interestingly enough, the Social Security Administration has a full page on their website devoted to the Nestor case.
The people who sign the Social Security checks sum it up this way:
"[Nestor] appealed the termination, arguing, among other claims, that promised Social Security benefits were a contract. In its ruling, the Court rejected this argument and established the principle that entitlement to Social Security benefits is not a contractual right."
Read that again…
You have no contractual right to Social Security.
It could end tomorrow, and there’s nothing you can do about it.
President Obama and Congress know this. Obama was a constitutional scholar, after all.
That historical precedent means they have the power to cut Social Security any time they want.
And that’s exactly what they’re doing on April 30 when Obama and Congress will shut down two major Social Security loopholes.
Over 32 million Americans could lose out on as much as $60,000 in extra benefits over their lifetime.
That’s the equivalent of two Social Security checks a year, taken away.
Is there anything seniors can do about it?
Tim Mittelstaedt, the editorial director of The Palm Beach Research Group is one of the foremost experts on the topic. He’s been showing seniors how to use these loopholes to get more money for a few years.
He says there is some good news for seniors.
"There’s a short window of time where seniors can reclaim this money before it’s too late.
You see, the law passed on Nov. 2, 2015. But that means it doesn’t go into effect until 180 days later, which is April 30. If you’re eligible, you can still get a potential $60,000 in extra benefits. But you have to do it before April 30."