Deleted
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Post by Deleted on Aug 8, 2013 16:18:15 GMT -5
BTW I was reading an article and they've closed that loop hole. You can no longer switch from spouse to yours. If you elect spouse first you collect spousal benefit until they/you die and if they die first you can then collect survivors (which is 100%, or at least def not 50%) if it's greater. You can take your benefit early and then wait until full time retirement and switch over to your spouse's record if it's greater than what you're collecting at the moment. Curses- foiled again. I did a little research and I'd fail the Earnings Test anyway. If I were still working, whatever spouse benefit I got would be reduced $1 for every $2 I earned over $15,000. I think the result for me might be negative.
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Phoenix84
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Post by Phoenix84 on Aug 8, 2013 16:54:12 GMT -5
I understand that it seems unfair. Married peole get a benefit that single people don't. The fact is that the majority of women won't have 35 years of income to average to get the higher SS in retirement while the vaset majority of men will. The spousal benefit was a way to make up for that. It was understood that while the woman weren't working a paid job, they were doing things that benefitied society and in many cases saved society money. If I knew that my social security was dramaticlly less if I stopped working to take care of an aging parent, I would be much more likely to put them in a nursing home and much sooner, than if I knew that safety net part was there. How much does a year in a nursing home on medicaid's dime cost? An extra $500 a month in SS, from the spousal benefit, is only $6000 a year and I think at that rate it would take ten or twelve years of SS paying for it to make up for paying for just one year in a nursing home. There is no magic solution which will make the money not be paid at all. IMO the only question is what pocket do you want it to come out of. I disagree with your assessment that women will not acumulate significant SS credits throughout their careers. The fact is most women in this day and age are going to have careers, long ones. Will they average less working years than men? Probably (though I would argue that will change at some point too). But regardless, I think the days of large swaths of women taking off years and years are over. Even most of the women of this very message have worked, or will work 20+ years or more.
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cronewitch
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Post by cronewitch on Aug 8, 2013 18:48:27 GMT -5
Women are still taking off large amounts of time to raise families or care for handicapped kids or elderly family. Some still think it is important to have a SAHS and when you have a special needs child it can be hard to keep working. Many also work under the table as housekeepers or babysitters so even when working part time they don't pay SS.
I was a housewife for most of 10 years when I didn't have kids and then entry level a few years. As my ex made enough to support us even when I worked I didn't attempt to earn as much as I could. I got by on two years of college because I didn't need to earn money until my divorce then got more education. I didn't finish college until I was over 40 and was over 30 before I made 10K a year.
It seems pretty typical for a wife to earn half what her husband does since he is the bread winner. My brothers were in the service and the wives worked a little retail or took in kids to watch. One SIL didn't start college until her oldest was 3rd grade. She became a teacher. The other didn't work much until she was older and is a fork lift driver now at 62. Each spent about 10 years as a service wife/mother/homemaker before starting work.
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Sum Dum Gai
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Post by Sum Dum Gai on Aug 8, 2013 18:51:48 GMT -5
All of your examples are people already in their 60s or over though, and it was absolutely true for the generation that's already SS eligible. What we're saying is it's far less true for today's younger workers.
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Deleted
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Post by Deleted on Aug 8, 2013 19:36:25 GMT -5
Two people earning 75k will each draw at a higher base and together receive more tHan one worker making 150k.
Why should a family unit be penalized for having one high wage earner rather than two medium wage earners?
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Ombud
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Post by Ombud on Aug 8, 2013 19:46:31 GMT -5
Thanks for the equation. If you're a safety employee or retiree, you give up $1 SSA for every $1 pension beginning with the first $ no matter how much you've paid in
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Post by littleoldauntie on Aug 8, 2013 19:46:38 GMT -5
Two people earning 75k will each draw at a higher base and together receive more tHan one worker making 150k. Why should a family unit be penalized for having one high wage earner rather than two medium wage earners? Because the 2 persons earning $ 75k each paid the SS contribution over their full earnings. The person who earned $150k only paid the SS contribution up to the annual max. I think that was just shy of $114k this year. Why should a (not disabled) person who did not contribute expect to draw a check? If the family unit could survive without that person contributing a paycheck, then can't they continue in the same manner? Why should a single person be penalized? I think we can agree, we all view the situation differently and we all think it is unfair.
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Deleted
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Post by Deleted on Aug 8, 2013 19:57:24 GMT -5
Ok, I'll test the one 114k vs two 62k when I get home.... Don't have good access on the train.
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Deleted
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Post by Deleted on Aug 8, 2013 20:02:35 GMT -5
First check. 57 k... 1226 a month, so two people making 57k ... 2452 a month
Same criteria one person making 114k... 1835 a month.
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teen persuasion
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Post by teen persuasion on Aug 8, 2013 20:12:03 GMT -5
BTW I was reading an article and they've closed that loop hole. You can no longer switch from spouse to yours. If you elect spouse first you collect spousal benefit until they/you die and if they die first you can then collect survivors (which is 100%, or at least def not 50%) if it's greater. You can take your benefit early and then wait until full time retirement and switch over to your spouse's record if it's greater than what you're collecting at the moment. Not sure how it deals with the fact I think working spouse has to collect SS first in order for spouse to collect. Wow, when did they change this? It isn't reflected on the SSA site: If you or your spouse are full retirement age, you may have some additional options.
If your current spouse is full retirement age, he or she can apply for retirement benefits and then request to have payments suspended. That way, you can receive spouse's benefits and he or she can continue to earn delayed retirement credits until age 70.
Note: Only one member of a couple can apply for retirement benefits and have payments suspended so his or her current spouse can collect benefits.
If you have reached full retirement age, and you are:
eligible for a spouse's benefit and your own retirement benefit, you may choose to receive only spouse's benefits. eligible for an ex-spouse's benefit and your own retirement, you may choose to receive only the ex-spouse's benefit. Your ex-spouse needs to be 62 but he or she does not have to have filed for benefits. If you do that, you can delay applying for your own retirement benefits until a later date to take advantage of delayed retirement credits.
Note: If both you and your current spouse are full retirement age, only one of you can choose to receive spouse's benefits now and delay receiving your own retirement benefits until a later date.
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973beachbum
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Post by 973beachbum on Aug 9, 2013 6:16:09 GMT -5
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happyscooter
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Post by happyscooter on Aug 9, 2013 6:27:04 GMT -5
I knew someone who had a little girl about 5 years old. Divorced, dad hardly ever paid CS. Dad was killed in an accident. The benefits were around $500 a month combined. The dad was only 23-24, no way he had paid in that much. When the mom got remarried she was going to have the husband adopt the little girl. When mom found out the money would stop, so did the adoption process. That was $5000 a year times at least 13 years. Do you really think the early 20s guy had worked enough to get $50k back from SS?
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973beachbum
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Post by 973beachbum on Aug 9, 2013 6:36:03 GMT -5
PB is being wonky and would let me write after the quote. I never thought about it before really and I think I am more well read on such subjects than the average woman in the general population. I could be a high earner for a substantial number of years like 20 with a few other years thrown in but those years at zero would be a killer. Maybe it will change in forty or fifty years but as of today i see very few who don't take time off after having their kids either for right after or a few years down the road when they realize how difficult it is to juggle and do a good job with everything. Then comes the parents who need help when they are older. Although it could work for either gender that falls into this catagory. So a stay at home dad would be just as able to claim SS on their spouse's SS record.
So society wil either pay for grandma's nursing home bill for an extra few years, because no one is willing to hurt themselves financially and lose a third of their SS if they stop working to do it, or pay the extra SS from the spousal benefit. A year in a nursing home here is about $50,000 plus. At three years in a nursing home that is a LOT of extra $500 SS payments a month.
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973beachbum
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Post by 973beachbum on Aug 9, 2013 6:45:16 GMT -5
I knew someone who had a little girl about 5 years old. Divorced, dad hardly ever paid CS. Dad was killed in an accident. The benefits were around $500 a month combined. The dad was only 23-24, no way he had paid in that much. When the mom got remarried she was going to have the husband adopt the little girl. When mom found out the money would stop, so did the adoption process. That was $5000 a year times at least 13 years. Do you really think the early 20s guy had worked enough to get $50k back from SS? That doesn't have anyting to do with the SS part that is like a pension. It is part of the insurance part. People get insurance all the time and have unfortunate accidents soon after. It really doesn't matter how much he paid in or not. The other side of the coin are the people who die without collecting anything and don't have any qualified survivors. What they paid in never gets paid out. That is why it's called insurance. I saw the numbers once, but can't remember the exact ones now. Those numbers are pretty stable and are pretty even with the people who die before any benefit could be paid. The biggest problem now is we have too few workers to every person collecting. We either need more babies to grow up and work or we need to start bumping people off.
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Deleted
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Post by Deleted on Aug 9, 2013 6:56:46 GMT -5
3.The highest 35 years of earnings are identified and totaled (fewer years of earnings are used for workers born before 1929 and those who have received disability benefits). Another area where I get shortchanged. I've hit the max SS wages every year for the last 35 years. Working another 5 years (6 if I wanted to reach full retirement age) is going to do zip to my benefit level. More for the less fortunate, I guess.
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973beachbum
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Post by 973beachbum on Aug 9, 2013 7:00:52 GMT -5
3.The highest 35 years of earnings are identified and totaled (fewer years of earnings are used for workers born before 1929 and those who have received disability benefits). Another area where I get shortchanged. I've hit the max SS wages every year for the last 35 years. Working another 5 years (6 if I wanted to reach full retirement age) is going to do zip to my benefit level. More for the less fortunate, I guess. Would you have rather made less for those 35 years?
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justme
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Post by justme on Aug 9, 2013 8:26:14 GMT -5
BTW I was reading an article and they've closed that loop hole. You can no longer switch from spouse to yours. If you elect spouse first you collect spousal benefit until they/you die and if they die first you can then collect survivors (which is 100%, or at least def not 50%) if it's greater. You can take your benefit early and then wait until full time retirement and switch over to your spouse's record if it's greater than what you're collecting at the moment. Not sure how it deals with the fact I think working spouse has to collect SS first in order for spouse to collect. Wow, when did they change this? It isn't reflected on the SSA site: If you or your spouse are full retirement age, you may have some additional options.
If your current spouse is full retirement age, he or she can apply for retirement benefits and then request to have payments suspended. That way, you can receive spouse's benefits and he or she can continue to earn delayed retirement credits until age 70.
Note: Only one member of a couple can apply for retirement benefits and have payments suspended so his or her current spouse can collect benefits.
If you have reached full retirement age, and you are:
eligible for a spouse's benefit and your own retirement benefit, you may choose to receive only spouse's benefits. eligible for an ex-spouse's benefit and your own retirement, you may choose to receive only the ex-spouse's benefit. Your ex-spouse needs to be 62 but he or she does not have to have filed for benefits. If you do that, you can delay applying for your own retirement benefits until a later date to take advantage of delayed retirement credits.
Note: If both you and your current spouse are full retirement age, only one of you can choose to receive spouse's benefits now and delay receiving your own retirement benefits until a later date. asklizweston.com/how-to-claim-ss-now-and-claim-more-later/ That's where what I said was from.
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justme
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Post by justme on Aug 9, 2013 8:37:55 GMT -5
I knew someone who had a little girl about 5 years old. Divorced, dad hardly ever paid CS. Dad was killed in an accident. The benefits were around $500 a month combined. The dad was only 23-24, no way he had paid in that much. When the mom got remarried she was going to have the husband adopt the little girl. When mom found out the money would stop, so did the adoption process. That was $5000 a year times at least 13 years. Do you really think the early 20s guy had worked enough to get $50k back from SS? I'm pretty sure the amount a child collects if the parent dies is based on earnings. There may be a minimum amount though. I vaguely recall somewhere on my last print out from SS regarding my benefits/info a line about "benefit to minors upon death" or something of that nature and it was somehow based off my work record. But this is all from memory since I have no kids so I glossed over that line.
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teen persuasion
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Post by teen persuasion on Aug 9, 2013 9:41:09 GMT -5
Justme, thanks for the link. Reading it several times, it doesn't seem to be a closed loophole, just normal SSA ungodly complexity. From your link: Answer: Thanks for that important clarification. The original letter referenced a technique that some married couples can use to significantly boost their overall benefit. The technique allows people to start spousal benefits — Social Security payments based on the work record of a husband or wife — while letting their own benefit grow, to be claimed later. But the option of switching from the spousal benefit to your own benefit is available only if you start spousal benefits at your own full retirement age (which is currently 66). People who start spousal benefits before full retirement age can’t later switch to their own benefit. - See more at: asklizweston.com/category/qawithliz/retirement/#sthash.qmkGNYjp.dpuf
This is consistent w/ what I found on the SSA site. You have to be at FRA to collect on spouse's record and switch to yours later. If either of you start early, you are permanently reduced.
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973beachbum
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Post by 973beachbum on Aug 9, 2013 10:02:52 GMT -5
So if I'm following what you two just posted, it means I must wait until I am full retirement age, say 65 and can take the spousal benefit at 50% of what the spouse gets, and then at 70 can switch to my own which has grown over the 5 years? I don't know if it works in reverse though. I guess the spouse I would be collecting off of would have to be older than me for it to work though.
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Deleted
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Post by Deleted on Aug 9, 2013 10:10:44 GMT -5
This thread is really timely for us and is making me re-think about us taking early SS retirement as to not tap into our investments.
I need to head out for a while but I'll post us a real life example and we can do a math exercise together!
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wodehouse
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Post by wodehouse on Aug 9, 2013 10:29:03 GMT -5
Bonny, I have really gotten into this lately with spreadsheet building. I am trying to include income from SS, for both me and my wife's spousal benefits (also accounting for possible knockdown of SS benefits over time), mandatory RMD from IRAs, income from investments, then seeing if this total is more or less than the year's expected expenses...if less, then have to draw down from capital somewhere (IRAs, Roths, or other investments), or if more, then the "more" can be reinvested. It is quite a learning experience. The on-line retirement calculators are all over the map as to how things will go for us, my spreadsheet is giving me more confidence and teaching me what scenarios will work well. One online calculator that I really like is at marketwatch.com ( www.marketwatch.com/retirement/tools/retirement-planning-calculator). It's the only one I've seen that accounts for spousal SS benefits, but I wish it would project beyond my assumed death to my wife's.
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teen persuasion
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Post by teen persuasion on Aug 9, 2013 11:04:42 GMT -5
So if I'm following what you two just posted, it means I must wait until I am full retirement age, say 65 and can take the spousal benefit at 50% of what the spouse gets, and then at 70 can switch to my own which has grown over the 5 years? I don't know if it works in reverse though. I guess the spouse I would be collecting off of would have to be older than me for it to work though. If I understand it properly (a big if), spouse 1 (after FRA) files and suspends. Spouse 2 (also after FRA) files for spousal benefits at 50% of spouse 1. They may continue working and benefits increase from that, and increase for waiting. At 70, they each file under their own records. At the time of the death of either spouse, the remaining spouse gets only the SS of themselves, or of deceased spouse if higher than their own.
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Phoenix84
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Post by Phoenix84 on Aug 9, 2013 11:36:47 GMT -5
All of your examples are people already in their 60s or over though, and it was absolutely true for the generation that's already SS eligible. What we're saying is it's far less true for today's younger workers. *sighs* board ate my post. Anyway, basically I agreed with Dark. I claim we need to change the model of how SS works with spouses, and you guys all come back with examples of people either in retirement, or close to retirement as to why it shouldn't be done. Granted, you can't point to a 30 year old woman and use her as an example of the way SS should be. I just don't understand why a homemaker spouse shouldn't be expected to live off of the breadwinner's SS. After all, that's what they did when the breadwinner was working. I'm not aware of any employer that pays you more just because you have dependents, except for maybe the military.
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Phoenix84
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Post by Phoenix84 on Aug 9, 2013 11:47:05 GMT -5
The truth is that we need to make changes to SS to keep it solvent for future generations. The fact is someone is going to have to bear some pain, and I think eliminating the spouse benefit is common sense reform. No, it likely wouldn't fix all of the problems with SS, but several small reforms add up. I don't think it's too unreasonable to expect a homemaker spouse to live off of the working spouse's retirement checks, after all, it's what they're used to.
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Post by The Walk of the Penguin Mich on Aug 9, 2013 11:48:20 GMT -5
All of your examples are people already in their 60s or over though, and it was absolutely true for the generation that's already SS eligible. What we're saying is it's far less true for today's younger workers. *sighs* board ate my post. Anyway, basically I agreed with Dark. I claim we need to change the model of how SS works with spouses, and you guys all come back with examples of people either in retirement, or close to retirement as to why it shouldn't be done. Granted, you can't point to a 30 year old woman and use her as an example of the way SS should be. I just don't understand why a homemaker spouse shouldn't be expected to live off of the breadwinner's SS. After all, that's what they did when the breadwinner was working. I'm not aware of any employer that pays you more just because you have dependents, except for maybe the military. Just about every employer that has family healthcare benefits does. For instance, my healthcare policy is just about $500/mo for a single person and my employer covers 95% of it. However, a family benefit runs around $1500/mo and it is covered 95%, so an employee with a family is receiving $1000 more each month than a single person. That is $12,000/year more merely for having a family.
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Phoenix84
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Post by Phoenix84 on Aug 9, 2013 11:54:29 GMT -5
3.The highest 35 years of earnings are identified and totaled (fewer years of earnings are used for workers born before 1929 and those who have received disability benefits). Another area where I get shortchanged. I've hit the max SS wages every year for the last 35 years. Working another 5 years (6 if I wanted to reach full retirement age) is going to do zip to my benefit level. More for the less fortunate, I guess. And they say SS isn't means tested. It very much is.
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Deleted
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Post by Deleted on Aug 9, 2013 16:12:27 GMT -5
Here's my real life example: DH is 55. According to his current statement at full retirement age 66 and 8 months (let's just say 67) he will receive $2612/mth 50% spousal benefit is $1306 I turn 52 tomorrow. Full retirement for me is 67. According to my 2010 statement (I'm having trouble logging in) I will receive $1483 mth. If I wait until age 70 my benefit will be $1839 So if I live until 87 and file using the spousal benefit for 3 years 36 x 1306 = 47016 plus 17 years (204 mths) @ my benefit 1839 = $375156 is a total of $422,172 vs 20 years @ 1483 = $355,920 wow, that's about a 20% difference. ETA: Let's try the same equation with early retirement at 62 DH's benefit at 62 is $1856 spousal benefit is 33.54% when I turn 62 (2023). So 8 years (96 months) x 622.50 = 59760 and 17 years (204 mths) $375,156 for a total of $434,916 vs 25 years (300 mths) at my reduced benefit of $1044 = 313,200 edited to correct math error!
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Sum Dum Gai
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Post by Sum Dum Gai on Aug 9, 2013 16:27:15 GMT -5
Which is a choice that they made. SS is a pension, you have to work a long time to max it out, just like any other pension. It's not welfare, or wasn't supposed to be. If you want to collect you have to work, if you want to collect a lot you have to make a decent amount and work a really long time. That's not unfair, that's how all pensions work.
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tallguy
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Post by tallguy on Aug 9, 2013 20:06:47 GMT -5
Yes, exactly. And that also applies to ex-spouses as long as you meet the qualifying conditions (married for at least ten years, not currently married again, etc....)
So if you do NOT claim early (before FRA) you have more options. Claim on the spouse's record at FRA, let your benefits grow until you hit 70, then switch to your own. If you claim early benefits on a spouse's record, you cannot switch to your own benefits later.
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