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Re: Age-adjusted SS eligibility
Old 04-18-2005, 01:05 PM   #21
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Re: Age-adjusted SS eligibility

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But if SS eligibility was adjusted to to 1935's average life expectancy, then today's eligibility age would be in our early-mid 80s.
The relevant figure is not average life expectancy, but years remaining once one has reached age 65.

Although this number has increased a bit since 1935, the change is nowhere near as dramatic as the increase in average life expectancy at birth. In 1935 we had no antibiotics, and many rural people had no adequate sanitation. (And there were still a lot of rural people.) Most of the increase in average life expectancy since then comes from saving people who prior to antibiotics would have died in childhood or early adulthood, from various diarrheal diseases, whooping cough, TB etc. These people not only would not have received any benefits, they also would not have paid much in SS tax, even if we had the same SS tax schedule that we have today.

This is an important point, that makes the idea of age 65 = age 80 today very misleading.

Mikey
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-18-2005, 01:16 PM   #22
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Re: My 1 on 1 with a US Congressman - Social Secur

I should have read a bit deeper into this thread. I see my above point has been pretty well covered.

I also would like to say that that Burns at Dallas Morning News with his "generational transfer" BS is all wet. The huge generational transfer is from older savers to younger borrowers. That is made possible by the largesse of Uncle Alan keeping real interest rates negative, combined with astoundingly loose mortgage underwriting.

I feel Burns is either stupid or dishonest or a bit of both.

mikey
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-18-2005, 03:39 PM   #23
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Re: My 1 on 1 with a US Congressman - Social Secur

Mikey, with all respect, Burns is a MIT graduate.
He has been writing a treasure trove of good
personal finance advice for a looong time. Like
all of us, he may be wrong sometimes ,,,, but he
is neither crooked nor stupid.

The generational accounting ideas come from the
co-author of their book "The Coming Generational
Storm" name of Kirtlikof (or some-such). He is an
economist of high regard ..... also a MIT grad.

The authors pass around blame to both parties
with a tad more scorn for Bush and the Republicans
so I don't think they have a hidden political agenda.

It is a great read and a real wake-up call.

Cheers,

Charlie
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-18-2005, 04:25 PM   #24
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Re: My 1 on 1 with a US Congressman - Social Secur

GD-ER,

I liked your comment of putting the tax on SS income
back into the "trust fund", but I would like it even
more if there were NO tax on SS income. That is an
unfair tax on tax and almost as regressive as the
payroll tax. For example, I had $15,640 of taxable
income that included $7082 SS income. My tax bill
was $1294 on that amount, but it would have been
about $858 if SS were not taxed. The extra $436
tax on $7082 SS income is a 61.7% marginal tax rate.

Cheers,

Charlie
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-18-2005, 05:22 PM   #25
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Re: My 1 on 1 with a US Congressman - Social Secur

Hello Charlie. I have become quite fond of paying no income taxes at all. I will be using my maximum
creative powers to insure this continues just as long as
possible.. This will be a real test, but as usual I expect I will come up with something.

JG
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-18-2005, 07:52 PM   #26
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Re: My 1 on 1 with a US Congressman - Social Secur

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Mikey, with all respect, Burns is a MIT graduate.
Remember Charlie, George W. Bush is not only a Yale graduate, he is a Skull 'n Bones Yale graduate.

Not sure these college credentials are very strong proof that these gentlemen aren't either stupid or dishonest. (Or as I posited above, both.)

Mikey
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Re: Age-adjusted SS eligibility
Old 04-18-2005, 11:36 PM   #27
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Re: Age-adjusted SS eligibility

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I've got to disagree with you here Nords!
Well, I certainly can't argue with census data. If I read the graph correctly, a 60-year-old in 1935 could expect to live ~15 years. And a 60-year-old in 1998 could expect to live ~22 years. So equating 10 years of full SS eligibility at age 65 in 1935, 10 years of full SS today would start at age 72. And the age of full eligibility has already been raised to age 67. Hmmmmm....

My life expectancy at birth (1960) was about 69. At age 20 it had risen to ~74. By 1998 (when I was 38) it was about 79. IOW, although progress of the age-specific lines was flattening out, I'm gaining five years every two decades. Does that mean that at age 60 my life expectancy will be 84 and at 80 it'll be 89? (Financially I'm planning for age 120.) Does this include any hedonic adjustments?

Didn't another thread refer to the IRS raising the IRA RMD divisors to reflect a longer lifespan? So whose longevity numbers is the IRS using? But that might also be an issue with IRAs compounding far better than expected.

Personally, this graph reveals some interesting cognitive dissonance. I'm willing to believe that the stock market's future will resemble its (median) past. But I'm not willing to believe that my lifespan will resemble this graph!
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-19-2005, 03:43 AM   #28
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Re: My 1 on 1 with a US Congressman - Social Secur

HI Nords and C-T. Nords, I have a little different take on
this lifespan debate. You say you are planning for
"120 years", and I understand how your expected lifespan increases as you age. In my head though
I kind of go the other way, i.e. I keep reducing my
expectations about the years I have left, which of course
is literally true. This has the effect of making me a bit more reckless with spending which fits in with the
"you can't take it with you " theory. Anyway, as I
begin to loosen the purse strings, I will keep my back-up
plans firmly in place in case things start to "gp south".
The prospect of fretting and stewing over SWR right
up to my demise is unappealing. I would rather roll the
dice and deal with the fallout, if any.

JG
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-19-2005, 07:08 AM   #29
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Re: My 1 on 1 with a US Congressman - Social Secur

Hi GD-ER. Looking to "political combinations" to solve
any problems (much less this one) is a fool's errand IMHO.

JG
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-19-2005, 07:12 AM   #30
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Re: My 1 on 1 with a US Congressman - Social Secur

Yep

No matter what party hat they wear - sooner or later Congress has to belly up to the bar and work the numbers.

Hopefully sooner.

P.S. - caught the French finance minister on Charlie Rose last night - !!!you think we have problems!!! with pensions/SS. I believe he said 57 was when 'they' stopped working.
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-19-2005, 07:15 AM   #31
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Re: My 1 on 1 with a US Congressman - Social Secur

When pigs fly.
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-19-2005, 08:32 AM   #32
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Re: My 1 on 1 with a US Congressman - Social Secur

OK, so I can't read my calculator right .... the extra
$436 of tax on $7082 SS income is 6.16% instead
of 61.6%......sorry about that! :

I may be a little fuzzy on what "marginal tax rate"
means. I have always assumed it was the tax rate
you paid on your last dollar of taxable income.

Cheers,

Charlie
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-19-2005, 08:39 AM   #33
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Re: My 1 on 1 with a US Congressman - Social Secur

Ah yes

One man's puke is another's fond wish. I remember(60's) the bulletin board at the Longshore Hall - the long missives - why we should trade with Red China.
and the Aussie prof's at the U of W in my Far East Studies - about the 150 year wait for the China trade - 'if each Chinese bought a yard of British texile - wow!'

My SS annual came yesterday:

2005: $15380
2009: $20364
2013: $26880

Reform SS, The China Trade - hope springs eternal.

De Gaul, the Norwegian widow - AND I'm leaning toward taking early SS.

Keep the faith.
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-19-2005, 08:47 AM   #34
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Re: My 1 on 1 with a US Congressman - Social Secur

Semper Fi
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Re: Age-adjusted SS eligibility
Old 04-20-2005, 02:57 PM   #35
 
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Re: Age-adjusted SS eligibility

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From http://www.actuary.org/pdf/socialsec...matic_0902.pdf

The 1983 amendments included a schedule of gradual increases in the normal retirement age to age 67, beginning with workers born in 1938 and ending with workers born in 1960 and later...

For example, increasing the normal retirement age gradually to age 70 by 2030 would eliminate about two-thirds of the system's long-term deficit...

IF these 'adjustments' were already reflected in current benefits, there would be NO deficit or problem to consider. *
As I said less than a year of the 5-7yr increase in life expectancy is reflected in those current SS recipients.
This will slowly increase to 2yrs, but not 5 or more w/o a change... I'll happily spend my 'windfall', but at some point someone is going to need to make the system actuarily sound. IT wasn't done in '83 or to date. NOT with Republican Executive - Democratic Congress OR Democratic Executive - Democratic Congress OR Democratic Executive - Republican Congress OR Republican Executive - Republican Congress... That's all the possible combinations with a couple mixed control of Congress thrown in along the way. We haven't seen a political combination yet leading to an actuarily sound system... Soooo, the debate goes on and the blame game continues...
I think the guys with the Military Pensions that have the 'answer' for Social Security solvency might want to help a bit with the 'problem'. Since the money all comes out of the same pot and the Military never even had to contribute real dollars just their time. And even I contributed 6 years in the Military and will receive no pension at all. *

Since Life expectancy has been growing for Social Security, it has also been growing for Military Pensions. Maybe they should be adjusted exactly the way they are proposing for Social Security. When Military Pensions were set, they never intended life expectancies to rise as high as they are today.

I won't try to 'Fix' your entirely tax payer funded Military Pension, if you won't try to 'Fix' my Social Security.

BTW - The tax payers paid your salaries also. And If the military 'promised' you a Pension, they also promised me my Social Security. A deal is a deal. Same Government, Same Money. I worked to pay the Military Salaries.

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Re: Age-adjusted SS eligibility
Old 04-20-2005, 03:59 PM   #36
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Re: Age-adjusted SS eligibility

Awright, Cut-Throat, it's time to critically examine your rant before some of the less-cynical board members start believing all of it...

Quote:
... the guys with the Military Pensions that have the 'answer' for Social Security...
Just because I think that SS is gonna lose wage indexing doesn't mean that I should be a member of your club. *I think this has been a Chicken Little red herring from re-election day, if you'll tolerate the mangled metaphor. *Some putative solutions are worse than the alleged problems.

Quote:
... the Military never even had to contribute real dollars just their time.
There have been a variety of programs over the years, but the latest incarnation of the military service wage credits ended in 2002. *During my 25-year working life I've contributed a total of $45,442 to the SSA and I want it back. *With interest.

Quote:
Since Life expectancy has been growing for Social Security, it has also been growing for Military Pensions. Maybe they should be adjusted exactly the way they are proposing for Social Security. When Military Pensions were set, they never intended life expectancies to rise as high as they are today.
We can only speak for the survivors here, let alone for those disabled veterans only able to "type" with their cheek muscles.

I think body armor improvements have more of an effect on that greater life expectancy, but the military pension was never designed to consider life expectancy. *It's part of the cost of attracting a quality recruit! *The last attempt to "fix" the pension "problem" was REDUX, which quickly made its impact on recruiting & retention. *Of course if REDUX had been allowed to continue then the Army wouldn't have had enough soldiers to go to GWII, but that's another issue.

I'd like to see an update to that old urban legend about retired CPOs only collecting 18 months of military pension. *There's a lot of truth in that, although today's retired CPOs are probably a much healthier bunch.

Quote:
I won't try to 'Fix' your entirely tax payer funded Military Pension, if you won't try to 'Fix' my Social Security. *:) *

BTW - The tax payers paid your salaries also. And If the military 'promised' you a Pension, they also promised me my Social Security. A deal is a deal. Same Government, Same Money. I worked to pay the Military Salaries.
I think we're both far enough along our lifespans that neither of us will be affected by the fixes. *I hope.

BTW the recruiters promised military healthcare for life, too, and look how long it took to fix that issue. *SS won't be any less of a struggle. *In the meantime, thank you for your contributions...

Quote:
And even I contributed 6 years in the Military and will receive no pension at all.
I'm pretty sure that the day you joined up you knew how long it'd take to vest that pension. *When you separated you had a chance to join the Reserves, complete an additional 14 years of "weekend a month & two weeks a year" and STILL collect a military pension eventually, right?

Let's compromise. *When we reach SS elegibility, let's contribute our SS payments to the charities of our choice. *You're senior-- you go first!
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-20-2005, 04:11 PM   #37
 
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Re: My 1 on 1 with a US Congressman - Social Secur


Quote:
Awright, Cut-Throat, it's time to critically examine your rant before some of the less-cynical board members start believing all of it...
They'll believe it, mostly because it makes so much sense!

Quote:
Let's compromise. *When we reach SS elegibility, let's contribute our SS payments to the charities of our choice. *You're senior-- you go first!
Well, since I spent my working life in the private sector banking on my Social Security and you spent your working life in the public sector banking on your Military Pension, I've got a better idea and more lucrative for the charities.

I will contribute my Naval Pension and you contribute your Naval Pension. You first, as you have already started drawing it.
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-20-2005, 04:14 PM   #38
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Re: My 1 on 1 with a US Congressman - Social Secur

Good one!
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-20-2005, 04:35 PM   #39
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Re: My 1 on 1 with a US Congressman - Social Secur

Seriously, a 10 to 15% reduction in our SS benefits
would be a major hit (no kidding). I wouldn't need
to go back to work in Walmart, but still..................

JG
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Re: My 1 on 1 with a US Congressman - Social Secur
Old 04-20-2005, 04:54 PM   #40
 
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Re: My 1 on 1 with a US Congressman - Social Secur

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Seriously, I'm sure a 10-15% reduction in OUR SS would NOT significantly impact either of OUR standards of living...
Maybe that's the difference between myself and those that think like yourself. When I was concerned about Civil Rights, it was because it was the Right thing to do, not because I was a minority. I did not think about how it benefited myself.

But, if Congress enacts a 10-15% reduction in all public pensions, including your Military Pension., I would like to see a Means test to see who could really afford it. - I would gladly give up mine under those conditions. I understand why you are so willing to give up 10-15% of your Social Security Pension. Are you also willing to give up 10-15% of your Military Pension? Same Country, Same Money, Same Reasons! - Why do you think that your Pension is exempt?
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