Social Security And the Will it be there issue.

[dumpster56]

Funny how I see so many say I am not counting on any social security when its time to retire.

I believe that most who think in those terms are well doomsdayers.

I mean IF social security is NOT there it will be the least of Americas Problems at that time. It would tell me that the country is in deep financial distress and life as we know it will be very different than it is today.

Think pre WWI times.

Now does that give you the willies or not?

 

[Zathras]

I think it is simply prudent. If I plan for SS not being there for me in 20+ years and it is there, I am well prepared and have bonus money laying around.
If I plan on SS being there for me and it isn't (or only half of it is) then I am working at Walmart greeting people.
Besides, medicare is going down well before SS;-)

 

[M Paquette]

Not so much "will it be there" as "will it be there for US"

For me, it's not so much a matter of 'will it be there' as it is 'will it be there for those of us who planned for retirement?'

I suspect that one of the fixes for underfunding and the empty special-issue Treasury bonds that won't be redeemed is going to be 'means testing.'

The current model incorporates a means test based only on earned income, and benefits lost because of the earnings test are not necessarily permanently lost, but cause the benefit to be adjusted upward when earnings fall below the test level.

There are proposals to apply a test for investment income, as well as tests for all assets, possibly excluding common assets such as a home or a car. Tests might be modeled on the Medicare 2003 reform package, for example.

The Concord Coalition made a proposal back in the mid-1990s to implement affluence testing, which would reduce SS benefits for families with incomes of 40K or more, phasing reductions to as much as 85% for those earning 120k annually.

The proposals for means or affluence testing will primarily affect those of us who bothered to plan for retirement in advance, and were particularly successful, so as to preserve government benefits for those who failed to plan ahead.

 

[aenlighten]

Social Security isnt much of a problem

The real problem is healthcare and it may take all of Social Security to pay for it. Imagine getting a bill instead of a check.

 

[donheff]

Funny how I see so many say I am not counting on any social security when its time to retire.

I believe that most who think in those terms are well doomsdayers.

I think most of us expect SS to "be here" if a bit reduced. It is too central to most retirement plans for even Republicans to get rid of. From what I have read here I would speculate that most posters who say they are not "counting on SS in their calculations" view it as a sort of fail safe. If their SWR numbers work out OK without SS, then SS may bail them out to some degree if the future is worse than the worst of the past.

 

[youbet]

I am counting on SS substantially being there. I do plug future SS income into Firecalc and my WR is higher today because I'm assuming SS in the future. Assuming no SS is OK for folks with lots and lots of fluff in the budget, and there seem to be many on this board, but I'm not canceling a single fishing trip this year because I'm worried about no SS in the future!

 

[Walt34]

The proposals for means or affluence testing will primarily affect those of us who bothered to plan for retirement in advance, and were particularly successful, so as to preserve government benefits for those who failed to plan ahead.

That's the part that would infuriate me the most! And, I'd wager, a lot of others on this forum.

I planned on it being there, but hedged the bet by only planning (depending on how gloomy I was that day) on anywhere from 40 to 80%.

 

[Khan]

My pension decreases when I turn 62. Don't think I'll start SSA then, but that is the assumption of the system.

 

[DallasGuy]

I don't necessarily count on SS being there in it's current state when I start collecting it. I do think for people that have planned for retirement it will probably be reduced to some extent. But having said that, it would also not suprise me if nothing was changed in the next 14 years when I get to age 65 and start collecting SS due to the gridlock that always seems to occur in Washington. Perhaps if one party takes over the house, senate and presidency something might change....probably not to our liking here though. But even then, politicians are so afraid of alienating voters that it still may not get fixed anytime soon.

 

[mickeyd]

Now does that give you the willies or not?

When I was first married in 1970 and began my first job after a stint in the army, I decided to plan for retirement and assume that SS would not be around any more by the time that I retired. Well, I am now retired and it looks like there will be a pretty darn big chunk of SS available for me. All I have to do is to tell Uncle Sam to turn on the faucet.

Plan for the worst. Hope for the best.

 

[armor99]

I completely agree with Zathras as well as some others here on this one. It is more a question of "who do you trust", and "what is a sure thing". By their very nature, a 401k is a sure thing. You control it, it belongs to you. Even if the company you are working for were to go bankrupt, they CANNOT raid it, as they no longer have any control over it, once that money leves their business accounts. Even pensions are no longer safe like they once were. Technically a pension is just a promise which a company could potentially revoke, change rules on, etc. Although I have heard there is a bit more legislation that prevents companies from "raiding" these accounts during bad company financial periods. My time horizon is at least 15 years. A LOT can happen in that time. I would much rather trust things like a 401k, and realty, rather than things that can be easily taken away like social security. Now if only I could find a way to "opt out" of SS and invest that money myself, I would be a happy man. As many here already know.... I definately do NOT view myself as my brothers keeper. I signed no "social contract" that I must sacrifice my earned wealth, for someone that has not earned theirs. I am very afaid that when the time comes for me, that the govt will see fit to "appropriate funds for the economically challenged, for the common good" (i.e. steal my SS fund). This is why in all of my projections of the future I ignore SS being there entirely. I refuse to bet my future on something that in my mind has a 50/50 shot to begin with.

 

[W2R]

I think Social Security will be in place for the next hundred years or more. I also think that there will be some erosion of benefits, maybe by fiddling with some of the multipliers used in their computations. Most people don't really understand how SS is computed, and wouldn't notice that.

I also think that SS will seem trivial compared with the extra tax burden that would be necessary for everyone (even retirees) to pay in order to fix our health system. Medicare is supposed to be shakier than SS, so it will probably disappear if a nationwide health care system is put in place. So sayeth my crystal ball. So much for your Medicare payments throughout life.

As far as counting on SS in retirement, I am counting on it, and counting on my federal pension, counting on the stock market, and counting on a number of things. However, I have enough leeway in my ER budget that I could manage without some of these sources of income that I am counting on. I don't think I should have to, though, and I don't think SS is going to just vanish. (Crystal ball again.)

 

[megacorp-firee]

I AM DEFINATELY COUNTING on SS being there. I believe it is a obligation that the government has placed upon itself. I would be very surprised if they make any major changes for people my age (57 in March).

HOWEVER, I just am NOT relying upon it. So I did not use it in any of my FIRE numbers when I ran them. I am going to be pleasantly surprised when I finally go and ask Uncle for my checks to start. It will be like when my youngest finished college... I looked down and found a bunch of money!

My wife is calling her future SS payments her 'shoe money'... move over Emelda ...

 

[TargaDave]

That's the part that would infuriate me the most! And, I'd wager, a lot of others on this forum.

I planned on it being there, but hedged the bet by only planning (depending on how gloomy I was that day) on anywhere from 40 to 80%.

Means testing would be a smack in the face for those prudently saved but that also implies those who get the full benefit (also likely reduced) will be essentially living in poverty. I might be irritated by it but not infuriated (assuming there aren't a bunch of silly loopholes in the testing). Wasn't that the original purpose of SS, a safety net to provide the bare minimum.

 

[clifp]

I am expecting my full SS payments. I do expect that it will be fully taxed (not 85% like currently) that the inflation adjustments will be reduced. On the other hand if I was under 30 I would be making other plans.

 

[kaudrey]

In my calculations, I assume I don't take it until 66 (full eligibility for me in 28 years), and I cut it in HALF.

I figure at some point means testing will come into play more, and since I hope to have enough money to retire at 52, I am assuming it will affect me.

 

[Arc]

I believe it will be there - after all it is supported by the only "annual, automatic and uncontested tax increase" that I am aware of - at least for those making over a certain amount. I am in M Paquette's camp - not sure it will be there for me in 24 years. And it really does make me ill to see that money taken out of MY paycheck thinking that it will go to SOMEONE ELSE'S retirement. I hope I am wrong on this one.

 

[tryan]

Certainly makes sense to plan for the worst ... Every Ponzi scheme fails for 2 reasons:

1. not enough new people entering "below" to support those "above".
2. the administrator steals/wastes the money.

SS is no different.