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Old 07-11-2009, 02:50 PM   #21
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DblDoc's quote above made me dig through my SSA paper file, as I remember and had programmed 73%, not 78%, into my spreadsheets.

Interestingly, I found that the percentage had been changing over time, actually increasing. I didn't know that.

All data is from SSA "Your SS Statement" dated in the summer of each year listed:

2001 - 73%
2002 - 73%

2003 - 73%
2004 - 73%

2005 - Don't have it
2006 - 74%

2007 - 75%
2008 - 78%
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Old 07-11-2009, 02:53 PM   #22
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Telly, the 2005 number was 74%, the same as 2006. And the number for 2000 - 72%.
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Old 07-11-2009, 02:56 PM   #23
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Originally Posted by Want2retire View Post
If my age was under 50, I would assume that I am not going to get SS. I think that is an absolute crime and a terrible injustice, but there it is.
I think there is a zero % chance that social security will be eliminated completly without being replaced by something similar so planning on getting nothing makes no sense to me. There's no way the government is going to let millions of elderly people with no savings live on the streets. There will always be social security in some form for those who need it. I could see them eliminating it for those with a certain net worth or for people with pensions that pay more than social security but not for those who need it.
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Old 07-11-2009, 04:27 PM   #24
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I have not read the article.... but I do remember reading that the worst case was not really 'that bad'... and a small fix here are there would make it where it would recover even paying out close to 100%...


Didn't I read somewhere where someone thought this recession would make it solvent since there are so many people now that will NOT be able to retire early and start their SS
That is the gist of the AARP article. There a few things they don't like but they point out a little bit of this and a little bit of that could fix the solvency problem without creating to much focused pain.

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Old 07-11-2009, 05:45 PM   #25
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I am 40 and right now assume I will receive 25% of my future benefits. I assume a SS COLA of 3%, which is approximately what the actual SS COLAs have averaged over the past 10 or 20 years, and then I discount that future income stream to an NPV which I use in my FIRE net worth.

I feel much like Katsmeow and bbbamI about it. It's a significant factor in my FIRE-ability but I don't like relying on it. I do have it as a variable in my spreadsheet and can adjust it as I see fit. What I think will happen is that I will "achieve FI" with that SS assumption in the next year or two, then I'll continue working so I don't have to rely on SS for FI.

One error I have is that I am basing things on the SS PEBES, which assumes I'll keep working until retirement age, which isn't true. I know I can get a estimate with an earlier retirement age; I just haven't done that yet.

I think if we review the history of SS since inception we can make a pretty good guess as to what will happen: the FICA taxes will be increased somehow (eliminating the SS MTA would be my guess), the retirement age will continue to be increased somehow (indexed to longevity would be my hope, but I doubt it), and SS/Medicare benefits will be taxed more.

One surprising prediction I would make based on history is that the program will be further expanded somehow -- perhaps they will add benefits for illegal immigrants or something. This is logically counterintuitive but I think it is part of the political process of making the other changes more palatable to the electorate.

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Old 07-11-2009, 06:23 PM   #26
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On the other hand, if there are fewer jobs, there are fewer people paying SS taxes. Plus, I don't think the models planned for zero or even negative wage growth for a while.

IIRC, it took that into account... the hit on peoples savings was huge... so a long time to recover... the unemployment will be a lot shorter term....

Now, my boss thinks we are about to have a lost decade like Japan (who actually have had 2).... if that happens... then we are in for a lot more troubles...
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Old 07-11-2009, 07:26 PM   #27
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Age 50 yrs 10 mos here. I know I was born at the tail end of the baby boom, and never used SS as a factor in my FIRE.
I have nothing in writing guaranteeing a SS benefit. Only a statement that arrives every year, starting with the words
"If you continue...".
"If" means If.
I'd rather see someone who w*rked hard all their life, not sitting on their keister whining, and needs it more than I do,
have a full benefit.
I really mean that. I do not need SS because of my survivor benefits and my own deferred pension coming at age 56.
If I get a benefit, I will use it. If I don't, well...
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Old 07-13-2009, 08:22 PM   #28
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Originally Posted by REWahoo View Post
Telly, the 2005 number was 74%, the same as 2006. And the number for 2000 - 72%.
Thanks for the fill-in, REW.

So the worst-case payout percentage has improved from a predicted 72% up to a predicted 78%. Wonder what this summer's will show, if it will show a decline or not.

I figure my mailman might have filched my 2005 statement, probably sold it to someone, right before he transferred down to your serving post office to try a new route method there Well, he really could have, ya know.
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Old 07-14-2009, 10:56 AM   #29
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Agreed. The last time SS reform was proposed, I recall the government saying "If you are older than X, then you won't be affected." IIRC X was 55, right?
The age was 50, not 55........as I recall.........
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Old 07-14-2009, 10:59 AM   #30
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Imagine if privatization of SS had taken place when it was last proposed.
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Old 07-14-2009, 11:00 AM   #31
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Well, I guess there is one good thing about being 51...
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Old 07-14-2009, 12:16 PM   #32
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Imagine if privatization of SS had taken place when it was last proposed.
I think the recent market swoon has killed that idea for a while. The last thing a lot of people want to do now is trade the last bit of pension-like retirement certainty in their arsenal for more 401K...
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Old 07-14-2009, 01:21 PM   #33
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Imagine if privatization of SS had taken place when it was last proposed.
Actually I trust the equity markets more than I trust Uncle Sam........
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