Heard an Interesting Interview on SS today........

[Zipper]

So take it as soon as you're eligible.

[cute fuzzy bunny]

Well heres the thing...for ER's thats true.

For people working, this new tilt might make it more worth their while to keep working longer, especially if they're making a lot of money. Simply because those more recent high earning years will weigh more than the older ones.

I suppose we'll have to wait until it goes through (because I think it has to) and see what the numbers come out to be.

[haha]

Quote:

I disagree Mikey, I think it would be seriously damaging, especially to ER's or people who earn their money early in life and then stop making money, such as disabled people, house wives/husbands, etc

TH, if the change being talked about is as you say, no pre-retirement adjustment at all, to wage levels or to CPI, then it wouldn't fix SS, it would end it. I thought we were discussing ending pre-retirement wage indexing, and going to CPI throughout one's career and also after retirement. In other words, harmonizing the adjustment rather than having the breakover.

If what is being suggested is what I understand you to be saying, no adjustment at all until retirement, it's curtains for SS.

I give this a 1 in 100,000 chance of coming about. Everyone who can read would be against it, no one for it.

Mikey

[sgeeeee]

Like I said . . .

Quote:

I'm not sure anyone can answer that question till we really know what this is. *

[unclemick]

And then, and then - like the perils of Pauline - there's Scott Burns talking about SS and the torpedo tax. Boy oh boy my brain is going to frizzle.

I want to go back to TH's comment about
Scwartzeneggar's "drilling point" of switching legislators
to part-time from full-time (to create less mischief).
That's a great idea. I would go a step further. Just send them home and mail them their checks. That way
they can't screw up anything

John Galt

[bruce1]

John, you are beinng nice!

There is an island in Northern Canada called Ellesmere Island and it gets so cold there it makes Winnepeg look balmy. I think we should send all of yours and ours there, leave them food for 1000 years then forget where it is.

We in Canada just went through an election that gave us several unpalitable choices. Choosing the best of the worst is not my idea of running a Country.


Bruce

Yeh, choosing "the best of the worst" is no fun, and
mostly why I stopped voting. I catch a lot of flack for
this as I have opinions on everything (including
politics) and am not the least shy about sharing them.
Truly, I woul like to become completely apolitical but to
do so I would need to be sent to that remote island myself (no newspapers, tv, etc). My senses can be
bombarded with bullshit and platitudes for only so long until pontificating
begins

John Galt

John, you don't vote What would Ayn think

I think Ayn would understand. After all, the John Galt
she created certainly didn't vote.

John Galt

[Jarhead*]

Un

Quote:

Well I'm bored too, so I might as well pursure this. OK, the wage deal _ This would only affect people that were still working right? - So in other words if you retired today and this thing went through 5 years from now it would have no effect? Or Not?

Cutthroat:

Just noticed the thread. Are you still not sure?
Basically, what they are proposing is to discourage future retirees from retiring early.
Without the wage adjustment, the amount you made early in career would be counted very little towards your eventual Soc. Sec.
Most people that retire at age 62, experience their highest wages from 50 to 62. Without the current wage adjustment, they would be back-loading their
Soc. Sec., and be in a position to receive the highest soc. sec. amount avaliable. (Have a late tee-off today, so have plenty of time).
Under current Soc. Sec. rules, in my case, for instance, I had been out of the system, with no further soc. sec. wages since I was 49. So there was a 13 year no participation period. But the fact that I had contributed the max, most of those years, the fomula currently being used, treated my previous income as "inflation adjusted" until reaching 62. My Soc Sec amount at age 62 was almost the maximum allowed. The only reason it wasn't the maximum, is that they require 35 years, and I had about 5 zeros. (30 years in system.)
If they have no changes in the formula, for instance, even though you bailed early, the same would hold true for you.
If they change to the non-adjustment formula, you should only be effected from the day they pass the bill until your retirement. (All your prev. credits have already been adjusted).
The young people, like my daughters, are going to be the ones that will carry a pretty heavy burden with no adjustments.
But, you know, like many young people now, they are very pessimistic about Soc. Sec. in general. (Leading me to try to leave something in the kitty for them).
Regards, Jarhead

Jarhead,

Thanks for the reply.

If I am understanding this correct, it would affect also those who have quit working, but have not started collecting SS yet?

[Hyperborea]

Quote:

If I am understanding this correct, it would affect also those who have quit working, but have not started collecting SS yet?

Not just them. It would affect the dollar income used for the calculation of SS for every year after the introduction of this law. It would make the dollars earned in your early years worth less than those from your later years. So if your income peaked in you late-40's/early-50's and then you took some other job (were downsized and couldn't find comparable work) for the rest of the years until you collected SS then those high earning years would be discounted too.

[sgeeeee]

I visited the social security administration web site today and happened to remember this thread so I figured I would look up what they had to say. I was surprised at how clearly they described the COLA and Average Wage Index. Here's some excerpts:

Indexing earnings - When indexing an individual's earnings for benefit computation purposes, one must first determine the year of first eligibility for benefits. For retirement, eligibility is at age 62. If a person retires at age 62 in 2004, for example, then 2004 is the person's year of eligibility. An individual's earnings are always indexed to the average wage level 2 years prior to the year of first eligibility. Thus, for a person retiring at age 62 in 2004, the person's earnings would be indexed to the average wage index for 2002, or $33,252.09. Earnings in a year before 2002 would be multiplied by the ratio of $33,252.09 to the average wage index for that year; earnings in 2002 or later would be taken at face value.

National average wage index series:
Year Index
1951 $2,799.16
1952 2,973.32
1953 3,139.44
1954 3,155.64
1955 3,301.44
1956 3,532.36
1957 3,641.72
1958 3,673.80
1959 3,855.80
1960 4,007.12
1961 4,086.76
1962 4,291.40
1963 4,396.64
1964 4,576.32
1965 4,658.72
1966 4,938.36
1967 5,213.44
1968 5,571.76
1969 5,893.76
1970 6,186.24
1971 $6,497.08
1972 7,133.80
1973 7,580.16
1974 8,030.76
1975 8,630.92
1976 9,226.48
1977 9,779.44
1978 10,556.03
1979 11,479.46
1980 12,513.46
1981 13,773.10
1982 14,531.34
1983 15,239.24
1984 16,135.07
1985 16,822.51
1986 17,321.82
1987 18,426.51
1988 19,334.04
1989 20,099.55
1990 21,027.98
1991 $21,811.60
1992 22,935.42
1993 23,132.67
1994 23,753.53
1995 24,705.66
1996 25,913.90
1997 27,426.00
1998 28,861.44
1999 30,469.84
2000 32,154.82
2001 32,921.92
2002 33,252.09

[Bob_Smith]

Quote:

If I am understanding this correct, it would affect also those who have quit working, but have not started collecting SS yet?

Cut-Throat, I'll throw my 2 cents...

Your intial SS benefit is based upon a formula applied to your average earnings over your lifetime. To update your past earnings into current dollars, they are "indexed" by the increase in average WAGES in the economy. Another way to update your earnings would be to index them to the change in PRICES (CPI). However, wages rise faster than prices because wages reflect not only inflation, but also increases in productivity. And the difference, when applied to one's initial SS benefit, isn't chump change. So, some have proposed a change in the way the initial benefit is determined (using increases in prices instead of wages) and the logic goes something like this: Under wage indexing every new generation gets a higher level of real SS benefits than the previous generation. I've seen sources that claim that under the present system the typical worker scheduled to retire in 2020 will receive benefits as much as 20 percent higher in real terms than today's retirees.

IMHO, if they do implement this change they won't make it retroactive - they'll just put it in place for $ earned going forward. I don't beleieve that it will have an impact upon those of us who are already ER'd.

If they were to do away with indexing altogether it would be the end of SS, as Mikey said earlier. That won't happen.

Lads/Ladies:

Absolutely fantastic thread - I've been away for awhile, but thanks so much for taking the time to clearly explain what the different scales of monetary adjustment mean and how that would affect my future (possibly non-existent) SS. This type of thread is what really makes it worth coming to this BBS.

Thanks again,

Deserat

[Helios]

Friends,
If a person worked enuff time to earn the ss minimum payroll.,(around $3500 this year, changes bout every yr.) would it not be possible to be essentially early retired and still wage paying? Thereby being adjusted for inflation?

Also seems like a solution to the 35 active year problem some people have.