How do you factor in SS?

[joeea]

Quote:

Originally Posted by YoungSaver I think it's simple to fix, but no politician wants to change it. Just lower the benefits for people under X age and increase the age to claim benefits. Simple.

Or, increase the tax rate and wage basic. Equally simple.
Or, do a bit of both. Not quite as simple, but far more likely.

[YoungSaver]

Quote:

Originally Posted by joeea Or, increase the tax rate and wage basic. Equally simple. Or, do a bit of both. Not quite as simple, but far more likely.

Agreed. Raise the $128,400 to $140,000 to buy some time.

[Aerides]

It's already raised for 2019 - to $132,900

I'd like to see it skip the increases on the middle and kick in again at higher incomes - say over $200k or more, then have no cap after whatever is picked. Isolates the increase to a smaller population of very-high income earners.

[joeea]

Quote:

Originally Posted by YoungSaver Agreed. Raise the $128,400 to $140,000 to buy some time.

That minor increase doesn't buy much of anything.

If you want to fix it for the next 75 years, we'll need to do better than that.

[USGrant1962]

Quote:

Originally Posted by joeea That minor increase doesn't buy much of anything. If you want to fix it for the next 75 years, we'll need to do better than that.

If you want to play with SS fixes there are a few calculators out there that show you the impacts.

I think this has been linked before, but I like this one because it shows the % impact before you even select options: The Reformer: An Interactive Tool to Fix Social Security

So for example, "slow benefit growth for top half of earners" [tweaking the bend points] combined with "subject all wages to payroll tax" [and still crediting all of it to the individual's account] closes the gap.

[jkern]

I'll be 62 twelve months from now and my spreadsheet includes 100% of the projected amount. My 2020 spreadsheet also includes 100% of the projected amount.

[HFWR]

The eagle deposits money into my checking account, then I spend it.

[corn18]

Quote:

Originally Posted by HFWR The eagle deposits money into my checking account, then I spend it.

This made me smile. Great approach.

[Cayman]

I'm conservative, so I run Firecalc for a 100% success rate without SS. I'm 51, ER'd.

I'd like to see annual increases to SS reduced. Just a small haircut to this year's 2.8% increase would have a BIG impact on the SS funding issue, and the benefit would compound over time. There are 62 million SS beneficiaries. The average SS benefit is expected to climb by $39 to $1461/mo. in 2019.

So, let's cut the increase by a few bucks per month. Multiply that by 62M/mo. Current benefits aren't cut, the COLA is largely maintained and we start shoring up SS for future generations. Easy, No brainer. I'm going to go get a slice of cake, DH just cut one for me. Chocolate w/toffee.

[Crabby Mike]

Quote:

Originally Posted by Cayman So, let's cut the increase by a few bucks per month. Multiply that by 62M/mo. Current benefits aren't cut, the COLA is largely maintained and we start shoring up SS for future generations.

"Current benefits aren't cut" is true only in nominal terms. Benefits wouldn't keep up with inflation, which would be the same as a cut.

[gauss]

Raising the retirement age is also a cut for those who have not started drawing. I am fully planning on the 24% (8% a year) increase in monthly benefit which results from delaying the draw from age 67 until age 70.

[Fedup]

Quote:

Originally Posted by gauss Raising the retirement age is also a cut for those who have not started drawing. I am fully planning on the 24% (8% a year) increase in monthly benefit which results from delaying the draw from age 67 until age 70.

I don’t think they will raise on people over 55, honestly if they do it’s going to be on the back of the younger generations like my kids. Maybe this is why some people only have very low SWR. They are thinking of their kids.

[ProspectiveBum]

Clearly there will be changes, IMO raising or eliminating the income cap and raising the age for full benefits are 2 very likely areas where we’ll see changes.

Since I’m nothing if not self-interested, I looked at how old the folks were who saw their full retirement age go up when they changed the SS system in ‘83. The cutoff then was folks born in 1938, so 45 years old. I just turned 46, so that’d suit me fine. Sorry whippersnappers!

[gauss]

The sad thing was that I started working in the late 80s and have paid the increased rates my whole career. The fix in the mid 80s was designed specifically to address the baby boomer demographic problem.

As such, I am not so ready to just suck it up without a fight. At an estimated $1M benefit each, in todays dollars, for both me and DW (assuming we live to 100) this is not small change.

BTW I am still bitter that Megacorp stopped my DB pension accruals (which are exponential in time) after 22 years of work. I missed the steep portion of the accrual curve.

-gauss

[Independent]

Quote:

Originally Posted by USGrant1962 So for example, "slow benefit growth for top half of earners" [tweaking the bend points] combined with "subject all wages to payroll tax" [and still crediting all of it to the individual's account] closes the gap.

I think those are two reasonable modifications.

Many more possibilities here for people who are interested: https://www.ssa.gov/oact/solvency/provisions/index.html

[FANOFJESUS]

I find it hard to believe a cut for folks getting a check now. Folks getting a check in the future that is a different story.

[FANOFJESUS]

Quote:

Originally Posted by YoungSaver Agreed. Raise the $128,400 to $140,000 to buy some time.

I never understood this cap in the first place. I was a low income earner and have always paid on 100% of my income. Why won't this work for the high income folks?

[USGrant1962]

Quote:

Originally Posted by FANOFJESUS I never understood this cap in the first place. I was a low income earner and have always paid on 100% of my income. Why won't this work for the high income folks?

Well, benefits scale with lifetime payments, and the benefit is capped. Hence the payment is capped. Uncapping both (while still applying the "bend points" that make higher lifetime payments worth less incremental benefit) would be one step toward stabilizing the system.

[pb4uski]

Quote:

Originally Posted by gauss ..... At an estimated $1M benefit each, in todays dollars, for both me and DW (assuming we live to 100) this is not small change. ....

$1m each may be a bit optimistic.... a few years ago Kitces estimated that the maximum benefit was $572k for men and $683k for women.

https://www.kitces.com/blog/valuing-...balance-sheet/

So adjusting for a few years of benefit increases, perhaps $1.4 combined at the most.

[pb4uski]

Quote:

Originally Posted by FANOFJESUS I find it hard to believe a cut for folks getting a check now. ...

Believe it... that is what would happen under current law.