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Re: Semi-retire: Without using RE $$$$
Old 08-29-2006, 03:36 PM   #21
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Re: Semi-retire: Without using RE $$$$

The folks that run social security estimate 70% of benefits just from cash flow from taxes.
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Re: Semi-retire: Without using RE $$$$
Old 08-29-2006, 03:53 PM   #22
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Re: Semi-retire: Without using RE $$$$

That does not necessarily mean that everyone will get 70% of their SS benefits.* Those who have no other source of income may continue to get 100%, while those of us with substantial outside investment income may get 0%.

When the crunch comes, the grasshoppers will almost certainly outnumber the ants.* For that reason,* I think means testing is inevitable (although I will certainly be unhappy about it).
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Re: Semi-retire: Without using RE $$$$
Old 08-29-2006, 03:57 PM   #23
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Re: Semi-retire: Without using RE $$$$

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Originally Posted by Gumby
That does not necessarily mean that everyone will get 70% of their SS benefits.* Those who have no other source of income may continue to get 100%, while those of us with substantial outside investment income may get 0%.

When the crunch comes, the grasshopppers will almost certainly outnumber the ants.* For that reason,* I think means testing is inevitable (although I will certainly be unhappy about it).
Yeah, that is pretty much how I expect things to play out. The other alternative is a large tax increase on workers, which I wouldn't rule out. I am not a big fan of the latter simply because Congress has seen fit to piss away SS taxes for decades, so I'm not interested in giving them more $100 bills to light cigars with.

FWIW, I'd welcome means testing if it meant that the program was kept more-or-less intact. SS is the main thing keeping an awful lot of seniors out of poverty, and I imagine that this will not cease to be the case any time soon.
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Re: Semi-retire: Without using RE $$$$
Old 08-29-2006, 04:52 PM   #24
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Re: Semi-retire: Without using RE $$$$

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Originally Posted by Gumby
That does not necessarily mean that everyone will get 70% of their SS benefits. Those who have no other source of income may continue to get 100%, while those of us with substantial outside investment income may get 0%...
For that reason, I think means testing is inevitable (although I will certainly be unhappy about it).
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Yeah, that is pretty much how I expect things to play out.
I think you guys are far to pessimistic. Means testing, possibly, maybe probably. But cutting back to next to nothing? Not gonna happen. I said it before and I will say it again, we are the ones that will determine what happens. That is why nothing has been done so far. The politicians are afraid to touch it for fear of a backlash from us. At some point they will have no choice so they will be forced to select something like a general scale back and eligibility age increases - whatever will result in the least voter backlash.
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Re: Semi-retire: Without using RE $$$$
Old 08-29-2006, 05:06 PM   #25
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Re: Semi-retire: Without using RE $$$$

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I think you guys are far to pessimistic.* Means testing, possibly, maybe probably.* But cutting back to next to nothing?* Not gonna happen.* *I said it before and I will say it again, we are the ones that will determine what happens.* That is why nothing has been done so far.* The politicians are afraid to touch it for fear of a backlash from us.* At some point they will have no choice so they will be forced to select something like a general scale back and eligibility age increases - whatever will result in the least voter backlash.
True, but, unfortunately, it's hard to predict what may result in the "least voter backlash" 20-40 years from now. If I have, say, $300K in the bank (in today's dollars) when I am 70 and apply for SS, will the voters/politicians say "Sorry, nothing for you, bud, until you spend your assets"? Or will they say "We'll give you an X% of your SS benefits, where the value of X depends on your income, assets and the phase of the moon"? Or will be it be something in between? It's this uncertainty that makes it difficult to include SS in your retirement calculations.
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Re: Semi-retire: Without using RE $$$$
Old 08-29-2006, 05:21 PM   #26
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Re: Semi-retire: Without using RE $$$$

Social Security is already means tested. The more income you average over your working career, the smaller the % of that income you draw from the Social Security system. Also, whether or not your Social Security check is taxed depends on how much total income you file with the IRS.

I'm 50. Based on the studies I've seen for various reform proposals, I reduce my projected Social Security benefits in Firecalc and other calculators by about 10-15%.
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Re: Semi-retire: Without using RE $$$$
Old 08-29-2006, 05:30 PM   #27
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Re: Semi-retire: Without using RE $$$$

A simple hypothetical. *Imagine there are only 10 people in the system.

Voters 1-3

Each have $2 million in savings
Each have income = $80k/yr income + $15k social security = $95k/yr

Voters 4-10

Each have zero savings
Each have income = $15k/yr social security

Total social security payments $150k per year

Social Security system can now pay only 70%, so you must cut $45k per year.

How do you do it - if you cut everyone equally, Voters 1-3 each suffer a loss of 4.7% of his/her income (4.5/95)

But Voters 4-10 each suffer a loss of 30% of their income. (4.5/15)

It is my prediction that Voters 4-10 will vote to take the $45k in reductions from Voters 1-3 and will not feel particularly bad doing so.

In a system where every vote is equal, the outcome is inevitable. * *


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Re: Semi-retire: Without using RE $$$$
Old 08-29-2006, 05:32 PM   #28
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Re: Semi-retire: Without using RE $$$$

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Social Security is already means tested.* The more income you average over your working career, the smaller the % of that income you draw from the Social Security system.
Yes, but that sort of adjustment is fair because, while you are working, once you get over a certain income, you stop contributing to the system fo the year.
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Re: Semi-retire: Without using RE $$$$
Old 08-29-2006, 05:54 PM   #29
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Re: Semi-retire: Without using RE $$$$

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Yes, but that sort of adjustment is fair because, while you are working, once you get over a certain income, you stop contributing to the system fo the year.
Gumby, try this. Go to http://www.ssa.gov/OACT/quickcalc/index.html and leave all of the defaults except vary the income. I just did this for incomes of $40000, $60000 and $80000 per year. You will find that the quck calculation gives age 66 annual Social Security payments of $14808 (37% of working income), $19836 (33% of working income), and $22236 (28% of working income). These are incomes that are fully taxable for Social Security. This is what I meant by means testing.
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Re: Semi-retire: Without using RE $$$$
Old 08-29-2006, 06:15 PM   #30
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Re: Semi-retire: Without using RE $$$$

Some of you are trying to decide and articulate what would be "fair"

Well don't hold your breath. This is the government working.

The final solution will neither be fair nor smart nor timely.

My prediction of when this will come to pass is around 2017 or so as the budget defocit starts to really really go into the red. Perhaps it will be caused when the Japanese/Chinese stop buying our bonds.

- 2017 that's my number and I'm sticking to it.
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Re: Semi-retire: Without using RE $$$$
Old 08-29-2006, 07:02 PM   #31
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Re: Semi-retire: Without using RE $$$$

Quote:
Originally Posted by Gumby

But Voters 4-10 each suffer a loss of 30% of their income. (4.5/15)

It is my prediction that Voters 4-10 will vote to take the $45k in reductions from Voters 1-3 and will not feel particularly bad doing so.

In a system where every vote is equal, the outcome is inevitable.

Sorry Gumby, but those voters are too dumb to vote their interests or else why is the estate tax viewed by them as a "death tax." It is only a few wishy-washy pinko liberals like me with too much money and not enough brains that actually want to level the playing field a bit. But I know I can rely on the people who don't benefit from the right wing policies to protect my interests. Thus I can remain on my high horse bitching and still do well
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Re: Semi-retire: Without using RE $$$$
Old 08-29-2006, 09:30 PM   #32
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Re: Semi-retire: Without using RE $$$$

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Originally Posted by tiredofwork
Gumby, try this.* Go to http://www.ssa.gov/OACT/quickcalc/index.html and leave all of the defaults except vary the income.* I just did this for incomes of $40000, $60000 and $80000 per year.* You will find that the quck calculation gives age 66 annual Social Security payments of $14808 (37% of working income), $19836 (33% of working income), and $22236 (28% of working income).* These are incomes that are fully taxable for Social Security.* This is what I meant by means testing.
You are correct; it is progressive taxation of a sort. I was thinking about those who exceed the social security wage base.
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Re: Semi-retire: Without using RE $$$$
Old 08-29-2006, 09:40 PM   #33
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Re: Semi-retire: Without using RE $$$$

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*It is only a few wishy-washy pinko liberals like me with too much money and not enough brains that actually want to level the playing field a bit.
I agree: "For unto whomsoever much is given, of him shall much be required" (Luke 12:48).* And because I am human, yes, I will be unhappy about the means test, but I will try to remember this verse when it happens. (The right wing does not have a lock on Christianity)
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Re: Semi-retire: Without using RE $$$$
Old 08-30-2006, 09:16 AM   #34
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Re: Semi-retire: Without using RE $$$$

As I have said, any SS benefit I can receive will be a bonus, in my eyes.

Maybe the Europeans have an edge on us in the Social program realm. Perhaps, given a few hundred year edge on us, the Brits, Germans, Dutch... have tried and failed at providing retirement, elder care, health care.... to their citizens while maintaining a relatively low tax rate.

Hopefully not, but as Gen X'ers and beyond see their parents living in near poverty conditions due to poorly funded pensions, minimal retirement savings and little to no health care, the voters might begin favoring higher taxes, the re-developement of the estate tax and a National healthcare system.
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