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Old 07-07-2011, 05:41 PM   #61
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Haven't a clue on the liklihood of real reform coming out of these negotiations.

But when changes are made I can't imagine there will be means testing other than through a) overall tax policy and b) changing FICA caps and payout ratios.

The ability to activily "means-test" retirees would be a administrative nightmare. Moreover, how do you adminster a policy where in any given year people could fall in and out of the system based on income or net worth?

Would be a nightmare and subject to massive manipulation by the citizenry...
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Old 07-07-2011, 05:50 PM   #62
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It's all about confidence and attitude. Maybe if the government stopped paying with checks and credit cards and went to cash payments. and used these instead of twenties:


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Old 07-07-2011, 05:51 PM   #63
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I can't be fussed to click on this link. Are you saying not to worry about SS and Medicare cuts?

A quote or comment on a "naked link" would be useful.
How's this?
Quote:
House Minority Leader Nancy Pelosi (D-CA) says Democrats will not support any entitlement benefit cuts as part of a deficit reduction package. "We do not support cuts in benefits to Social Security or Medicare," she said after today's meeting at the White House.
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Originally Posted by Nords View Post
Two comments:
1. Fear mongering. Some "unnamed officials" say that some "unspecified cuts" to Social Security may be necessary. Seriously?

2. If Social Security is a single point of failure in an early-retirement plan, then the plan is not adequately capitalized.

Bonus comment: There's plenty of tinkering room to Social Security through means testing (taxation of benefits) and "improving" the COLA calculation. The real program to be concerned about is Medicare.
I agree with Nords and would say that after reading almost 60 comments, this is a fact free discussion.

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I don't think it is new news. Who on this forum is not expecting SS cuts and planning for them?
I'm not planning on cuts - but only because I'm also not planning on collecting any SS, although I do hope it continues to cover my basic Medicare premium.

FWIW, however, the greatest benefit (decreasing the net future liability) to SS without bending the PIA or raising the salary ceiling would be slowing the average wage index, followed by slowing the benefit indexation. The latter is reported to be in discussions right now.


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Old 07-07-2011, 06:01 PM   #64
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Thanks for response Texas, and please give more feedback. But if I understand what I am reading, SS even at this point in time is still bringing in more money than is being sent out in payments, with Medicare on the edge. I realize the 2 trillion in SS reserves owed to the system because the govt "borrowed it" will not be there. So if it is still cash flow positive, shouldn't the short term focus be on whacking other programs that have exploded the last 5-10 years?
The debt problem is not an immediate problem it is a long term problem. In fact many economists think immedediate curtailments in spending will be counterproductive, possibly pushing us into a double dip. On the other hand, other economists think immediate curtailments will instill confidence. In either case, it isn't important to "whack" a bunch of current programs since they are a drop in the bucket compared to SSA and Medicare/Medicaid.
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Old 07-07-2011, 06:04 PM   #65
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I was just notified by SSA that I was approved for the so-called claim now, claim more later SS provision. In the following paper it says that this provision alone will cost SSA about 10 Billion bucks when boomers catch on to it's availability.

http://www.womoney.com/Articles/STRA...LAIMSOCIAL.pdf

I'm glad that I was approved, but I can see that provisions like this may be trimmed in the future as I doubt that it was intiially supposed to be like this.
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Old 07-07-2011, 06:15 PM   #66
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Originally Posted by donheff
The debt problem is not an immediate problem it is a long term problem. In fact many economists think immedediate curtailments in spending will be counterproductive, possibly pushing us into a double dip. On the other hand, other economists think immediate curtailments will instill confidence. In either case, it isn't important to "whack" a bunch of current programs since they are a drop in the bucket compared to SSA and Medicare/Medicaid.
Donheff, thanks that clarifies the reasoning behind it for me.
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Old 07-07-2011, 06:48 PM   #67
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Sorry for taking this in a political direction I saw the subject and assumed it was in the political forum. So, I agree, lets forget the whys and focus on the what nexts -- at least in this forum
I am sorry, too.

For me and my early ER, my biggest challenge is getting from now (I am 48) to age 60 when the first of my reinforcements begins. Those reinforcements include unfettered access to my IRA, then SS and my forzen company pension. And this is in addition to the income I am already receiving from my taxable account to cover my current expenses.

Another indirect reinforcement is Medicare eligibility which may or may not be better than what I have today or in the near future with Obamacare. At least Medicare will provide me with broader coverage than I have today, a good thing especially if my health is not as good as it is now. I could see my Medicare premium go up which would not shock me, but it would still be cheaper than buying an equivalent individual HI policy.

If the SS benefit formula is changed to reduce monthly benefits (i.e. price indexing), then my benefits would decrease. If the SS benefits become fully taxable, then my tax bill would increase slightly. If the FRA is increased, then I would either have to wait longer to collect full benefits or see a reduction if I took them at the same time. If the SS benefit formula were changed so that more years got averaged in the PIA calculation, then my SS monthly benefit would decrease because more zeroes would be averaged into it.

However, if the SS payroll tax is increased, either through the cap or the rate, then I would not be affected because I have not paid any SS taxes since 2008. If the Medicare payroll tax were extended to unearned income, then I would see a slight increase in my tax bill.

So overall, I don't see SS or Medicare changes hurting me all that much.
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Old 07-07-2011, 08:34 PM   #68
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Is this a multiple choice question?



Hell, it doesn't even look like we can get them to pay taxes on it.
Good one, you made me laugh big 10-4 on the not paying taxes, seems like that should be a no brainer to change, except in DC.
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Old 07-08-2011, 03:16 AM   #69
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During my planning years I always included projected SS income but I never included it as an income stream to cover the essential expenses I was estimating in ER. (The FIDO retirement planning software has discretionary and non-discretionary expenses and nice charts).

I expect to receive SS when I'm eligible and if it is reduced then it shouldn't cause any hardship to me.
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Old 07-08-2011, 06:00 PM   #70
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Master,
I get "page not found" on your Simpson-Bowles link. I looked for info on their income brackets a couple of months ago, but couldn't find that either. I'd really like to check out that info.
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Old 07-08-2011, 07:32 PM   #71
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Haven't a clue on the liklihood of real reform coming out of these negotiations.

But when changes are made I can't imagine there will be means testing other than through a) overall tax policy and b) changing FICA caps and payout ratios.

The ability to activily "means-test" retirees would be a administrative nightmare. Moreover, how do you adminster a policy where in any given year people could fall in and out of the system based on income or net worth?

Would be a nightmare and subject to massive manipulation by the citizenry...
Well, it seems it might be a nightmare, until you realize that Medicare Part B premium amounts are already means tested by annual income. And also the SS provision that allows recipients under 70 a maximum amount of income from work per year. I assume both of these income values are taken from tax returns. The SSA likely has a way of getting this info from the IRS, without much human labor involved. It's reasonable to believe that any future means tested provisions of SS would follow the same income verification procedures already in place.

As for manipulation, working the system will always be a factor for any government program involving personal enrichment. Be it questionable food stamp claims for the poor, or income tax deduction maneuvering for the wealthy.
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Old 07-09-2011, 08:36 AM   #72
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But when changes are made I can't imagine there will be means testing other than through a) overall tax policy and b) changing FICA caps and payout ratios.
You're making it sound like tax policy and changing the FICA caps aren't methods of means testing. They are. Those techniques are not quite as "in your face" as the means testing involved in, say, qualifying for Medicaid. But they're means testing just the same.
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Old 07-09-2011, 08:44 AM   #73
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As for manipulation, working the system will always be a factor for any government program involving personal enrichment.
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Old 07-09-2011, 10:33 AM   #74
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You're making it sound like tax policy and changing the FICA caps aren't methods of means testing. They are. Those techniques are not quite as "in your face" as the means testing involved in, say, qualifying for Medicaid. But they're means testing just the same.

Not at all (I said "other than", which was not meant to diminish the point). It was meant to qualify that I do not see a more encompassing "asset test" to determine "means".

Edit: Which if I'm right will benefit those with net worth over those with pensions.
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Old 07-10-2011, 09:48 PM   #75
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Social Security Disability

I know a few people who receive substanial disability pensions (tax free) and receive ss disability for themselves & their kids. The husband or wife is also working. Why do they collect SS Disability. This should be means tested.
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Old 07-10-2011, 10:04 PM   #76
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I have a # of friends who are Cops and Firemen collecting both a pension and SS. Only one of them is even in the least bit disabled. I think it's easier for them to stay not working because they get SS as well as their pensions. Most folks who are injured continue to work because they can't survive on the SS payments alone.

It should be more than means tested, most of these guys should be in jail.
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Old 07-11-2011, 05:04 AM   #77
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I have a # of friends who are Cops and Firemen collecting both a pension and SS. Only one of them is even in the least bit disabled. I think it's easier for them to stay not working because they get SS as well as their pensions. Most folks who are injured continue to work because they can't survive on the SS payments alone.

It should be more than means tested, most of these guys should be in jail.
I do not agree with trying to control fraud that way. Means testing would not be an effective fraud deterrent!

But on a separate note: I have read some articles that during this prolong recession that there has been a big increase in application for disability with SSI.

Luckily, I was never disabled. So I cannot speak with too much personal experience on the matter.

But... SSI disabilty should only be available to people that are really disabled.

I have not doubt that with the impending budget crisis and funds for SS being debated that they will increase their focus on fraud in SS, Medicare, Medicaid, Defense Spending and any other spending they government does.
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Old 07-11-2011, 08:00 AM   #78
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But... SSI disabilty should only be available to people that are really disabled.
Why do you (and maybe others) think that it is not?

BTW, folks are using a mix of terms. SSD & SSI are two separate programs, with different funding sources and different assets allowed (most SSI receipients, administered by each state, have a $2K limit on assets to be able to qualify for the program).

Here's an article on the difference in programs, and who qualifies (based upon "proof"):

SSDI and SSI Difference
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Old 07-11-2011, 10:27 AM   #79
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Master,
I get "page not found" on your Simpson-Bowles link. I looked for info on their income brackets a couple of months ago, but couldn't find that either. I'd really like to check out that info.
That link works for me to bring up the (Simpson-Bowles) Presidential Commision on Fiscal resposibility and Reform report.

That previous link (that works for me) was to the actual PDF file report - graphs and all.

here's the Wikipedia synopis of that report.

National Commission on Fiscal Responsibility and Reform - Wikipedia, the free encyclopedia

At the bottom of the Wikipedia linked page the actual PDF report is the first link in the "External Links" section
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Old 07-11-2011, 12:51 PM   #80
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I know a few people who receive substanial disability pensions (tax free) and receive ss disability for themselves & their kids. The husband or wife is also working. Why do they collect SS Disability. This should be means tested.
My wife is disabled and receives SSD payments of about $10k/year. It is not enough to pay her annual medicines costs. Our 25% tax bracket and the means based medicare part B premium takes a lot of it. I have not done the calcs to see what the real benefit is but i am guessing maybe $5k/year net.
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