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Old 07-11-2018, 03:41 PM   #221
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See below. A nice article on the subject

https://www.yahoo.com/amphtml/financ...171500408.html
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Old 07-11-2018, 03:42 PM   #222
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Originally Posted by Easypick View Post
I am 61 and the wife is 59. We both have upcoming birthdays, so I am facing the “do I take SS early or not”. I think it is a good move based on the following:



•Our annual expenses less travel are $60K

•Wife has a state teacher’s pension of $30K per year (no SS contributions)

•My SS at 62 would kick in about $24K per year for a delta of $6K

•Her health is good. I had bypass ten years ago (runs in the family), but still doing great

•A 3% withdrawal rate would easily cover the balance ($30K) and travel if no SS taken



Can you think of any reasons not to take the money and run?

See this article
https://www.yahoo.com/amphtml/financ...171500408.html
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Old 07-11-2018, 03:45 PM   #223
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+1 IIRC when SS was first established and the retirement age was 65 they would be expected someone to collect retirement benefits for 13-15 years... by 1980 that had increased to 15-19 years... so response, the FRA was changed to 67 in 1983 .... this brought the years that one would collect back to 13-17 years... however, medical advances have significantly improved mortality since 1983 and IMO an increase in FRA to reflect those improvements in mortality are long overdue. IOW, make occasional changes to FRA to reflect mortality improvements so on average people collect for 13-15 years after they retire as one way of preserving the system.
Agreed! maybe if you and I and a few more here could get elected to congress, we could get a reasonable proposal pushed along.......Nah, that sounds too much like a J*b.
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Old 07-11-2018, 03:46 PM   #224
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Has mortality increased since 1983?
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Old 07-11-2018, 04:46 PM   #225
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well it looks like it has,longevity that is, to 19 to 22 yrs, from the SSA website:

  • A man reaching age 65 today can expect to live, on average, until age 84.3.
  • A woman turning age 65 today can expect to live, on average, until age 86.7.


https://www.ssa.gov/planners/lifeexpectancy.html
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Old 07-11-2018, 04:56 PM   #226
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AFAIK, every change to SS that might reduce the future gap between revenue and benefits is politically unpopular. That's why we continue with the system we have.
In 1983, the changes that were made were also politically unpopular, each by one side or the other.

But at the time the "crisis" was more imminent, and the government was capable of compromise solutions.
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Old 07-11-2018, 05:05 PM   #227
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I wonder how much support there might be for a down-the-road conversion to a true pay-as-you-go system.
Social Security is already a pay-as-you-go system, except for the excess placed into the Trust Fund to provide a buffer for the lean years.
see: https://en.wikipedia.org/wiki/PAYGO

"In social insurance, PAYGO refers to an unfunded system in which current contributors to the system pay the expenses for the current recipients. In a pure PAYGO system, no reserves are accumulated and all contributions are paid out in the same period. The opposite of a PAYGO system is a funded system, in which contributions are accumulated and paid out later (together with the interest on it) when eligibility requirements are met.

An important example of such a PAYGO system in this second sense is Social Security in the U.S. In that system, contributions are paid by the currently employed population in the form of the Federal Insurance Contributions Act tax (FICA), while recipients are mostly individuals of at least 62 years of age. Social Security is not a pure PAYGO system, because it accumulates excess revenue in the Old-Age, Survivors, and Disability Insurance Trust Funds (OASDI)."

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Every dollar collected would be paid out, but no more inter-generational borrowing or lending.
There is no inter-generational borrowing. By "lending" perhaps you mean the Trust Fund itself?

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When the economy is prosperous, there would be more money for seniors. When the economy takes a dip, seniors would have less to spend.
So when the economy is bad, the people living on previously-fixed incomes without the ability to work have to suffer for it? Imagine trying to plan your retirement around that!

That's not going to happen. Nor would most folks want it to.
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Old 07-11-2018, 05:26 PM   #228
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There is no inter-generational borrowing. By "lending" perhaps you mean the Trust Fund itself?


So when the economy is bad, the people living on previously-fixed incomes without the ability to work have to suffer for it? Imagine trying to plan your retirement around that!

That's not going to happen. Nor would most folks want it to.

+1 ..... I think you have to study the Depression Era a bit to understand the dynamics of this program... The 'Everyone on their Own' Philosophy was failing miserably.... The S.S. Program was set up to get the Entire Country Moving again.....



The earliest recipients of Social Security paid nothing into the program, but God knows that they contributed to the Country and the coffers of the Rich long before they received their meager stipend.
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Old 07-11-2018, 05:32 PM   #229
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Haven't Congress dipped into the surplus many times for general spending?
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Old 07-11-2018, 05:38 PM   #230
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Haven't Congress dipped into the surplus many times for general spending?

Yes, they have spent it all and then some! .... The programs that are spending this surplus are the ones that should be discussed and Cut!
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Old 07-11-2018, 06:22 PM   #231
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Yes, they have spent it all and then some! .... The programs that are spending this surplus are the ones that should be discussed and Cut!
Nope.
https://www.cbsnews.com/news/lets-de...security-myth/
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Old 07-11-2018, 06:31 PM   #232
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Has mortality increased since 1983?
Absolutely.... principally due to advances in medicine... but mortality improvements are currently plateauing.

See bottom line on page 2 of this link.... https://www.cdc.gov/nchs/data/hus/2016/014.pdf

In 1980 a 65 yo male could expect to live 14 years... in 2014 it was 18 years... pretty big difference.
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Old 07-11-2018, 06:35 PM   #233
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Haven't Congress dipped into the surplus many times for general spending?
Sort of but not really.... basically, rather than issuing more bonds to the public to fund general fund deficits, they have issued bonds to the SS Trust Fund since the trust fund had a surplus and needed to invest those surpluses.

However, all owings... both to the public and interagovernmental borrowings like the bonds issued to the SS Trust Fund are included in the national debt.

Had the SS trust fund not existed then the national debt would be the same, just more government bonds would be held by the public.
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Old 07-11-2018, 06:35 PM   #234
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I did know that, so thanks for posting this,.......But, my head is spinning trying to figure out how they bought Bonds that pays themselves with money that they may or may not have....
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Old 07-11-2018, 07:04 PM   #235
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That's easy.. if the SS Trust Fund wasn't available to buy the bonds then they would have been sold to the public. Both are included in the national debt.

Think of it as two siblings where sibling A has money to invest and sibling B doesn't but had good credit.... Sibling B simply borrows from Sibling A rather than getting a bank loan. Sibling A's debt is unchanged.
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Old 07-11-2018, 07:21 PM   #236
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That's easy.. if the SS Trust Fund wasn't available to buy the bonds then they would have been sold to the public. Both are included in the national debt.

Think of it as two siblings where sibling A has money to invest and sibling B doesn't but had good credit.... Sibling B simply borrows from Sibling A rather than getting a bank loan. Sibling A's debt is unchanged.

Except there is only 1 Sibling.
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Old 07-11-2018, 07:47 PM   #237
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Everything at the link is true, but I do not believe it is germane to the point at hand.

If we consider the US Government general fund and the SS program as one "system," there are zero net assets in the SS trust fund, since every "asset"in the fund is a liability of the US government. 1 - 1 = 0.

This is not a political point, I'm making no assessment of what should have been done with the SS payroll taxes that exceeded annual SS payments to recipients. But every special bond that SS "cashes in" from the trust fund to pay Social Security benefits must be paid by the US Government--from tax revenues, from additional borrowing, or from increases in the money supply ("printing money"). In this sense (that is, from an annual budgetary perspective), we >already< don't have a pay-as-you-go system, since we now have annual infusions from the US government every year to pay SS benefits. In fact, from that same perspective, nothing at all would need to change when the SS "trust fund" runs out, the transfers could continue just as they had been doing for the previous 20 years. Legislation would be required to make that happen, but from a USG balance sheet perspective there need be no significant change that year.


But it's not pay-as-you-go as far as SS is concerned. Pay-as-you-go would mean every collected dollar goes to beneficiaries-->paid out as we go. If we linked SS benefits directly to current year SS taxes (in a slowly phased-in fashion) it eliminates the bookkeeping "procedures" that were convenient at the time, but which just kick liabilities down the road to future generations, which is what we are already experiencing.
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Old 07-11-2018, 09:22 PM   #238
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In 1983, the changes that were made were also politically unpopular, each by one side or the other.

But at the time the "crisis" was more imminent, and the government was capable of compromise solutions.
Yes, many of us are old enough to remember Reagan and O'Neill.

Those were the days.
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Old 07-11-2018, 09:53 PM   #239
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Except there is only 1 Sibling.
And some people just don't get it.
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Old 07-11-2018, 10:05 PM   #240
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.... But it's not pay-as-you-go as far as SS is concerned. Pay-as-you-go would mean every collected dollar goes to beneficiaries-->paid out as we go. If we linked SS benefits directly to current year SS taxes (in a slowly phased-in fashion) it eliminates the bookkeeping "procedures" that were convenient at the time, but which just kick liabilities down the road to future generations, which is what we are already experiencing.
Pay as you go means self-funding and no borrowing... and that is what SS is... by law.

That is why when the surplus and interest run out in 2034 that benefits will be cut by ~25%... at that point you will get your wish... SS benefits will be limited to the then current year taxes.
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