Social Security in Trouble

[Martha]

I think SS won't be that hard to fix. I do think raising the retirement age is a mistake. A lot of people take SS early at 62 because they are already so beat up by work and life. Very few are able to hold off past 66.x.

Although life expectancy has increased, most of the extra length is due to reductions in very early deaths. A pre 20th Century individual who lived past the teenage years could expect to live to an age close to the life expectancy of today.

So raise the tax cap.

Medicare is a bigger problem.

[ziggy29]

Quote:

Originally Posted by Martha I think SS won't be that hard to fix. I do think raising the retirement age is a mistake. A lot of people take SS early at 62 because they are already so beat up by work and life. Very few are able to hold off past 66.x.

Another problem with raising the retirement age is that there has to be additional jobs for all these older people who used to be able to retire. Do you see those jobs out there? I don't...

[Westernskies]

Any eligibility change is SS age grids should be implemented to affect younger workers (they presumably will live longer thanks to the benefits of medical science) who are not paying into the system now- those of us who have been paying SS taxes for 20-30-40+years to help fund our retirements have done so against a very clear set of expectations.


Besides, we all grew up with spankings when we misbehaved; lived with chain smokers and secondhand smoke; ate 4% butterfat milk and 12% butterfat ice cream; sugared soft drinks and saccharine; scotch whiskey from a flask and beer from a metal can, ate steaks, chops, and eggs- including the yolks. drank flouridated water from the garden hose; rode in the backs of pickup trucks and in cars without seat belts, no bike helmets or tofu; watched grainy B&W TV, took plain aspirin, and prepared for the Cold War. We clearly weren't expected to live this long.

[dshibb]

"So raise the tax cap."
Don't need to.

"Another problem with raising the retirement age is that there has to be additional jobs for all these older people who used to be able to retire. Do you see those jobs out there? I don't..."
Obviously with exception of the current economic climate, this statement shows a clear lack of knowledge of economics, no offense. Jobs aren't finite they build off each other. AKA there isn't a big pie of jobs out there where one person getting one deprives another of one. As certain jobs are created, those workers have money to spend. So, more jobs need to be created to increase production for those previously hired workers.

Actually as evidenced by China, India, etc. having more workers is a plus to your economy. Just take a look at the difference between a small town and a city. Which has more wealth? Labor is a commodity, more of it increases everyones wealth. I'll admit that right now our current situation is a unique one in world history, and does provide certain temporary problems. Adding a billion workers overnight is a huge shock to the system, traditionally the increase in labor is more gradual(a good thing). So much, so fast will mean that the world will grow faster, but at the expense of some labor wage stagnation, which tends to piss off many Americans.

[ziggy29]

Quote:

Originally Posted by dshibb Obviously with exception of the current economic climate, this statement shows a clear lack of knowledge of economics, no offense.

You know, you've been having some trouble making your points without being insulting or condescending.

[unclemick]

Don't forget cheeseburgers - still my favorite.

Took my SS early and with time in the market can afford to supplement my new Medicare card.

Now they want to rattle my cage?

Well don't that just beat all.

heh heh heh -

[FinanceDude]

Quote:

Originally Posted by dshibb "the next step will be to further increase eligibility age" This should be the next step, but good luck. I personally expect that they will means test it and cutback on benefits by changing the formula, freezing its wage inflation index, etc. That is just an honest assessment of the political will.

They have already done that, I have to be 67 to get the full benefit, up from 65. However, I can take the early amount at 62, I expect that will go up in the future........

[ziggy29]

Quote:

Originally Posted by FinanceDude They have already done that, I have to be 67 to get the full benefit, up from 65. However, I can take the early amount at 62, I expect that will go up in the future........

It doesn't need to go up. If it's a problem, they could just increase the amount of reduction for taking it at 62 to make it actuarially even out.

[dshibb]

"You know, you've been having some trouble making your points without being insulting or condescending."
Sorry, I spend to much time on FWF, and they are bigger A-holes than I am. I'll try to be a little more pleasant on here.

[FinanceDude]

Quote:

Originally Posted by ziggy29 It doesn't need to go up. If it's a problem, they could just increase the amount of reduction for taking it at 62 to make it actuarially even out.

They could but they won't. If they took the limits off where they stop taking FICA, SS could be funded indefinitely. However, the problem is not really SS, it IS MEDICARE and MEDICAID........

[ziggy29]

Quote:

Originally Posted by FinanceDude They could but they won't. If they took the limits off where they stop taking FICA, SS could be funded indefinitely. However, the problem is not really SS, it IS MEDICARE and MEDICAID........

Well, SS *is* a problem, but you're right -- compared to the ticking time bomb of Medicare it's a minor problem and easy to fix. SS can be shored up with a combination of several tinker-around-the-edges changes.

Medicare, on the other hand, needs to be (metaphorically) blown up and something sustainable rebuilt in its place. "Shoring it up" is doomed to failure and no amount of tinkering on the edges will make it long-term sustainable. But then again, "blowing it up" is political suicide (remember who votes). So we're back to square one...

[Cb]

I have a hunch that the young will bear more of the pain associated with fixing SS than will AARP members.

But to be on the safe side in my own planning, I more than split the difference, derating our current SSA projections by 15%, and assume that 100% will be taxed when the time comes.

We're 48 & 49, fwiw.

Cb

[ziggy29]

Quote:

Originally Posted by Cb I have a hunch that the young will bear more of the pain associated with fixing SS than will AARP members.

I have a hunch that the sun will rise in the east tomorrow.

[mikex]

Good news - this guy says SS is not in any real trouble (but Medicare definitely is)

Weiner: The program is solvent for the next 30 years. Once, and even then, when they say insolvent, it still will be able to pay 75% of the benefits even under the worst economic model. And the economic model that they’re using is the crash that we’re in right now. So they’ve taken the worst case scenario, instead of recognizing that the economy will improve and that we’ll go back to a solvency situation with Social Security.

...

That is the real problem. Social Security is solvent for at least 30 years and one third of the cost of the Iraq war or one third of the tax cuts; even then in the worst case scenario would solve it. Let’s worry about that in thirty years. As Nancy Pelosi said, first, do no harm. But Medicare is in dire straits and it can be solved with allowing imports. It can be solved with vying and buying and it can be solved with the national health care program that there seems to be a consensus toward right now.

Medicare is the real danger, not social security – amFIX - CNN.com Blogs

[Independent]

Quote:

Originally Posted by dshibb Still though, the best move is private accounts(when this issue came up it was accompanied by the worst explanations I have ever seen in my life, the vast majority of the public still doesn't understand that plan). It should get younger people off the system. Then the goverment will be able to justify taking on a little bit more debt and cutting into other programs because one day 20 years down the road, the entitlement will all but stop and the savings would more than pay off the debt.

Could you explain the private account plan? If you did this on another thread, a link will suffice. (full disclosure -- I read the President's Commission report back when it was news, I wasn't impressed.)

[Nords]

Quote:

Originally Posted by dshibb ... you clearly don't know much about this issue at all.

Quote:

Originally Posted by dshibb "It is crap because... Anybody that says that people would end up with less in private accounts instead of government run is either A) a liar or B) ignorant."

Quote:

Originally Posted by dshibb I don't care what his thoughts are. You don't understand that...

Quote:

Originally Posted by dshibb ... this statement shows a clear lack of knowledge of economics, no offense.

When I go back and read these phrases I form the opinion that the credibility of your assessments, let alone the quality of your discourse, is greatly reduced by the personal attacks and characterizations. The strength of your arguments could stand on logic alone without resorting to those tactics.

Quote:

Originally Posted by dshibb I'll try to be a little more pleasant on here.

Looking forward to it.

[Zoocat]

Quote:

Originally Posted by ziggy29 Another problem with raising the retirement age is that there has to be additional jobs for all these older people who used to be able to retire. Do you see those jobs out there? I don't...

Exactly right. All the women I know who are my age, late 50s, do not have full time jobs with benefits. They were all been laid off along the way and now rely on contract work with no benefits. I work part time and that is my situation. This is enough of a problem because frankly there isn't a whole lot of contract work out there for older people anyway. Age discrimination is alive and well and growing.

In addition people who reach their late 50s, early 60s are often burnt out, as Martha pointed out. They don't all have office jobs or professional positions. Some are blue collar, like my brother, who does specialty printing despite a back injury, and my older son, an electrician. Their bodies will break down eventually and they will need other employment. What sort of jobs will they be able to train for in their late 50s?

Another point, albeit, a grim one. We might not all reach that projected longer lifespan which depends upon medical care that has been available to the previous generation. With funding for health care becoming so extremely tight and procedures and treatments for the elderly so expensive, you can probably bet that this is one area that will see "rationing of care." In other words, in the future a patient like my 86 yr old dad who died six months after receiving a pacemaker and a week stay in the hospital courtesy of Medicare will probably the last of his kind.

[mark500]

I have a hunch that the young will bear more of the pain associated with fixing SS than will AARP members.

The AARP. Don't they eat their children and grandchildren?

[dshibb]

It was pathetic(the president's commission).

There is one particular detail that everybody left out that made all the arguments against it a mute point. And they should have stressed it endlessly. Under the GOP plan, a very small percentage of the money that went into private accounts would go to purchase secondary insurance. That insurance said this, if an individual reaches retirement age and due to crash, losses, etc. the amount in the account wasn't sufficient for paying an income at least equal to what the current system provided, the secondary insurance would make up the difference.

So under the Bush plan you were guaranteed to receive at least what the current system paid, and had the opportunity to get much, much more. I don't remember the exact calculations, but it was something like this. If you assumed a 10% rate of return, the income would be like 4 times as much at retirement, and the excess was transferable to your heirs.

[dshibb]

Nords, I'll admit that I should stop saying things like quotes 1 and 4. 2 and 3 aren't bad. 2 is just factually accurate, blunt, but accurate. In 3 if Obama can't get the votes than I don't care what his thoughts are.