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Old 11-10-2015, 11:45 AM   #21
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Like some posters have said here, I don't think the change will happen to people who are already taking SS. If the SS is reduced for the current recipients, many become homeless and starve, which I don't think the government will let happen, although I could anticipate more taxes taken out of SS very slowly...

This is not about US, but my mom in Japan tells me her SS stayed the same during the deflation years there (while their tax deduction increased gradually but at a slow pace) and although they are now experiencing inflation, the government is not raising the SS since they didn't lower it when the deflation was happening. Just tidbits.
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Old 11-10-2015, 11:50 AM   #22
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SS is already means tested if one considers that above a certain level it is taxed more and more. And, IIRC, that level is not indexed for inflation, thus increasing the tax level almost every year.
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Old 11-10-2015, 11:55 AM   #23
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Yes , I don't remember where I read it but that 70-75% rings a bell that's why I used it. As far as reducing my pension numbers I didn't do that at all, I factored it in at 100%. Don't depress me with what if my pension gets cut, you might as well tell me did I factor in that my investments will be nationalized.
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Old 11-10-2015, 11:56 AM   #24
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I started seriously thinking about SS and retirement when I was in my 40's. Even back then I figured the gov would figure out a way to steal what I was forced to contribute. So I never considered SS in my retirement calculations. To my surprise, I've been collecting it for a couple of years now and just consider it extra cash. However I realize that they could cut it off or reduce it at any time. To me it's not if they will cut it off or reduce it, it's when and by how much and by what conditions. It will be legalized thievery anyway you slice it.
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Old 11-10-2015, 11:57 AM   #25
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Yes , I don't remember where I read it but that 70-75% rings a bell that's why I used it.
I believe 70% comes from the SS trustees' report.
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Old 11-10-2015, 11:57 AM   #26
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Sorry if I wasn't clear

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SS is already means tested if one considers that above a certain level it is taxed more and more. And, IIRC, that level is not indexed for inflation, thus increasing the tax level almost every year.
What I ment was if the monthly benefit that was projected will be reduced, taken away , if you have above a certain amount of income or for that matter asessts.
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Old 11-10-2015, 12:03 PM   #27
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Why wouldn't I apply the risk factor to the variable that I actually think is at risk?
No reason whatsoever. For example, in my circumstances, I don't think my SS is at risk so I don't make any adjustments for it being reduced. However, I do think taxes (an expense) will be increasing and therefore I assume my expenses will be constant or slowly rise as I age as opposed to the theory that expenses decrease as you age. We all pay our money and we all get to take our chances on predicting the future.
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I should be getting much more in SS than my pension, and I personally think SS is more at risk than the pension, so why would I adjust my pension assumption rather than SS?
Again, we all get to take a stab in the dark. I'm much less confident in my pension (or DW's State of Illinois pension) than I am in SS.

We're all busy guessing and making adjustments to models. In my case, I've come to my own personal conclusion that there are many factors that are indeed variables, not constants, and that developing a flexible lifestyle able to cope with unpredictable outcomes makes more sense than detailed models built on guesses. Much of it seems like measuring with a micrometer and cutting with an axe to me.

We all do it as we wish.
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Old 11-10-2015, 12:07 PM   #28
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What I ment was if the monthly benefit that was projected will be reduced, taken away , if you have above a certain amount of income or for that matter asessts.
I just try to leave a big pad / allow for Murphy's Law in my retirement plan. I used to do that with big project schedules at work and it worked well while most of the optimistically planned projects pretty consistently went down in flames.

I expect to have SS benefits reduced either outright or in some more subtle ways like tax brackets not indexed to inflation or chained CPI. Chained CPI almost passed once. But a SS benefit cut by any other name is still a benefit cut. I do think sooner or later wealth inequality will be addressed more than it currently is.

If we have to reduce assets, maybe we'll speed up donations and gifts to the kids instead of leaving money in our estate.
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Old 11-10-2015, 12:08 PM   #29
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SS is already means tested if one considers that above a certain level it is taxed more and more.
That is absolutely true and most people never talk (or maybe don't know) that. I fully expect (and fear) that the day will come that they will add additional means testing, probably by actual net worth (cash and assets). I've read about all sorts of "proposals" ranging from reducing or eliminating SS benefits for higher net worth individuals. Most of the time it seems to be targeting folks with 3 million or more in total net worth. Some sort of reform is coming. Reform, ha, that's a nice way to describe theft.

I know many here don't share that "perspective"... That's okay, I wish you good luck and I really hope you are right!
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Old 11-10-2015, 12:12 PM   #30
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. As far as reducing my pension numbers I didn't do that at all, I factored it in at 100%. Don't depress me with what if my pension gets cut, you might as well tell me did I factor in that my investments will be nationalized.
Your pension might get cut. Entirely possible.

A political upheaval, war, natural calamity, etc., might cause the nationalization of land and capital and completely eliminate the ownership rights normally attached to passive investing.

Who knows? I'm not planning for either of those. But, WTF? It's possible.
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Old 11-10-2015, 12:27 PM   #31
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If figure that if they crank up means testing some day (there is already SOME relating to taxing it)

1. If things go well, I don't need it

2. If things go poorly, means testing affect me
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Old 11-10-2015, 12:38 PM   #32
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I included WEP in my calculations, but went with the current rules and I have no idea what will happen in the future.

If I were to guess, means testing won't happen. When you look at what other countries have done to improve the finances of their systems the solution is usually increasing the retirement age and a progressive reduction in the rates used to calculate the benefit so that the poor don't see a reduction in their payments. The UK has taken an extreme approach by slowly increasing the retirement age of both women and men to age 67 and proposing age 68 after 2030 as life spans increase.The UK has also eliminated all earnings related components from social security. Everyone, no matter how much they earn, will get the same payment if they retire on or after 6th April 2016. This is larger than the basic UK state pension I would have qualified for as an expatriate, so I'm happy.
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Old 11-10-2015, 12:43 PM   #33
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I've always assumed SS taxed at 100%. During my accumulation phase, I used 0 SS, only factoring it in once I was 10 years away (50% I think), and 100% at 5 years. I figured the speed of government would grandfather me in at that point. I agree with others that once you're collecting, your benefit won't be cut, except for future CPI increases. Congress would be too afraid of the consequences and would most likely go after future generations. If I was starting over, I'd still follow the same plan, except I'd factor in SS into the plan at maybe 7 and 4 years before being able to collect at 62.


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Old 11-10-2015, 12:50 PM   #34
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I believe 70% comes from the SS trustees' report.
It appears in many SS.gov documents, just one example of their current stance:
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Originally Posted by SS.gov
The concepts of solvency, sustainability, and budget impact are common in discussions of Social Security, but are not well understood. Currently, the Social Security Board of Trustees projects program cost to rise by 2035 so that taxes will be enough to pay for only 75 percent of scheduled benefits. This increase in cost results from population aging, not because we are living longer, but because birth rates dropped from three to two children per woman. Importantly, this shortfall is basically stable after 2035; adjustments to taxes or benefits that offset the effects of the lower birth rate may restore solvency for the Social Security program on a sustainable basis for the foreseeable future. Finally, as Treasury debt securities (trust fund assets) are redeemed in the future, they will just be replaced with public debt. If trust fund assets are exhausted without reform, benefits will necessarily be lowered with no effect on budget deficits.
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Old 11-10-2015, 01:05 PM   #35
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All the means testing scenarios seem to involve people with incomes greater than $250K. It is unlikely to happen as the system was designed for a pension program, not a welfare program.

Secondly, if they did means test, like others have said, it will be unlikely to affect people 55 years of age and older.

Thirdly, it would likely be phased in, and have a limited effect on most people.

Fourthly, the Government doesn't really have a 'trust fund' with money in it. It has the ability to print money. Printing money is the best way out of most financial problems for Governments. The USD is the reserve currency of the World, and will continue to be so for a long time.

I use the full amount of SS in my plans. I do over-estimate the amount of spending I actually need. If it does go away in any fashion, I am not worried about it.
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Old 11-10-2015, 01:47 PM   #36
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Market crashes, take away SS, get sick, whatever else. Not going to focus on or worry about these but will deal with them when they happen.
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Old 11-10-2015, 02:17 PM   #37
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I started a poll on this back in 2011.

As expected, responses varied a lot by age. Older people expected higher percents of the current benefit formula.

The 40-49 group had a modal response of 75%, that was also the median. The mean was a little less.

Note that the poll was about "most likely". Many people intentionally use more conservative assumptions for when-to-retire decisions.

Poll:Are You Expecting Social Security?
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Old 11-10-2015, 02:25 PM   #38
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For those very close to the age of 62 and above, in order for you to believe that your SS would be impacted in any way, you would have to believe Congress would do something it has never done before
But isn't that exactly what they are doing with the elimination of F&S and deemed filing? I am 63 next week and my DW is already 63. While we were not "planning" on using that scenario when we file, it was nice to know it was an option. Now it will not be an option. IT does impact us.


So my point is, the cat is now out of the bag. We can no longer assume that benefits to those of SS age, whether collecting or not, will not be affected in the future.
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Old 11-10-2015, 02:31 PM   #39
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Market crashes, take away SS, get sick, whatever else. Not going to focus on or worry about these but will deal with them when they happen.
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Old 11-10-2015, 02:32 PM   #40
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This was only 6.2% of my earnings so it has already been written off as a loss. If it comes back to me then it is a bonus.
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