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Old 11-10-2015, 05:10 PM   #61
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Originally Posted by eta2020 View Post

LBYMs will never end up like non savers. Those are dreams of non savers :
Of course, but it's not about it being effective. It's about them thinking that they're getting even.
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Old 11-10-2015, 05:17 PM   #62
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Originally Posted by eta2020 View Post
LBYMs will never end up like non savers. Those are dreams of non savers
But they can surely have policies that will narrow the gap.
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Old 11-10-2015, 05:31 PM   #63
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Just the opposite. The manner in which these latest changes (closing a "loophole") were implemented (not affecting those over 62) reinforces the idea that this past practice will continue . See this:

https://www.bogleheads.org/forum/vie...ewpost=2684095

Specifically:

Quote:
Currently, if you are younger than full retirement age, and you file for either a retirement benefit or a spousal benefit, the SSA checks to see whether you are eligible for the other type of benefit also (i.e., retirement or spousal). If you are, you are automatically “deemed” to have filed for that other benefit as well. You have no choice in the matter.

This deemed filing rule is the reason that, when people want to file a restricted application (i.e, an application to collect just spousal benefits while they allow their retirement benefit to continue growing), they must wait until full retirement age in order to do so.

For anybody who will be 62 or older as of 1/1/2016, there will be no changes to this deemed filing rule or to the restricted application strategy.
Frankly, my brain hurts! That being said, I believe that I will no longer be able to:


a)Wife not file when she becomes 66 in Feb, 2017 and
b)Wife allow her benefits to increase while not filing and
c) Me, File and suspend when I reach FRA in Nov 2017
d) wife then files restricted application for spousal benefits while her earned benefits grow
e) both her and my benefits grow until we decide the time is right.


This was one possible plan to draw down 401K and taxable IRA's a bit to limit RMD's. As I see the new rules, if I file and suspend at 66, then my wife will no longer be able to collect spousal while mine is suspended. I am too young to see FRA before May 2016. So that is a loss of future ~$15K/yr of "spousal benefit" It is now lost even though we are both currently eligible for some SS benefits. That and there will no longer be the ability to retroactively un-suspend. These are not included in the new laws for those who actually file within 180 days of the signing of the law. I see that as impacting us.


At least that is how I am reading the actual laws as signed into law,
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Old 11-10-2015, 05:40 PM   #64
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Originally Posted by CRLLS
But isn't that exactly what they are doing with the elimination of F&S and deemed filing?
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Originally Posted by mpeirce View Post
This approach seems to be the "modern way". That is, rather than a bold stroke, it's tinkering around the edges. Those tinkering do add up though.
Evidently Tinkering with a capital T. Though file & suspend is very popular here, if this AARP webpage is correct, f & s was trivial.
Quote:
A very small number of people — perhaps less than one-tenth of 1 percent of all Social Security recipients nationwide — took advantage of so-called file-and-suspend claiming strategies to increase their take.
That's so small it won't even register on the mainstream electorates radar, so not an indication of what may come.

I would have guessed file & suspend was far more common...

Budget Act Safeguards Social Security, Medicare for Older Americans – AARP
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Old 11-10-2015, 05:44 PM   #65
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But they can surely have policies that will narrow the gap.
They already have and High income non LBYMs pay for it.

Because if you earn max taxable SS income from 25 to 55 or from 25 to 67 you will get about same SS benefit.

So non LBYMs work extra 12 years and pay into SS, but he/she will not get anything extra in terms of benefits.

55 is nice age to say so long to work IMO to squeeze most out of SS benefit and pump least into it. (For high earners)
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Old 11-10-2015, 05:48 PM   #66
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I am very disappointed with AARP on their position. If F&S is such a trivial part, how can it have much of an effect, if any, on safeguarding SS into the coming years? It is contradictory to anyone who uses their heads.
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Old 11-10-2015, 06:06 PM   #67
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I keep hearing social security is running out of money, I'm 53 & retired, the bride is 47 , she is a homemaker, I imagine like most folks in here as an early retiree , if means testing happens , everyone of us would get a reduced social security benefit (if any).
At this point I'm not very concerned about it. I'm 65 now and will take SS at FRA (66) next spring. Despite the fast action on F&S, that affects a minuscule number of SS recipients so the political fallout is equally small. I think that's what made it feasible for Congress to do it.

Like most others I think any changes that affect large numbers of people will be spread out over long time periods (such as raising FRA from 65 was) so people can plan on it. Or at least the ones who do any planning.

And while I think it is highly unlikely I also think the worst that will happen for us is a 25% cut. That would be noticed, but it would hardly put us on a cat food budget or anything close to it. I seriously doubt Congress would have the stomach for taking on the protests that would follow. Far too many people are relying on SS for their only retirement income and are living on a cat food budget.
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Old 11-10-2015, 06:23 PM   #68
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... Far too many people are relying on SS for their only retirement income and are living on a cat food budget.
Hence, the people who get SS reduced will be the ones not living on a cat food budget. That means people with pensions, 401k, IRA, or even after-tax savings if they figure out a way to count that.
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Old 11-10-2015, 07:58 PM   #69
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Originally Posted by CRLLS View Post
Frankly, my brain hurts! That being said, I believe that I will no longer be able to:


a)Wife not file when she becomes 66 in Feb, 2017 and
b)Wife allow her benefits to increase while not filing and
c) Me, File and suspend when I reach FRA in Nov 2017
d) wife then files restricted application for spousal benefits while her earned benefits grow
e) both her and my benefits grow until we decide the time is right.


This was one possible plan to draw down 401K and taxable IRA's a bit to limit RMD's. As I see the new rules, if I file and suspend at 66, then my wife will no longer be able to collect spousal while mine is suspended. I am too young to see FRA before May 2016. So that is a loss of future ~$15K/yr of "spousal benefit" It is now lost even though we are both currently eligible for some SS benefits. That and there will no longer be the ability to retroactively un-suspend. These are not included in the new laws for those who actually file within 180 days of the signing of the law. I see that as impacting us.


At least that is how I am reading the actual laws as signed into law,
Yes, this is brain-hurting stuff (isn't all of it at times? personally, I've been having an internal LMP debate all week involving buying a small deferred annuity that kicks in at 70 and an additional QLAC beginning at 80. The annuities seem to have won out due to the small PF commitment but I'm worse for the wear ).

See this:

Millions of Americans just lost a key Social Security strategy - MarketWatch

Specifically:

Quote:
The first big change is to the “deemed filing” rule, said Mike Piper, author of Social Security Made Simple: Social Security Retirement Benefits and Related Planning Topics Explained in 100 Pages or Less.

But this change only affects people who will not yet have attained age 62 by the end of 2015,” he said. Specifically, he said, the new law would make it so that deemed filing applies beyond full retirement age rather than only applying before full retirement age.

This, in effect, kills off the “restricted application” strategy in which a person files for spousal-benefits-only at full retirement age while allowing their own retirement benefit to continue growing.

But for people who will be 62 or older at the end of 2015, the restricted-application strategy is still available,” Piper said.
Emphasis added

As to the mechanics of this strategy, I'm not planning on doing F&S (not married), but if I were I would definitely consult SS. Have you thought of posting on the BH forum on the thread I included above? I'm sure they could and would help.
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Old 11-10-2015, 08:31 PM   #70
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I continue to think long lead times will be the norm for any Congressional action on SS as I suspect the F&S change was an anomaly for Congress. It was seen by them as closing a unintended loophole and not a change to SS per se.
+1 on this... if they see where there is a problem in a law/rule etc., then they will fix it pretty fast... that is not changing the rules of SS IMO...

Also, isn't F&S a recent change to begin with? I have never paid attention to it, so I do not know....
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Old 11-10-2015, 08:43 PM   #71
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I am very disappointed with AARP on their position. If F&S is such a trivial part, how can it have much of an effect, if any, on safeguarding SS into the coming years? It is contradictory to anyone who uses their heads.
Trivial things can become big things if nothing is done to stop it....

Back before it was changed, someone who had a state pension and had never paid into SS could qualify IF they retired while working a job that paid into SS.... this was available to all states.... but it became a cottage industry here in Texas.... many teachers would get a job at a school district that did pay into SS.... for ONE DAY... that qualified them to get spousal benefits... when my sis did it she had to pay the school district for the one day of work... it took them many years to get this fixed as it was a small item.... but it was growing bigger each year...


Same thing with the offsets they now have...
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Old 11-10-2015, 08:48 PM   #72
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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.
Yes, I realize that. I simply point out that the tax system can do the same thing without appearing to be a 'means test'.
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Old 11-10-2015, 08:56 PM   #73
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FWIW, I have known a few people who worked in government jobs where the leaders opted out of the SS system in favor of a more generous government pension system. My entirely observational conclusion is that most wish they had been in SS, especially when they read about Detroit, Illinois, etc.
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Old 11-10-2015, 09:01 PM   #74
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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.
Brits I have worked with told me that the UK does not apply a COLA to the state pension program for those who reside in retirement outside the UK.

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Old 11-10-2015, 09:08 PM   #75
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FWIW, I have known a few people who worked in government jobs where the leaders opted out of the SS system in favor of a more generous government pension system. My entirely observational conclusion is that most wish they had been in SS, especially when they read about Detroit, Illinois, etc.

Our system was a one time vote taken in the 1940s before most pensioners alive even had a say in it. I do not know the reasoning either way other than the pension system said it was overwhelmingly voted down by the members. For me I imagine it would have been a near zero difference. I imagine the pension would have been smaller as the contribution rates would have been smaller to allow for SS deductions.


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Old 11-10-2015, 09:19 PM   #76
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However, the file and suspend change happened very quickly, and unless you are already 62, a married couple can no longer take advantage. So we have rethought our position.
Actually the File and suspend change was proposed in the 2014 budget of the president as well as the 2015. So it was discussed for 1.5 years what happened here was the exception to regular order that congress likes now days no passage thru committees etc. BTW it should be noted that once the full retirement age begins to rise (starting in 2020 by 2 months a year for the next 6 years) the benefit increase will be limited to 24% from todays 32%. (you loose 1 year of increase).
Actually if the full retirement age then remains the same for 10 years and increases again following the model that implies that folks turning 65 in 2035 would start the 2 months a year moving to 68 for folks turning 65 in 2041 etc.
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Old 11-10-2015, 09:31 PM   #77
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Agreed.... What the article clearly tapped danced around is the fact this was set up clearly as a "pay as you go system". No illusion there as it has been that way from the beginning. The current working generation pays for the retired. Yes there are some problems that need to be addressed. But to label it as "welfare" in the sense the common man interprets that word is just plain wrong. And this is coming from a WEP victim , who begrudgingly supports the WEP.


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Old 11-10-2015, 09:53 PM   #78
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Brits I have worked with told me that the UK does not apply a COLA to the state pension program for those who reside in retirement outside the UK.

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That is true for some countries, mostly Commonwealth countries like Canada and Australia because of historical reasons and no reciprocal SS agreements. The UK pays full COLA on its SS payments when made to residents of other European countries and the USA.
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Old 11-11-2015, 05:51 AM   #79
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... to label it as "welfare" in the sense the common man interprets that word is just plain wrong.
Agreed. If every government program that was a pay as you go was considered welfare, federal and private pensions, military retirement, even interest on treasury bonds would be considered welfare. And the ACA and medicare would be a no-brainer. Even driving on public streets.

If SS was privatized, and the accounts was invested in government bonds, it would be no different. I suppose the MyIRA would be welfare welfare too.

SS will always be around in one for or another. They may means test it for high earners, increase the age to collect, increase the withholding, adjust the bend points, reduce the CPI or any number of other tricks to extend or fund it, but it will be around.

If I had a $100K retirement income, outside of SS, I would not be worried about being means tested in the next 20+ years.
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Old 11-11-2015, 06:11 AM   #80
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Agreed.... What the article clearly tapped danced around is the fact this was set up clearly as a "pay as you go system". No illusion there as it has been that way from the beginning. The current working generation pays for the retired. Yes there are some problems that need to be addressed. But to label it as "welfare" in the sense the common man interprets that word is just plain wrong. And this is coming from a WEP victim , who begrudgingly supports the WEP.


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Yes, not only wrong but also off topic and likely to bring a premature end to a lively and interesting thread.
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