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Old 11-11-2015, 06:24 AM   #81
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Originally Posted by eta2020 View Post
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)
Nice observation! Sort of a "Freakonomics" analysis!

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I am very disappointed with AARP on their position. .
Disappointed, but not surprised.
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Old 11-11-2015, 06:37 AM   #82
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A true retirement saving system would result in a retiree with 40 years of work getting twice as much as a retiree who worked only 20 years. SS does not do that.

I have seen systems in other countries where they separate out the welfare and the retirement parts. For the welfare part, everybody has to contribute, and as there's no cap on that the well-paid worker pays more without getting a direct benefit, just like other taxes. But in return, his own retirement portion is really his, and the longer he works the more he has. He will never complain about getting cut or has to "share". It is also tied directly to the investment markets, so that when the economy is down nobody gets a guaranteed benefit. That system also avoids the silly clauses like our SS has, that one needs an optimizer program to figure out how to file for benefits. File and suspend, spousal, survivor benefits. Arghh!

At this point, I do not see how our SS can be changed. We are stuck.
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Old 11-11-2015, 06:44 AM   #83
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At this point, I do not see how our SS can be changed. We are stuck.
We might be 'stuck' as you put it, but in this case, I don't see how anyone on this forum would be better off if anything changed.

"Change is not good" in this instance.
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Old 11-11-2015, 06:52 AM   #84
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That's why our SS system is stuck. We cannot go back and undo the silly things that were passed into laws in the past. In fact, we keep passing more laws to make it ever more complicated.

So, we are forever running optimizer programs this and that, shifting money around to get ACA subsidy, and playing the shell game with the IRS by moving money around different IRA/401k/Roth/After-tax accounts.

I am sure that if we sit down and explain all the nuances in our financial planning to people in other countries, they will be astounded: "What the hell?".

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Old 11-11-2015, 08:58 AM   #85
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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.
Actually, that's what's happening now. As much as 85% of your SS can be taxed if your AGI plus non-taxable interest plus 1/2 your SS benefit exceeds $34K for an individual, $44K if filing jointly. It gets worse since many states base your state income tax on your Federal Adjusted Gross, which already includes SS. Some states allow you to back that out of state taxable income, but some, such as KS, happily tax you on SS, too. (KS will let low-income people exclude SS but that didn't apply to us.)

To answer the OP's question, I took the cynical view that SS would be zero. Then, 18 months ago, the political BS at work became intolerable. I took a look at the numbers again and decided to factor in SS; I was 61 and, while I was aware of the taxation issue (DH is 15 years older), I figured zero was unreasonably pessimistic. I included 100% (planning to wait till age 70) but will be able to manage regardless of what they tax away, between a couple of small pensions (<$20K total, no COLA) and investment income.
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Old 11-11-2015, 10:46 AM   #86
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For planning purposes, I use the full amount expected in 4 years at 62. However, I'm very conservative and I can still sustain my standard of living without SS. If things got tight I have some flexibility to reduce spending.
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Old 11-11-2015, 12:17 PM   #87
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I plan on taking SS at age 70, expect no reductions for myself, and it's part of my planning. If Congress actually passes a law making changes to SS and it is signed by the president, the time during that law changing process would be the time for thinking about alternatives, because that's when it will be clearer as to who is affected and what is the extent of the change.

I haven't heard of any bills for SS changes on the floor of the House or Senate. Let me know if I am wrong. and nothing on SS is going to happen in 2016, an election year.
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Old 11-11-2015, 12:29 PM   #88
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The means testing you mention is not about making a dent in the situation; it is about feeling good about making those who saved, did without and LYBM end up like everyone else who didn't. In fairness, of course, y'know.
Won't argue that point, but some, for instance Frank Langone of Home Depot fame, has suggested that he doesn't need the money, and donates it to charity. Doubtful he retired by LBYM...
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