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Old 12-15-2010, 11:24 AM   #41
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And as I've said before about any number of aspects of future gummint policy regarding taxes and entitlements, I hope those of us who are planning to "engineer" a high net worth/relatively low income retirement fly under the radar because we're few enough in number to go after -- and that "means testing" continues to look only at income and not assets or net worth.
With all respect Zig (and I really do generally respect your opinions and POV), I think you're in fantasy land on this one. It will not be possible to hold wealth and not have it impact means testing unless you have it buried in the backyard. And when the gov't is successful in bringing in some higher inflation levels (not hyper-inflation, just 4% - 5%) you won't be able to afford not having divs, int, CG to grow your stash correspondingly. So, "back yard storage" of the FIRE portfolio won't be a long term solution either.

When you report unearned income (including so-called tax free income) on your 1040, there goes your SS and up goes your income taxes.

It's coming........
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Old 12-15-2010, 11:24 AM   #42
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Concerning RMDs, unless you care about leaving an estate when you die, RMDs are irrelevant. I'm willing to be convinced otherwise.
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Old 12-15-2010, 11:26 AM   #43
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Ziggy, are you under the assumption that if us old folks give up some of our SS that the government isn't going to figure out another way to screw the younger folks out of it.
No. That's not my assumption. I'm just saying that folks at and nearing retirement age are hoping that future changes don't negatively impact them. They see the house of cards is starting to fall, but they hope to stabilize it long enough to come crashing down only on a future generation.

Human nature, I suppose. It just so happens that the Boomers are the generation on the cusp here.
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Old 12-15-2010, 11:27 AM   #44
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With all respect Zig (and I really do generally respect your opinions and POV), I think you're in fantasy land on this one. It will not be possible to hold wealth and not have it impact means testing unless you have it buried in the backyard.
Being hopeful that X will happen is not the same as *expecting* X to happen. Where X means continued focus only on income for means testing, yes, I *hope* that will be the case and I plan to be prepared for it if so. Not at all the same as expecting that will happen. But if it doesn't happen I'd be screwed either way, right?
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Old 12-15-2010, 11:32 AM   #45
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I'd be screwed either way, right?

And you won't be alone......

BTW, I'm "hoping" for the same thing you are. I'm just thinking that that outcome would be too good to be true.
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Old 12-15-2010, 11:36 AM   #46
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What you said was that us old folks want to protect our money at the expense of our children and grand children. Yes we want to protect our money but don't try to say that it's at the expense of our kids and Gkids.

If the older generation gave up anything SS wise I can guarantee you that the money won't be going to the next generation. The government will put their hands back into the general fund and take it away. So I don't like your statement that we are stealing from our kids and grand kids.

If the government leaves my SS money alone I'll be able to leave more of my money to my kids and Gkids.

I'm not giving up a dime if I don't have to.
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Old 12-15-2010, 11:36 AM   #47
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Perhaps the current situation of extending tax cuts regardless of income is relevant to whether means testing will get implemented.
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Old 12-15-2010, 11:49 AM   #48
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What you said was that us old folks want to protect our money at the expense of our children and grand children. Yes we want to protect our money but don't try to say that it's at the expense of our kids and Gkids.

If the older generation gave up anything SS wise I can guarantee you that the money won't be going to the next generation. The government will put their hands back into the general fund and take it away. So I don't like your statement that we are stealing from our kids and grand kids.

If the government leaves my SS money alone I'll be able to leave more of my money to my kids and Gkids.

I'm not giving up a dime if I don't have to.
+1 It's not the baby boomers that are the problem here. It's the greedy politicians IMO.
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Old 12-15-2010, 11:50 AM   #49
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I think there is sentiment to means test SS even for those already receiving it. Divs, Int and CG's as well as pension income reported on your fed income tax could be key to what happens to your SS. Actually, this has already started. Look for it to continue and accelerate.
Right - didn't mean to say it would not or could not change for "elders". Mainly was trying to address concern that changes on "younger" folks was less fair.
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Old 12-15-2010, 11:52 AM   #50
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+1 It's not the baby boomers that are the problem here. It's the greedy politicians IMO.
It's the constant kick-the-can approach to governance that I'm really getting tired of. Let's all ignore a minor problem that can be resolved with minor sacrifices until it's a crisis, and then start to consider draconian "fixes" which pit different groups of people against each other (in this case, young against old).

Nice divide and conquer tactic, really. Helps deflect some of the blame away from the people who deserve it most.
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Old 12-15-2010, 11:54 AM   #51
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Concerning RMDs, unless you care about leaving an estate when you die, RMDs are irrelevant. I'm willing to be convinced otherwise.
I would agree (in our situation, only).

The vast majority of our TIRA's (as forecasted) will be going to charity after we pass. the little excess RMD's (e.g. required withdrawls, in excess of our projected retirement expenses) will be added to our disabled son's SNT (special needs trust).

As to the remainder? It's going to charity, with no tax due (under current laws). If the laws change? No problem; we won't be around to worry about it ...
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Old 12-15-2010, 11:54 AM   #52
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+1 It's not the baby boomers that are the problem here. It's the greedy dumb-ass, self-centered, thieving, criminal, low life, butt hole and always-on-the-take politicians IMO.
There, I changed your statement a tad to reflect what it's like for us living with our politicians in Illinois. If ours were only greedy, we'd have it made!
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Old 12-15-2010, 11:54 AM   #53
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It's the constant kick-the-can approach to governance that I'm really getting tired of. Let's all ignore a minor problem that can be resolved with minor sacrifices until it's a crisis, and then start to consider draconian "fixes" which pit different groups of people against each other (in this case, young against old).

Nice divide and conquer tactic, really. Helps deflect some of the blame away from the people who deserve it most.
Exactly!
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Old 12-15-2010, 11:55 AM   #54
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There, I changed your statement a tad to reflect what it's like for us living with our politicians in Illinois.
Thank you! I think your corrections are well justified everywhere, particularly in Illinois from what I have heard (but Louisiana is not far behind).
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Old 12-15-2010, 12:05 PM   #55
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I think means testing could happen. It is more of the class warfare that is going on now. At first it will be people with say over a hundred million in net worth. Surly those people do not need their SS. Then as time goes on, either through the failure to index, or congressional changes to the value, this value will be lowered. How much lower. If the income tax is any guide it will be lowered until only about 50% of the people are receiving it.
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Old 12-15-2010, 12:12 PM   #56
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Ziggy, so we should give up part of our SS now to let the government redistribute it to our kids. JMHO but you're in dream land.

This is not a fight between young and old. It's a fight to keep and get what we were promised from our wonderful government. Anything I give back or don't take won't be going to my kids and grandkids. Maybe to some Indian or Black farmers but we don't fit the bill.
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Old 12-15-2010, 01:08 PM   #57
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I'm not sure means testing of "the rich" would go a long way in making significantly larger benefits available to the masses. Depending on where you draw the line on "rich", you may get to deny SS to the wealthiest 2, 10, or 20% of retirees. Even taking away 1/5 of the SS payments and splitting them among the remaining 4/5 would provide only a 25% boost versus what you would get absent means testing (ignoring the fact that higher wealth is positively correlated with larger lifetime earnings and hence larger average SS payments). And in the meantime, you have royally pissed off most of the 1/5 you took the SS from.

Take SS from the very richest (top 1-2% wealthiest), and you are left with an even smaller slice of the pie to split up among a larger population of those still eligible to collect SS.

I personally think they will "fix" SS by increasing the retirement age, increasing the early retirement age beyond 62, and/or increasing the SS payroll tax. People in their 20's and maybe 30's will be affected by longer retirement ages. Those in their 40's and 50's are less likely to be affected. That's my take.
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Old 12-15-2010, 01:38 PM   #58
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This is not a fight between young and old. It's a fight to keep and get what we were promised from our wonderful government.
Even if it turns out those promises were irresponsible and unrealistic?

ISTM that this is exactly the same kind of mentality that has thrown Greece into the economic abyss. All kinds of rich entitlements were promised, without sufficient funding (or, at the very least, based on economic assumptions that turned out to be overly optimistic), and now they have to either renege on those promises, or rob their own children to pay for them.

It sounds like you're of the opinion that the promises MUST be kept, regardless of how badly doing so impoverishes the next generation.

If Roosevelt promised every retiree a Ferrari, to commence in 2010, and now it turns out that that promise was unaffordable, would you be arguing "I WANT MY FERRARI" irrespective of how fiscally untenable that promise turned out to be?
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Old 12-15-2010, 02:40 PM   #59
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I wouldn't worry too much about that, but let's try to stay focused on SS.
Oops! Well, that's kept Ernest Borgnine healthy all these years, hasn't it?
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Old 12-15-2010, 02:59 PM   #60
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I think means testing could happen. It is more of the class warfare that is going on now. At first it will be people with say over a hundred million in net worth.
And how would the government know your net worth?
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