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Old 12-15-2010, 03:07 PM   #61
Thinks s/he gets paid by the post
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Well, being paranoid, I'll bet it is easier to come close than either one of us thinks.
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Old 12-15-2010, 03:11 PM   #62
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Originally Posted by kombat View Post
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?
The only people getting robbed is us. The government can't keep their hands off our money in the general fund. If the SS money we and our employers paid in was left alone there would be plenty of money for everyone.

Since the government now wants to reneg on their promise what makes you thiink that they will do what they say and give it to our kids and grand kids? I'd rather get my money and leave it for my kids and grand kids myself. At least I know they will have a chance of seeing it.
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Old 12-15-2010, 03:21 PM   #63
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Originally Posted by TromboneAl View Post
Concerning RMDs, unless you care about leaving an estate when you die, RMDs are irrelevant. I'm willing to be convinced otherwise.
i think the point being made about RMDs and when to take SS is that if you put off taking SS till 70 and use your IRA to fund your retirement between 62 and 70 the ballance of your IRA (and your RMD) would be smaller at age 70 then if you started SS at 62 and took less out of your IRA from 62 to 70. the smaller RMD might make less of your SS taxable at age 70 thus you would pay less in taxes.
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Old 12-15-2010, 04:02 PM   #64
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And how would the government know your net worth?
Form TD D 90-22.1 (Domestic) Revised 2011...

There's already a form for foreign accounts, which includes the maximum value of each account reported, along with account numbers and where the account is held.
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Old 12-15-2010, 05:05 PM   #65
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It sounds like you're of the opinion that the promises MUST be kept, regardless of how badly doing so impoverishes the next generation.
What other opinion makes sense? A promise is a promise.
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Old 12-15-2010, 05:20 PM   #66
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I tend to agree with that, but hey, I also think a contract is a contract and should be abided by unless amended by both parties.
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Old 12-15-2010, 06:39 PM   #67
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My guess is they will grandfather in everybody past a certain age. As others have pointed out, the magic age was 46 last time they fixed SS in 1983. This time maybe the same, maybe 50. I am 55 and DW is 52 so we hope to be grandfathered.

I wouldn't rule out a net worth test (when I lived in the Netherlands 1995 to 1996 we had a tax on your net worth), but I think it is unlikely. Too many small businesspersons in this country, too many intangibles to value. Plus all the politicians confuse "rich" with high income, not high net worth. Long, long precedent of using AGI for phaseouts (Roth contributions, college tax credits, etc etc).
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Old 12-15-2010, 08:41 PM   #68
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My guess is they will grandfather in everybody past a certain age. As others have pointed out, the magic age was 46 last time they fixed SS in 1983. This time maybe the same, maybe 50. I am 55 and DW is 52 so we hope to be grandfathered.

I wouldn't rule out a net worth test (when I lived in the Netherlands 1995 to 1996 we had a tax on your net worth), but I think it is unlikely. Too many small businesspersons in this country, too many intangibles to value. Plus all the politicians confuse "rich" with high income, not high net worth. Long, long precedent of using AGI for phaseouts (Roth contributions, college tax credits, etc etc).
I can't see a net worth test working out very well. Would this mean that a person who has $100,000 in the bank and a paid off $700,000 house in sunny CA would get SS, but the person renting a 1bd apt in ID with $800,000 in the bank would not? How would that possibly be fair? And if you value the house as part of the net worth, then would we force people to sell their home before they could get on SS? What about the expensive wedding ring or the diamond bracelet they were given for their 50th aniversary? Do we make them sell all of their things before they get SS, or do we just deny SS to the person who forgoes all of that stuff and lives frugaly to amass the nice bank account?
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Old 12-15-2010, 09:17 PM   #69
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Even the UK doesn't means test on the basic State Pension ( ie SS).

I can see the US making the whole of the SS taxable. High income folks would then be paying a large % of it in taxes. (In the UK, the 2010 tax rate for incomes over $250k is 50%, and the rate is 40% for incomes over $60k).

Means testing SS based on net worth would so messy, complicated and unpopular I just don't see it happening.
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Old 12-15-2010, 10:03 PM   #70
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I am not sure, but I believe that to qualify for Public Assistance you have to provide proof of your assets (value of your home, bank accounts, etc) to establish your net worth. If so, then it seems to me that it is not beyond the realm of reason that the same thing could be done to qualify for SS. But I could be completely wrong! It wouldn't be the first time...
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Old 12-15-2010, 10:22 PM   #71
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I am not sure, but I believe that to qualify for Public Assistance you have to provide proof of your assets (value of your home, bank accounts, etc) to establish your net worth. If so, then it seems to me that it is not beyond the realm of reason that the same thing could be done to qualify for SS. But I could be completely wrong! It wouldn't be the first time...
Public assistance is getting something for which you never paid anything into, and those applying for it have a lot fewer assets than "Rich" folks. (I expect).

I don't dispute it is possible, but I think it is a political hurdle too high to get over. It will be much easier to make SS taxable.
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Old 12-16-2010, 07:26 AM   #72
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Obviously they won't yank the rug out from under people in their mid to late 50s.
Why is this so obvious? I say screw 'em. To me, "fair" is equally sharing the burden, regardless of age, race, religion (amish excluded). The gummit promises nothing but a tax bill.

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Originally Posted by ziggy29 View Post
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.
Steps to mean testing SS a gummit guide.
1. Pickup FAFSA form
2. Scratch out "FAFSA"
3. Write "Social Security Application"
4. Hand to applicant.
5. Plug applicant's info into the computer
6. Allow computer to crank an esoteric and complex algorithm
7. hand results back to applicant.

I'm with you zig...but there is such an obvious model right under their noses. And this model looks well beyond income.

crawling back under my rock...carry on.
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Old 12-16-2010, 10:10 AM   #73
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Originally Posted by 79protons View Post
I can't see a net worth test working out very well. Would this mean that a person who has $100,000 in the bank and a paid off $700,000 house in sunny CA would get SS, but the person renting a 1bd apt in ID with $800,000 in the bank would not? How would that possibly be fair? And if you value the house as part of the net worth, then would we force people to sell their home before they could get on SS? What about the expensive wedding ring or the diamond bracelet they were given for their 50th aniversary? Do we make them sell all of their things before they get SS, or do we just deny SS to the person who forgoes all of that stuff and lives frugaly to amass the nice bank account?
This is what I was thinking about. We have considered renting as cheaply as possible to keep more liquid funds from which to take withdrawals. In theory, means testing that only involved one's liquid assets would mean it would make more sense to pay cash for a home to reduce the amount in the nest egg on which means testing was based.
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Old 12-16-2010, 11:09 AM   #74
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It's not a screwing or not screwing them.

Especially with the Boomers, the people retiring or reaching SS age within 10 years are a large cohort. If they are forced to spend less, that hurts the economy and everyone else.

Some large number of people would be under the poverty line without SS. So then they become burden to other agencies besides SS.
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