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SS is taxable if your modified gross income is above a certain level. In 2008 for a single person if half your SS income added to all your other income is less than $25k your SS is not taxed.
Is this not earned income? If you have earned income you are paying FICA and increasing the amount of SS you will get at full retirement age.
I was saying that I wouldn't be surprised if they started taxing SS on folks who have large sums ( eg >$100K) of unearned income.
First, add one–half of the total social security you received to all your other income, including any tax exempt interest and other exclusions from income.
Then, compare this total to the base amount for your filing status. If the total is more than your base amount, some of your benefits may be taxable.
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I'm supposed to get 18K/yr at 62 but don't expect to see it.
Govt doesn't need to reduce the promised amount, and doesn't need to tax it further - just make me pay more for medicare, and take the medicare payment out of the SS check - I'm hoping to net five hundred a month.
The more that I think about it, my guess is that someone over a certain income level (say the $100,000) will get their SS payment as promised. However, it will be taxed at 90 % to make it virtually irrelevant.
So I agree the Government won't renege on the obligation, just tax it away...
I checked 0%-25% simply because I plan on SS being 0% of our expenses.
In 25 years (when I would qualify for it) I don't expect it to be there. We will either be means tested out of it, or it will be marginalized in some other way.
If we do receive any, it will be gravy and most likely donated.
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"We do not inherit the earth from our ancestors, we borrow it from our children.
(Ancient Indian Proverb)"
I haven't locked down my retirement budget yet, haven't decided where to live or if I will have a mortgage or what medical will cost.
Assuming I can live on 35K a year and SS is 18K, roommate pays 7K that leaves 10K from investments. I will retire when my portfolio reaches 500K. So SS is more than half my expenses but not more than half of my income.
I want my portfolio to grow so that later in retirement if my roommate dies or something needs replaced I won't be in trouble. I don't want to take out more than 2% until I am over 75.
The more that I think about it, my guess is that someone over a certain income level (say the $100,000) will get their SS payment as promised. However, it will be taxed at 90 % to make it virtually irrelevant.
So I agree the Government won't renege on the obligation, just tax it away...
The more that I think about it, my guess is that someone over a certain income level (say the $100,000) will get their SS payment as promised. However, it will be taxed at 90 % to make it virtually irrelevant.
So I agree the Government won't renege on the obligation, just tax it away...
As well as taxing high income people they could also start taxing high net worth people like some European countries. Wealth Tax
I probably heard it on this forum but once we reach maximum numbers of retirees, discussions on how to fund SS will be like 2 wolves and a sheep voting on what to have for lunch.
As well as taxing high income people they could also start taxing high net worth people like some European countries. Wealth Tax
Anything is possible, but the complications of enforcement of a wealth tax make it highly unlikely in my view. Moreover, we cannot even gain consensus on estate taxes so it is hard to see how a wealth tax would fly.
Anything is possible, but the complications of enforcement of a wealth tax make it highly unlikely in my view.
Perhaps. But there are a lot of ways to impact the ants without going to a wealth tax:
-- Higher tax rates on investment income (cap gains, interest, dividends)
-- ROTH IRAs/Roth 401Ks/ traditional 401Ks, traditional IRAs: While the annual increases in value would not be taxed, any gains would be included in determining the taxpayer's bracket. So, maybe the very first dollar of taxable income would be at the 25% rate.
-- ROTH withdrawals: tax 'em. ("They never paid taxes on these gains!")
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"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
If we get what the SS Statements indicate we will are supposed to get then I am in the 50%-75% of expenses --- This figures a modest lifestyle budget without extras of 30K per year. Realistically our expenses will be more because we will have more to spend but I am planning for LBYM and we will see how it goes. Also this does not consider my wife's SS which would cover another 25% of expenses should we actually get what is projected in 20 years.
My parents currently (and for the past 10years) do it on $27000/year and out of that comes $4800/year of health plan premiums and also the medicare premiums.
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USAF Veteran -- Retired Air National Guard -- OSW -- ONW -- OIF
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