Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
SS Means Testing
Old 01-24-2013, 10:59 AM   #1
Recycles dryer sheets
 
Join Date: May 2012
Posts: 58
SS Means Testing

Newbie question here: what constitutes the "means" that might/probably will be tested? Don't want to start an argument about whether it will or won't be; just a likely definition please.
__________________

__________________
tessaduncan is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-24-2013, 11:11 AM   #2
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
IF it does happen, probably something similar to the current Medicare system.
__________________

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 01-24-2013, 11:18 AM   #3
Full time employment: Posting here.
 
Join Date: Jul 2007
Location: ST LOUIS
Posts: 993
I am guessing it will be income based at least for many years at the start.
__________________
Proverbs 15:22 Designs are brought to nothing where there is no counsel: but where there are many counsellors, they are established.
rec7 is offline   Reply With Quote
Old 01-24-2013, 11:33 AM   #4
Full time employment: Posting here.
ronocnikral's Avatar
 
Join Date: Apr 2010
Posts: 852
I consider SS to already be means tested. They do so through the "bend points" of calculating your PIA.
__________________
ronocnikral is offline   Reply With Quote
Old 01-24-2013, 11:41 AM   #5
Recycles dryer sheets
 
Join Date: May 2012
Posts: 58
Rephrasing my question - How will means be determined? Investments (IRAs, 401Ks..), income from investments, property, net worth, etc?
__________________
tessaduncan is offline   Reply With Quote
Old 01-24-2013, 11:43 AM   #6
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,802
Quote:
Originally Posted by tessaduncan View Post
Rephrasing my question - How will means be determined? Investments (IRAs, 401Ks..), income from investments, property, net worth, etc?
That's the big question...

Since it's not a for sure thing... and congress can't agree on anything, including where the bathroom is, I don't think anyone can tell you details of what *might*, someday, be implemented.
__________________
rodi is offline   Reply With Quote
Old 01-24-2013, 11:59 AM   #7
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
Quote:
Originally Posted by tessaduncan View Post
Rephrasing my question - How will means be determined? Investments (IRAs, 401Ks..), income from investments, property, net worth, etc?
If, and as others have pointed out, that is a very big IF, it is done similar to Medicare it will be based on your Modified Adjusted Gross Income (MAGI).
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 01-24-2013, 12:16 PM   #8
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,800
Quote:
Originally Posted by ronocnikral View Post
I consider SS to already be means tested. They do so through the "bend points" of calculating your PIA.
+1

There are multiple articles about how SS is already means tested; here's one below.

?Means testing? to bolster Social Security? It?s already happening. - Washington Post
__________________
You may be whatever you resolve to be.
Huston55 is offline   Reply With Quote
Old 01-24-2013, 12:20 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,256
Quote:
Originally Posted by REWahoo View Post
If, and as others have pointed out, that is a very big IF, it is done similar to Medicare it will be based on your Modified Adjusted Gross Income (MAGI).

+1 on how they would do it if it every happens....


This is the only way that they can get your numbers on an easily reportable basis that already is in place... I do not see them inventing another wheel when they already have one that can be used...


I also agree that it is already means tested as other have said... plus that it is already included in taxable income if your income is high enough...
__________________
Texas Proud is offline   Reply With Quote
Old 01-24-2013, 12:22 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,256
Quote:
Originally Posted by tessaduncan View Post
/snip/Don't want to start an argument about whether it will or won't be; just a likely definition please.

Good luck with that....


I see Porky at the end of this one...
__________________
Texas Proud is offline   Reply With Quote
Old 01-24-2013, 12:39 PM   #11
Recycles dryer sheets
 
Join Date: May 2012
Posts: 58
Hmmm. So a possible shelter would be a second (or more) home rather than investments that throw off income? Assuming one didn't need the income to eat
__________________
tessaduncan is offline   Reply With Quote
Old 01-24-2013, 01:13 PM   #12
Full time employment: Posting here.
 
Join Date: Jun 2006
Posts: 926
Quote:
Originally Posted by ronocnikral View Post
I consider SS to already be means tested. They do so through the "bend points" of calculating your PIA.
And those bend points are pretty acute. I also consider that because all of SS is tax free for people with lower incomes and up to 85% of it is taxed for people who have other income is a form of means testing.
__________________
CW4, USA-(ret)
RN, BSN-(ret)
jclarksnakes is offline   Reply With Quote
Old 01-24-2013, 01:17 PM   #13
Full time employment: Posting here.
 
Join Date: Jun 2006
Posts: 926
Quote:
Originally Posted by tessaduncan View Post
Hmmm. So a possible shelter would be a second (or more) home rather than investments that throw off income? Assuming one didn't need the income to eat
Maybe yes, maybe no. At this time I would not purchase a second home even remotely hoping that it could save me some money on as yet unknown future means testing.
__________________
CW4, USA-(ret)
RN, BSN-(ret)
jclarksnakes is offline   Reply With Quote
Old 01-24-2013, 01:19 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,904
There are very few countries that tax net worth, probably because it's hard to calculate and some components of net worth may be easy to hide. As indicated the mechanism for means testing SS based on income is already in place and making it more severe will be relatively easy (assuming our congress folk can find the bathroom)
__________________
ejman is offline   Reply With Quote
Old 01-24-2013, 01:51 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,812
Quote:
Originally Posted by tessaduncan View Post
Newbie question here: what constitutes the "means" that might/probably will be tested? Don't want to start an argument about whether it will or won't be; just a likely definition please.
The correct answer is "Nobody knows".

"Means" would be defined by whatever law is passed. No law means no definition.

At this point hardly any Congress people are willing to go on record with an actual bill that states exactly what they would include or exclude.
Here's a rare exception:
GOP senators: Raise retirement age, 'means test' Social Security - First Read

As others have mentioned, there are practical problems with how to prevent people from hiding assets/income, and how to keep compliance costs down. So we can make some generalized guesses, but that's it.

If you're asking for detail like, "Would they exclude Roth IRA withdrawals while including traditional IRA withdrawals?", I don't think you're going to find it.

(and, note that we already have means testing both in the bend points in the benefit formula and in the rules for FIT)
__________________
Independent is offline   Reply With Quote
Old 01-24-2013, 02:02 PM   #16
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,812
I did a little more research. The SS actuaries have scored multiple proposals for changing SS. I could only find one that looks like "standard" means testing

Quote:
Reduce individual Social Security benefits if modified adjusted gross income, or MAGI (AGI less taxable Social Security benefits plus nontaxable interest income) is above $60,000 for single taxpayers or $120,000 for taxpayers filing jointly. This provision is effective for individuals newly eligible for benefits in 2019 or later. The percentage reduction increases linearly up to 50 percent for single/joint filers with MAGI of $180,000/$360,000 or above. Index the MAGI thresholds for years after 2019, based on changes in the average wage index (AWI).
I read this as no impact on a couple with a MAGI of $120k, and a 50% reduction for a couple with a MAGI of $360k.

They probably looked at this because some Congress person asked for this specific calculation. As it happens, this reduces SS benefit costs by about 0.33% of covered payroll in 2038.

Long Range Solvency Provisions
__________________
Independent is offline   Reply With Quote
Old 01-24-2013, 02:09 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
"I'm a man of means by no means..."

Roger Miller
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 01-24-2013, 02:20 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Feb 2011
Posts: 1,629
Quote:
Originally Posted by Huston55 View Post
+1

There are multiple articles about how SS is already means tested; here's one below.

?Means testing? to bolster Social Security? It?s already happening. - Washington Post
Thanks for that link!!!!

Partly for reasons mentiioned in this article I think more & more folks will be chosing to NOT w#rk beyond FRA. At least not beyond their 1st meeting with their tax preparer when they realize how little net of their earnings they actually get to keep.

Being >10yrs from SS FRA, I fully expect to get little or nothing from SS. When DW & I had formal financial plan done earlier this yr we had them run projections on that basis. IMHO Eventual "Means Testing" of SS will bite hard into folks who would never consider themselves "rich". If I'm wrong, I'll consider SS a windfall & have a bigger beer fund
__________________
ERhoosier is offline   Reply With Quote
Old 01-24-2013, 02:29 PM   #19
Full time employment: Posting here.
EvrClrx311's Avatar
 
Join Date: Feb 2012
Posts: 524
I keep forgetting to include SS in my equation... whatever I get will be a pleasant surprise.
__________________
EvrClrx311 is offline   Reply With Quote
Old 01-24-2013, 02:39 PM   #20
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
It seems mean to means test.
__________________

__________________
bondi688 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 04:25 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.