Will SS be there

[REWahoo]

For those like me in GenX, SS will be there, but either with much later age requirements or much lower payout ratios.

I'd take issue with your use of the word "much".

Eligibility may be delayed two or three years but nothing beyond that. Funding adjustments will be made to keep the system whole, with likely modifications to how CPI increases are calculated.

Personally, I'm not baking it in to my retirement calculations.

Nothing wrong with erring on the side of caution, but leaving SS completely out of your calculations seems unnecessarily pessimistic. Reduce it by 25% or even 50%, but no more.

 

[Rustward]

I've heard people say they were going to take SS at 62. They're afraid if they wait until NRA or 70, that the rules will change and they'll be shut out (mainly because of means testing). Their theory is that is you're in pay-status, chances are better they won't take it away.

Anyone have an opinion on this theory?

I don't think [-]even the boneheads in[/-] Congress would dare screw those between 62 and 70 who have not started receiving benefits. That is just not how SS does things.

 

[ERD50]

I've heard people say they were going to take SS at 62. They're afraid if they wait until NRA or 70, that the rules will change and they'll be shut out (mainly because of means testing). Their theory is that is you're in pay-status, chances are better they won't take it away.

Anyone have an opinion on this theory?

People taking SS at 62 or 70 are on equal footing - it is simply an actuarial adjustment. So there is no valid reason to treat them differently. Doesn't mean it can't happen, I'm just sayin'.

-ERD50

 

[youbet]

I think that thru a variety of methods, (means testing, CPI adjustments, additional taxes, God knows what else)

The latest method being considered comes right out of the history books. What goes around comes around I guess.

Your SS number is engraved on a small stone. The stone is dropped into a deep pot of boiling water. You must reach in and retrieve the stone. If successful, your stone (with your SS number) is placed in queue to have you receive SS at the then prevailing rates.

Political insiders will have their stone dropped to the bottom of a giant chocolate sundae. Yes, they'll be allowed to lick their fingers after retrieving their stone.

 

[jollystomper]

Also, the electorate hates high income people, it’s the New American Way.

I strongly suspect in the next few years there will be means testing for Social Security. As the Baby Boomers age there will be a larger percentage of "rich" (as others see them) folks eligible for SS, so you will see a stronger movement to reduce/eliminate SS for folks whom are considered "rich".

 

[Chuckanut]

Eliminated? No. Taxed Away from those who had the foresight to save, invest and sacrifice current wants for their future? Yes.

And we will see older full retirement ages in the future. I don't see how this can be avoided with longer life spans. However, they must also strengthen the laws against age discrimination if they do raise the full retirement age. Just my 2 cents.

 

[ejman]

The latest method being considered comes right out of the history books. What goes around comes around I guess.

Your SS number is engraved on a small stone. The stone is dropped into a deep pot of boiling water. You must reach in and retrieve the stone. If successful, your stone (with your SS number) is placed in queue to have you receive SS at the then prevailing rates.

Political insiders will have their stone dropped to the bottom of a giant chocolate sundae. Yes, they'll be allowed to lick their fingers after retrieving their stone.

I knew it! Comes right off the Federal Register right?

 

[kmt1972]

I am 41. When I budget for our retirement I plan on 70% what the SS calculator claims we will get if and when we claim SS when we turn 67. I figure chain-CPI will be in place and SS has to be cut so it can continue to pay.

 

[haha]

haha, I'd love to believe that grandfathering would protect us, but I've seen things in the employee benefit/retirement world in the last 5 years that still cause my jaw to drop. I honestly don't know what to think. I will say we are seriously considering taking SS at 62, mainly for this reason. I work with actuaries who put this idea in my head.

I wouldn't have expected grandfathering, but your comments from actuaries should be meaningful, if anything is. Thanks for the info SumDay.

Ha

 

[Katsmeow]

I've heard people say they were going to take SS at 62. They're afraid if they wait until NRA or 70, that the rules will change and they'll be shut out (mainly because of means testing). Their theory is that is you're in pay-status, chances are better they won't take it away.

Anyone have an opinion on this theory?

I have never found it convincing. To me it strains credulity to say that a law would be passed that would say that, for example, the 62 year hold who has started collecting can continue receiving benefits but the 69 year old who hasn't started collected will receive nothing. To me, that just seems unlikely in the extreme. I would never say it couldn't happen because anything can happen but I just don't see that happening.

That said, the possibility exists that they could change the amount of benefits or how they are taxed to reduce the net benefits. In that event someone who had started collecting at 62 might end up better off by having collected for some period of time at the higher net amount before the lower amounts came into play.

 

[Walt34]

Nothing wrong with erring on the side of caution, but leaving SS completely out of your calculations seems unnecessarily pessimistic. Reduce it by 25% or even 50%, but no more.

Agreed on that. SS will be there but benefits will change. Chained CPI is one of them, raising FRA is another that will probably happen. Means testing could happen but seems unlikely at least in the near future.

 

[donheff]

I have never found it convincing. To me it strains credulity to say that a law would be passed that would say that, for example, the 62 year hold who has started collecting can continue receiving benefits but the 69 year old who hasn't started collected will receive nothing. To me, that just seems unlikely in the extreme. I would never say it couldn't happen because anything can happen but I just don't see that happening.

That said, the possibility exists that they could change the amount of benefits or how they are taxed to reduce the net benefits. In that event someone who had started collecting at 62 might end up better off by having collected for some period of time at the higher net amount before the lower amounts came into play.

+1 Remember, "they" is us or at least our elected representatives. All this sturm und drang over what "they" will do seems misplaced. Think about what you would do to relieve the long term 25% shortfall (chained CPI, taxing all benefits, etc) and then project that onto the electorate. No one on the Hill is going to suddenly cut SS out for those under 50 or some similar horror story. They are going to expand the tax base and/or cut back benefits to cover that 25% shortfall. Some of us will get whacked more than others on the margins but none of us is going to find that SS doesn't exist for us. And in the end I bet we will find that the expected unfair tilt against those of us with sufficient assets/income to get heavily taxed will find that things like chained CPI will whack the lower classes relatively more since they depend on the promise of SS to a much higher degree than we do.

 

[NanoSour]

Few understand the SS is already means tested!

Few understand that Social Security is already means-tested | Dallasnews.com - News for Dallas, Texas - The Dallas Morning News

 

[ratto]

SS is not going away, but I believe inflation will be allowed to eat away at the real value of the payouts.

+1. Taking SS away could lead to social unrest. Instead, inflation will be a much more subtle and preferred way to get the dirty job done in conjunction of keeping CPI artificially low. We can potentially keep kicking the can down the road for a few more decades by doing so.

 

[Closet_Gamer]

+1 Remember, "they" is us or at least our elected representatives.

The folks on this board are not, as a rule, representative of the "they" population at large.

Sadly a large fraction of the "they" voting on this stuff (citizens & their reps) are neither smart enough, planful enough, nor responsible enough to take responsibility for their choices over the long term.

I hate to say it, but I don't buy T-bonds or muni-bonds at this point in part b/c I don't broadly trust American culture or the political decisions it produces. Its selfish, self-serving, and in so many ways completely irresponsible. Look around...how many of your fellow citizens would loan money if they were personally responsible for paying it back?

Now, if I won't loan them money, why would I trust them even a little to care for my retirement?

This amoral herd will do whatever is best for them, in that moment. If it means screwing me based on some made-up pretense about my wealth or geography or because "the public unions were promised" this , or the baby boomers promised themselves sunshine and butterflies until the end of time and now I have to pay for it,then the herd will justify it to themselves on some pretense and move on. I will NOT trust these people to even contribute to my family's security.

So with that jaded, sad, cynical view of the my fellow citizens, I score SS at ZERO when I plan my retirement. Anything I do get back from SS is a bonus.

 

[panhead]

Although I very much appreciate the extreme cynical view of some on this board, I do believe a piece of it will be there for me (GenX). I also discount the amount I'll get by about 25% based on future predictions and the tendency of our electorate to kick the can. I would expect that our fearless leaders will look soon to remove the SS income cap (direct tax on the wealthy), move to the chained CPI, increase FRA, increase benefits taxing, etc, or at least some of the above. I've been expecting them to remove the cap for some time, seems like low hanging fruit and the 99% would love the idea.

 

[Independent]

While we are not counting on it so our plan is without it...but what is the general consensus on whether SS will be available to those of us retiring in the next year or so at 50

I did a poll on this question in July 2011. The results would probably be about the same today.

We had 183 responses. The most common responses were pretty much in line with the SS actuaries' reports. 100% for the near term, eventually 75%.

Many people here are concerned that they might be "high asset" or "high income" retirees and hence get caught with some sort of means testing, so we had some responses that are more conservative.

http://www.early-retirement.org/forums/f28/are-you-expecting-social-security-56869.html

 

[Midpack]

I plan on 50% of projected SS benefits, though 70-75% seems to be the consensus (and therefore what I might wager on), and a higher % seems entirely possible. IMO 100% is wishful thinking and 0% is highly unlikely unless there's a complete financial collapse (which we can't plan for anyway). OP notwithstanding, I'm suspicious when anyone asks if SS will be there at all...

I am way more concerned about Medicare, a far more daunting fiscal threat ahead. And I wonder why questions RE: Medicare's future aren't asked far more often than RE: Soc Sec...

 

[Katsmeow]

There is no way I could plan for zero SS for DH and I and still retire. (DH is already drawing SS in fact). Well, I guess we could retire but our lifestyle without any SS would be far below the lifestyle we want to have. So, yes, in planning for retirement we include SS as otherwise we would have to work far longer than we want to work. Now, yes, I have run scenarios of what would happen for example if SS was reduced by 50%. And I've determined that if that happened we could still make it in an acceptable manner (cutting discretionary spending I would prefer not to cut but could live with cutting).