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Old 01-25-2012, 03:53 PM   #61
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Thanks Midpack. That was an interesting read.
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Old 01-25-2012, 04:24 PM   #62
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My guess is they won't do a direct haircut. They may increase it to being 100% taxable (vs 85%) and they will likely skim more off the top by making the medicare premiums significantly more means tested. Maybe they will think of some fees.

I think they will also get the haircut by pushing the retirement age back, very slowly, but that isn't means testing. I would advocate we should index it to life expectancy.
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Old 01-25-2012, 04:36 PM   #63
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My guess is they won't do a direct haircut. They may increase it to being 100% taxable (vs 85%) and they will likely skim more off the top by making the medicare premiums significantly more means tested. Maybe they will think of some fees.

I think they will also get the haircut by pushing the retirement age back, very slowly, but that isn't means testing. I would advocate we should index it to life expectancy.
+1

Medicare's projected deficit is far more than SS's. Medicare is the program that is unaffordable and the one IMO that will be scaled back, means tested, and/or taxed in some fashion.
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Old 01-25-2012, 05:05 PM   #64
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Another good source for solid information about SS is The Concord Coalition, an organization I have been a member of since 1995 Back in 2005, when SS Reform was a hot topic, Concord did a series of publications about SS. Here is a link to Concord's SS main page:

Social Security | The Concord Coalition
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Old 01-25-2012, 05:23 PM   #65
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Note that this thread has been moved to the FIRE related political topics forum, but the mods gently remind all keep political commentary to a minimum and only as directly related to FIRE. [/mod hat off]
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Old 01-25-2012, 06:28 PM   #66
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As others have stated, I believe means testing will be on income rather than assets. I base this on that is how medicare part B premiums are currently being means tested.

Individuals with income< $85k & couple with income <$170 pay std $99.90.
Then there are several brackets that have surcharges.
Top bracket
Individuals with income >$214k pay & couple with income>$428k pay monthly surcharge of $219.80 which means $319.70 a month for medicare part B

Prescription drug [medicare part-d has surcharges also.
Medicare Premiums: Rules For Higher-Income Beneficiaries

I fully expect the income thresholds will decline as boomers roll onto the roles.
The money has to come from somewhere.

Europe is also facing this problem. Their cuts will be more severe as their demographics are worse than the US's.
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Old 01-25-2012, 06:44 PM   #67
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I think they will also get the haircut by pushing the retirement age back, very slowly, but that isn't means testing. I would advocate we should index it to life expectancy.
This sounds reasonable -- except that it would increase unemployment in an era where unemployment is already way too high.
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Old 01-25-2012, 07:26 PM   #68
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Perhaps you meant to look at the income level that was above the FICA tax limit?

.
No, I meant the same thing you said - two people who had the same SS earnings history should get the same benefit. If they want to cut benefits to "better off" people, I'd prefer that they do something like put a cap on the PIA (even retroactively) without looking at your post-retirement income or assets.
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Old 01-25-2012, 09:01 PM   #69
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I believe the means testing will be more subtle. More along the lines of tweaking the bend points and percentages that are used calculating the PIA. That and perhaps raise the cap on fica taxae earnings but not raise the cap on earnings used to figure the PIA. It would be almost invisible to change the bend point percentages somewhere along the way.

some one posted that a few tweaks could maintain benefits for a long time and I agree with that.
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Old 01-26-2012, 03:04 PM   #70
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Folks in prison get SS. I wonder if there shouldn't be some clawback provision for the room and board.


Social Security benefits while in prison

Updated 10/26/2011 10:53 AM | ID# 259
Does Social Security pay benefits to prisoners?
We pay benefits under both the Social Security and Supplemental Security Income (SSI) programs. Both of these programs prohibit payments to most prisoners. Social Security benefits are suspended if an otherwise eligible person is confined in a jail, prison, or other penal institution for more than 30 continuous days due to conviction of a crime.
We cannot pay benefits to someone who, by court order, is confined in an institution at public expense in connection with a criminal case if the court finds that the person is: guilty, but insane; not guilty of such an offense by reason of insanity or similar factors (such as a mental disease); or incompetent to stand trial for such an alleged offense.
Also, we cannot pay benefits to someone who, immediately upon completion of a prison sentence for conviction of a criminal offense (an element of which is sexual activity), is confined by court order in an institution at public expense. The confinement must be based on a court finding that the individual is a sexually dangerous person or sexual predator (or a similar finding.) However, if a person is not confined in prison or other similar place, benefits may be paid to an eligible individual.

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Old 01-26-2012, 03:12 PM   #71
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Social Security benefits while in prison

Updated 10/26/2011 10:53 AM | ID# 259
Does Social Security pay benefits to prisoners?
We pay benefits under both the Social Security and Supplemental Security Income (SSI) programs. Both of these programs prohibit payments to most prisoners. Social Security benefits are suspended if an otherwise eligible person is confined in a jail, prison, or other penal institution for more than 30 continuous days due to conviction of a crime.

<snip> </snip>
Thanks for the facts. I suspect the earlier post may be because of reports that SSA and other agencies databases don't get updated properly or timely and continue to pay in some cases when they shouldn't. Just as reports claim IRS continues to find bogus returns filed from prisons.
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Old 01-26-2012, 04:22 PM   #72
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Social Security benefits while in prison

Updated 10/26/2011 10:53 AM | ID# 259
Does Social Security pay benefits to prisoners?
We pay benefits under both the Social Security and Supplemental Security Income (SSI) programs. Both of these programs prohibit payments to most prisoners. Social Security benefits are suspended if an otherwise eligible person is confined in a jail, prison, or other penal institution for more than 30 continuous days due to conviction of a crime.
Thanks. Interestingly, an illegal alien married to an incarcerated individual would still receive social security spousal benefits if he/she lived in the US, or if he/she moved to a country with an agreement with the US (Mexico, the Philippines, etc). (Table 1 and Table 2 of the document I linked earlier)
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Old 01-26-2012, 05:33 PM   #73
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Thanks. Interestingly, an illegal alien married to an incarcerated individual would still receive social security spousal benefits if he/she lived in the US, or if he/she moved to a country with an agreement with the US (Mexico, the Philippines, etc). (Table 1 and Table 2 of the document I linked earlier)
Of course, someone living outside the US would not be an illegal alien. It is not obvious to me how an unlawful immigrant could collect while living in the US.
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Old 01-26-2012, 08:39 PM   #74
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This sounds reasonable -- except that it would increase unemployment in an era where unemployment is already way too high.
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My guess is they won't do a direct haircut. They may increase it to being 100% taxable (vs 85%) and they will likely skim more off the top by making the medicare premiums significantly more means tested. Maybe they will think of some fees.

I think they will also get the haircut by pushing the retirement age back, very slowly, but that isn't means testing. I would advocate we should index it to life expectancy.
I am all for upping the retirement age, similar to how the age was raised to 67. You can't "spring" it on people that are within a few years of the magic age. I am 47 and if I were told I have to wait until 70 to draw minimum benefit I would be okay with that; as long as I have LBYM and saved money, my retirement will be driven by my own savings. I still could retire at any age I wish. Allows for FIRE if I have been a good saver vs. penalize me by means testing my income and cutting the monthly benefit.
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Old 01-26-2012, 11:43 PM   #75
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I am all for upping the retirement age, similar to how the age was raised to 67. You can't "spring" it on people that are within a few years of the magic age. I am 47 and if I were told I have to wait until 70 to draw minimum benefit I would be okay with that; as long as I have LBYM and saved money, my retirement will be driven by my own savings. I still could retire at any age I wish. Allows for FIRE if I have been a good saver vs. penalize me by means testing my income and cutting the monthly benefit.
I'm for this too. Guess why? I'm 70.

Ha
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Old 01-27-2012, 04:55 AM   #76
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So one more issue to throw in the old mixer here. It seems to me that a big part of the reason SS is or will have problems paying the number we expect every month is the increase in the programs over the years. Disibility claims, as noted by several WSJ articles have increases, and appeals are approved at an increasing rate. One SS judge had approved all appeals in 2011 as of something like end of Nov. We also pay benefits for surviving children and spouses. I don't know of all the programs they support with the old FICA tax but they have increased and the charge for them has not kept pace.

I'm not saying these programs are a waste or un-needed, but that they haven't been paid for and thus are taking funds collected each month. If you were to offer a jelly-of-the-month club at $5/month after carefully planning the costs and a small profit, then added pickles, olives and sardines to the shippment without an increase in the $5 charge you could go broke like SSA.
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Old 01-27-2012, 08:13 AM   #77
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So one more issue to throw in the old mixer here. It seems to me that a big part of the reason SS is or will have problems paying the number we expect every month is the increase in the programs over the years. Disibility claims, as noted by several WSJ articles have increases, and appeals are approved at an increasing rate. One SS judge had approved all appeals in 2011 as of something like end of Nov. We also pay benefits for surviving children and spouses. I don't know of all the programs they support with the old FICA tax but they have increased and the charge for them has not kept pace.

I'm not saying these programs are a waste or un-needed, but that they haven't been paid for and thus are taking funds collected each month. If you were to offer a jelly-of-the-month club at $5/month after carefully planning the costs and a small profit, then added pickles, olives and sardines to the shippment without an increase in the $5 charge you could go broke like SSA.
Our society has unlimited needs and wants but our financial situation unfortunately is unsustainable.One way or another our standard of living is going to decline at least for a significant period of time. We'll all have to sacrifice but coming up with a compromise people can accept IMHO will be impossible. We'll probably need a crisis. How can pols ask for real shared sacrifice when Bush and Obama bailed out the Banksters without prosecutions and new management and allowing them to get their multimillion dollar bonuses? The latest is letting Obamas buddy Corzine go Scott free after "misplacing" 1.2 billion at MF GLOBAL. Crony capitalism at it's finest.
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Old 01-27-2012, 08:42 AM   #78
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I am all for upping the retirement age, similar to how the age was raised to 67. You can't "spring" it on people that are within a few years of the magic age. I am 47 and if I were told I have to wait until 70 to draw minimum benefit I would be okay with that; as long as I have LBYM and saved money, my retirement will be driven by my own savings. I still could retire at any age I wish. Allows for FIRE if I have been a good saver vs. penalize me by means testing my income and cutting the monthly benefit.
I'm 57 and retired. It would not surprise me if elibility ages are raised before I enroll in Soc Sec, I think we all need to be prepared to sacrifice...like it or not.
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Old 01-27-2012, 08:50 AM   #79
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I seriously doubt any changes to SS will impact anyone 55 or older other than changes to how cost-of-living increases are calculated and eliminating the FICA earned income limit.

Congress has repeatedly demonstrated they don't have the courage to address the problem and when finally forced to bite the bullet, they will look for whatever cover they can find. Phase-ins of changes to the FRA and grandfathering those over 55 will almost certainly be used to try to shield them from tar and feathers.
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Old 01-27-2012, 09:05 AM   #80
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I seriously doubt any changes to SS will impact anyone 55 or older other than changes to how cost-of-living increases are calculated and eliminating the FICA earned income limit.

Congress has repeatedly demonstrated they don't have the courage to address the problem and when finally forced to bite the bullet, they will look for whatever cover they can find. Phase-ins of changes to the FRA and grandfathering those over 55 will almost certainly be used to try to shield them from tar and feathers.
I suspect you're right and that would be beneficial to me, but I am still prepared to take a hit. We're all going to have to sacrifice some to get our ship in order IMO...time will tell. All these proposals selecting one group or another to pay more or benefit less are pointless and tiresome to me. Let's just quit kidding ourselves that we can go back to the 50's, and get on with it. Sorry, I digress...
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