Proposed SS means-testing (by income)...

[LARS]

[mod edit] propose phasing out Social Security payments for those making more than $80,000 in other income, and eliminating them for those making $200,000 or more a year.

I presume a non-starter, what do others think?

http://www.foxbusiness.com/…/nj-gov-chris-christie-proposi…/

 

[2017ish]

Weird. I started a thread earlier on this, entitled "so it begins," which had 12 responses. Looks like it disappeared somehow?

Anyway, consensus was non-starter and attempt to draw media attention.

 

[mpeirce]

Christie will propose phasing out Social Security payments for those making more than $80,000 in other income, and eliminating them for those making $200,000 or more a year.

If the proposal is based on INCOME and not ASSETS, I'd assume that people will get even better a shuffling their finances around so as to keep income under the limit.

Much as people do now for other various income level triggers.

 

[Options]

His "proposal" will probably go nowhere. Read this to get an idea of what's wrong with it:

Christie’s bold plan to destroy Social Security by turning it into welfare - MarketWatch

But one big flaw in Christie plan is that means testing doesn’t actually save very much money. The vast majority of Social Security benefits go to people who make less than $50,000 a year. Cutting off benefits for wealthier retirees would only reduce Social Security spending by a few percentage points, not nearly enough to put the program’s finances in the black.

Why? Because there aren’t that many rich people! And, because monthly benefits are capped, no one — not even Bill Gates — is getting rich off their Social Security check.

 

[easysurfer]

Zzzzzz Zzzzzzzzz .... that's the sound of the third rail

 

[steelyman]

It's giving the media another chance to use the word "entitlements".

 

[FUEGO]

Sounds fine to me. It wouldn't adversely impact my retirement finances, since if I have enough to exceed $80k AGI or even approach $200k AGI, then I'd be living pretty high on the hog vs. today and wouldn't need the $20k/yr of SS that we are entitled to.

Though I agree with the other poster that it won't likely have any significant impact on SS solvency since so few in their late 60's and 70's have $80k+ or $200k salaries.

 

[Bestwifeever]

A statement by a person who is currently in no position whatsoever to influence SS but who is likely to run for higher office is probably a political topic unrelated to early retirement....

 

[MichaelB]

At the request of some members we are reopening this thread. Keeping the discussion focused on the proposal and not the candidates will help.

 

[Texas Proud]

At the request of some members we are reopening this thread. Keeping the discussion focused on the proposal and not the candidates will help.

Thanks for reopening the thread... (even though I was not one who asked for it)... as usual I did not know why it was closed.... but there might have been some comments made that needed to be deleted...

I think it is an important discussion and is in the political forum...

 

[2B]

A statement by a person who is currently in no position whatsoever to influence SS but who is likely to run for higher office is probably a political topic unrelated to early retirement....

[mod edit]

Earlier comments that it really wouldn't save much money are probably true so why would this be anything other than symbolic. For those of us with significant pensions or big RMDs in our future, life will become more complicated and it could cost us some SS cash. Interestingly from my perspective, it would most likely hit people with large pensions. With the death of private pensions, that leaves only government pensions. I'm not sure what the range of pensions are but I suspect more will be impacted than private pensions.

Personally, I believe this will be a non-starter. SS benefits are already taxed as ordinary income for middle income recipients. The "wealthy" get a much lower replacement ratio for their "contributions." The other take I have is the message that tells us that have saved you lose the benefit. Be "irresponsible" and get it. One more excuse not to save for retirement.

 

[photoguy]

In the article options linked it said the main benefit was from raising the retirement age 2 years for both early and full SS.

Sent from my Nexus 5 using Early Retirement Forum mobile app

 

[REWahoo]

2B, what part of this...

Keeping the discussion focused on the proposal and not the candidates will help.

...did you not understand? It appears you want this thread closed again.

 

[2B]

2B, what part of this...



...did you not understand? It appears you want this thread closed again.

I didn't think I was making a "political" reference [mod edit] up, down or trying to incite others. The part of the comment [mod edit] was whether he is grabbing hold of the proverbial "third rail" on purpose.

 

[REWahoo]

I didn't think I was making a "political" reference to Christie -- up, down or trying to incite others. The part of the comment mentioning Christie was whether he is grabbing hold of the proverbial "third rail" on purpose.

Which is about the politician, not the financial impact of proposed SS changes. Precisely what gets threads closed.

 

[LARS]

I guess the interesting question to me is whether this proposal by a prominent politician signifies the beginning of a serious shift in the debate on means-testing of SS? Will other politicians (of either party persuasion) jump on the means-testing bandwagon?

In general, I have never thought means-testing a viable solution (but I may be a little bias ) for solvency of SS. First, as others have stated, you would have to dip down too low on the income level to get sufficient $s thus making it a non-starter. If means-testing were to migrate from income to asset based the same problem arises: threshold would have to be so low (think $500,000 in assets) to gain $ traction (not to mention added $s spent on admin would make it even worse).

So I have always felt with regard to SS the answer will end up being phased in increased retirement ages and increase cap on FICA wages.

 

[Texas Proud]

The two areas of the budget mentioned represent 60% of the spending by the gvmt... both need to be addressed for long term reasons...

As to the proposal... I have not seen any 'meat' to know what is really being proposed... but I kinda fall into the camp that says if it is taken away from anybody, including the billionaires, it really then just becomes another welfare plan... and really, how much money goes out to retired people who make over $1 million per year (I know his proposal was lower... just saying that I do not think there is much savings here)...

Probably what photoguy said.... the increase in the age is the biggest savings... that is not new.... others have proposed this...

I think others have proposed better solutions to the problem...

 

[pb4uski]

I think a lot of what was proposed makes a lot of sense. If the changes are phased in for people who will not be nearing retirement age as most major changes to SS are done the changes should have minimal impact on beneficiaries but the long term changes should help to preserve the system.

The only proposal he made that I would object to is reducing benefits based on income. My objection to that proposal is that it penalizes those who save and rewards those who spend.

Raising the retirement age from 67 to 69 would seem consistent with increasing longevity. I would do two things... reframe it not as the "retirement age" but the age at which one can collect SS retirement benefits to try to move people away from the idea that you need to be collecting SS in order to be retired and towards the idea that if you want to retire before . Also, while we define it as a specific age for ease of administration, to me conceptually the FRA should be the average longevity less x years or y% of average longevity so it would expand as longevity expands.

Phasing in an increase in the early retirement age from 62 to 64 for those currently under 47 would reflect improvement in health and at the same time provide enough notice for those future beneficiaries to plan for the change.

Below are some details on the proposals.

http://online.wsj.com/public/resources/documents/christie_factsheet.pdf

 

[EastWest Gal]

Christie will propose phasing out Social Security payments for those making more than $80,000 in other income, and eliminating them for those making $200,000 or more a year.

I presume a non-starter, what do others think?

http://www.foxbusiness.com/…/nj-gov-chris-christie-proposi…/

Your previous thread was closed by the moderators.

I suspect the idea he floated will probably float like a lead balloon...in other words, it will go nowhere. Social security was started 70+ years ago, so all of us have paid into it and it's funds are supposed to be kept separate from the rest of the government, so it shouldn't affect the national debt. I kind of think if a pollster went out and polled the general public, the popularity for this idea will be in the range of 0% liking the idea.

 

[REWahoo]

I think a lot of what Gov. Chirstie has proposed makes a lot of sense and I applaud his political courage in even talking about the proverbial third rail.

Once again, talking about the candidate, not the proposed change to SS, will end up getting this thread closed.

 

[pb4uski]

Once again, talking about the candidate, not the proposed change to SS, will end up getting this thread closed.

Get real. I referred to the proposal... not the candidate.

I guess I could have referred to "what has been proposed" [mod edit] but I figure that the posters here are adult enough that such neuterization was unnecessary. Perhaps I'm wrong.

 

[REWahoo]

...I applaud his political courage...

Sounds like an endorsement to me.

 

[MichaelB]

Other members have asked to discuss this, so let's please leave out discussion of the candidates, adult, neutered or any other form.

Rude responses will also lead to premature thread closing.

 

[pb4uski]

Sounds like an endorsement to me.

Was not my intent.... but my bad. I have amended the post.

 

[athena53]

The only proposal .... that I would object to is reducing benefits based on income. My objection to that proposal is that it penalizes those who save and rewards those who spend.

Years ago I met Robert Myers, the original Chief Actuary for SS, at an actuarial meeting. I asked him about the possibility of means-testing it and his reply was exactly as you said- it would discourage saving.

Somehow that didn't stop them from taxing SS for high-income recipients, though.