The Future of SS

[Another Reader]

42 plus 18 equals 60. I think you can count on some Social Security at this point...

 

[aaronc879]

There are plenty of options to pay for SS. Most(all?) of them won't happen with a split Congress. The most likely result will be a cut in benefits of up to 25% for everyone. SS is not going to go away in any of our lifetimes but reduction in benefits are very possible.

 

[harllee]

I don't think there will be an across the board cut in SS benefits. There are plenty of other ways to fix SS. Us old geezers get out and vote. It would be political suicide to cut SS across the board.

 

[ziggy29]

I don't think there will be an across the board cut in SS benefits. There are plenty of other ways to fix SS. Us old geezers get out and vote. It would be political suicide to cut SS across the board.

Right, and because the "old geezers" vote, I see essentially *no* chance that current recipients, and/or all people above X years of age, won't be grandfathered from sharing any pain of benefit cuts (and where X is somewhere between 50 and 60, most likely). Same goes for Medicare.

I will be 55 in October and I don't expect any major overhauls before the next election. Most proposals I've heard in the past that cut future benefit formulas seem to draw a line at 55 (anyone over 55 gets the old rules, under 55 get the 'new' rules). If that holds, I would probably be safe but DW (who will be 52 later this year) might not be. So my current prediction (and planning) would be that if you were born in 1965 or earlier, you have a pretty good chance of keeping the deal you have now. Still, it's not a bad idea to assume a slightly lower future benefit if you are not yet collecting.

 

[timo2]

Disagree. I hope to retire in 2 years at age 56. I am planning on SS. It's $58k a year of income @ age 70. Without that, I have to work forever. I am planning on benefits being reduced by 25%, though.

I count on SS also. I have factored in the haircut in 2033 in our plans and actually that was part of the reason I took out a dreaded annuity, in case I need that to make up some of the difference at that time.

 

[audreyh1]

Only three?

I’m pretty sure he meant decades.

 

[foxfirev5]

SS isn't going anywhere. Worst case you might get 77% of it. Planning on zero is poor planning and anti-ER.

Sums it up. To completely disregard SS skews the plan to encourage failure. Just to be safe keep working.

 

[USGrant1962]

Sums it up. To completely disregard SS skews the plan to encourage failure. Just to be safe keep working.

And contributing to our SS

 

[Just_Steve]

Nothing like a good "The sky is falling" thread to start the new year off right.

Signed: Chicken Little.

 

[Independent]

House bill still stuck in committee - HR 860 - Social Security 2100 Act[/b]

I call that bill a "serious" proposal for two reasons.

- It's not smoke and mirrors, or a kick the can down the road. According to the SS actuaries, it balances taxes and benefits for their 75 year horizon.

- It has a sponsor plus 208 cosponsors. That's very close to a majority of the House (218 votes).

We all know that balancing taxes and benefits means raising taxes and/or reducing benefits. This bill goes 100% on the tax side, there are no benefit cuts.

That's not my preferred approach, but I've got to compliment all those cosponsors for going on record on a tough issue.

I'm guessing it is "stuck in committee" until the news cycle is loose enough that public hearings would get some news coverage. No telling how long we will have to wait for that window to open. Could be 2021.

In the meantime, I'm 72 and not worried about benefit cuts, even though SS is an increasingly important part of my income.

 

[jollystomper]

Another thing I'm not going to worry about.

Agree.

 

[Closet_Gamer]

I treat social security as an un-modeled inflation hedge. I expect to get something, not sure how much. I will take it on the later side. Its what will let me be comfortable with a 3.25% WD rate instead of a 3%.

Sometimes precision is the enemy.

 

[marko]

My wife and I are not counting on getting SS.

I do not recommend for anyone to expect to get SS.

Yes! That is exactly what I was told!
Oh, wait....that was 50 years ago when I first started working.

"They" said with great and absolute surety that SS would be long, long gone by the time I would be of age.

 

[frank]

Yes! That is exactly what I was told!
Oh, wait....that was 50 years ago when I first started working.

"They" said with great and absolute surety that SS would be long, long gone by the time I would be of age.

same here

 

[Dtail]

Still expecting to receive 100% benefits. Do not think any cuts would be across the board either if there were cuts.
DGF is already receiving benefits, so one to go.

 

[Lakewood90712]

Now taking bets how long before this thread goes off the rails and gets closed.

Last time I started a thread on this , it became an infant mortality. Didn't last 24 hours. So while it's still open, I'm in the let it get cut to 80 % group. Medicare trust fund shortage issue is immediate. On that, the payroll tax will go up.

 

[frank]

I wonder if all the loans the government took from the social security and medicare trust funds ever got repaid?

 

[LRDave]

My fear about SS going away was the cause of me finding this great online community. Now I hardly think about it and SS going away is WAY down the list of things I worry about.

 

[donheff]

I wonder if all the loans the government took from the social security and medicare trust funds ever got repaid?

Those loans are no different than the loans the government takes from individuals or institutions buying Treasuries. The government pays them back on an ongoing basis through SS payments just like it pays back Treasuries when they come due.

The idea that there was a "lock box" for these funds that would never be touched was always a misconception. The lock box was just a commitment that the government would keep an account (the Trust Fund) dedicated to SS. And that they have done.

 

[harllee]

In 2 years when I turn 70 I fully expect to get my full $3000 per month SS payment. I do not believe that the politicians in DC will cut SS payments, it would be political suicide. There are other easier ways to fix the problem.

 

[HFWR]

We all know that balancing taxes and benefits means raising taxes and/or reducing benefits.

What a novel idea!

 

[audreyh1]

Because I retired very young, I never counted on SS. Now that it’s closer I’m just hoping it will cover Medicare premiums and taxes on SS and RMDs. If so I’ll be perfectly happy.

 

[Walt34]

In 2 years when I turn 70 I fully expect to get my full $3000 per month SS payment. I do not believe that the politicians in DC will cut SS payments, it would be political suicide.

Exactly. And it isn't just because the folks like me who are now collecting on SS, or you who will collect in the near term, would vote to boot their respective butts out of office.

Their kids and stepkids and grandkids and grandnephews and grandnieces would immediately rejoice at the thought that they wouldn't be paying higher SS premiums. But in a while they would start to realize that hey, Mom and Dad, and/or grandma and grandpa, or maybe stepgrandma and/or stepgrandpa, is going to move in with them because with reduced SS payments they can't afford to live on their own anymore.

And all of a sudden the younger ones start to think that maybe the idea of keeping the SS payments as promised is maybe not such a bad deal after all if it means they don't have to give up a good chunk of living space and put up with some strange geezer that they have nothing in common with.

And then they too will vote to boot those respective politicians out of office as well. At least that's the way I see it unfolding. YMMV of course.

 

[Lakewood90712]

The popular belief is " politicians will not vote to cut benefits. Fair enough. AFAIK, the system is funded with current inflows and income from treasury securities. The system is currently a creditor. The system trustees have no authority to issue debt.

Just how will that become a debtor ?.

Cant just grab massive general fund money to make up the shortfall when the system exhausts the investment portfolio of treasurys

# slo motion train wreck
# oh crap , they are going to vote me out of office

 

[Walt34]

The popular belief is " politicians will not vote to cut benefits. Fair enough. AFAIK, the system is funded with current inflows and income from treasury securities. The system is currently a creditor. The system trustees have no authority to issue debt.

Just how will that become a debtor ?.

That "politicians will not vote to cut benefits" is a misnomer. More accurately what they will not do is allow benefits to be reduced to balance SS fund income and outgo. This last happened in the 1980's (1983 I think, but may be mistaken) within a few months or weeks of an actual reduction in payments to the then-current SS payment recipients.

I will not be surprised to see the same thing happen again.