First, the OP had no choice since he had insufficient retirement savings to stop working at 62 without drawing SS prior to FRA.
To be fair, the OP did have the choice to continue working.
First, the OP had no choice since he had insufficient retirement savings to stop working at 62 without drawing SS prior to FRA.
My own opinion is that the cuts will be means tested in some way or another. Perhaps it will be similar to the method currently used to have folks with higher incomes pay much more for their Medicare Part B than folks with lower incomes.
It won't matter what age you are or if you've already started SS or not. Your cut will depend on your other income.
I think that will be political suicide. But i am wrong (right?) 50% of the time....
To be fair, the OP did have the choice to continue working.
True, but at the same time depending on the OP's profession finding new employment at age 62 can often be challenging or in some cases even impossible.
My own opinion is that the cuts will be means tested in some way or another.
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Well, a wholesale 25% cut would not be something most SS recipients planned upon.
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even with means testing couldn't income be "managed" to qualify, as many already do for ACA subsidies?
Since we are discussing SS possibly running out of funds down the road, I wonder why they don't eliminate the caps (6.2 % SS tax on income, capped at $127,200 in 2017) on SS contributions paid by wage-earners. ..
omni
All changes that I know of where SS cut the amount paid out, left existing folks grandfathered in. Including those that were close to the point.
Example is the file and suspend (I think that's what it was called).
The reasoning being that people planned their retirement upon it.
Well, a wholesale 25% cut would not be something most SS recipients planned upon.
How to not do a random 25% cut, they could employ a number of things.
If they want to means test it (sort of backwards) then just raise the 85% taxable to 100% and raise the 50% taxable to 65%.
Plus of course raise the FRA to 68.
Remove the cap on earnings, but no increase in benefit (yep just an extra tax on the rich, but in a way the bend points are light that right now.). So if folks don't like no increase in benefits then just ad another bend point of 1%
Change the bend formula 90% 32% 15% to 91% 32% 12%
But a massive one year withdrawal might fix that.Be harder to do once past 70 1/2, RMDs would force income up.
But a massive one year withdrawal might fix that.
My thoughts exactly!Decide that having enough financial assets to worry about Tax Torpedos is a sign of being in the upper income levels of retired people and enjoy life more.
Possibly. Or change the 'normal' order of recommended withdrawals from:
Non tax advantaged money, Reg IRA/401K, Roth IRA/401K
to.....
Reg IRA/401K, Non Tax advantaged money, Roth IRA/401K.
Bite the bullet and go through the Reg IRA/401K money first, then enjoy a blissful retirement with no more Tax Torpedos.
Or.....
Decide that having enough financial assets to worry about Tax Torpedos is a sign of being in the upper income levels of retired people and enjoy life more.
BTW, the tax on SS doesn’t go back into the SS “trust fund”, if it were, we may not have to do anything to SS. All this is just funny accounting, they can find the money, just raise the deficit.