Semi-retire: Without using RE $$$$

[tiredofwork]

Social Security is already means tested. The more income you average over your working career, the smaller the % of that income you draw from the Social Security system. Also, whether or not your Social Security check is taxed depends on how much total income you file with the IRS.

I'm 50. Based on the studies I've seen for various reform proposals, I reduce my projected Social Security benefits in Firecalc and other calculators by about 10-15%.

 

[Gumby]

A simple hypothetical.  Imagine there are only 10 people in the system.

Voters 1-3

Each have $2 million in savings
Each have income = $80k/yr income + $15k social security = $95k/yr

Voters 4-10

Each have zero savings
Each have income = $15k/yr social security

Total social security payments $150k per year

Social Security system can now pay only 70%, so you must cut $45k per year.

How do you do it - if you cut everyone equally, Voters 1-3 each suffer a loss of 4.7% of his/her income (4.5/95)

But Voters 4-10 each suffer a loss of 30% of their income. (4.5/15)

It is my prediction that Voters 4-10 will vote to take the $45k in reductions from Voters 1-3 and will not feel particularly bad doing so.

In a system where every vote is equal, the outcome is inevitable.    

 

[Gumby]

Social Security is already means tested.  The more income you average over your working career, the smaller the % of that income you draw from the Social Security system.

Yes, but that sort of adjustment is fair because, while you are working, once you get over a certain income, you stop contributing to the system fo the year.

 

[tiredofwork]

Yes, but that sort of adjustment is fair because, while you are working, once you get over a certain income, you stop contributing to the system fo the year.

Gumby, try this. Go to http://www.ssa.gov/OACT/quickcalc/index.html and leave all of the defaults except vary the income. I just did this for incomes of $40000, $60000 and $80000 per year. You will find that the quck calculation gives age 66 annual Social Security payments of $14808 (37% of working income), $19836 (33% of working income), and $22236 (28% of working income). These are incomes that are fully taxable for Social Security. This is what I meant by means testing.

 

[MasterBlaster]

Some of you are trying to decide and articulate what would be "fair"

Well don't hold your breath. This is the government working.

The final solution will neither be fair nor smart nor timely.

My prediction of when this will come to pass is around 2017 or so as the budget defocit starts to really really go into the red. Perhaps it will be caused when the Japanese/Chinese stop buying our bonds.

- 2017 that's my number and I'm sticking to it.

 

[donheff]

But Voters 4-10 each suffer a loss of 30% of their income. (4.5/15)

It is my prediction that Voters 4-10 will vote to take the $45k in reductions from Voters 1-3 and will not feel particularly bad doing so.

In a system where every vote is equal, the outcome is inevitable.

Sorry Gumby, but those voters are too dumb to vote their interests or else why is the estate tax viewed by them as a "death tax." It is only a few wishy-washy pinko liberals like me with too much money and not enough brains that actually want to level the playing field a bit. But I know I can rely on the people who don't benefit from the right wing policies to protect my interests. Thus I can remain on my high horse bitching and still do well

 

[Gumby]

Gumby, try this.  Go to http://www.ssa.gov/OACT/quickcalc/index.html and leave all of the defaults except vary the income.  I just did this for incomes of $40000, $60000 and $80000 per year.  You will find that the quck calculation gives age 66 annual Social Security payments of $14808 (37% of working income), $19836 (33% of working income), and $22236 (28% of working income).  These are incomes that are fully taxable for Social Security.  This is what I meant by means testing.

You are correct; it is progressive taxation of a sort. I was thinking about those who exceed the social security wage base.

 

[Gumby]

 It is only a few wishy-washy pinko liberals like me with too much money and not enough brains that actually want to level the playing field a bit.

I agree: "For unto whomsoever much is given, of him shall much be required" (Luke 12:48).  And because I am human, yes, I will be unhappy about the means test, but I will try to remember this verse when it happens. (The right wing does not have a lock on Christianity)

 

[bcurtis]

As I have said, any SS benefit I can receive will be a bonus, in my eyes.

Maybe the Europeans have an edge on us in the Social program realm. Perhaps, given a few hundred year edge on us, the Brits, Germans, Dutch... have tried and failed at providing retirement, elder care, health care.... to their citizens while maintaining a relatively low tax rate.

Hopefully not, but as Gen X'ers and beyond see their parents living in near poverty conditions due to poorly funded pensions, minimal retirement savings and little to no health care, the voters might begin favoring higher taxes, the re-developement of the estate tax and a National healthcare system.