Social Security and Medicare cuts now on the table

[73ss454]

I have a # of friends who are Cops and Firemen collecting both a pension and SS. Only one of them is even in the least bit disabled. I think it's easier for them to stay not working because they get SS as well as their pensions. Most folks who are injured continue to work because they can't survive on the SS payments alone.

It should be more than means tested, most of these guys should be in jail.

 

[chinaco]

I have a # of friends who are Cops and Firemen collecting both a pension and SS. Only one of them is even in the least bit disabled. I think it's easier for them to stay not working because they get SS as well as their pensions. Most folks who are injured continue to work because they can't survive on the SS payments alone.

It should be more than means tested, most of these guys should be in jail.

I do not agree with trying to control fraud that way. Means testing would not be an effective fraud deterrent!

But on a separate note: I have read some articles that during this prolong recession that there has been a big increase in application for disability with SSI.

Luckily, I was never disabled. So I cannot speak with too much personal experience on the matter.

But... SSI disabilty should only be available to people that are really disabled.

I have not doubt that with the impending budget crisis and funds for SS being debated that they will increase their focus on fraud in SS, Medicare, Medicaid, Defense Spending and any other spending they government does.

 

[rescueme]

But... SSI disabilty should only be available to people that are really disabled.

Why do you (and maybe others) think that it is not?

BTW, folks are using a mix of terms. SSD & SSI are two separate programs, with different funding sources and different assets allowed (most SSI receipients, administered by each state, have a $2K limit on assets to be able to qualify for the program).

Here's an article on the difference in programs, and who qualifies (based upon "proof"):

SSDI and SSI Difference

 

[MasterBlaster]

Master,
I get "page not found" on your Simpson-Bowles link. I looked for info on their income brackets a couple of months ago, but couldn't find that either. I'd really like to check out that info.

That link works for me to bring up the (Simpson-Bowles) Presidential Commision on Fiscal resposibility and Reform report.

That previous link (that works for me) was to the actual PDF file report - graphs and all.

here's the Wikipedia synopis of that report.

National Commission on Fiscal Responsibility and Reform - Wikipedia, the free encyclopedia

At the bottom of the Wikipedia linked page the actual PDF report is the first link in the "External Links" section

 

[Brett_Cameron]

I know a few people who receive substanial disability pensions (tax free) and receive ss disability for themselves & their kids. The husband or wife is also working. Why do they collect SS Disability. This should be means tested.

My wife is disabled and receives SSD payments of about $10k/year. It is not enough to pay her annual medicines costs. Our 25% tax bracket and the means based medicare part B premium takes a lot of it. I have not done the calcs to see what the real benefit is but i am guessing maybe $5k/year net.

 

[BLS53]

Determining disability is a slippery slope. It's subjective and individual. If someone has a doctor and/or attorney that can convince the SSA or other benefit granting authority, that they are disabled, more power to them.

I find 3rd parties that obsess over their co-worker, neighbor, etc., getting disability under the guise "that's my tax dollars", are nothing more than busy body's that should mind their own business. If the same individuals spent hours on the internet looking for defense contractor, farm subsidy fraud etc., I might lend the passion for disability abuse a little more credibility. But I see a lot more concern for disability fraud than I do other areas of tax money waste. Not just on this forum, but just about any internet board.

Short of the military activating 58 year old retirees, and getting injured on active duty, I'm not in a position to ever receive any sort of government disability. But if I was, I would just tell people I had won a lottery or received an unexpected inheritance. No need for people to meddle in my business, disability checks or otherwise.

 

[sundance]

I am of the opinion that if you receive a "tax free" pension on average of say 5500 dollars from a city or state you should not receive social security disability. SOCIAL security should be means tested. You are entitled to receive social security at the proper age. Many people receive tax free benefits under the guise of religion, agricultural & so on & on & on & on & on. I say fix some of these loop holes.

 

[sundance]

OPPS, " SS Disability" should be means tested

 

[cb7010]

After seeing the job the federal government has done managing our economy and budget over the past several decades, I think it's just a ludicrous idea that anybody would want the federal government to manage either their personal retirement account or their healthcare. Who disagrees and thinks the federal government is the best place for our retirement savings to go?

 

[cb7010]

Also, if I understand history correctly, wasn't FDR's version of Social Security supposed to be only a safety net for those in dire need? I am pretty sure it was never intended to be the nation's retirement program. Could we ever get back to this? Maybe those with comfortable personal savings shouldn't get social security payments at all (means testing)? Bottom line is that these programs have been mis-managed and won't be solvent for much longer..who has a better solution besides taxing the rich?

 

[GregLee]

Who disagrees and thinks the federal government is the best place for our retirement savings to go?

I do. The ideal retirement account is an annuity, so we can average out our lifespans, and not be faced with the uncertainty of our death date. At present, the only way we have to approximate this retirement system is dealing with insurance companies whose main purpose is to gouge out as much profit from us as possible. I understand that, since they are for-profit enterprises, but as an individual, I have little bargaining power. I don't like it. This is something we need government to do for us.

 

[BLS53]

After seeing the job the federal government has done managing our economy and budget over the past several decades, I think it's just a ludicrous idea that anybody would want the federal government to manage either their personal retirement account or their healthcare. Who disagrees and thinks the federal government is the best place for our retirement savings to go?

Well, I realize I'm in the minority on this board, but some of us don't have a choice at this point in our lives. When I started my adult life, pursuing federal pensions and Social Security was seen as an honorable endeavor. Those benefits weren't seen as "welfare" as the well heeled investor class seems to view them now.

As for trust. I've watched people loose private pensions, I've seen the Enron's and Madoff's wreck their havoc, and various other meltdowns of private "I saved the money myself" investment schemes. Meanwhile I've never missed a pension check, and fully expect to get SS in 3 1/2 years. And I make no apologies for it.

If the U.S. government fails, it will take everybody with it. So the fact that you saved a lot of money, and don't get your retirement income from Uncle Sam, will have little relevance. I suppose you could go travel around Thailand in an RV, or some other alternate lifestyle discussed on this board, but for most, life will be over as they know it.

 

[rescueme]

OPPS, " SS Disability" should be means tested

It is means tested, in a way. You can only get a benefit as related to your SS contributions before becoming disabled. The higher your contribution, the higher your benefit. Also, if you are able to return to work, or have part-time work, you lose SSD if you established monthly income (which is currently $1K/month).

BTW, SSD converts to regular SS at your FRA age. The payment remains the same (of course adjusted for any annual inflation).

Many people receive tax free benefits under the guise of religion, agricultural & so on & on & on & on & on. I say fix some of these loop holes.

They do? Please share some info on your statement; I don't understand.

 

[LARS]

After seeing the job the federal government has done managing our economy and budget over the past several decades, I think it's just a ludicrous idea that anybody would want the federal government to manage either their personal retirement account or their healthcare. Who disagrees and thinks the federal government is the best place for our retirement savings to go?

I guess I disagree.

The vast majority of Americans, IMHO, are not equiped to manage their retirement assets; and so, I would fear that having done a poor job the multitudes would end up being even more of a burden/drain on those of us that have saved.

This is in no way suggesting Congress gets it right, but I think the alternative would cost the taxpayer twice in this instance.

 

[Mulligan]

I guess I disagree.

The vast majority of Americans, IMHO, are not equiped to manage their retirement assets; and so, I would fear that having done a poor job the multitudes would end up being even more of a burden/drain on those of us that have saved.

This is in no way suggesting Congress gets it right, but I think the alternative would cost the taxpayer twice in this instance.

Unfortunately, LARS I have to agree with you. Being involved with the general public for many years, they do not resemble the population on this site. I hate to say it, but the government has to be involved or many many people would be penniless. Then our taxes would really sky rocket to take care of them, unless we just say "to bad you should have saved". That doesn't seem likely based on the pattern of government the past 50 years.

 

[rescueme]

Unfortunately, LARS I have to agree with you. Being involved with the general public for many years, they do not resemble the population on this site. I hate to say it, but the government has to be involved or many many people would be penniless.

I also agree.

Could I have done better by investing my contributions to SS vs. what I will actually get? The actual numbers say yes.

But I'm sure that I (and most of the folks on this board) are the exception to what would normally occur while looking at the population, in general.

Even though the "return" is less, you need to save folks from themselves - or we (even us "smarties") would have a worse condition overall in this country - related to retirement income, and in turn may even promote the increased taxability to we "non-grasshoppers" . I have no problm (along with my DW) as playing the "role" of the ant...

 

[donheff]

Me too. Eliminating or privatizing SS would not be a positive development.

 

[ERD50]

I do. The ideal retirement account is an annuity, so we can average out our lifespans, and not be faced with the uncertainty of our death date. At present, the only way we have to approximate this retirement system is dealing with insurance companies whose main purpose is to gouge out as much profit from us as possible. I understand that, since they are for-profit enterprises, but as an individual, I have little bargaining power. I don't like it. This is something we need government to do for us.

I can see the point that the govt might be in the best position to annuitize our retirement money. But when you mention having little bargaining power, well, I also feel that way about the Govt.

The vast majority of Americans, IMHO, are not equiped to manage their retirement assets; and so, I would fear that having done a poor job the multitudes would end up being even more of a burden/drain on those of us that have saved.

This is in no way suggesting Congress gets it right, but I think the alternative would cost the taxpayer twice in this instance.

We don't need to swing the pendulum so far as to leave everything up to the individual. I think there is some middle ground here. I could see a 401K-like system, with some/all of it converted to an annuity at retirement.

-ERD50

 

[rescueme]

I think there is some middle ground here. I could see a 401K-like system, with some/all of it converted to an annuity at retirement.

-ERD50

Gee, that's what I did (with 10% of DW/my's joint retirement portfolio - and I didn't need the government to make that decision for me )...

But again, being an "ant" (rather than a grasshopper), it just comes naturally, don't U know ...

 

[ERD50]

Gee, that's what I did (with 10% of DW/my's joint retirement portfolio - and I didn't need the government to make that decision for me )...

But again, being an "ant" (rather than a grasshopper), it just comes naturally, don't U know ...

The difference is the Govt kept pulling money from my paycheck under a line item labeled "FICA". I had no choice, no decision to make. All I'm saying is I'd rather have that in a private account (like my 401K), and have some choices with it.

I might annuitize some of my portfolio at some point, but since my pension and SS are already annuities, that will play into the decision. I'm not anti-annuity in any way, or anti the idea of someone doing this on their own if that's what you were getting at. I do think there are risks and issues, and those need to be considered, like any investment.

But I agree with others, some kind of 'forced' savings plan can help save the ants from the grasshoppers. It would be nice if we could count on people to do it, but that's wishful thinking.

-ERD50

 

[rescueme]

I might annuitize some of my portfolio at some point, but since my pension and SS are already annuities, that will play into the decision.

True, in your specific case the idea of an "annuity" (more specifically, an SPIA which I/DW hold) has to be based upon your specific situation, and may not apply to you.

In our case, with me retiring at age 59 (no pension, 11 years till SS at age 70) it was the perferred solution to form a "pension". For others (such as you), it must be investigated.

Again, these types of decisions for the general public are much beyond their thoughts of "living for today" (grasshopper).

Just a question to consider; how many of currrent retirees (not government) actually have a pension? I would think the numbers are low - as in my case, in the private sector.

In that case (regardless of the "returns" on SS "investments"), it's better than not having a "fallback plan" to count on. Is it perfect? Nope. Is it better than nothing? Yes (IMHO)...

BTW, I consider an annuity (e.g. SPIA) as a "private pension" plan. Just a way to convert your existing assets into a lifetime revenue stream - such as a DB (pension) was designed to do in the past.

 

[Mulligan]

Just a question to consider; how many of currrent retirees (not government) actually have a pension? I would think the numbers are low - as in my case, in the private sector.

A recent thread from another person, showed a graph that had private workforce with a pension is 7%, down from near 70% thirty years ago.

 

[Alan]

We don't need to swing the pendulum so far as to leave everything up to the individual. I think there is some middle ground here. I could see a 401K-like system, with some/all of it converted to an annuity at retirement.

-ERD50

The UK has had something like this since the 80's. Taxpayers can choose to cut their FICA contributions by 50% and invest the money into a private savings plan, investing it themselves. By age 70(?) they have to convert the savings into an annuity unless they can show they have sufficient other income streams, in which they can keep it invested or draw cash from it etc.

BIL opted out in '89 and so far it seems to be working for him.

 

[ERD50]

The UK has had something like this since the 80's. Taxpayers can choose to cut their FICA contributions by 50% and invest the money into a private savings plan, investing it themselves. By age 70(?) they have to convert the savings into an annuity unless they can show they have sufficient other income streams, in which they can keep it invested or draw cash from it etc.

BIL opted out in '89 and so far it seems to be working for him.

Thank you, I was unaware of that. It's great to have international input on this forum.

It sounds very reasonable to me. So much of what bugs me about the way our US Congress does things is the one-size-fits-all approach. As I understand it, high deductible policies are 'out' in the US Healthcare bill. Shame - as in the above example, if I can prove I am 'good' for the deductible, why not give me a choice?

-ERD50

 

[donheff]

Thank you, I was unaware of that. It's great to have international input on this forum.

It sounds very reasonable to me. So much of what bugs me about the way our US Congress does things is the one-size-fits-all approach. As I understand it, high deductible policies are 'out' in the US Healthcare bill. Shame - as in the above example, if I can prove I am 'good' for the deductible, why not give me a choice?

-ERD50

this does sound reasonsble. The rrquirement for an annuity absent a skowing of FI protects society.