The Social Security 2100 Act

[OnTheAve]

The operational word here is "earned." Is this W-2 income such as working a job? Or does it include unearned income such as TIRAs, dividends, and interest?

 

[KenZ71]

3 legged stool is ideal when referring to retirement funding.

If we are talking about increasing SS benefits, free college tuition, free healthcare perhaps the better approach might be choose one of the three.

Take free education to give yourself the means to fund the other two.... oops, getting political better stop.

But I think it is safe to say most here who follow LBYM don't need or want Gov't handouts.

 

[beowulf]

3 legged stool is ideal when referring to retirement funding.

If we are talking about increasing SS benefits, free college tuition, free healthcare perhaps the better approach might be choose one of the three.

Take free education to give yourself the means to fund the other two.... oops, getting political better stop.

But I think it is safe to say most here who follow
LBYM don't need or want Gov't handouts.

Really? How about all those folks with lots of assets who take advantage of subsidized health insurance because the law was written poorly? They openly say it’s OK as long as it’s legal. Not only that, but they proactively manage their taxable income to keep it under the earnings limit. Do you truly believe that wealthy people, to include LBYM’ers who tend to accumulate lots of savings, would turn down “free” benefits? Posts on ER dispute the assumption that they would.

 

[pb4uski]

I think that you are both sort of right. Many here would be fine with no government help or subsidies.... but if the government is offer them then they wiil partake.

No ACA subsidies here, but we do manage our income to pay 0% capital gains... and a by-product is that we qualify to buy catastrophic health insurance which is a bargain in our state.

 

[pb4uski]

The operational word where? Is there a specific post that you are responding to? If so, please quote it.

The operational word here is "earned." Is this W-2 income such as working a job? Or does it include unearned income such as TIRAs, dividends, and interest?

 

[joeea]

But I think it is safe to say most here who follow LBYM don't need or want Gov't handouts.

You think Social Security is a handout? If so, I follow LBYM and apparently I want a handout.

 

[Senator]

Does the 93% mean that someone making $1,000 a month while working, they will make $930 a month in SS?

No.

So under the current formula, someone with AIME of $1,000/month would have a PIA of $839.10.... the proposed 3% increase would increase it to $865.95.

Maybe I should have used the bend point as my example. If someone was making the first bend point ($895.00 a month?), when they claim SS they get 93% of the amount they made while working. Not bad for a non-pension. The military only gives 75% after 30 years.

Primary insurance amount (PIA) equals
90% of the first $895 of average indexed monthly earnings (AIME), plus
32% of AIME over $895 through $5,397, plus
15% of AIME over $5,397

 

[pb4uski]

Yeah, but the 93% only applies to the first $895/month and subsequent percentages are much less generous.... so lower earners get a higher percentage of average earnings than higher earners... I'm ok with that.

So let's say you had someone that earned $30k a year. Military pension at 75% would be $22,500.... SS would be $16,151 (54% of $30k)... big difference.

 

[joeea]

If someone was making the first bend point ($895.00 a month?), when they claim SS they get 93% of the amount they made while working. Not bad for a non-pension. The military only gives 75% after 30 years.

Yup, 93% is better than 75%.

Of course it's still less than $10k and less than the Federal poverty level.

 

[pb4uski]

Yeah, but the 93% only applies to the first $895/month and subsequent percentages are much less generous.... so lower earners get a higher percentage of average earnings than higher earners... I'm ok with that.

So let's say you had someone that earned $30k a year. Military pension at 75% would be $22,500.... SS would be $16,151 (54% of $30k)... big difference.

I wanted to add another example at $50k...

75% military pension would be $37,500... SS would be $22,551.

 

[Independent]

The operational word here is "earned." Is this W-2 income such as working a job? Or does it include unearned income such as TIRAs, dividends, and interest?

If "here" means discussions of Social Security, it's is that type of income that is subject to SS taxes. You pay SS tax on wages, not on withdrawals from IRAs, dividends, or interest.

Your SS benefits are based on your "earnings" record, which is that part of your income that was used to calculate SS taxes.

 

[mpeirce]

The bill currently has more than 200 co-sponsors in the House. Supporters plan to hold a markup of the legislation in the fall, and then move it to the House floor for a vote.

Why are we bothering to discuss this bill?

Sure it has 200 cosponsors, but they are all Democrats meaning that this has approximately 0% chance of passing Congress, let along be signed by the President.

Any serious reform of Social Security will have to be at least superficially bipartisan.

 

[joeea]

Why are we bothering to discuss this bill?

Sure it has 200 cosponsors, but they are all Democrats meaning that this has approximately 0% chance of passing Congress, let along be signed by the President.

Any serious reform of Social Security will have to be at least superficially bipartisan.

We aren't allowed to discuss partisan politics.

We are allowed to discuss pending bills which have some connection to retirement and finances.

 

[MichaelB]

Discussing legislation of this sort is difficult without getting into partisan views, and we all do appreciate everyone's effort so far to avoid that. Focusing on how the proposed legislation affects us and our retirement leads to a more useful thread with greater participation.

 

[mpeirce]

I'm not trying to be partisan, it's just that there a lot of bills introduced that have little to no chance of passing (by both sides). They really aren't worth discussing as something that might affect us.

 

[Rianne]

Try not to porky this discussion. It's so relevant to most of us. Yes, our portfolio will support us for the long term but solving the SS issue, especially since we paid into it for all these years, is important. If not this legislation, maybe something similar. A give and take of sorts.

 

[MichaelB]

I'm not trying to be partisan, it's just that there a lot of bills introduced that have little to no chance of passing (by both sides). They really aren't with discussing as something that might affect us.

The post was not directed at you, sorry for that misunderstanding.

You are correct, most of the legislative proposals have little chance of even getting to the floor and even less chance of passing. Still, some members wish to discuss them and engage in a bit of "what if..." speculation.

 

[MarieIG]

Polls repeatedly show that most folks think they only need to save up to the company match, and no more.

Must be nice to get a match . . .

 

[dd564]

My opinion is in the next 20-30 years we'll have substantial changes to social security and other forms of citizen payments or else our society will pretty much crumble.

There is going to be way too many people without enough for retirement who will be past working age and politicians aren't going to ignore them.

 

[joeea]

My opinion is in the next 20-30 years we'll have substantial changes to social security and other forms of citizen payments or else our society will pretty much crumble.

There is going to be way too many people without enough for retirement who will be past working age and politicians aren't going to ignore them.

I'm not sure about the "without enough" part, but many, many people depend on their Social Security benefits for a significant part of their retirement income. I read today that a third of retirees get more than 90 percent of their income from Social Security and that two thirds get half their income from Social Security.

It seems unlikely that politicians will just ignore that voting block.

 

[dd564]

I'm not sure about the "without enough" part, but many, many people depend on their Social Security benefits for a significant part of their retirement income. I read today that a third of retirees get more than 90 percent of their income from Social Security and that two thirds get half their income from Social Security.

It seems unlikely that politicians will just ignore that voting block.

"Without enough" is subjective. It's whatever a large enough portion of our society wants after it reaches a point of critical mass.

This could include basics for necessity of food and shelter. Or it could go to food, shelter, and all expenses paid trips to Hawaii and Europe. It's whatever is considered reasonable by a large portion of the population.

Thirty years ago I didn't think gay marriage would become a reasonable change.

Also I didn't think forgiveness of college loans was realistic, but that one is getting very close.

These two are both examples and I'm not attempting to debate the pro's and con's of either. My point is simply that if a large majority have a need, politicians generally react to it and try to correct it by creating a large bureaucratic program to "solve" the issue.

 

[joeea]

Or it could go to food, shelter, and all expenses paid trips to Hawaii and Europe.

Sure.

Thirty years ago I didn't think gay marriage would become a reasonable change.

Uhm, okay.

My point is simply that if a large majority have a need, politicians generally react to it and try to correct it by creating a large bureaucratic program to "solve" the issue.

Seems unlikely that "politicians" will create a new large bureaucratic program in this case. Mostly, since there is no need to create anything at all, just to fund what already exists.

Anyway, I suspect we agree that something will be done to prevent drastic cuts in benefits.