Are you concerned that your nest egg will cause you to get means tested out of SS?

[Nords]

By the time 2030 rolls around we'll have 85% of our SS subject to taxation in the 25% bracket. Whatever's left will probably go right back into paying Medicare premiums. And by then, 85%/25% will probably seem like very low numbers.

I only have 24 years of W-2 work history anyway.

[TromboneAl]

Quote:

Originally Posted by W2R However, at this point I feel like I'm playing "chicken" with the Social Security Administration. Dare I wait as planned, and possibly get caught up in means testing or other reductions, or will I chicken out and take it before 66? Who knows.

Perhaps you can keep your finger on the trigger, and as soon as you hear unpleasant noises from the government, pull it. You'll probably be grandmothered in anyway.

[W2R]

Quote:

Originally Posted by TromboneAl Perhaps you can keep your finger on the trigger, and as soon as you hear unpleasant noises from the government, pull it. You'll probably be grandmothered in anyway.

So true! I love it - - -"grandmothered in".

I guess that is kind of what I am doing, or trying to do anyway. Listening and hoping to pull the trigger early enough, and that it helps.

[growing_older]

Means testing based on wealth is likely to have other "fairness" issues, such as how one values pensions or annuity contracts.

[dex]

Quote:

Originally Posted by Nords By the time 2030 rolls around we'll have 85% of our SS subject to taxation in the 25% bracket. Whatever's left will probably go right back into paying Medicare premiums. And by then, 85%/25% will probably seem like very low numbers. I only have 24 years of W-2 work history anyway.

What you say is the key.
It may not be means testing but just inflation and/or an increase in the tax rates that eats away from what you keep of SS.



Benefits Planner: Taxes and your Social Security benefits
No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:

• file a federal tax return as an "individual" and your combined income* is
  • between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
  • more than $34,000, up to 85 percent of your benefits may be taxable.

[East Texas]

Quote:

Originally Posted by dex Benefits Planner: Taxes and your Social Security benefits No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you: file a federal tax return as an "individual" and your combined income* is between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits. more than $34,000, up to 85 percent of your benefits may be taxable.

Just about every one who posts on this board is / will be in the 85% bracket. I expect the 85% will go to 100% pretty soon.

[veremchuka]

if they means test income i should be ok. i plan on taking ss at 62. i have a pension that will be reduced at age 62 because i am ss eligible regardless whether i take it or not. anything you get from the govt comes with strings attached, the fact we paid into it for 40+ years is a moot point.

[Westernskies]

This thread is just asking for a poll...

[FIREd]

I am still 30 years away from full retirement age and I fully expect to receive little or no SS. I planned accordingly so I am not concerned.

[79protons]

Here we go again.

So how do they reconcile person A with a $1,000,000 modest home in LA or NY vs person B renting an apartment in Alabama and having $1,000,000 in cash in the bank? Which one has higher means? They both have the same net worth.

[harley]

Same way they do with taxing the rich (making over $250K) without differentiating between living in NY or Alabama. Just because it isn't fair, or even logical, doesn't mean they won't do it.

[Htown Harry]

Quote:

Originally Posted by swampwiz Folks are talking about means testing the middle class retirement programs like Social Security and Medicare (obviously Medicare isn't going anywhere, but perhaps a larger premium would be required for folks who have means.)

If I had to lay odds, I'd bet there is a much greater means-testing risk related to Medicare than Social Security. We've seen it already, with the upcoming increase in Medicare tax ceilings for high-income earners.

SS can be "fixed" with a combination of relatively minor adjustments over a number of years. Also, the scale of the problems and potential solutions are quantifiable with traditional longevity, inflation and similar calculations. (We've had some lengthy threads discussing this when various commissions have put out their reports.)

Medicare? No one can say when elderly health care expenses will stop their double-digit annual increases, therefore no one has a solid estimate of how the Medicare taxes, participant premiums and program spending will be kept in balance during the years I will be eligible. Relative to SS, the financial gap ten years out appears to be huge.

[East Texas]

Quote:

Originally Posted by Westernskies This thread is just asking for a poll...

Yep. However, figuring out which questions to ask will be the challenge....

[Alan]

Quote:

Are you concerned that your nest egg will cause you to get means tested out of SS?

No. It may cause SS to be taxed at 100% but I can't see it being removed altogether based on either income or net worth - that would be political suicide imo.

[oldtrig]

I am with WR2
I'll be 64 in August, and my plan was to take SS at 66. I now plan on taking the money in August. The penality is not enough to worry about taking it two years early. Tom

[meierlde]

Note that Eric Cantor (the rep budget chairman) is talking 55 as the cut off no changes affecting anyone over 55. Recall that the great privatization was also cut off at 55. It looks like 55 is a magic number the idea being that you have less time to prepare past that point. Note that current full benefit age rise stops with those at 51. More likley as I have seen suggested, is that the cost of living increase for amounts above the 15% bend point will cut or done away with. (That works out to be a benefit of about $1800 a month, they might well go down a bit from 4517/month on this bend point.

[East Texas]

Quote:

Originally Posted by meierlde Note that Eric Cantor (the rep budget chairman) is talking 55 as the cut off no changes affecting anyone over 55. Recall that the great privatization was also cut off at 55. It looks like 55 is a magic number the idea being that you have less time to prepare past that point. Note that current full benefit age rise stops with those at 51. More likley as I have seen suggested, is that the cost of living increase for amounts above the 15% bend point will cut or done away with. (That works out to be a benefit of about $1800 a month, they might well go down a bit from 4517/month on this bend point.

You lost me with the bolded red. What is a "bend point"?

[Telly]

Are you concerned that your nest egg will cause you to get means tested out of SS?

No. And I don't understand the continuing fatal attraction to this non-starter idea on this forum. It's like a flame to a moth...

No - Because serious talk of it in congress would put boomers from all over the country onto busses to Washington DC. Talk about a march on Washington! And I'll be on the bus, for sure.
Remember that the definition of the "baby boom generation" was widened all the way to those who were born in 1964! We're talking about a giant slice of the population.

No - Because to means-test for SS benefits that people have been paying into for years would be a most blatant admission that they want SS to morph into just another welfare scheme. I think it's a kiss of death.

No - No reason to. The 32k rule instituted in the 1983(84?) SS revision with it's non-inflation adjusted fixed parameter means that every year, more and more people taking SS will be taxed, and more and more of what they get opens to taxation as each year goes by. The revenue will be coming in... congress just needs to stop spending it for every other idea they can think of.

No - All they have to do is open up that big Social Security "Lock Box" that has all of those super-special "bonds" in it, and everything will be fine. BWwwaaHahahahahahahaha! Sorry, I couldn't resist that.

[Katsmeow]

Telly -- I basically agree with you.

However, I could see them sort of sneakily getting around by increasing Medicare premiums for the "rich" to the point that virtually all your SS benefits are eaten up by Medicare premiums and income taxes on SS.

Whereas the "not-rich" would have the same SS benefits but their Medicare premiums would be lower.

[meierlde]

Quote:

Originally Posted by East Texas You lost me with the bolded red. What is a "bend point"?

If you look at the SS benefit formula its 90% of the first 761 per month, then 30% of up to 4586-761 and then 15% of the amount between that and the wage adjusted cap based upon a wage adjusted monthly average of your highest 35 years of earning. See:Your Retirement Benefit: How It Is Figured (2010)
for more details. Note that hidden in this formula already is a pretty good means test, lower wage folks get a greater percent of their income replaced.