Collecting Social Security at age 62 is the best decision, here is why:

[marko]

Quote:

Originally Posted by Doc0 I'll be laughing in 2034.

If I'm even alive in 2034 I won't know "whether to be ecstatic or ludicrous"!! (quote: the great wit Mike Tyson)

In the meantime, a whole lot of things can happen/change to SS before then. I might lose sleep over a lot of things but what might happen to SS almost 20 years from now isn't going to be one of them.

Waaaay too many variables including my own mortality.

[CRLLS]

The laws are in place to prevent SS from paying more than they take in or have in the Trust Fund (reserves). That is certain. I cited my references above.

If the SSA comes to needing a reduction in payouts, I can find no credible documentation as to exactly HOW the SS would apply that reduction. Whether they would do across the board cuts or would somehow proportion that to the higher paid recipients appears to be undefined. It is not in the laws, as far as I can find.

[pb4uski]

+1 my understanding as well

[Running_Man]

https://www.ssa.gov/policy/docs/ssb/...v70n3p111.html

This is a relatively old policy paper from the Social Security but it makes pretty clear three things:

1) Social Security can only invest in US Government bonds as a result of an act of Congress.

2) If funds are short, no decision on how to address the shortfall can be accomplished without a Congressional Act. the obligations would remain. This would be similar to the Illinois government which didn't have authority to pay and so began paying obligations late. Without Congressional action the SSA would be forced to pay obligations as the funds came to them causing later and later payments and a building large unfunded liability.

3) Congress will almost certainly act in some fashion, which by it's very nature is unpredictable.

[Cut-Throat]

Quote:

Originally Posted by Running_Man https://www.ssa.gov/policy/docs/ssb/...v70n3p111.html 3) Congress will almost certainly act in some fashion, which by it's very nature is unpredictable.

The only thing that is predictable is Congress wants to get re-elected... There is no surer path to re-election, than to shore up the votes in the over 55 crowd... "Social Security is widely considered the "third rail" of politics: any politician who touches it, dies."

[golfnut]

By 2034, many boomers (born between 1946 and 1964) won't be around and some who are won't know the time of day. Sobering thought but true.

[Cut-Throat]

Quote:

Originally Posted by golfnut By 2034, many boomers (born between 1946 and 1964) won't be around and some who are won't know the time of day. Sobering thought but true.

Which is true, but remember that the 38 year olds of today will be 55 by then and they will be just as focused on collecting their SS as the Boomers of today. This is not a 'Boomers' issue! It's a Senior Issue and there will always be Seniors.

When I was 25 and started my Software Engineering Career (Over 40 years ago), I was assured by all of the 'Conservatives' that I would not collect my Social Security, so don't plan on it, because it was 'going broke'. So, remember that the first step in eliminating SS, is to get you to believe that it won't happen for you.

And Remember that Social Security has never contributed 1 Penny to the National Debt, but has a 2.8 Trillion Dollar Surplus. So there are other areas to look at in the Federal Budget for Deficit Reduction. S.S. is not one of them.

[foxfirev5]

Quote:

Originally Posted by Cut-Throat Which is true, but remember that the 38 year olds of today will be 55 by then and they will be just as focused on collecting their SS as the Boomers of today. This is not a 'Boomers' issue! It's a Senior Issue and their will always be Seniors. When I was 25 and started my Software Engineering Career, I was assured by all of the 'Conservatives' that I would not collect my Social Security, so don't plan on it, because it was 'going broke'. And Remember that Social Security has never contributed 1 Penny to the National Debt, but has a 2.8 Trillion Dollar Surplus. So there are other areas to look at in the Federal Budget for Deficit Reduction. S.S. is not one of them.

Yes. It is a benefit. NOT an entitlement that so many today propose. A big part of ER and I'm amazed at the number of posters here who are willing to roll over. Similar to my feelings on ACA posted in prior years. Even though not currently part of MY plan and I'm covered, I know what I feel is right.
These issues are critical to the retirement plans of many and not a political statement. More of a generational issue that more people evolve into each year.

[ShokWaveRider]

Quote:

Originally Posted by foxfirev5 Yes. It is a benefit. NOT an entitlement that so many today propose. A big part of ER and I'm amazed at the number of posters here who are willing to roll over. Similar to my feelings on ACA posted in prior years. Even though not currently part of MY plan and I'm covered, I know what I feel is right. These issues are critical to the retirement plans of many and not a political statement. More of a generational issue that more people evolve into each year.

+10 How can an entitlement be something we paid into for 30+ years? SS & Medicare IMHO do not fall into that category. Medicaid Yes, Food Stamps, Yes, but NOT SS & Medicare.

[joeea]

Quote:

Originally Posted by pb4uski My understanding is that the rub is that Social Security is prohibited from borrowing... so after the surplus is gone the only option will be to reduce benefits in aggregate by ~23% in 2034 and possible as much as 27% by 2091... with those reductions SS benefits will be equal to SS tax revenues. It is unclear how these reductions would be implemented.. whether it would be across-the-board to all recipients, to only future recipients, to only recipients with benefits exceeding $x or what.

You are correct. Unless the laws are changed, SS will only be able to pay out what comes in, and they will have to reduce everyone's benefit.

It will be across-the-board, if the current rules stand.

However, Congress has a habit of waiting until the last minute to do anything unpopular (this "fiscal cliff" and "government shudown"). I fully expect them to wait until they have no choice, then increase SS funds so that at least seniors currently receiving SS benefits won't be harmed.

[pb4uski]

Just curious joeea, you say "It will be across-the-board, if the current rules stand."

While I think that is the most likely outcome is there a source that definitively states that cuts would be across the board?

[Cut-Throat]

Quote:

Originally Posted by pb4uski Just curious joeea, you say "It will be across-the-board, if the current rules stand." While I think that is the most likely outcome is there a source that definitively states that cuts would be across the board?

"Predictions are hard to make, Especially about the Future"..... Yogi Berra

[youbet]

Quote:

Originally Posted by joeea Unless the laws are changed, SS will only be able to pay out what comes in, and they will have to reduce everyone's benefit.

They don't have to reduce "everyone's" benefit. They have to reduce the aggregate benefit paid out. They've already set the precedent with Medicare. High MAGI folks pay far higher premiums for Part B and Part D than low MAGI folks. The system is already in place complete with links to your Form 1040 MAGI numbers. All they need to do is to decide on what MAGIs result in what SS reduction.

Low MAGI = no SS reduction
Med MAGI = moderate SS reduction
High MAGI = large SS reduction

And so on.........

[pb4uski]

and then wait for the riots to begin.

[youbet]

Quote:

Originally Posted by pb4uski and then wait for the riots to begin.

Yeah, those high MAGI folks (a population minority but probably abundant in this discussion group) will be out there waving their protest signs and setting automobiles ablaze.........

Sarcasm aside, I don't think the high MAGI folks will riot any more over being hit harder with SS reductions than they did when they got stuck with much higher Medicare premiums or when they had to start paying income tax on 85% of their SS or when they had to start paying a tax surcharge on investment income (related to the ACA), etc.

Higher costs and/or smaller benefits for those showing higher income on their 1040's is the trend and I'll be surprised if it reverses going forward.

[pb4uski]

I think you are wrong... because in this case you're talking about 27%+ of their SS checks... they'll be pissed to begin with that their check is decreasing 27% and even more so one they find out that theirs is being dinged, say, 40% while their friend Sally Spender is not getting dinged at all.

The other things that you mention are chump change by comparison.

[youbet]

Quote:

Originally Posted by pb4uski I think you are wrong... because in this case you're talking about 27%+ of their SS checks... they'll be pissed to begin with that their check is decreasing 27% and even more so one they find out that theirs is being dinged, say, 40% while their friend Sally Spender is not getting dinged at all. The other things that you mention are chump change by comparison.

Well, I hope you're right as that will save me some money. But I don't think so. There is just too much precedence and momentum.

[bada bing]

Quote:

Originally Posted by pb4uski Just curious joeea, you say "It will be across-the-board, if the current rules stand." While I think that is the most likely outcome is there a source that definitively states that cuts would be across the board?

I do not believe the SS administration has the authority to alter payout schedules. If Congress doesn't act, the reduction will have to be straight across the board. Similar to when a company goes bankrupt, the unsecured creditors
all get a pro-rata payback.

I don't have a "cite" for that, but that is the precedent for all other shortfalls. It would be more than a little unnerving to learn that Congress had abdicated their authority to the SS bureaucrats.

[youbet]

Quote:

Originally Posted by bada bing I do not believe the SS administration has the authority to alter payout schedules. If Congress doesn't act, the reduction will have to be straight across the board.

That would be great for me. But in recent history and a similar situation, Congress did act. When they needed increased Medicare funding, they had the IRS provide annual MAGI data for all tax payers and now charge higher Part B and Part D premiums to folks who exceed defined MAGI thresholds.

Maybe they won't do this for SS. But the system to do so is already in place and readily available to be used for this purpose and has been used to increase Medicare premiums, help fund the ACA through an investment income additional 3.8% tax, charge income tax on up to 85% of SS benefits, etc.

Quote:

I don't have a "cite" for that, but that is the precedent for all other shortfalls.

Help me here. I can't think of any examples of other federal gov't program shortfalls where insufficient funds caused a "straight across the board" (percentage-wise I presume) cuts to all due benefits. Which ones are you referring to?

I'd love to be talked into the concept that higher (relatively speaking) MAGI folks won't be hit harder than lower MAGI folks if SS cuts must be made, but that just doesn't seem to be the way things have been going. Higher income folks have been receiving progressively less and paying progressively more, relative to lower income folks, in regards to gov't services and benefits.

[daylatedollarshort]

Over a potential 40 years into the future all I can do is leave a big buffer and have a plan that could withstand a 23% or so cut. It doesn't seem prudent not to count on one because that is the default course we are on currently with SS.