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Old 10-25-2017, 10:48 AM   #101
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And what is the basis for that view other than pure conjecture? I have not seen anything written suggesting that approach. Everything that I have seen suggests that just a percentage of benefits would be paid out.

The latest projections are 100% of scheduled benefits to ~2034 and 75% thereafter.

In my case, if I take 70% benefit now at age 62 until 2034 I would receive $1,190 (17 years @ $70). On the other extreme, if I wait until I'm 70, I'll collect 130% for 9 years... or a total of $1,170 (9 years @ $130). So my BEP ignoring time value is about age 79 give or take.

If benefits are cut 25% in 2035 and beyond... if I claim at 62 I'll receive $52/year (75% of $70) but if I claim at 70 I'll receive $98/year (75% of $130).

In our case, joint mortality is an issue since DW was a SAHM and her benefits are a lot less than mine... the chances of one or the other of us living past 80 is very high.
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Old 10-25-2017, 11:29 AM   #102
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While reading this thread I am watching a documentary about people in their 100ís.

The program started by saying that in 1917 George V started a tradition of sending a card to everyone on their 100th birthday. That year he sent 24 cards. So far this year (October) the Queen has sent over 6,000.

We are both in our 60ís so as an insurance policy I, with the much larger SS benefits, plan on taking mine at age 70. If we both die before our mid 80ís then so be it, thatís life (or death).
In Ireland they get a check! $2400 this year. Grows with inflation I think.
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Old 10-25-2017, 11:47 AM   #103
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And what is the baiss for that view other than pure conjecture? I have not seen anything written suggesting that approach. Everything that I have seen suggests that just a percentage of benefits would be paid out.

The latest projections are 100% of scheduled benefits to ~2034 and 75% thereafter.

In my case, if I take 70% benefit now at age 62 until 2034 I would receive $1,190 (17 years @ $70). On the other extreme, if I wait until I'm 70, I'll collect 130% for 9 years... or a total of $1,170 (9 years @ $130). So my BEP ignoring time value is about age 79 give or take.

If benefits are cut 25% in 2035 and beyond... if I claim at 62 I'll receive $52/year (75% of $70) but if I claim at 70 I'll receive $98/year (75% of $130).

In our case, joint mortality is an issue since DW was a SAHM and her benefits are a lot less than mine... the chances of one or the other of us living past 80 is very high.
Not sure if the first comment is for me or the comment after mine about means testing. I suspect the latter so I'll ignore it.

I'm a bit confused by your numbers ($130/year?) but I guess you used $100 as a sample FRA amount and people can multiply that by whatever their real numbers are. The important thing, as you've done, is to keep the relative 130%/70% numbers, and the (possible) 25% cut on those.

I hadn't been assuming they'd necessarily wait until 2034 to make the change, especially if they decide to grandfather people in. But if they do it in 2034, I'll only be 72, so my break even point would come later.

In your case, if you're 62 now, you'd have virtually hit your break even already by 2034 as you've shown, so the cut wouldn't change the break even point (though it would affect just how far ahead you get for each year after).

In my case, using your numbers, taking at 62 I'd have received 10*70=$700, vs 2*130=$260 for taking at 70, when the cut comes in 2034. That's a gap of $440 left to make up. Without the cuts, I'd have been getting $60/yr more so I'd make up the gap in just under 7.5 more years. With the cuts, I'm only getting $46/yr more now, so it takes just over 9.5 more years. If you factor in the time value of getting money earlier when taking SS at 62, it's definitely going to be more than 2 years difference. OTOH, the inflation factor increase on SS benefits will bring that part way back.

Marital status and spousal benefits is another one of those factors that makes this a case-by-case decision. I keep forgetting to mention that one since I'm single.
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Old 10-25-2017, 12:23 PM   #104
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And what is the basis for that view other than pure conjecture? I have not seen anything written suggesting that approach. Everything that I have seen suggests that just a percentage of benefits would be paid out.
Where did you see that the percentage paid out would be equally reduced among all participants vs some taking a bigger cut, some a smaller cut and some no cut at all? They can achieve the equivalent reduction in payout that way as easily as spreading the pain uniformly (percentage-wise) across all.

I don't see our gov't reducing the SS payments to low income folks driving them below (or further below) the poverty line. Keeping their benefits intact will require reducing the benefits of well heeled folks.

They're already doing it with Medicare so the precedent is well established. Why do you think they would handle SS differently?
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Old 10-25-2017, 12:37 PM   #105
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Is this true? from reading these forums, it seems that upon post evaluation, most here feel that they could have jumped sooner. Or, maybe it's not fair to use just the folks on this forum as an accurate sample of the ER population, in general?
You are not getting an accurate sample. Over the years almost all these types of threads get drowned out by people saying you should wait as long as you can assuming you have good health. However, most people are not on ER.org and not as well off so most of the general populations takes SS as early as they can. Since no one knows the future and therefor the right answer I am going to take SS at FRA (splitting the difference).
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Old 10-25-2017, 12:54 PM   #106
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Where did you see that the percentage paid out would be equally reduced among all participants vs some taking a bigger cut, some a smaller cut and some no cut at all? They can achieve the equivalent reduction in payout that way as easily as spreading the pain uniformly (percentage-wise) across all. .....
While the trust fund reports are not specific, they generally suggest across-the-board reductions, though if it comes to that and I doubt that it will) it might well me that lower benefit beneficiaries might be protected.

Quote:
After 2021, interest income and redemption of trust fund asset reserves from the General Fund of the Treasury will provide the resources needed to offset Social Security's annual deficits until 2034, when the OASDI reserves will be depleted. Thereafter, scheduled tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2091.
See https://www.ssa.gov/oact/presentatio..._20171017a.pdf slide 17:

Quote:
Make choices addressing OASDI deficits 2034-2091:
• Raise scheduled revenue after 2033 by about 33%: increase revenue from 4.6 to 6.1% of GDP
Reduce scheduled benefits after 2033 by about 25%: lower benefits from 6.1 to 4.6% of GDP
• Or some combination of the two
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Old 10-25-2017, 01:00 PM   #107
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Yep, looks like they will means test (which I'm all for) if benefits are actually reduced in aggregate. Nothing above indicates that each individual benefit will be reduced by the same percentage. It just shows that aggregate benefits paid out will need to be reduced (if things continue as they are).

As with Medicare, I'm guessing and preparing for having them cut the high earners more than the low earners. I don't see them changing mid-stream now that they're already into the means testing mode for retirement benefits.

Where do you think you see in the above that projected benefits will be reduced uniformly across low and high income folks vs using the already established Medicare Part B system where high earners bear the brunt of the pain? I just see them saying that aggregate benefits paid out might need to be reduced 25% if greater income to the system is not achieved.
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Old 10-25-2017, 01:05 PM   #108
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Where in the world are you getting that "Yep, looks like they will means test"? Means testing isn't even mentioned.

However they do say that one of the options would be to reduce benefits by about 25%.... that sounds similar to across-the-board to me.
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Old 10-25-2017, 01:18 PM   #109
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Where in the world are you getting that "Yep, looks like they will means test"? Means testing isn't even mentioned.

However they do say that one of the options would be to reduce benefits by about 25%.... that sounds similar to across-the-board to me.
It doesn't sound like across the board to me. It sounds like an aggregate 25% increase. I learned my lesson from the Medicare Part B premium debacle. I thought the increase would be uniform there, but it wound up being heavily weighed towards high income folks.

Well....... we're getting no where with this. You can assume Bill Gates and Warren Buffet will get the same percentage reductions as a impoverished citizen and that's fine with me. I'm going to assume that they're saying that if nothing changes they'll need to reduce SS payouts by an average of 25% and will use means testing to place more pain on high earners than very low earners. This would be similar to what they are already doing with Medicare Part B so they'll already collecting the data to do it.

I really don't have a dog in the fight. I started SS at 62 (2009), invested every penny and have already won the game. But, for planning purposes, I'm assuming there will be a sharp decrease in my SS payout (as there has been a sharp increase in my Medicare Part B premium) sometime in the future.

Probably a good time for us to just agree to disagree. We'll only know the answer down the road sometime.
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Old 10-25-2017, 01:20 PM   #110
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So this is the first I have hard of using means testing to pay for Medicare Part B. So you are saying that they check your income and then decide what to charge you?
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Old 10-25-2017, 01:29 PM   #111
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So this is the first I have hard of using means testing to pay for Medicare Part B. So you are saying that they check your income and then decide what to charge you?
Yes, exactly. I get a letter annually where they give me the surcharge based on my prior years income tax statement. They check yours too but you must be below the cutoff for a surcharge so no notification is necessary.

From SSA.gov:

Quote:
If you have higher income, you'll pay an additional premium amount for Medicare Part B and Medicare prescription drug coverage. We call the additional amount the income-related monthly adjustment amount.


It's the way our gov't handled securing more Medicare premium money that makes me believe they'll use the same system to reduce future SS payments in a means tested way. The precedent seems to be set. If they don't, that's fine with me. I'll be better off.

Don't ya love that name....... ? "The income-related monthly adjustment amount." Hee hee...... It's not means testing! It's "the income-related monthly adjustment amount." Has a nice ring to it don't ya think?
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Old 10-25-2017, 01:35 PM   #112
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So this is the first I have hard of using means testing to pay for Medicare Part B. So you are saying that they check your income and then decide what to charge you?
Yes, there's 2-year look back period for Part B premiums:

https://www.medicare.gov/your-medica...t-b-costs.html

And another whammy...RMDs at 70.5 and beyond.

I've not yet started RMDs but suspect they will add considerably to my income and drive up my Medicare costs.

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Old 10-25-2017, 01:41 PM   #113
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So this is the first I have hard of using means testing to pay for Medicare Part B. So you are saying that they check your income and then decide what to charge you?
Not only Part B, but Part D also.
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Old 10-25-2017, 01:46 PM   #114
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I found this paper interesting: https://www.actuary.org/pdf/socialse...means_0104.pdf

I think the support of the program in the long term would be severely impaired if means testing were put in place and as a result it will never be done.... besides, it would difficult to administer... especially wealth based means testing.
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Old 10-25-2017, 01:50 PM   #115
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I am only 63 so not on Medicare yet. This is the first I have heard of this. I also work p.t. and plan too unless my brain stops working)
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Old 10-25-2017, 01:51 PM   #116
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I found this paper interesting: https://www.actuary.org/pdf/socialse...means_0104.pdf

I think the support of the program in the long term would be severely impaired if means testing were put in place and as a result it will never be done....
Implemented like the current Medicare Parts B and D means testing program, it will be very popular with the vast majority of Americans in the same way that higher taxes on the "rich" are usually popular with the "not rich."
Quote:
besides, it would difficult to administer... especially wealth based means testing.
The system is already in place and being used without difficulty for Medicare based on MAGI. I doubt they'll try to tackle a wealth based system.

But, again, by all means use the assumption everyone (extremely high MAGI's to extremely low MAGI's) will receive the same percentage reduction for your planning. It probably won't matter and it's good to have a variety of outlooks. I just don't see them changing course now that they've started.

Personally, I hope you are correct.
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Old 10-25-2017, 02:06 PM   #117
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Well, technically, Medicare B is not means tested, because no one pays the full cost. All premiums enjoy a subsidy, but that subsidy decreases as oneís income increases. https://www.ssa.gov/pubs/EN-05-10536.pdf
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Old 10-25-2017, 02:09 PM   #118
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Since we are discussing SS possibly running out of funds down the road, I wonder why they don't eliminate the caps (6.2 % SS tax on income, capped at $127,200 in 2017) on SS contributions paid by wage-earners. These are already folks who are in the higher-levels of earnings...having their SS tax drop-off for a few months a year means little to them, yet can substantially contribute to the SS pot.

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Old 10-25-2017, 02:13 PM   #119
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Well, technically, Medicare B is not means tested, because no one pays the full cost. All premiums enjoy a subsidy, but that subsidy decreases as one’s income increases. https://www.ssa.gov/pubs/EN-05-10536.pdf
Hee hee...... You are the master of semantics Michael! Still, if someone with a higher income gets charged more than someone with a lower income, it just kinda smells like "means testing" to me. But I won't debate the "technical" aspect of it with you.

BTW, when you say "no one pays the full cost," I say "everyone (in aggregate) pays the full cost."
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Old 10-25-2017, 02:17 PM   #120
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OTOH, youbet, you seem to be the master of anything that is income sensitive being "means tested".
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