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Old 03-03-2017, 07:34 PM   #41
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It is a form of retroactive means testing, the lower lifetime earner gets a higher percentage than the higher one. (Lower lifetime earnings likley means less means at retirement) It somewhat depends on what means testing means however.
You still don't get it... lower lifetime earnings doesn't necessarily mean less means at retirement. From this forum we know of many of moderate earners who were savers and have more means than higher earners who were spenders. IOW, earnings do not necessarily correlate with means/wealth.

What the SS benefit formula does is provide relatively higher benefits to those who earned less and relatively lower benefits to high earners... a subtle form of transfer of wealth from high earners to low earners.... but not anywhere near means testing as that term is typically used.

I found this Society of Actuaries report on Means Testing for Social Security interesting reading. I think there could be a lot of unintended consequences if means testing were put in place that would be bad public policy... like erosion of public support for the program (it becomes just another entitlement program like retirement welfare) and disincentives for retirement saving.. etc.

Note that one of the alternatives to means testing is making the current difference in benefits between those with higher earnings history and lower earnings history more extreme than it currently is... if that were means testing then they would not have referred to it as an alternative to means testing.
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Old 03-03-2017, 07:34 PM   #42
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Prob raise retirement age - without raising the last age to defer to over 70. Some other sneaky tweaks to reduce benefits.
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Old 03-03-2017, 07:42 PM   #43
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All I can say is that I remember a impassioned, tearful conversation with my dear, late mother in the early 1970's in which I told her there was NO WAY that SS would survive long enough for me to get any of it (and I felt we were supporting her generation, it wasn't fair, blah blah blah, great tears of outrage). She wisely told me that politicians could never cut SS because older people vote consistently.

In 2010, when I turned 62, I wondered if I should get SS early while I still could. There were a lot of articles being written about how one should grab it ASAP before it was cut or vanished.

OK, so I waited. I claimed divorced spousal SS at age 66, and SS still has not been cut. I am 68 now and plan to switch to my own SS at age 70 because it will be more. I got in just under the wire, so my SS is growing from now to age 70.

This is almost like playing a game of chicken.
I'm in the same boat as W2R. I am collecting SS on the late wife's account until 70. The way that is set up is great for me. Like W2R, I have to be very careful about withdrawals from retirement accounts or it will kick me into higher Medicare payments. You can call all the different add ons and premiums whatever you want, they are still taxes paid by those who make more income than the powers that be think is needed. I just did my annual withdrawal from my 401k and paid over 25% of that to taxes. That is in addition to the 85% of SS, etc. Any way you look at it, higher income means a larger tax bite. I don't see it ever getting smaller.
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Old 03-03-2017, 07:48 PM   #44
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Whatever they do with SS (and Medicare) to make them long-term sustainable, I wish they would do it soon. It is hell to plan with the uncertainty. Once they put in the inevitable adjustment, it could be stable for couple, three decades, maybe more. With the uncertainty gone, a lot of retirement savings that are currently being hoarded by those concerned with their future SS benefits could be turned loose. Might be a very nice economic stimulus. How many are saving as if there will be no SS and what could they do for the economy if they gained confidence that 75% or whatever percentage of the current formula will be there for them?
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Old 03-03-2017, 07:58 PM   #45
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The last time they messed seriously with SS was in 1983 when they increased the full retirement age from 65 to 67.
Didn't 'they' also vote to tax SS for the 1st time in 1983 ?
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Old 03-03-2017, 08:15 PM   #46
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I disagree... I don't think we will ever see means testing... even income based. I think there is a good likelihood that SS will become fully taxable (rather than 85%) which is a second-order of income means testing but I doubt that we will ever see different retirement benefits paid for two people of the same age and earnings history because one has a pension or other retirement income and the other does not.
I agree. It is far more likely that SS benefits of higher income people will be reduced via taxation than outright taken away.
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Old 03-03-2017, 08:32 PM   #47
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Social Security's imminent demise has been predicted for the last 80 years.
Well, the thing about Ponzi schemes (or "pay-as-you-go" schemes like SS) is that they work fine .... until they don't. And then they collapse.

The money that is given to retirees comes from the people who are currently working. If there is a large increase in the number of retirees and a small increase or even decrease in the number of current workers, the system runs into big trouble.
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Old 03-03-2017, 09:03 PM   #48
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...I think there could be a lot of unintended consequences if means testing were put in place that would be bad public policy... like erosion of public support for the program (it becomes just another entitlement program like retirement welfare) and disincentives for retirement saving.. etc.
I suspect this will be the critical reason why means testing won't happen. Once SS stops being the "contract between the generations" it's toast.

Boosting the 85% taxability to 100% is as certain as night follows day, and the eligibility ages will be raised again with a long transition time to soften the blow, because neither of those changes messes with the Universal Appeal factor. But once it's perceived as yet another welfare giveaway, it won't be the third rail anymore like it always has been.
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Old 03-03-2017, 09:12 PM   #49
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I don't see how it really could ever be perceived as a welfare giveaway considering you pay about 12% of your income every year into it. This is actually more than most people are putting away in their 401K or contributing to a pension plan.
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Old 03-03-2017, 09:47 PM   #50
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So to be clear, this thread is not about predicting what haircuts will become fashionable in the second term of a Trump presidency?

I was thinking shaved on the back and the sides with 3 inches or so left on top, combed sideways but still looking like maybe you weren't trying too hard to go for a style.
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Old 03-03-2017, 10:39 PM   #51
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I think the mullet will make a big comeback...especially with the rebooted MacGyver.
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Old 03-03-2017, 11:49 PM   #52
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My husband's SS is already taxed at 85%, but we still pay zero tax unless I do some Roth conversion. Because of that I won't hurry to take it until I'm 70. I'm going to try to covert my IRA to Roth before I have to take it. I think it won't matter much to me what amount it will be as long as there will be some amount.
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Old 03-04-2017, 12:07 AM   #53
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Originally Posted by braumeister View Post
Whatever "they" are going to do will happen, someday.
But I don't understand how people can think "it" might happen suddenly, overnight, without warning.

The last time they messed seriously with SS was in 1983 when they increased the full retirement age from 65 to 67. That two-year change was phased in over a 22-year period, with an 11-year hiatus in the middle at which the retirement age remained at 66.

Whatever happens, there will be ample warning.
Exactly what I was thinking (you saved me the research from early 80's). I, like other commentators, remember doubting SS would be there for me (when I was in mid-30's). BUT, once I hit 50, figured I was safe for the reasons braumeister quoted.

Means testing SS would create a firestorm and a voter meltdown from those who "paid into" SS and expect benefits, unlike welfare and foodstamp recipients, etc. And, SS retirees actually VOTE. AARP membership would climb through the roof if means testing was actually on the table, IMHO.
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Old 03-04-2017, 04:09 AM   #54
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Can you explain this? How did your claiming age affect your medicare payment?
Good question: DW claimed at 62 which was 8 years before I claimed. At the time she reached 65, she started MC and paid a certain deduction FROM her SS monthly payment. I too started MC at 65 (roughly same time) but paid by check quarterly because I was NOT on SS yet. When MC premiums went up recently, I had to pay the new, higher premium but DW was grandfathered because "it wouldn't be 'fair' to take more from her SS check" (all quotes because that's probably not the official reasoning, but don't forget, anything that affects an SS check is political to da max!) So, when I claimed a month ago, MY MC premium was whatever it is now (which is significantly more than DW's starting MC deduction.) I ASSUME next year, if MC premiums rise, I TOO will be grandfathered at the rate I am NOW having deducted from my SS check - but who knows - it IS political, so all bets are off. So, as usual, YMMV.

We all discussed this a couple of months ago elsewhere here IIRC, but I don't seem to be able to do searches, so I'll let you look it up or someone else may reference it for us.
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Old 03-04-2017, 08:15 AM   #55
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Thanks for an interesting discussion

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