Social security grandfathering question

[GenXguy]

Quote:

Originally Posted by GenXguy That would be an improvement, for sure, especially if it was indexed to inflation going forward. If that's in reference to the lower threshold, that's actually extra generous to married couples as it exceeds what the 1983 figure is when adjusted for inflation while the single figure comes up short.

Looks like those proposed figures are based on the 85% taxable threshold that was added at a later date rather than the original 50% taxable threshold, but it would still be more fair to seniors receiving SS benefits in the future.

https://www.congress.gov/bill/116th-...house-bill/860

[Perryinva]

If that proposal became a serious contender, that would EASILY sway the Roth conversions decision for those with high SS benefits & pre tax IRAs! If MFJ SS tax income threshold went to $100k, I’d convert every cent of my IRAs and the ROI would be very few years!

[Dtail]

Quote:

Originally Posted by VanWinkle Where did you find that proposal, and do you think it has a chance? VW

I think it was contained in the Social Security 2100 act proposal.
As far as chances to exceed, who really knows, as there are other proposals in that act too.

[VanWinkle]

Quote:

Originally Posted by Dtail I think it was contained in the Social Security 2100 act proposal. As far as chances to exceed, who really knows, as there are other proposals in that act too.

Yep, found it!!

"The Social Security 2100 Act would raise the income threshold for taxing benefits to $50,000 for single taxpayers and $100,000 for married couples. Up to 85% of benefits would be taxable at ordinary income tax rates. The 50% taxation formula would be eliminated."

[Lakewood90712]

How long before this thread turns into a food fight and gets shutdown . I think I have seen this movie before

[Aerides]

Quote:

Originally Posted by Lakewood90712 How long before this thread turns into a food fight and gets shutdown . I think I have seen this movie before

Eh, I put the over/under at 7 pages? We're all tired of that fight anyway.

As to the OP, I don't believe we'd ever see a major cut to SS for anyone close to taking it (i.e. within 10 years). More likely way past that. And there is a pretty large population of younger workers these days.

[gwraigty]

Quote:

Originally Posted by Aerides As to the OP, I don't believe we'd ever see a major cut to SS for anyone close to taking it (i.e. within 10 years). More likely way past that. And there is a pretty large population of younger workers these days.

I'm not as certain of that. Didn't file and suspend go away with barely 2 months notice? That's a door that we'd planned on walking through in future that's now closed to us. Right now, I'm not aware of any provision that would spare anyone collecting vs. those who are not. Even so, I don't believe they'd say "effective immediately", so I'd advise against OP or anyone else from making a rash decision to collect based solely on fear of a cut.

I've read deep into some proposals that aren't widely reported on in the media. I won't mention specifics, but I can assure you that the proposed time frames for when they would take effect is measured in less than 10 years. My best advice is to trust the amounts on your SS annual statements unless you hear/read of a definite change with a specific date of effect.

[MissMolly]

File and suspend went away after 6 months notice.

[gwraigty]

Quote:

Originally Posted by MissMolly File and suspend went away after 6 months notice.

Thanks. I knew it was short. I remember reading articles in October that starting in January...

Based on that, I'd continue to prepare for future SS changes taking effect in less than a year after being widely announced as fact. They set a precedent for it.

[Independent]

Quote:

Originally Posted by VanWinkle Where did you find that proposal, and do you think it has a chance? VW

One place is the "Social Security 2100 Act"

Quote:

Presently, your Social Security benefits are taxed if you have non-Social Security income exceeding $25,000 for an individual or $32,000 for couples. This would raise that threshold to $50,000 and $100,000 respectively. [Sec. 104]

https://larson.house.gov/social-security-2100 Note that the 50/100 are not indexed.

Does it have a chance? That's political speculation. The bill is sponsored by the Chairman of the Ways & Means Social Security Subcommittee. It currently has 208 cosponsors (218 is a majority in the House). So that looks like a lot of support.

The bill balances SS indefinitely, entirely by raising taxes, no benefit cuts.

https://www.congress.gov/bill/116th-...house-bill/860

[GenXguy]

Quote:

Originally Posted by Independent One place is the "Social Security 2100 Act" Quote: Presently, your Social Security benefits are taxed if you have non-Social Security income exceeding $25,000 for an individual or $32,000 for couples. This would raise that threshold to $50,000 and $100,000 respectively. [Sec. 104]

Except the $25K/$32K apply to the 50% taxable threshold and the $50K/$100K apply to an 85% taxable threshold.

The current 85% taxable thresholds are $34K/$44K.

[Walt34]

Quote:

Originally Posted by MissMolly File and suspend went away after 6 months notice.

That's true of course, but it was also a little-used tactic in the pool of SS recipients. The most I saw of notice about it in print was on this forum. Nowhere else that I can remember.

Getting back to cutting SS payouts to current or soon-to-be recipients, I agree that's not going to happen anytime soon. Not only would that affect the recipients, but it would also affect the relatives of everyone who is living solely on SS now and is on the edge financially. Many of those relatives would be very aware of how Mom, Dad, Grandma, Grandpa, Aunt Sally and Uncle Bill are all suffering and they too would be writing their congresscritters about how mean it was to pull the rug out from under their beloved relatives.

So my prediction is that Congress will act and make a change when they have to, which is about six weeks before the cuts take effect.

At least that's what MY crystal ball says.

[TNBigfoot]

Quote:

Originally Posted by Midpack That's undoubtedly true now, but an obviously insolvent system can't last forever. As younger American voters (who are unlikely to enjoy today's SS benefits and/or pay relatively more in) continue to replace older American voters (who are enjoying SS benefits or planning to), eventually politicians will become beholden to a younger majority. They follow the money, fairness has little to do with it. I don't know when, but I expect a significant change well within my lifetime.

Agree that the politicians will follow the money. The “hedge” against younger generations shifting the mood around SS benefits is that the younger generation would then need to support their older parents to a greater extent...(or not)

[Midpack]

Quote:

Originally Posted by Walt34 That's true of course, but it was also a little-used tactic in the pool of SS recipients. The most I saw of notice about it in print was on this forum. Nowhere else that I can remember. Getting back to cutting SS payouts to current or soon-to-be recipients, I agree that's not going to happen anytime soon. Not only would that affect the recipients, but it would also affect the relatives of everyone who is living solely on SS now and is on the edge financially. Many of those relatives would be very aware of how Mom, Dad, Grandma, Grandpa, Aunt Sally and Uncle Bill are all suffering and they too would be writing their congresscritters about how mean it was to pull the rug out from under their beloved relatives. So my prediction is that Congress will act and make a change when they have to, which is about six weeks before the cuts take effect. At least that's what MY crystal ball says.

Quote:

Originally Posted by TNBigfoot Agree that the politicians will follow the money. The “hedge” against younger generations shifting the mood around SS benefits is that the younger generation would then need to support their older parents to a greater extent...(or not)

Fair point, and that'll probably lead to your prediction above. But sooner or later something has to give somewhere, we can't just deficit spend with no limits whatsoever. The next recession might teach us all that lesson before we address Soc Sec, Medicare etc. Fasten your seatbelts.

[tmohre]

Pretty comprehensive answers here. Thank you all. Clearly there was nothing that could be considered law with regard to my hope I could sneak in at 62 to lock in the good rate, (regardless of taxation after the fact). I don’t need to money and it really doesn’t change my thought to take it early. Use it for cash flow. Thanks again all. Very cool to have this degree of engagement on a first post

[grayv]

I like that the thread title connects social security with grandfather.

[Lakewood90712]

Cuts to social security ? From an ade to the late Tip O,Neilll

https://en.wikipedia.org/wiki/Third_rail_of_politic

[swabby01]

Could they cut it - YES, would they cut it - probably. I never thought that the feds would screw over California tax wise by taking that which we paid the state in tax and essentially castrate the deduction and here I am just into retirement last year and the only thing I can deduct for the most part is my property tax. I am fortunate to have saved and invested to the point that I still make decent income between pension and dividends/interest and now pay $50K of state tax and then the fed taxes the $50K as federal income. Yes we can and probably will get it stuck to us on SS

[Al18]

According to https://www.ssa.gov/history/reports/gspan.html


'The National Commission on Social Security Reform (informally known as the Greenspan Commission after its Chairman) was appointed by the Congress and the President in 1981 to study and make recommendations regarding the short-term financing crisis that Social Security faced at that time. Estimates were that the Old-Age and Survivors Insurance Trust Fund would run out of money possibly as early as August 1983. This bipartisan Commission was to make recommendations to Congress on how to solve the problems facing Social Security. Their report, issued in January 1983, became the basis for the 1983 Social Security Amendments which resolved the short-term financing problem and made many other significant changes in Social Security law.'


I find it interesting that in 1983 Congress waited until months before the running out of money before fixing the problem. I suspect the same will happen again.

[Winemaker]

With the current millennial group reportedly favoring socialism overwhelmingly, how could they vote against the most popular socialism program in the US, and cut benefits?