I'm not going to say this is a terrible solution, but it could use some more details.I am curious why you think that current SS recipients would not be affected by any cuts/changes to SS?
I hear this all the time as if current SS recipients are somehow immune to any future changes in benefits.
Those of us a few years away from collecting vote as much as those currently receiving benefits.
I think any changes will ( and should) affect everyone....those waiting to collect and those currently collecting.
A fair and balanced approach might include:
1) Gradually raise the minimum age to begin collecting benefits from 62 to age 65 over the course of the next 20 years.
2) Increase the FICA tax withheld slowly and responsibly in future years. Amounts to be determined.
3) Responsibly cut benefits to all current SS recipients.
This way everyone takes a haircut and no one escapes the pain.
This should keep the program solvent for many years to come.
The people who are in danger of collecting much less they they ever contributed are those in their 20's and 30's....not those of us within a few years of collecting.
Let's take the simplest example. Single, 62-year old has $1,000,000 in IRA and a
$20,000 SS benefit (stating at 62) or a
$35,000 SS benefit (starting at 70).
How much can/should this person spend in the first year of retirement if he/she
A. Starts at 62
B. Plans to start at 70
And what his/her spending needs are at 62. If the investments throw off enough income, they may want to wait...and what is their health like?It really depends on if he/she has a 40 year old BF / GF
I am curious why you think that current SS recipients would not be affected by any cuts/changes to SS?
I hear this all the time as if current SS recipients are somehow immune to any future changes in benefits.
Those of us a few years away from collecting vote as much as those currently receiving benefits.
I think any changes will ( and should) affect everyone....those waiting to collect and those currently collecting.
As a retired banker, I suggest three things:
1) Determine the age you want to be when you retire and estimate where your expenses will/should be at that age. For example, I determined I wanted to retire at 60 without taking any distributions from my 401-K. The only way I could do that was to have my mortgage paid off. THAT became my goal along with enough in savings to pay expenses until age 62.
2) Calculate your SS breakeven point and decide your personal risk. For example, my breakeven, if I wait to take my SS until age 66, is age 82. If I die before then, I leave money on Social Securities table instead of my own.
3) Last, 3-5 years before your projected retirement, determine the large expenses you may be able to eliminate prior to the big day. For example, I replaced my roof, A/C, appliances, did painting, etc., so I could avoid these huge expenditures during the gap period with little to no income. You can never avoid everything, but determining end-of-life on household maintenance and other necessities should be easy to accomplish.
Just my two-cents!
.... In your other posts, you said you were a banker for 38 years and worked as an FA for 5 of those years, so I'm wondering what I'm missing (since I was neither). Can you explain?
-ERD50
... This was always a sort of pyramid scheme, and for it to work, the birth rate needed to keep rising. There are many problems with the system that need fixing. But most retirees will be wholly or nearly wholly dependent on SS benefits for their 'golden years'. The quickest route to social unrest (and voting politicians out of office) would be to cut their benefits by 25%!
Oh boy! I picture in my mind a mob of geezers out on the streets throwing Molotov cocktails, overturning cars, smashing business glass windows, battling with riot police.
..... Taking it at 62 will cover about 50% of my expenses at 62 (next year) ...
If your age 62 benefit will cover 50% of your expenses, then your FRA benefit will probably cover 67% of your expenses (50%/75%=67%) and your age 70 benefit will cover 88% of your expenses (67%*132%=88%).
Did you save all that money to hoard it or for your retirement?
Sorry ERD but I find your posts don’t really make sense.
You have stated the answer and it is 'Voting'.... Whether you are collecting S.S. or a few years away, you are 'Paying attention'... When they slipped in the Taxing and raising retirement age of S.S. back in the Reagan era, I was only 30 and 'Not paying Attention'... They did not screw the older folks as much as the younger folks..... Expect the future 'solution' to be screwing the younger folks 'Not paying attention'
Let me throw out an emotional component. As a life long compulsive saver investor and master of delayed gratification I excelled at the accumulation phase. In ER I kinda suck at the distribution phase, the idea of depleting what I accumulated as I age makes sense on paper but not in practice. It bothers me even though I have been doing it for years and my portfolio increasing. SS will be like getting a paycheck, money coming in again instead of money going out. Taking it at 62 will cover about 50% of my expenses at 62 (next year) and reduce the draw on my portfolio to just under 2% annually. Early SS will make me feel better and if I feel better I will enjoy retirement more. That's my plan and I am sticking to it.