When/who will SS reduce?
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audreyh1
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I was born in 1959, and my goal posts were moved from 65 to 66 and 10 months.
If you were born between 1943 and 1954 your full retirement age is 66. Even people born in 1938 had their FRA delayed 2 months.
So goalposts were moved for people earlier than 1960.
https://www.thebalance.com/full-retirement-age-benefits-2388831
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Crabby Mike
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All true, but a little clarification might be helpful.
Federal employees (and I don't know if Congress gets an exception here) only carry FEHB into retirement if they retire when eligible for an immediate pension (which is dependent on age and years of service, but in your example above, would only work if that 3-term congressman was already at least 62). And what they get is eligibility for the same FEHB group rate that employees get, i.e., a good rate but not free. I'm not so sure it's much better than ACA with a subsidy.
The lifetime pension comes from the FERS system that they pay into while employed, and equals 1.7% (as opposed to the 1% that other Federal employees get) per year of service. So that hypothetical 5-year congressperson would get 8.5% of his "high 3" average salary, or in the case of the current $174,000 salary, about $15k per year. Unlike employees in the "old" CSRS system, they are also eligible for Social Security (which they pay into like everyone else), and have a 401k plan (TSP).
As a former employee of both Megacorp and Megagov, I'd say the benefits were similar.
Crabby Mike
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I'm sure you meant to say 66 and 10 months.
Same here.
When I was 29, my FRA was moved from 65 to 66. Goalposts moved after working and paying social security taxes for 14 years.
And when I was 60, the file-and-suspend strategy that I planned to utilize was eliminated. That goalpost move cost us more than $40k.
These things happen. Fortunately, I have more than enough cushion that it didn't matter all that much.
audreyh1
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Yes, thanks, corrected.I'm sure you meant to say 66 and 10 months.
Crabby Mike
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Yes, ditto! I forgot about that one. We're still going to use file-and-restrict, though, because DW just barely qualifies.
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gwraigty
Thinks s/he gets paid by the post
In 1983, everyone had plenty of time to adjust to the changed reality. Until the law changed, FRA was 65, as it had been from the beginning. For you, the increase was 1 year. For me, it was 2 years. For people older than us, it was a range of months, as little as 2 to up to 10 months.
I've seen a proposal that would move the goalposts on people my age again, moving my FRA from 67 to 69. I don't think this has been widely reported in the media. There are other proposals not widely known as well, some concerning spousal benefits, some concerning how the PIA is calculated so that anyone working for more than minimum wage (my phrasing entirely) doesn't benefit as much, and many other sundries.
It wasn't so long ago that a huge change was made with the elimination of file & suspend. Not much notice was given and it affected many people so near to retirement. I read plenty of comments when the news broke. Some people had counted on file & suspend to retire and it had suddenly been taken off the table for them. Some missed the cutoff by mere months.
Until then, it was widely thought that any significant changes to Social Security wouldn't affect anyone 55 or older, because of the lack of time to adjust. They proved that to be wrong.
The way they dicker around about this, a proposal circulated in committee today to raise FRA from 67 to 69, could become legislation in 10 years, affecting the plans of many near-retirees again.
gwraigty
Thinks s/he gets paid by the post
No, only folks whose plan depends on SS. Everyone else will be fine.
Yes, it's best not to depend on it, which we won't be when the time comes for us. Still, one doesn't have to like the changes that have been made and those that will probably be made down the road.
Crabby Mike
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I agree with everything you're saying, and certainly that no one above a certain age should have their FRA changed. As one of the ones affected near retirement, I was bummed about file-and-suspend, but agreed that it was basically a loophole that was being exploited by the few who could benefit (as I would have if given the chance!). At your age (55?), I think you're pretty safe from further goalpost-moving.
This has been a good thread. I've always been an SS non-believer. I ignored it completely in my retirement planning throughout my working years. The first time I even looked at the benefit was after I retired at 52... inspired by a thread on this forum with a link to the SS calculator. I then started including it but with a big haircut, initially 50%, now 30%. I'm 57 now and thinking it might actually be there in full. As detailed in this thread, the funding issue seems very fix-able, with lots of options, but probably no imminent action by our hopelessly divided government. So us non-believers will remain in quasi-limbo with fudge factors in our spreadsheets.
I wanted to retire in 2010 at 49 but the numbers (minus SS) were squeaky tight. So I soldiered on and pulled the trigger in 2013 at 52. Had I considered SS, even with a modest haircut, I probably could have retired at 49. I'm still glad I planned it that way. I'll just have to figure out how to spend the money now, which shouldn't be too difficult. But I wonder how many years came off my life expectancy due to those last 3 years [-]in Hell[/-] at Megacorp.
I wanted to retire in 2010 at 49 but the numbers (minus SS) were squeaky tight. So I soldiered on and pulled the trigger in 2013 at 52. Had I considered SS, even with a modest haircut, I probably could have retired at 49. I'm still glad I planned it that way. I'll just have to figure out how to spend the money now, which shouldn't be too difficult. But I wonder how many years came off my life expectancy due to those last 3 years [-]in Hell[/-] at Megacorp.
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I agree... the 1983 changes moved the goal posts for those ages 23-45 (including me).... giving those taxpayers 20-42 years to adapt to the changes... seems fair enought to me and I suspect that will be the model for future changes in the FRA to reflect improvements in longevity.
File and suspend was a loophole that probably never should have existed to begin with and one the loophole became noticeable enough it was closed.
brucethebroker
Thinks s/he gets paid by the post
1. Am I the only one who remembers the same "sky is falling" debate on SS in the late 1970's?
2. Why no worries about cuts in Section 8 housing, Medicade, SNAP (food stamps), government pensions, military spending, etc? How will the government possibly pay for those programs? Borrowed money? Higher inflation? Only if the past is any indication of the future....
Most here are a frugal, creative lot. If SS cuts come, we will find a way to keep keepin' on.
2. Why no worries about cuts in Section 8 housing, Medicade, SNAP (food stamps), government pensions, military spending, etc? How will the government possibly pay for those programs? Borrowed money? Higher inflation? Only if the past is any indication of the future....
Most here are a frugal, creative lot. If SS cuts come, we will find a way to keep keepin' on.
marko
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Nope! Back when I started working in 1972 I was told that by now, SS would be long, long gone.
I tangentially referenced this, among other sky is falling catastrophes, several posts ago, adding "they never materialized" but was advised that "never is a long time".
I do maintain my position however that despite all the expert insights, the worst never (there it is again: 'never') seems to happen. I fully expect to keep my SS benefits fairly intact throughout my life (which I do hope will go beyond my 83rd birthday in 2034!)
scrabbler1
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If giving taxpayers at least 20 years to adjust for future changes serves as a model for future changes, then that would automatically include anyone in my "don't move goalposts twice" category. Anyone at least 45 years old today would have been born in 1972, 6 years later than 18-year-olds were in 1984 who could have been subjected to the "goalposts moved twice" scenario.
The "goalposts moved twice" scenario I was worried about was more relevant when I was writing my members of congress and the Senate back in 2005 when SS reform was a hot topic. Those born in 1966 would have been only 40 years old in 2006 had SS reform been enacted, and 45-year-olds would have been born in 1961, subjected to "goalposts being moved twice."
pb4uski
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While I understand your point, to me how many times the goal posts were moved is less relevant than taxpayers having advance notice so they can adapt their plans.... but I agree that one movement would be better than two.
None of those are PAYGO programs like Social Security with trust funds accumulating excess revenues. They are all paid for out of general revenues.
Thus none of those have a targeted Trust Fund and a date which can be used to predict when the benefits must be cut.
If Social Security were paid for differently, there would be no doom and gloom about 2034. Instead, we'd annually have to watch politicians potentially create wild swings in SS benefits. That tends to make it hard to plan appropriately...
What does "left to default" mean to you in this context?
gwraigty
Thinks s/he gets paid by the post
I do hope you're right. However, several proposals at this link suggest that FRA may go up gradually for people born in 1961 and later (which would include me):
https://www.ssa.gov/oact/solvency/provisions/retireage.html
Most of the proposals appear to exempt people born in 1960. After that, the FRA increases for those born in 1961 and later by varying numbers of months every so many years until eventually the FRA reaches anywhere from 68 to 70. Under the varying scenarios, my FRA would rise from 67 to anywhere from 67 and 1 month to 67 and 6 months. Admittedly, this isn't going to break my bank. It just illustrates that they're not too concerned about letting alone those who are 55+, many of whom are approaching (or have already approached, per this forum
) the tail end of their working years.Along with raising the FRA, are proposals to raise the earliest age one could collect from 62 to 64 or 65, also gradually, but as early as 2019, 2020, or 2022. Lest that seem impossible to consider, remember what they did with file & suspend.
One proposal would allow for delayed retirement credits until 72.
Some of these changes were proposed as early as 10 years ago, but others are dated within the last couple of years with substantially similar ideas and timelines.
And that's just the proposed changes to retirement benefits at FRA. They're also looking at changes to spousal benefits, taxation of SS benefits, and many other things that don't normally hit most people's radar when potential changes to SS are discussed.
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Unable to pay 100% of benefits. I do not believe anyone will make any changes prior to that for obvious reasons.
Keeping all politics out of this course.
chrisaukcam
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My prediction is that the politicians won't act until they have to - keep kicking the can down the road and only when it is close to a crisis will they act.
Crabby Mike
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If then ...
