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Old 08-14-2020, 11:35 AM   #141
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This is a SS discussion but I think Medicare should be included. There’s a danger of losing that too, or at least reduced benefits. We paid into Medicare as well. It would hurt us more to lose Medicare than SS. Adjusting or capping the benefits could be catastrophic. Especially since both of us have pre-existing conditions where treatment for those would dwarf our NW.
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Old 08-14-2020, 11:47 AM   #142
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This is a SS discussion but I think Medicare should be included. There’s a danger of losing that too, or at least reduced benefits. We paid into Medicare as well. It would hurt us more to lose Medicare than SS. Adjusting or capping the benefits could be catastrophic. Especially since both of us have pre-existing conditions where treatment for those would dwarf our NW.
Good point. Medicare is apparently in worse financial shape than SS.

Tacking onto the "means testing" portion of the discussion, Medicare does do heavy duty means testing via the IRMAA mechanism. Perhaps that needs to be increased? And, obviously, we have to find some way to control costs. One way or the other, tax input = payment output has to be achieved.
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Old 08-14-2020, 11:49 AM   #143
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With SS, you're not making a choice to buy a product. You're not making bets. You're not investing. And you're not playing a game (there's no 9th inning silliness). The government has already made various changes to SS over the years - higher FICA tax, raised the retirement age, taxing benefits, added an 80% taxation threshold, changed how spousal benefits are handled. So a means test for handling benefits fits in with these changes nicely, so people that don't really need SS will see a cut in their benefit or have it completely eliminated, while more needy seniors can see increases to their benefits. I hate to see struggling poor seniors and am willing to make this sacrifice myself. It seems only fair.
I can see that it might seem fair to a GenX. But to those of us who have paid in for 40-50 years (my first year of contributions was 1970), having promised benefits cut or "completely eliminated" is not at all fair. Had I known that was a possibility I might have structured my income in a way that reduced or avoided such significant contributions to SS.

You're clearly in the minority... so give it up.

In addition, there were some sensible reasons for some of the changes... the extension of the FRA in 1983 was to reflect increased longevity and reset the expected longevity past age FRA to what it was when the program was originally established, the taxation of benefits effectively aligned the taxation of SS with the taxation of other post-tax retirement savings programs like contributory pension plans, non-deductible IRAs and the like and for many years the OASDI tax was regularly changed.
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Old 08-14-2020, 12:04 PM   #144
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to those of us who have paid in for 40 years, having promised benefits cut or "completely eliminated" is not at all fair.
Benefits promised when? The benefit rules and regs that existed the day you first contributed? The benefit rules and regs that existed the day you started to collect? The rules and regs from some other point in time where it most benefits you?

You keep talking about these "promises" made to you personally. What specific promises are you referring to?
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Old 08-14-2020, 12:05 PM   #145
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.... It just makes no sense that some poor stiff making minimum wage should see her FICA tax rate increase so that Bill Gates and Warren Buffet can receive full SS benefits. That's just too regressive for (generally conservative) me.
But you're missing the whole point... everyone contributes and everyone is entitled to collect... that is why the program is so popular.

Now of course, if you're rich beyond your wildest dreams and don't apply for benefits then you won't receive them. Alternatively, you could collect them and donate them to your favorite causes.

Though I would agree that I would favor changes to preserve the system other than just increasing SS taxes to fill the gap.
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Old 08-14-2020, 12:10 PM   #146
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Benefits promised when? The benefit rules and regs that existed the day you first contributed? The benefit rules and regs that existed the day you started to collect? The rules and regs from some other point in time where it most benefits you?

You keep talking about these "promises" made to you personally. What specific promises are you referring to?
Come on... smarten up for chrissakes.

SSA sends me a statement annually telling me what I would receive monthly if I retire at my FRA, at 70 or at my current age. See below. millions of American taxpayers receive them. I bet you do too.

The wording is pretty definitive...."your payment would be about".
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Old 08-14-2020, 12:17 PM   #147
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But you're missing the whole point... everyone contributes and everyone is entitled to collect... that is why the program is so popular.

Now of course, if you're rich beyond your wildest dreams and don't apply for benefits then you won't receive them. Alternatively, you could collect them and donate them to your favorite causes.

Though I would agree that I would favor changes to preserve the system other than just increasing SS taxes to fill the gap.

We can just agree to disagree then. I don't feel low wage working folks should see their FICA taxes increase (one bit) so that wealthy geezers can collect their so-called "full as promised" SS retirement payments. We're big kids, let's "hitch 'em up" and stop looking for the handicapped woman working part time at McDonalds to pay more so we don't take a minor haircut.

My view would cost me money. But that's the way I see things.
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Old 08-14-2020, 12:20 PM   #148
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Come on... smarten up for chrissakes.

SSA sends me a statement annually telling me what I would receive monthly if I retire at my FRA, at 70 or at my current age. See below. millions of American taxpayers receive them. I bet you do too.

The wording is pretty definitive...."your payment would be about".
Are the rules and regs that determine the numbers in that statement the same now as they were during all the years you payed into the system? Or have things changed?
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Old 08-14-2020, 12:27 PM   #149
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The moral here is, that Government (Whoever that may be at any given time) can change the rules whenever they want, can say what they want with No Consequence at all, and not much effect on themselves (They will make sure their pensions and Healthcare are guaranteed). The only other platform that folks that say things with no consequence is most forms of advertising in the USA.
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Old 08-14-2020, 12:38 PM   #150
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You do realize that we already means test in many areas, right? Progressive income tax rates, for example. Folks who saved for retirement generally pay income taxes at higher marginal rates than folks who didn't. That's a disincentive to save for retirement, but we do it just the same.

As far as your fear that folks might hide/manipulate income to avoid SS means testing, isn't that the popular thing to do for obtaining ACA subsidies? Are you also for eliminating the means testing involved in doling out those dollars?
This is entirely different and a straw man's argument. People have not paid into ACA for their entire working lives expecting it to be there for them when they were old. No comparison.
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Old 08-14-2020, 12:42 PM   #151
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Exactly, SSI wasn’t a voluntary Contribution, they took it from you! I can guarantee you I would have opted out if I could have. Soo, they took your money with a promised payback and they continue to make “ADJUSTMENTS” none of which are a benefit to you. These so called adjustments are always ether reducing your benefits or taking more in the form of taxes.
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Old 08-14-2020, 12:46 PM   #152
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Are the rules and regs that determine the numbers in that statement the same now as they were during all the years you payed into the system? Or have things changed?
I'm not intimately familiar with the history of the PIA calculation and bend points, but I suspect that they haven't been changed since the early 1980s other than for inflation.
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Old 08-14-2020, 12:48 PM   #153
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I'm beginning to think a Blow that Dough strategy could be rationalized for the means testing possibility. It would be more fun than my current 30% savings rate in retirement. YOLO.
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Old 08-14-2020, 12:58 PM   #154
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Exactly, SSI wasn’t a voluntary Contribution, they took it from you! I can guarantee you I would have opted out if I could have. Soo, they took your money with a promised payback and they continue to make “ADJUSTMENTS” none of which are a benefit to you. These so called adjustments are always ether reducing your benefits or taking more in the form of taxes.
While I agree in general, to be fair, some of the adjustments are sensibly based on changes in facts. For example, the 1983 changes to adjust FRA from 65 to 67 were based on increased longevity from when the program was established in the 1930s. The increased longevity resulted in longer payouts so they adjusted FRA to try to reset the average number of years that payments would be received. The addition of taxation resulted in broadly aligning the taxation of SS with similar post-tax pension contribution plans like non-deductible IRAs, contributory pension plans and the like.

But to now make an adjustment based on means isn't a response to changes in facts.... it is more a response to that Congress mismanaged the program over the last 30 years and it can't afford to pay the benefits that have been promised. OASDI rates haven't been changed since 1990... from 1970 to 1990 there were 10 rate changes... if there had been periodic rate changes since 1990 it would have shed light the program's funding.

https://www.ssa.gov/oact/progdata/taxRates.html
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Old 08-14-2020, 12:58 PM   #155
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Come on... smarten up for chrissakes.

SSA sends me a statement annually telling me what I would receive monthly if I retire at my FRA, at 70 or at my current age. See below. millions of American taxpayers receive them. I bet you do too.
The wording is pretty definitive...."your payment would be about".
I haven't received a mailed SS statement in years, but I check it online.

At any rate, that's not a promise. The government can completely eliminate your benefit and provide it to someone who is more needy.

I think the household "other" income phaseout of SS benefits from $30,000 to $50,000 seems fair. This would allow someone with the average SS benefit to earn close to $50,000 of "total" income without receiving any SS benefit cut, at all.

No, I won't give up my views and opinions on this. I know a lot of other people support means testing of SS so that wealthy seniors don't receive benefits that they don't need so that struggling seniors can receive more benefits.

I do fully support increases in FICA taxes to help support SS and Medicare. I think it would be a good idea to tax investment income as well for households with over $50,000/yr income to help shore up SS & Medicare.
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Old 08-14-2020, 01:02 PM   #156
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Just so you know, the first time my SS check comes up short, I'll be coming over to your house to take as much of your stuff as necessary to make up the difference.
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Old 08-14-2020, 01:02 PM   #157
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Exactly, SSI wasn’t a voluntary Contribution, they took it from you! I can guarantee you I would have opted out if I could have. Soo, they took your money with a promised payback and they continue to make “ADJUSTMENTS” none of which are a benefit to you. These so called adjustments are always ether reducing your benefits or taking more in the form of taxes.

SSI? That's Supplemental Security Income, not to be confused with Social Security benefits being discussed here.
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Old 08-14-2020, 01:06 PM   #158
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What would stop people over the threshold from pulling enough of their invested assets out and putting them in something not reportable/trackable as income (say under the mattress, or maybe in Bitcoin, although I have no idea how Bitcoin works, or whatever) so they can still get the SS payments they had planned on?.

Well, a $2M stash's return at 7% would be lot to give up for the average $1400/mo SS benefit.
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Old 08-14-2020, 01:15 PM   #159
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Here's some more detail in reference to my earlier comments about "net" SS benefits being cut every year, with some references:

Social Security after-tax "net" benefits are already being "cut" every year and have been for years, but most people aren't aware of how this is being done.

The SS formula for determining how much of your SS benefits are taxed is NOT indexed to inflation, so that threshold has not increased since it was first introduced in 1983. For a single person, if your income combined with half your SS benefits exceeds $25,000, you have to pay income tax on up to 50% of your SS benefits. If it exceeds $34,000, you have to pay income tax on up to 85% of your SS benefits. $25K in 1983 is worth a lot more than $25K in 2018. Since your retirement distributions and SS benefits will be adjusted with inflation, but NOT the $25,000/$34,000 thresholds, a greater percentage of your SS benefits will become taxable as each year passes (for married filing jointly, the thresholds are $32,000/$44,000.) It's a built-in tax increase, reducing "net" SS benefits, hurting seniors further. The greater your combined income and SS/2, the more you will be affected by this up to a max of 85% of your benefits being taxed! It's absurd, and those thresholds should be increased to reflect inflation since 1983.

The ways it is, you should play it safe by estimating that 85% of your SS benefits well into the future will be taxable. More information about this can be found in these references:

https://www.marketwatch.com/story/pe...xes-2019-01-07
https://www.fool.com/retirement/gene...-wreaking.aspx
http://www.foxnews.com/story/2007/03...-benefits.html
https://www.ssa.gov/policy/docs/issu...ip2015-02.html

I'm not one to support tax increases, but I would be open to paying higher FICA taxes to help shore up SS to prevent cuts to benefits and to prevent increasing the FRA for people within a decade of collecting SS.

At some point, the FRA will need increased for younger workers also as lifetime durations increase over time, so perhaps those under 50 wouldn't be able to collect FRA benefits until age 70. And means testing for higher income households can help preserve the funds that struggling seniors need to survive.
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Old 08-14-2020, 01:36 PM   #160
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Here's some more detail in reference to my earlier comments about "net" SS benefits being cut every year...
Pretty common knowledge around here, so you're

And I think there would be agreement that the threshold should be adjusted for inflation.
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