mistermike40
Recycles dryer sheets
- Joined
- Aug 6, 2014
- Messages
- 364
Well, mostly we haven't been pre-paying. Social Security is not primarily pre-funded. It is mostly pay-as-you-go.At the risk of sounding obvious - if eliminated, eliminate for those entering the workforce.
What to do about those who have been PRE-PAYING their entire adult lives?
If you give me $100 to hold. I write an IOU, put it in my drawer, and then spend the money. The money really is not there. My IOU is, and that may be good, or may not. For me, other than a law hiding this, the government owed the debt when it collected the tax, it then spent the tax. Therefore, there appears nothing magical about the trust fund going away, it went away when it was spent. All that is happening is a reduction in the IOU.
Sarcasm alert:
Haven't you all heard? Government supplied money is now endless. Remember, taxation is taking from Peter to pay Paul...but now all we need to do is pay Paul and not even take away from Peter! So there is no need for all this silly worrying about how to pay for things! All we need to do is just add money to the system, like magic. With our modern day digital system, we don't even need to make the money printing machines go Brrrrrr, all we need to do is magically have the fed buy assets (e.g. bonds) in open market operations (via member banks). The fed takes those assets off of the poor bankers hands, and in return credits those banks with the value of those assets - and just like magic there is more money in the system.
Even better! Since people are stuck at home and some businesses closed, that money - instead of being used to buy goods and services - can be used to buy the really important things - like equities and other financial assets. Then the magic is even better with a robust stock market.
End of Sarcasm.
From a personal perspective - I can't influence or change what is happening. All I can do is adapt my own strategy to best survive it (at least for now). That means going with the flow in terms of stock prices (e.g. my largest holding Apple now at $450/share) and to realize as we debase our currency and lock our children and grandchildren into massive amounts of debt - try to hedge as much as I dare in things like a good food storage supply, land to provide wood to heat my home, and in alternative assets like gold/silver.
In the meantime, the payroll tax deferment being discussed here is just a pimple on the *ss of the overall problem.
CindyBlue, hope this makes you feel better.
Sigh...I'm hoping that, since there is really nothing I can do about it (except vote!), that I can figure out how to stop worrying. Thank you for letting me worry here, though, everyone!
Without trying to open a political discussion...Ok, I'll be the one to ask...yet again...
I retired last August. I've been living on my savings since then (not my 403b, but savings - I planned it that way for the first year of retirement) plus my pension. I was all set to do fine in retirement. But...
Will Social Security be there when I take it next March (I'm waiting until FRA)? After reading about the president approving tax cuts...and the economy...I'm worried about Social Security. I'm also worried about my (defined benefit) pension still being there.
Sometimes I think all I do is worry...sigh...
You’re a glass half full person...I like it.Without trying to open a political discussion...
Does anyone think that the current Pandemic might actually help SS or retirement in the long run? 1 less seniors around to claim benefits since the disease is much more fatal for seniors. 2 people not able to retire now staying in the work force and delaying benefits, 3 might this cause a systemic change in people’s lives, where not wanting to be caught in the next pandemic out of work and living paycheck to paycheck create more savers and a sense of frugality. 4. Will living now without travel, shopping, dining out and spending, have a continuing impact on how we live our lives post pandemic?
For an example in #4. We have replaced our expensive gym memberships with walking, home work outs, exercising to free YouTube videos. Not going to the gym means no post work out smoothie, snack in a cafe or expensive coffee drink and less driving. I mean...sure we miss the gym, pool, steam room etc but now we are asking ourselves if it is REALLY worth it?
Anybody else feeling this way?
As I see things, this is a variation of the "paradox of thrift" - saving is good for us individually, but if everyone does it, we will suffer collectively since consumer spending is the major driver of the economy. Other things being equal, you will have an easier time with retirement finances if you stop spending and save more pre-retirement, as well as spending less post retirement. However, consider the ramifications of millions upon millions of people who stop buying lattes, gym memberships, restaurant meals and new cars. That will drive down the need for employees in the businesses that provide these things. Lower employment means fewer people contributing to Social Security and, consequently, a bigger likelihood that benefits will be cut. It also means that the money you have invested in the stock market may take a hit due to the drop in consumer demand....Does anyone think that the current Pandemic might actually help SS or retirement in the long run?....
Yoga. Seriously.
Since I first started retirement planning back in the 1980's, I have assumed that I would receive zero from social security and have saved accordingly. As it turns out, I'll get $25k per year starting in 6 months, and I'll be happy to take it even though I don't really need it for day to day living. Once we can travel again, that will fund a couple of nice vacations a year.I guess the moral of this story is: If one NEEDs SS in any form to Retire, one should think again.
I guess the moral of this story is: If one NEEDs SS in any form to Retire, one should think again.
I wish that were true, but the fact is that a lot of people, including me, are counting on Social Security as part of our "3 legged stool" for retirement income.
Yep, I need it. I have savings but could never retire on only that..I can't count on the market.
I'm sure we will get SS of some kind. It won't be zero. The question is how much... I often use a 25%-30% haircut number for retirement calculations and make it a regular pension (100% taxed). I also tweak my discretionary spending (eg. travel) and check different scenarios.
However, consider the ramifications of millions upon millions of people who stop buying lattes, gym memberships, restaurant meals and new cars. That will drive down the need for employees in the businesses that provide these things. Lower employment means fewer people contributing to Social Security and, consequently, a bigger likelihood that benefits will be cut. It also means that the money you have invested in the stock market may take a hit due to the drop in consumer demand.
4. Will living now without travel, shopping, dining out and spending, have a continuing impact on how we live our lives post pandemic?
For an example in #4. We have replaced our expensive gym memberships with walking, home work outs, exercising to free YouTube videos. Not going to the gym means no post work out smoothie, snack in a cafe or expensive coffee drink and less driving. I mean...sure we miss the gym, pool, steam room etc but now we are asking ourselves if it is REALLY worth it?
Anybody else feeling this way?
*Let's try to avoid politics to allow this thread to have a chance*
OP I think for you, yes it will be there. The larger haircuts - IF they happen - are more likely to apply down the road, to those retiring later, vs. already on it or about to be.
(IMO)
I assume they meant claiming the benefit later.Retiring later or claiming the benefit later?
Is there an advantage to collecting earlier, like at 62, so you've collected for longer before any haircuts?
I wish that were true, but the fact is that a lot of people, including me, are counting on Social Security as part of our "3 legged stool" for retirement income.
Yep, I need it. I have savings but could never retire on only that..I can't count on the market.
Same here. We have a decent amount of retirement monies, but could not live our current and projected lifestyle without SS.
In fact, my DGF already collects SSDI.
Ditto, and I wanted to spend down my IRA, and take advantage waiting till I’m 70, but now....
I can't see a surplus of idle labor leading to higher pay and benefits. It is a market like any other; when supply exceeds demand, prices drop.My bold. The stock market is nearing an all time high and my portfolio has exceeded its all time high. Small businesses are suffering, large corporations are flourishing. I still see a long line at the Starbuck's drive thru. And their stock price is up. The economy is shifting. I don't know where that leaves SS or employees. Are large corps going to hire more? Maybe better jobs, better benefits, higher salaries? I might be dreaming, if so, don't wake me up. I posted this article in another thread but applies to this discussion.
Education is more important than ever.
How Pandemics Past and Present Fuel the Rise of Large Companies
Does that meant that when I get Social Security next March, it will stay the same (with cost of living increases) for my lifetime? Or will I get a "haircut" later on? Are the decreases in Social Security projected for 2035 only for those who take it in 2035, or across the board for everyone?
If substantial actions are deferred for several years, the changes necessary to maintain Social Security solvency would be concentrated on fewer years and fewer generations. Much larger changes would be necessary if action is deferred until the combined trust fund reserves become depleted in 2035. For example, maintaining 75-year solvency with changes that begin in 2035 would require: (1) an increase in revenue by an amount equivalent to a permanent 3.65 percentage point payroll tax rate increase to 16.05 percent starting in 2035, (2) a reduction in scheduled benefits by an amount equivalent to a permanent 23 percent reduction in all benefits starting in 2035, or (3) some combination of these approaches.