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Will Social Security be there?
08-09-2020, 07:14 PM
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#1
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Full time employment: Posting here.
Join Date: Feb 2017
Posts: 807
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Will Social Security be there?
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...
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08-09-2020, 07:17 PM
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#2
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Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,731
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SS will be there next March. A lot of us are counting on it. As far as your defined benefit pension, ask your ex employer.
__________________
*********Go Yankees!*********
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08-09-2020, 07:17 PM
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#3
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Recycles dryer sheets
Join Date: Apr 2017
Location: SF East Bay
Posts: 155
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Not if the President is able to eliminate the payroll tax that funds Social Security.
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08-09-2020, 07:27 PM
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#4
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Moderator
Join Date: Nov 2015
Posts: 13,921
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*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)
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08-09-2020, 07:28 PM
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#5
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gone traveling
Join Date: Dec 2015
Location: Berkeley, Denver, CO, USA
Posts: 1,406
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Quote:
Originally Posted by GoBears
Not if the President is able to eliminate the payroll tax that funds Social Security.
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Well, he has not proposed that.
He has proposed delaying collection and then recapturing it later.
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08-09-2020, 07:30 PM
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#6
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Full time employment: Posting here.
Join Date: Feb 2017
Posts: 807
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Quote:
Originally Posted by Aerides
*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)
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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?
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08-09-2020, 07:39 PM
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#7
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Recycles dryer sheets
Join Date: Nov 2016
Location: San Jose
Posts: 470
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So far no permanent payroll tax cut: what has been ordered is a payroll tax holiday for those who earn less than $100K annually. Money must be paid back by the end of 2020.
Permanent payroll tax cut has been also mentioned, just in case if current President is re-elected. But executive order alone cannot accomplish that. There is a Congress which must approve it. Which is highly unlikely, no matter who is going to be elected.
I don't think this is a problem. But there is a real problem. The real problem is that currently unemployment is very high, and not many people actually pay payroll tax. Potentially it could be a serious issue, if economy will not recover soon. Money may be cut, or retirement age adjusted. But those who apply for SS within the next few years will be fine.
__________________
Retired Sep 2023 @56
Target AA: 50% stock / 20% bond / 30% cash
Target WR: ~3.6%
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08-09-2020, 08:02 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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Well we're broke. All these social programs will have to end and end soon. Too bad.
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08-09-2020, 08:56 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
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Quote:
Originally Posted by CindyBlue
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?
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The decreases in benefits when the trust fund runs out, about 2035, are for all benefits payable then and later, regardless of when you started.
That's the current law, congress can change it.
The recession caused by the coronavirus will decrease SS revenue this year, and probably for a number of future years. As a result, the trust fund may run out sooner than the last projection.
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08-09-2020, 09:00 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Coronado
Posts: 3,706
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Quote:
Originally Posted by CindyBlue
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?
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Under the current law, a haircut for one is a haircut for all. It does not matter if you've been collecting SS for 20 years or 1 month or are planning to start in the future.
Of course Congress can change the law any time, and many people do think that there will be fixes put in place before it's necessary to cut benefits by 25 to 30 percent.
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08-09-2020, 09:05 PM
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#11
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Full time employment: Posting here.
Join Date: Feb 2017
Posts: 807
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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!
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08-09-2020, 10:03 PM
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#12
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Full time employment: Posting here.
Join Date: Nov 2003
Posts: 580
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Quote:
Originally Posted by RobbieB
Well we're broke. All these social programs will have to end and end soon. Too bad.
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Funny....define broke!! We have been some version of broke since 1836 and that increases by the second. That being the case the social programs would not seem to be in danger and in fact I would argue that they need to be increased based upon our contemporary needs.
I trust that SS or something equivalent will always be there as long as we are a Democracy.
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08-09-2020, 10:08 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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Yeah, I was making a hehe. Well broker then ever before and getting worse every day.
How's that? But with negative interest we'll be able to reduce the burden, yes?
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08-09-2020, 10:22 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 1,561
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For the OP
This pamphlet was included with my Vanguard 401(k) statement back in 2006.
Sorry about the quality, had a really cheap scanner back then.
__________________
"No beast so fierce but knows some touch of pity, but I know none, therefore am no beast"
Shown @ The End Of The Movie 'Runaway Train'
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08-10-2020, 05:04 AM
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#15
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Recycles dryer sheets
Join Date: Jul 2019
Posts: 416
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I have the same concerns. The payroll tax noise made me consider taking SS early (am 62), but aca and income concerns keeps me from doing that. I think otherwise I'd start it today.
What I read is the 'postponed' taxes would probably be forgiven. (taking current news with grain of salt)
Sure wish we could do a SS lump sum payout and get the money in our own hands.
Planning for retirement is challenging when fixed income isn't fixed.
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08-10-2020, 05:14 AM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,298
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Quote:
Originally Posted by cathy63
Under the current law, a haircut for one is a haircut for all. It does not matter if you've been collecting SS for 20 years or 1 month or are planning to start in the future.
Of course Congress can change the law any time, and many people do think that there will be fixes put in place before it's necessary to cut benefits by 25 to 30 percent.
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+1
I believe there will be a last minute fix, or a proposal to kick it further down the road.
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TGIM
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08-10-2020, 05:15 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,298
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Quote:
Originally Posted by bobbyr
I have the same concerns. The payroll tax noise made me consider taking SS early (am 62), but aca and income concerns keeps me from doing that. I think otherwise I'd start it today.
What I read is the 'postponed' taxes would probably be forgiven. (taking current news with grain of salt)
Sure wish we could do a SS lump sum payout and get the money in our own hands.
Planning for retirement is challenging when fixed income isn't fixed.
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The permanence of the deferral is already being walked back.
__________________
TGIM
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Will Social Security be there?
08-10-2020, 06:12 AM
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#18
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,941
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Will Social Security be there?
Quote:
Originally Posted by cathy63
Of course Congress can change the law any time, and many people do think that there will be fixes put in place before it's necessary to cut benefits by 25 to 30 percent.
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+1. Experts who actually understand SS and know what they are talking about, vs. news media alarmists, project worst case cuts at approximately 25% somewhere around or after 2035. Factor that in as a worst case and you are good to go. Or, succumb to overblown fears that SS will disappear and keep working for many, many more years. Your choice.
https://www.ssa.gov/policy/docs/ssb/...v70n3p111.html
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08-10-2020, 06:26 AM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,891
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Quote:
Originally Posted by CindyBlue
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!
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CindyBlue, as Markola points out below, the estimates were for ~ 25% cuts to SS in 2035 if no action is taken. Now, the economic impact of COVID19, plus the effect of this Executive Order could pull that date in some, but it certainly isn't going to pull it in to March!
Rather than worry, plan. So maybe instead of that 25% cut in 2035 (again, assuming no action is taken), maybe plan for a 25% cut in 2034, or 2033 instead? If you plug that into FIRECalc, does that change your success rate significantly? I doubt that a few more years of a 25% cut will have much effect, and if it does, you might be playing things a bit too close anyhow? Regardless, you have 12 years or so to makes some adjustments.
-ERD50
Quote:
Originally Posted by Markola
+1. Experts who actually understand SS and know what they are talking about, vs. news media alarmists, project worst case cuts at approximately 25% somewhere around or after 2035. Factor that in as a worst case and you are good to go. Or, succumb to overblown fears that SS will disappear and keep working for many, many more years. Your choice.
https://www.ssa.gov/policy/docs/ssb/...v70n3p111.html
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08-10-2020, 07:19 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,723
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Quote:
Originally Posted by RobbieB
Well we're broke. All these social programs will have to end and end soon. Too bad.
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SS is not free, we have all paid for it throughout our working life. The fact it is called "Social Security" does not mean it is an entitlement, it is more of an insurance policy. BUT, all games are off "IF" the insurance company is forced into bankruptcy.
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