Boehner: Raise SS age and means-test benefits

[IndependentlyPoor]

And the answer is ...
20

[samclem]

Quote:

Originally Posted by ziggy29 And exactly where are all these extra jobs going to come from, to say nothing about the rampant age discrimination that already exists even below age 65?

They might not be very good jobs for older folks. Oldsters who don't keep their minds fit and don't retain the flexibility to learn/embrace new technology just aren't going to be worth as much to employers. The "traditional" pattern of ending your working life at your highest income level may be a thing of the past as these factors, plus increasing global competition driving down US pay, take hold over the coming years.

On the flip side, the virtual elimination of defined benefit plans and the likely elimination of employer-sponsored health plans reduces the disincentive to hire older workers. And, though it may be a stereotype, I think many employers do find that older workers have a stronger work ethic and are more customer-focused than their younger counterparts. When I'm in Lowes looking for an employee who knows something, I'll go to the old guy shuffling down the aisle rather than anyone with ear gauges.

I'm not sure why Boehner would choose this particular method to highlight the issue of government spending. It does demonstrate a willingness to take on hard, intractable issues, but I think I'd file it under "mistake" rather than "bravery."

[RonBoyd]

Quote:

Originally Posted by Sarah in SC Like you, this is what I'm expecting. Only makes sense, really. But I also see the problem with hiring older folks--there will have to be some kind of incentive to convince employers to retain or hire above 55, to me.

A major hurdle will be that the great advantage of younger employees is the way they tackle any job (no matter how idiotic) with much enthusiasm and energy. Think in terms of why an 18 year old makes a better soldier than most over 50 (40?). And they are willing to do it for a tremendously discounted price. I can't see anyone over the age of 62, being forced to w*rk, jumping out of bed every morning filled with much joy and happiness. Would that present an attractive choice for any company (read Stockholder)?

I may be wrong (and there are certainly exceptions to the above described individuals) but expecting that there will be jobs for all those "boomers" comes from a shaky conceptual foundation. I believe, for instance, that it will take another ten years for the jobs scene to recover even a little.

[ronocnikral]

Quote:

Originally Posted by ziggy29 * Build a lot of Roth and taxable savings/investment wealth and use some of that as retirement income which won't hit your AGI.

B/c of the uncertainty of my future tax bracket and living well below my means and the possibility of the gov't "taxing" my roth distributions in retirement, i'm settling on a 50/50 roth/trad philosophy. Not sure what you deem as "a lot"...

[jIMOh]

Quote:

Originally Posted by ziggy29 The more money you make from other sources, the less they give you.

thx

I was thinking it was a new way of calculating an average (mean=average) so this one comment helps me understand many other comments THX!

[ziggy29]

Quote:

Originally Posted by IndependentlyPoor And the answer is ... 20

Since when? I thought it was 42....

[aaronc879]

What about blue-collar workers who are often not physically able to do the work until age 60 let alone through out their entire 60's. They're going to have to be supported one way or another or there will be a lot more homeless people roaming the streets in their 60's.

[DeborahB]

Quote:

Originally Posted by ziggy29 * Even if it's more than you need, withdraw just enough from IRAs and 401Ks to be just below some threshold of increased tax rates or means-testing, and transfer it into your bucket of already-taxed wealth to withdraw from later.

The problem with that is the money is taxed as income when you take it out, and then the gain is taxed again if you don't need it all. UGH!

[samclem]

Quote:

Originally Posted by thinker25 The problem with that is the money is taxed as income when you take it out, and then the gain is taxed again if you don't need it all. UGH!

But, if your tax rate is the same when you withdraw it as when you would have withdrawn it (later), then it's (almost) a wash, right?

*excepting the effects of compounding you lose when you pay the tax on the growth every year vs paying the tax on the accumulated gain when it is withdrawn. This is a small amount, IIRC, under most timeframes/growth rates. Or, I could be wrong.

[DeborahB]

Quote:

Originally Posted by samclem But, if your tax rate is the same when you withdraw it as when you would have withdrawn it (later), then it's (almost) a wash, right? *excepting the effects of compounding you lose when you pay the tax on the growth every year vs paying the tax on the accumulated gain when it is withdrawn. This is a small amount, IIRC, under most timeframes/growth rates. Or, I could be wrong.

Or you could be right - good point, hadn't thought about that.

[Texas Proud]

Quote:

Originally Posted by MuirWannabe I had the same question. How will means testing be done? I don't see how it would work if its based on AGI. That can be manipulated. Seems like it would have to consider your net worth in some fashion. But that gets complicated quickly as well. It's sad to see this being discussed. But I understand why even if it is all so regretable. My projected ER date will be drastically off base should SS be unavailable as currently planned.

It would be to hard to do with net assets.... it is easier to hide than AGI... go look at the gold coin thread... it is one of the reasons some like it...

Also, like when someone asks your net worth... we get so many questions as 'what do you mean'.... so again, not a simple solution... AGI is the only way I can see it being simple and easy to check...

[Westernskies]

Do away with cushy Congessional pensions and replace them with the same SS benefits, age requirements, and means testing they are proposing for the rest of us... Problem solved.

[lets-retire]

I think it's a good idea. SS was started when the life expectancy was much lower than it currently is. I also think any changes should have a fairly long phase in period. So those who are within 10-15 years of retiring, wouldn't have any changes to their system. Then phase it in over the course of five or six years. Raise all ages for SS. Even the early retirement age should get raised by two or three years. If it were up to me, and I know it isn't, I'd try to tie it to life expectancy at a selected age, so it wouldn't need to be adjusted again.

[Lazarus]

Quote:

Originally Posted by lets-retire I think it's a good idea. SS was started when the life expectancy was much lower than it currently is. I also think any changes should have a fairly long phase in period. So those who are within 10-15 years of retiring, wouldn't have any changes to their system. Then phase it in over the course of five or six years. Raise all ages for SS. Even the early retirement age should get raised by two or three years. If it were up to me, and I know it isn't, I'd try to tie it to life expectancy at a selected age, so it wouldn't need to be adjusted again.

But it would be raised again. Just as soon as the money ran out.

[MasterBlaster]

We fixed the system before in 1983. What short memories we all have. All I can see is that I have paid significantly higher taxes. And for what - pork spending ? The outlook for payments is now worse than ever. Check out the suggestions of 75 year solvency and surpluses forever below from the 1983 "fix".

<from wikipedia>

The federal government appointed the National Commission on Social Security Reform, headed by Alan Greenspan (who had not yet been named Chairman of the Federal Reserve), to investigate what changes to federal law were necessary to shore up the fiscal health of the Social Security program.[4] In addition to recommending tax increases to alleviate the short-term funding problem, the Greenspan Commission projected that the system would be solvent for the entirety of its 75-year forecast period.[4] The changes to federal law enacted in 1983 pursuant to the recommendations of the Greenspan Commission increased the Social Security payroll tax so that revenues derived from the tax would exceed the amounts needed to fully fund current benefits, thus causing a reserve to accumulate, which could be drawn upon when necessary. The resulting surplus is accounted for in the Social Security Trust Fund. As of the end of calendar year 2008, the accumulated surplus stood at just over $2.4 trillion. [1] Projections are that current receipts will continue to exceed expenditures until 2017 (according to Charles Blahous, Special Assistant to the President for Economic Policy). Thereafter, there will be a shortfall that will be made up by withdrawals from the Trust Fund, although the Trust Fund will continue to show net growth until 2025 because of the interest generated by its bonds. [2]
The Trust Fund will gradually be drawn upon to cover the difference between tax receipts and benefit payments. It will be completely depleted by 2042 (according to the Social Security Administration) or 2052 (according to the Congressional Budget Office). However, if the US economy performs better than the economic assumptions and projections used by the SSA and CBO, the trust funds may remain in surplus indefinitely.

[Emeritus]

Quote:

Originally Posted by Westernskies Do away with cushy Congessional pensions and replace them with the same SS benefits, age requirements, and means testing they are proposing for the rest of us... Problem solved.

Do you really believe that virtually Members of Congress are not in social security?
This is such an incredibly old urban legend that I'll reprint the whole thing

Benefits Paid to Members of Congress
You may have read that Members of Congress do not pay into Social Security. Well, that's a myth.
Prior to 1984, neither Members of Congress nor any other federal civil service employee paid Social Security taxes. Of course, the were also not eligible to receive Social Security benefits. Members of Congress and other federal employees were instead covered by a separate pension plan called the Civil Service Retirement System (CSRS). The 1983 amendments to the Social Security Act required federal employees first hired after 1983 to participate in Social Security. These amendments also required all Members of Congress to participate in Social Security as of January 1, 1984, regardless of when they first entered Congress. Because the CSRS was not designed to coordinate with Social Security, Congress directed the development of a new retirement plan for federal workers. The result was the Federal Employees' Retirement System Act of 1986. Members of Congress receive retirement and health benefits under the same plans available to other federal employees. They become vested after five years of full participation.
Members elected since 1984 are covered by the Federal Employees' Retirement System (FERS). Those elected prior to 1984 were covered by the Civil Service Retirement System (CSRS). In 1984 all members were given the option of remaining with CSRS or switching to FERS.
As it is for all other federal employees, congressional retirement is funded through taxes and the participants' contributions. Members of Congress under FERS contribute 1.3 percent of their salary into the FERS retirement plan and pay 6.2 percent of their salary in Social Security taxes.
Members of Congress are not eligible for a pension until they reach the age of 50, but only if they've completed 20 years of service. Members are eligible at any age after completing 25 years of service or after they reach the age of 62. Please also note that Members of Congress have to serve at least 5 years to even receive a pension.
The amount of a congressperson's pension depends on the years of service and the average of the highest 3 years of his or her salary. By law, the starting amount of a Member's retirement annuity may not exceed 80% of his or her final salary.
According to the Congressional Research Service, 413 retired Members of Congress were receiving federal pensions based fully or in part on their congressional service as of Oct. 1, 2006. Of this number, 290 had retired under CSRS and were receiving an average annual pension of $60,972. A total of 123 Members had retired with service under both CSRS and FERS or with service under FERS only. Their average annual pension was $35,952 in 2006.
US Congress Salaries and Benefits – Salaries and Benefits of US Congress Members

[ziggy29]

Quote:

Originally Posted by Emeritus Do you really believe that virtually Members of Congress are not in social security? This is such an incredibly old urban legend that I'll reprint the whole thing

Go back and read what you are responding to. Nowhere was it asserted that Congress doesn't pay into SS. You're reading something into it that wasn't said.

The point is that if Congress wants to means test SS and raise the full age to 70, they should do the same to their own Congressional pensions or forego their own pensions. (Which would mean most of them, regardless of party, would get nothing from them in either case.)

Lead by example, y'know?

[TromboneAl]

...he suggested reducing or eliminating benefits to Americans with a "substantial non-Social Security income" while retired.

Do you think that refers to investment income? Withdrawals from IRAs?

"We're all living a lot longer than anyone ever expected,"

Life.jpg

[Emeritus]

Quote:

Originally Posted by ziggy29 Go back and read what you are responding to. Nowhere was it asserted that Congress doesn't pay into SS. You're reading something into it that wasn't said. The point is that if Congress wants to means test SS and raise the full age to 70, they should do the same to their own Congressional pensions or forego their own pensions. (Which would mean most of them, regardless of party, would get nothing from them in either case.) Lead by example, y'know?

I'm sorry, but you not me, misread the post
the precise quote was
"Do away with cushy Congessional pensions and replace them with the same SS benefits, age requirements, and means testing they are proposing for the rest of us... Problem solved."

This is a demand to eliminate congressional pensions, not change them as you suggest
the request is that the Pensions be REPLACED

The total claim was that there were Cushy Congressional pensions that should be "replaced" with "The same SS etc." That is clearly a statement that Congress is not covered by SS.







It said

[ziggy29]

Quote:

Originally Posted by Emeritus This is a demand to eliminate congressional pensions, not change them as you suggest the request is that the Pensions be REPLACED

I guess that wasn't covered in the part where I said "or forego" their Congressional pensions.

My bad.