Social Security (House) Proposal

[MichaelB]

Fully agree with #1

I probably didn’t explain #2 well. People should receive in benefit what they contributed together with any investment gain or interest income the fund enjoys.

My point is today the benefit is indexed to the national average wage index, which grows faster than inflation and effectively is an unfounded benefit. It’s also the most significant cause of an underfunded trust.

 

[Car-Guy]

I probably didn’t explain #2 well. People should receive in benefit what they contributed together with any investment gain or interest income the fund enjoys.

Then with that, I can agree with #2 also.

 

[marko]

Problems of this magnitude require everyone to chip in, and the underlying principles should be 1) this is a program to help ensure when people reach retirement age they will avoid extreme poverty, 2) people should not get out more than what they put in, 3) social programs should be funded with general revenues.

Always a good and noble sentiment. The problem is that it seems that one always finds out afterwards that not everyone has chipped in, quite often those with the least to lose and the most influence.

 

[MichaelB]

Then with that, I can agree with #2 also.

Cheers

Always a good and noble sentiment. The problem is that it seems that one always finds out afterwards that not everyone has chipped in, quite often those with the least to lose and the most influence.

I agree. That’s also why the most likely proposals are those where the impact is not immediate, or obvious, or easy to understand. For example, using chained CPI (instead of CPI-W) to calculate COLA, or increasing the retirement age by one month per year for the next 3 decades.

 

[Exit 2024]

Sounds reasonable but would be difficult to implement. When does a piece of machinery actually become a robot? And when does a application actually pass into being Ai? And then how do you determine how to tax the different ones? I would hate to see a UBI going to everyone who works, but we should always have a social safety net other than SS.

It does not have to be based on robot or AI count. It could be as simple as taxing excess of productivity. Today we all can agree that all such increases are coming from technological advances and not from people working better. Feds already measure productivity overall, so one of the simplified option - set up a baseline, for example XX gross revenue per working hour. Then each company would calculate theirs and pay taxes on the excess over the baseline. Baseline need to be adjusted for inflation every year but other then that it would be straight forward. More automation - less people - higher productivity per hr - additional SS and Medicare tax. Win Win

 

[JDARNELL]

Just think of all the yarns that are going to be spun about SS the next decade til the 11th hr when the politicians duck out in the middle of the night once they are finished in 2034 or later. Nothing like kicking the can down the road which is what our chosen leaders seem to be very proficient doing.

I'm gonna go out on a limb and say this topic is gonna be more popular than the pay off mortgage/invest discussion of the last two decades the next 10 yrs. Popcorn anyone?

I think I will go ahead and have my boys and start a YouTube channel now discussing this one topic to get it monetized by 2034 to fund the early retirement years before they are eligible to collect SS. Of course they will probably be means tested out of any benefits but I am sure they will be prepared.

 

[FiveDriver]

Indeed, she performed a wonderful service for your household and should deserved to get half your SS credits during those years, just not from other tax payers.

+1 Precisely!

My Wife gets a monthly amount based on her own work record, plus an additional amount to bring her up to half of my SS payment.

The Social Security system is built upon active workers kicking in a small percentage of salary to fund a Benefit for Retirees. Are you planning to take the whole Social Security system apart ?

Not every government benefit is a blatant form of Socialistic Communist-Marxist Bolshevism ?

 

[Flieger]

IMO, the Wage Base must be increased to keep the Fund solvent. The current cut-off is around $160K, and that is too low in today's job market. That is entry-level salary is some occupations

I sure would like to know where this is entry level salary.... I know there may be a couple, but I venture to say that is a VERY small subset.

Flieger

 

[RetiredHappy]

My Wife gets a monthly amount based on her own work record, plus an additional amount to bring her up to half of my SS payment.

The Social Security system is built upon active workers kicking in a small percentage of salary to fund a Benefit for Retirees. Are you planning to take the whole Social Security system apart ?

Not every government benefit is a blatant form of Socialistic Communist-Marxist Bolshevism ?

She did not earn the "additional amount to bring her up to half of my SS payment." Other taxpayers are paying for this amount.

 

[FiveDriver]

I sure would like to know where this is entry level salary.... I know there may be a couple, but I venture to say that is a VERY small subset.

Flieger

A Law School Grad with a good GPA could pull down $150K first year. Experience in Patent Law and Intellectual Property could bring in more.

Shall we talk about Medical Degrees ? How about Computer Science ??

 

[GenXguy]

My Wife gets a monthly amount based on her own work record, plus an additional amount to bring her up to half of my SS payment.

If she's getting a payment based on half your benefits, then her own work record is not factored in, she's getting to double dip on your SS credits, thanks to other taxpayers like me who paid for it.

 

[AudiDudi]

If she's getting a payment based on half your benefits, then her own work record is not factored in, she's getting to double dip on your SS credits, thanks to other taxpayers like me who paid for it.

OFC her work record is factored in. The "extra" thata bothers you is the difference between her benefit and 1/2 her spouses benefit. The more she made, the less the "extra".

Also available to pay for that "extra" is the amount paid in by people that paid in and were not able to claim.

 

[statsman]

If she's getting a payment based on half your benefits, then her own work record is not factored in, she's getting to double dip on your SS credits, thanks to other taxpayers like me who paid for it.

Edit: It appears I've mixed up spousal benefit vs spousal survivor benefit.

 

[GenXguy]

OFC her work record is factored in. The "extra" thata bothers you is the difference between her benefit and 1/2 her spouses benefit. The more she made, the less the "extra".

No, that's not how it works. It's not factored in when choosing to double dip on the spouse. It's one or the other. Other tax payers are paying for a benefit she didn't earn. That should concern everyone about unearned benefits being paid when the people who actually earned benefits are looking at future 25% haircut or other cut.

Not necessarily. For instance, if she is entitled $1,000/mo on her own record, while the spousal benefit (looked at in a vacuum) is $1,200/mo, then she is still getting her original $1,000/mo plus an additional $200/mo from the spousal benefit. I really don't see that as a double-dip.

No, that's not how it works. You have a choice between only your own SS credits or double dipping on the spouse. She would get the double dip amount regardless of her own work record, so that's thrown out when double dipping. They don't pay one one and then just add on the other. It's one or the other. And that's on the backs of other taxpayers.

 

[GenXguy]

She did not earn the "additional amount to bring her up to half of my SS payment." Other taxpayers are paying for this amount.

Exactly!

 

[statsman]

I'm done reading this thread, as I suspect Porky will be along any minute now. My DW and I are collecting on our own records, so thankfully we aren't leeches in the eyes of some here.

 

[GenXguy]

I'm done reading this thread, as I suspect Porky will be along any minute now. My DW and I are collecting on our own records, so thankfully we aren't leeches in the eyes of some here.

I'm not calling anyone a leech. I just think that is a reform to the system that should be made so that it isn't exploited.

 

[pb4uski]

No, that's not how it works. It's not factored in when choosing to double dip on the spouse. It's one or the other. Other tax payers are paying for a benefit she didn't earn. That should concern everyone about unearned benefits being paid when the people who actually earned benefits are looking at future 25% haircut or other cut.
No, that's not how it works. You have a choice between only your own SS credits or double dipping on the spouse. She would get the double dip amount regardless of her own work record, so that's thrown out when double dipping. They don't pay one one and then just add on the other. It's one or the other. And that's on the backs of other taxpayers.

GenXguy,

No you have it totally wrong and AuduDudi and statsman both had it right. The spousal benefit is the difference between 50% of the PIA of the higher spouse and the lower earning spouse's PIA based on their work record.

There is no double dipping. Technically they pay the lower earning spouse their benefit based on their work record first and then an adder IF the lower earner's PIA is less than 50% of their spouse's PIA.

I can understand that some people, like you, object to the spousal benefit as an unjustifiable bonus and I wouldn't object to it being phased out but it is a well established benefit. However another way to view it that it refunds some of the impact of bend points in the benefit formula for some married couples, in effect adjusting benefits to a joint basis for married couples with highly disperate income.

 

[dmpi]

I'd hate to see Porky because this thread has been quite educational. This is just inherently a hot topic. You can see why reaching a consensus on social security is just about impossible.

 

[pb4uski]

If she's getting a payment based on half your benefits, then her own work record is not factored in, she's getting to double dip on your SS credits, thanks to other taxpayers like me who paid for it.

No. Totally wrong. See above.

 

[pb4uski]

... These programs should be based on what someone pays into them, not their life decisions on having kids in a marriage vs. single people having kids.

While I can understand your point of view, that's not really the way it works. Even putting aside the spousal benefit thing, the fact is that lower earner benefits are a much higher percentage of their contributions than higher earners so there is, and always has been, a degree of cross subsidization of lower earners by higher earners.

 

[pb4uski]

Eliminating income taxes on social security as proposed might be politically popular but is an extremely flawed idea.

It would be better to tax social security like other contributory retirement benefits such as contributory pension benefits, non-deductible IRAs or retirement annuities. The SSA knows what your earnings were each year and therefore your total contributions into the program so they could easily determine what portion of your benefits are return of contributions and how much is from growth.

Or to make it even easier, benefits are tax-free to the extent of contributions and then taxable after that.

 

[RetiredHappy]

Also available to pay for that "extra" is the amount paid in by people that paid in and were not able to claim.

If it is really "available", the SS trust fund will not be running out of money by 2034. Every extra dipping by folks who did not contribute to the amount is exacerbating the situation, not to mention the unfairness.

 

[AudiDudi]

No, that's not how it works. It's not factored in when choosing to double dip on the spouse. It's one or the other. Other tax payers are paying for a benefit she didn't earn. That should concern everyone about unearned benefits being paid when the people who actually earned benefits are looking at future 25% haircut or other cut.
No, that's not how it works. You have a choice between only your own SS credits or double dipping on the spouse. She would get the double dip amount regardless of her own work record, so that's thrown out when double dipping. They don't pay one one and then just add on the other. It's one or the other. And that's on the backs of other taxpayers.

You lack an understanding of how that works. It is automatic!! So you poor GenX payers are only paying $200/mo more, not $1200 as you would have been paying $1k anyway. Please keep on working and contributing

Ida May Fuller is the one that got the best deal from SS. Feel free to look that one up.

 

[AudiDudi]

If it is really "available", the SS trust fund will not be running out of money by 2034. Every extra dipping by folks who did not contribute to the amount is exacerbating the situation, not to mention the unfairness.

Actually, you are correct. Every cent paid in this month + an amount from the Trust Fund, is paid out next month. The Trust Fund is decreasing each year. (Same for Medicare)