Another Article On Social Security Running Out of Money

[Blue Collar Guy]

My take away is. "you aint getting what you thought you were". They offer a few suggestions, those who have children and grandchildren will love it. It goes something like this "raise their taxes". https://finance.yahoo.com/news/soci...-17-years-unless-congress-acts-175058898.html.

Maybe instead of the money being invested in treasuries they should have taken a hint from us in this forum and invested 25 % in equities.

 

[MichaelB]

The thread title was modified for clarity.

Edit to add - the article just quotes from the SS Trustee report and doesn't add anything to the discussion.

 

[Fedup]

Thanks for bursting our bubble, I thought we are( my husband at least) is getting a raise this coming year. Something around 2% and Medicare part B is not changed.

 

[Nightcap]

With respect to the article's writer, a 75 year fix would be a great step forward, thank you. Let's not let the perfect be the enemy of the good.

[mod edit]

 

[Blue Collar Guy]

With respect to the article's writer, a 75 year fix would be a great step forward, thank you. Let's not let the perfect be the enemy of the good.

[mod edit]

The first 2 sentences were fine. I could have lived without the last one. Ok Seems the last sentence is gone

 

[2017ish]

My take away is. "you aint getting what you thought you were". ....

I'm still counting it as zero in our retirement calculations, but beginning to think that we might be pleasantly surprised.

 

[Blue Collar Guy]

I'm still counting it as zero in our retirement calculations, but beginning to think that we might be pleasantly surprised.

Yes, I agree. I think worst case in our life time might be 30 reduction.

 

[2017ish]

30% reduction would leave us with a lot of social income under current law. OTOH, my siblings and others in their shoes would find that to be a big and bitter pill.

I still think that, whether perceived as "fair" or or not, the disparate impact may result in a disparate remedy.

All I ask is that DW and I are both still around to see what happens!

 

[GrayHare]

To paraphrase Charles Dudley Warner, "Everybody complains about Social Security, but nobody does anything about it."

 

[Blue Collar Guy]

To paraphrase Charles Dudley Warner, "Everybody complains about Social Security, but nobody does anything about it."

This is a great idea for a new thread, thanks

 

[Montecfo]

I do not think it will be cut for people near retirement age or in retirement. However, as time passes the choices become more difficult.

Would be nice if politicians would not vow "not to touch social security" and instead vow to "reform social security to make it solvent for future generations while protecting retirees and those nearing retirement".

 

[gerntz]

"A root cause for the financial woes for Medicare and Social Security is the aging baby boomer population,"

Not true at all. It's promising more benefits than willing to tax to pay for.

 

[gerntz]

With respect to the article's writer, a 75 year fix would be a great step forward, thank you. Let's not let the perfect be the enemy of the good.

[mod edit]

I doubt those working would agree with that 75 year "fix".

 

[Ted_Shepherd]

Would be nice if politicians would not vow "not to touch social security" and instead vow to "reform social security to make it solvent for future generations while protecting retirees and those nearing retirement".

For those nice words from a politician to be practical and interesting, rather than just pleasant to hear, the politician must then continue and specify what he proposes to do about a shortfall of payroll tax income. He might propose delaying full retirement age. He might propose reducing or eliminating cost-of-living adjustments for those who have high monthly benefits. He might propose raising the cap on payroll income subject to the FICA tax. He might propose taking general tax revenue to plug the gap, or imposing payroll taxes on non-payroll income like dividends, capital gains, interest, IRA withdrawals, and rents. He might propose that the government pay the promised benefits with no reduction and no increase in taxes by just adding the necessary money to the national debt. He might propose cutting benefits for everyone by the same percentage, about 30%, or imposing cuts that are more severe according to what other income someone has or how high his social security benefit is. If this politician is a statesman and not just a vote seeker, he will also discuss both the advantages and the disadvantages of his proposed solution, rather than pretending that only good things would result from adopting his ideas. If he says "This solution method benefits everyone", know that he is a charlatan. If it isn't too wonkish, he might even comment on what's good and what's bad about proposals that rival his, and how he decided that his version is the best possible. Finally, he might talk about what proposals have some chance of passing Congress, considering that geezers like me vote, and turning out to be effective. . ... I just talked myself into the hunch that Congress will do nothing about the problem and just add debt when the time comes to cover for the government's income from FICA taxes payroll income being too small. When the trust fund is gone, I'll be 95. I should live so long.

 

[youbet]

Would be nice if politicians would not vow "not to touch social security" and instead vow to "reform social security to make it solvent for future generations while protecting retirees and those nearing retirement".

If reform means younger folks paying more to get less, they might not think it's so "nice." The burden really needs to be shared. Asking a working stiff trying to support a family to pay higher FICA taxes so a well-heeled geezer can use his SS to make yacht payments is only going to be popular with well-heeled geezers........

Means testing has to be part of the answer. Maybe something similar to how they means test Medicare with IRMAA.

Another part of the answer might be separating the retirement part of SS from the charitable and disability part. We've added several new categories of benefits to SS since Roosevelt's original concept.

 

[LRDave]

I'm still counting it as zero in our retirement calculations, but beginning to think that we might be pleasantly surprised.

I hope zero from SSA isn't triggering any retirement decisions, because based on your handle and tag line, you are def getting something. I am counting on it being close to intact in 10 years (for one of my age).

 

[Blue Collar Guy]

If reform means younger folks paying more to get less, they might not think it's so "nice." The burden really needs to be shared. Asking a working stiff trying to support a family to pay higher FICA taxes so a well-heeled geezer can use his SS to make yacht payments is only going to be popular with well-heeled geezers........

Means testing has to be part of the answer. Maybe something similar to how they means test Medicare with IRMAA.

Another part of the answer might be separating the retirement part of SS from the charitable and disability part. We've added several new categories of benefits to SS since Roosevelt's original concept.

Seems no one asked me in 1983 what I thought of raising the retirement age. I had started my career just then. I would have voted a big fat no. I dont even know the history of how it got extended.

 

[youbet]

Seems no one asked me in 1983 what I thought of raising the retirement age. I had started my career just then. I would have voted a big fat no. I dont even know the history of how it got extended.

Yep, they definitely need to means test your SS.......

 

[Blue Collar Guy]

Yep, they definitely need to means test your SS.......

I know, Im going to be the poster child for the beat down. I feel it coming.

 

[Ted_Shepherd]

Gentlemen: Social Security is ALREADY means tested in two ways. First, in computing a monthly retirement benefit, it replaces a larger fraction of a worker's income when that income is smaller. Then, then the recipient (including rich geezers like me) pays income taxes on the social security benefit and a surtax for Obamacare. We couldn't deduct our FICA payments at the time, but when the money comes back to us, we have to pay income taxes on it -- double penalty. When you advocate means testing, it would be helpful if you include recognition of the amount of means testing already in the program. Further, please consider a life, fire, or casualty insurance policy you might buy. If, when it comes time to pay off, the insurance company declines to pay, or pays only part of the insured amount, because the insurance company feels you don't need the payoff. The caterwauling about immoral corporations would then be deafening, but you may be OK with the federal government stiffing us. If need is the basis of Social Security payouts, then the program becomes welfare, rather than a universal program, and its public support would decline. (Wouldn't it?) Of course, it would be burdensome on young struggling families to pay higher social security tax. Old guys like me are already helping those families through property taxes that go largely or mostly for schools for the children of those young families. At this point, I am not advocating any particular policy. I'm just commenting on pros and cons of your naked, unsupported statement "Yep, they definitely need to means test your SS." To that extent, I am behaving like the statesman of my dreams, one who admits both the costs and benefits of his proposals, and faces political realities too. Note to that person: Geezers VOTE.

 

[Blue Collar Guy]

To the above poster, Yeah, It is already means tested, I agree. I just think since im a perpetual loser that It will get means tested a second time when it my turn at the apple. I hope they just give me back my 226k that my employer and I paid into it, with interest.

 

[haha]

During much of my life I was pretty much behind the 8-ball financially. My wife was going to school, and we had children too. Our joint credit card debt was ~$40,000, mostly but not entirely for her tuition and expenses. Then I hit a few good investments, and without any real study or even reading I retired. I don't think there was much of the retirement literature around then that smacks us in the face every time we turn around today. My wife took off, and I was stuck with the cc debt, since she was a student with very little income. She got half of the positive assets in the divorce. I used a method I think called snowball to prioritize the debt paydown. It took me a while but I finished it. Our house was free and clear, and she didn't force me to sell since I was keeping the one child that was still at home. We finally sold it and split the proceeds a few years ago.

Anyway, I was kind of shell shocked so my goal with expenses, SS, and investments was to try to keep the monthly nut as close as possible to falling off a log difficulty. Since I waited to 70, my ss almost pays my expenses, though if I suddenly developed an urge to spend a lot of time in Monaco I think that would end. It helped me that I was renting when the property crash came, so I could pick up a good condo right where I wanted to live, though in a somewhat downscale part of the neighborhood relative to where I had been renting. Since then most but not all of the differential has closed. And a lot is going on here which I needed after I became single. I paid cash for the condo, which saved me money going in by creating a stronger negotiating position for me. Having no loan allows me to pick investments with little regard to income, so I save a bit in income taxes too. Anyway, I like it that I really have no financial anxiety. I don't have to cut corners, but neither can I go out of my way to try to spend more money. Having a larger monthly SS check is calming to me.

I have learned quite a bit about frugality here. I knew these things as a boy. I always had little jobs and I saved the money, but beginning in adolescence I preferred the make it and spend it on pleasure plan.

Ha

 

[Blue Collar Guy]

During much of my life I was pretty much behind the 8-ball financially. My wife was going to school, and we had children too. Our joint credit card debt was ~$40,000, mostly but not entirely for her tuition and expenses. Then I hit a few good investments, and without any real study or even reading I retired. I don't think there was much of the retirement literature around then that smacks us in the face every time we turn around today. My wife took off, and I was stuck with the cc debt, since she was a student with very little income. She got half of the positive assets in the divorce. I used a method I think called snowball to prioritize the debt paydown. It took me a while but I finished it. Our house was free and clear, and she didn't force me to sell since I was keeping the one child that was still at home. We finally sold it and split the proceeds a few years ago.

Anyway, I was kind of shell shocked so my goal with expenses, SS, and investments was to try to keep the monthly nut as close as possible to falling off a log difficulty. Since I waited to 70, my ss almost pays my expenses, though if I suddenly developed an urge to spend a lot of time in Monaco I think that would end. It helped me that I was renting when the property crash came, so I could pick up a good condo right where I wanted to live, though in a somewhat downscale part of the neighborhood relative to where I had been renting. Since then most but not all of the differential has closed. And a lot is going on here which I needed after I became single. I paid cash for the condo, which saved me money going in by creating a stronger negotiating position for me. Having no loan allows me to pick investments with little regard to income, so I save a bit in income taxes too. Anyway, I like it that I really have no financial anxiety. I don't have to cut corners, but neither can I go out of my way to try to spend more money.

I have learned quite a bit about frugality here. I knew these things as a boy. I always had little jobs and I saved the money, but beginning in adolescence I preferred the make it and spend it on pleasure plan.

Ha

Wow, I dont even remember what the tread was about, but the post was heartfelt and honest. I enjoy hearing about peoples life journey. Thank you for sharing.

 

[Ted_Shepherd]

Forlorn Hope, Recovering what You Paid

To the above poster, Yeah, It is already means tested, I agree. I just think since im a perpetual loser that It will get means tested a second time when it my turn at the apple. I hope they just give me back my 226k that my employer and I paid into it, with interest.

I haven't seen the numbers, but I think that is a forlorn hope. The Feds cannot give you back the money you put it because most of it has already gone out to recipients. The system design always aimed at redistribution from relatively well-paid workers to those with lower earnings. Remember that FICA came in under FDR as a New Deal program. New Dealers have never had your interests at heart, nor mine. Look too at the Orwellian name -- Federal Insurance Contribution Act. If it were really insurance, we'd have vested rights that Congress could not reduce. That is, in real insurance, such as life insurance, the company cannot reduce the contracted amount to a beneficiary on the grounds that the company thinks that person is quite rich enough already. If Social Security really depended on "contributions", that would make the program voluntary. Letting the little people manage their own affairs voluntarily violates the sensibilities and lust for power of our masters in Washington. Mandatory tax payments are not "contributions" in any realistic sense. Pollyanna says this to you and me: "Forcing people to save for retirement is a benefit to you guys this way: it reduces the demand for government welfare programs for old folks, and you guys would have to pay for those welfare programs through your income taxes." Gotta love that girl though sometimes you want to smack her.

 

[marko]

OMG "SS is running out of money"!!
Yeah, yeah, yeah. Been hearing that since I started working back in '66.
Just keep sending the checks, ok boys?