When/who will SS reduce?

[bada bing]

I totally agree with the last few posters that eliminating the cap should be considered... when I was working it was always a mystery to me and I would have been fine

My view would be yes... you need to allow those paying those additional SS taxes to gain some benefit... to not allow an increase in benefits would be an additional nudge of SS towards being just another welfare program

Lots of taxes I pay now give me no benefit. I suspect most high earners wouldn't care all that much...I wouldn't have when I was working

I'd agree that raising or eliminating the wage cap is likely. The reason is because it concentrates the pain for the solution on a small number of people and lets the majority off the hook for any changes.

I'm at the end of my wage earning career, 33 years of wages above the cap so far, including 12 years as self employed. I am one who definitely would have minded raising the cap while working and to be consistent I wouldn't support it now even though it would be to my benefit. The "black box" of SS already includes a very heavy dose of income redistribution "welfare" and raising or eliminating the cap just increases the "welfare" aspect. I'm not against welfare as a concept, but the general welfare should be paid for from the general fund, not on the backs of a small percentage of workers with higher earned income.

If I had to predict when SS will get "fixed", I would guess it will happen when the majority of congress still expects/hopes to be in their seats at the time the hammer would fall. Since SS is funded until 2034 (16 years from now), I would bet you'll see more interest in tackling it 4-6 years from now.

 

[pb4uski]

xx

I'm confused. Is that two hugs? One for me and one for marko?

 

[alaska55]

Agreed. I think significant changes for the younger crowd who aren't paying attention are more likely than a big haircut for us older folks. When they last fixed the system 30+ years ago, I was a 20-something and SS was not even on my radar screen.

Let me guess there was no internet and social media in 1983.

 

[jollystomper]

If I had to predict when SS will get "fixed", I would guess it will happen when the majority of congress still expects/hopes to be in their seats at the time the hammer would fall. Since SS is funded until 2034 (16 years from now), I would bet you'll see more interest in tackling it 4-6 years from now.

+1000


Until not fixing it directly impacts themselves, or their ability to get re-elected, I do not expect changes.



IMHO I will be shocked if anything happens before 2030. And maybe not until 2032, the last presidential election year before 2034.

 

[racy]

Lots of concern & ideas expressed here. Also, consider voicing your concerns to your government representatives, who have the power to do something: https://www.congress.gov/members

 

[marko]

I'm confused. Is that two hugs? One for me and one for marko?

I got my hug. Didn't you,PB?

 

[pb4uski]

I got my hug. Didn't you,PB?

Looks like he took it back (deleted the post).

 

[Rianne]

FIRE posters: Run for office! I think it is cruel to U.S. citizens to force us to create solutions to problems such as SS deficit. Saving SS is crucial to our society for a variety of reasons. Don't politicians get pretty nice salaries and perks like lifetime HC, pensions...I guess they get pensions and don't have to worry about SS. They get HC, I thought lifetime HC.



I'm befuddled as to why this issue and the solutions are not cramming the news cycles.

 

[joeea]

I'm befuddled as to why this issue and the solutions are not cramming the news cycles.

Because nothing is imminent.

Wait 12-15 years or so. Then it will be news.

 

[Crabby Mike]

Interesting that adding immigrants wasn't considered in the options the article presented.

Actually, it was the first option presented.

 

[Crabby Mike]

Don't politicians get pretty nice salaries and perks like lifetime HC, pensions...I guess they get pensions and don't have to worry about SS. They get HC, I thought lifetime HC.

Nice salaries, yes (Congresspeople get $174,000/yr.). Other benefits tend to be overstated in rumor mills, though -- they basically get the same health care and pension benefits as all other Federal employees, which are similar to Megacorp's. And no, not lifetime health insurance.

 

[marko]

Looks like he took it back (deleted the post).

Sorry, you can't take back a hug. What's done is done.

 

[MichaelB]

If Unemployment rates are actually so low, shouldn't that also increase the pool of payers into SS?

It will. But not enough to matter.

The unemployment rate does not measure the number of people working, it measures the number of people wanting work but currently not employed.

The total number of people working in the US is derived from the Labor Force Participation Rate, which over the past 15 years has fallen from around 67% to around 63%. While unemployment has been falling, more people have been leaving the work force, so the total employed has declined. Even if the unemployment rate went to 0, fewer people would still be working, compared with two decades ago.

This number is projected to decline even more over the next decade, meaning even fewer people will be paying into SS. BLS projects this to decline to 61% by 2026. This biggest factor here is due to boomers retiring. This is one of the issues with SS funding.

​

 

[Offgrid Organic Farmer]

At this point, I think it is a guess.

Whatever you do, do not rely on SS to be your sole or even primary support.

 

[Spock]

I don't see immigration, or growth of any kind, "solving" the SS shortfall.
Most immigrants are at the very bottom of the wage scale
while automation/globalization (off-shoring) monkey hammers the higher wage jobs. (ignore that immigrants have doubled the amount of $ they send to their home country). Since SS transfers more $ to lower incomes, those minimum wage contributions to SS would not match the SS benefits those worker would collect later.

Without starting a diatribe on all of societies ills that will prevent historical "grow you way out of it", the education system needed to drive growth is in a shambles... while drop out rates are supposedly dropping, the reading, comprehension, math, etc scores are still dropping. Debt is skyrocketing without being invested in infrastructure to enable growth. Healthcare is going to be a major suck on economic growth. etc. etc. etc.

 

[gwraigty]

(3) I would raise the (full) retirement age to not more than 68, phasing it like before, but not in a way which affects anyone previously affected by the 1983 change. That is, don't move the goalposts twice for those who already had them moved once.

I agree wholeheartedly, being among those who already have had their FRA moved from 65 to 67. Unfortunately, some of the proposals do include moving those goalposts again, for anyone not turning 62 by 2022.

 

[Crabby Mike]

I agree wholeheartedly, being among those who already have had their FRA moved from 65 to 67. Unfortunately, some of the proposals do include moving those goalposts again, for anyone not turning 62 by 2022.

Since everyone born in 1938 and after had their "goalposts" moved, i.e. everyone under 80 today, who would you exclude?

 

[Crabby Mike]

To put it another way, in 1983 they raised FRA for everyone who was then under 45 years old, presumably thinking they had enough time to adjust their retirement plans. I'm guessing lots of folks on this forum would not appreciate that happening today!

 

[scrabbler1]

Since everyone born in 1938 and after had their "goalposts" moved, i.e. everyone under 80 today, who would you exclude?

What I mean is that if someone was already old enough to be paying into SS before the 1983-84 reform went into effect, then their FRA was only 65, and for some of us (if born after 1960) it instantly jumped to 67. What I suggest is that our FRA is frozen at whatever the 1983-84 reform set it at, and not raise it again.

From a practical perspective, this would mean anyone born before, say, 1965 or 1966 (making them around 18 years old at the time of the 1983-84 reform) would not see a second increase to their FRA. Only those born after that, those who never had their FRA age changed after they were old enough, theoretically, to be paying into SS, could see their FRA changed, and not beyond 68.

 

[BigE]

Well just follow the votes. Baby Boomers collecting SS = **** ton of votes. Risk the votes and reduce benefits OR simply raise the amount subject to SS taxes and raise the eligibility age for benefits. No brainer in my mind.

 

[pb4uski]

FIRE posters: Run for office! I think it is cruel to U.S. citizens to force us to create solutions to problems such as SS deficit. Saving SS is crucial to our society for a variety of reasons. Don't politicians get pretty nice salaries and perks like lifetime HC, pensions...I guess they get pensions and don't have to worry about SS. They get HC, I thought lifetime HC.



I'm befuddled as to why this issue and the solutions are not cramming the news cycles.

Not running.... that would be returning to work so NFW!

On the last part... over the last year or so I have had to set a few well meaning conservative friends and relatives straight that congress and their staffs have to use ACA like the rest of us (though part of the cost is picked up by the employer the same as employees of other large organizations) and that if a congressperson serves one term that they do not get a lifetime pension. Unfortunately, there is a lot of ignorance out there that just a little googling would straighten out.

 

[gwraigty]

Since everyone born in 1938 and after had their "goalposts" moved, i.e. everyone under 80 today, who would you exclude?

In 1983, the goalposts were moved for anyone born after 1960. The oldest of that group was only 23 then. I was 20. Moving FRA from 65 to 67 for that age group wouldn't/shouldn't have had a material effect on when or if they could afford to retire in their mid-60's.

I don't have an exact answer. I think generally that moving the goalposts again for people who are within 10 or so years of their FRA of 67 isn't the right way to go about it.

 

[Which Roger]

I don't see immigration, or growth of any kind, "solving" the SS shortfall. Most immigrants are at the very bottom of the wage scale

Not the immigrant engineers who I worked with at high-tech MegaCorp.

 

[Crabby Mike]

In 1983, the goalposts were moved for anyone born after 1960. The oldest of that group was only 23 then. I was 20. Moving FRA from 65 to 67 for that age group wouldn't/shouldn't have had a material effect on when or if they could afford to retire in their mid-60's.

I don't have an exact answer. I think generally that moving the goalposts again for people who are within 10 or so years of their FRA of 67 isn't the right way to go about it.

Not to be picky, but they were moved for everyone born in 1938 or later. I imagine you're thinking 1960 because that's where the FRA currently flat-lines at 67. I was born in 1953, was 30 when the law changed (and had been paying into the system for 14 years), and my FRA moved from 65 to 66.

 

[Huston55]

On the last part... over the last year or so I have had to set a few well meaning conservative friends and relatives straight that congress and their staffs have to use ACA like the rest of us (though part of the cost is picked up by the employer the same as employees of other large organizations) and that if a congressperson serves one term that they do not get a lifetime pension. Unfortunately, there is a lot of ignorance out there that just a little googling would straighten out.

Correct. They must use ACA while serving but, are eligible for guaranteed lifetime health care (FEHB) upon retirement after >5yrs of service.

Five yrs of service (one Senatorial term or three Representative terms) qualifies a retired congress person to a lifetime pension which is based on years of service and collectible at age 62.

IMO, most of this is in line with other large employers, with the exception of guaranteed lifetime health insurance, which is quite valuable.