Changes Americans are willing to make to fix Social Security

[GenXguy]

It is true that ACA provides more benefits to pre-65 people than Medicare to the 65+ crowd. I mean people who get ACA subsidy, else it's not inexpensive at all.

Hence, a lot of people got a sticker shock when they crossed the age threshold, transitioned from ACA to Medicare, and found out they had to pay more. But if you don't get ACA subsidy, you will love Medicare.

But the person I was speaking of didn't get an ACA subsidy and didn't pay into Medicare to qualify for free part A, so in addition to all the other premiums that most of us have to pay, this person also has to pay about $500/mo for Part A. This person was on Medicaid under the ACA so wasn't paying anything at all, and is now faced with $1000+ premiums for parts A, B, D, Supplemental, and then there are out of pocket costs on top of that. So in this case, we're talking about a much bigger sticker shock than the ACA marketplace plan to Medicare (with free part A). Basically unaffordable yet can't qualify for traditional Medicaid or SS benefits.

 

[NW-Bound]

But the person I was speaking of didn't get an ACA subsidy and didn't pay into Medicare to qualify for free part A, so in addition to all the other premiums that most of us have to pay, this person also has to pay about $500/mo for Part A. This person was on Medicaid under the ACA so wasn't paying anything at all, and is now faced with $1000+ premiums for parts A, B, D, Supplemental, and then there are out of pocket costs on top of that. So in this case, we're talking about a much bigger sticker shock than the ACA marketplace plan to Medicare (with free part A). Basically unaffordable yet can't qualify for traditional Medicaid or SS benefits.

OK. The US laws are so complex and contradictory at times.

It's a screwball system that I don't think any other developed countries have.

You cannot make this up.

 

[pb4uski]

You're not reading the full post or my earlier suggestions about how to cut costs. In the specific post you responded to, I mentioned eliminating spousal benefits when both spouses are living. And yes, for many people, the benefits needs increased. This would need offset with other changes.

Spousal benefits are a nit and will have negligible impact which is why you don't see that proposed anywhere.

 

[pb4uski]

How can someone not qualify for free Part A unless they haven't paid in for 40 quarters, and in that case why would the think that they are entitled to anything at all?

No tickie, no laundry.

 

[PERSonalTime]

Raise the cap on SS wages. Raise it to $400k.

+1

 

[GenXguy]

How can someone not qualify for free Part A unless they haven't paid in for 40 quarters,

Duh! You answered your own question. And those are those 1.4% that you mentioned just up-thread that don't qualify for SS benefits for the same reason - not paying in for 40 quarters.

I would rather those "1.4%" people receive benefits than the spousal benefits that are paid out to people that certainly didn't earn them. Spouses who didn't pay in for 40 quarters should not be entitled to anything. And if they did pay in for 40 quarters, they should only be entitled based on their own contributions, not their spouse's.

 

[Aerides]

For those so against a spouse with less than 40 quarters receiving any benefits, hopefully you are aware that in many cases, these are family decisions. Young parents decide, together, that one will stay home, usually the wife.

"She can go back to work when they go to school!" - maybe, maybe she has more than 2 children, maybe over several years, maybe home schools them, so there is no free time.

"She can go back when they are out!" - maybe, but you try getting a decent paying job at 50+ with no work history. A family that planned for her to stay home might not have any reason for her to go out and start making $15 an hour.

Maybe both spouses decide they'd rather the one continue to stay home, Or now their parents are aging so the SAM spouse becomes a care giver. MIL has a fall and moves in. Oldest kid has their own children, so now babysitting the gkids, etc.

There are many - valid - reasons that a couple can and do decide, jointly, that one will stay home for the duration, and the other will provide outside income.

And such couples tend to produce more future tax payers to help the system than the average family, so penalizing one of them doesn't help the big picture.

 

[Bigdawg]

For those so against a spouse with less than 40 quarters receiving any benefits, hopefully you are aware that in many cases, these are family decisions. Young parents decide, together, that one will stay home, usually the wife.

"She can go back to work when they go to school!" - maybe, maybe she has more than 2 children, maybe over several years, maybe home schools them, so there is no free time.

"She can go back when they are out!" - maybe, but you try getting a decent paying job at 50+ with no work history. A family that planned for her to stay home might not have any reason for her to go out and start making $15 an hour.

Maybe both spouses decide they'd rather the one continue to stay home, Or now their parents are aging so the SAM spouse becomes a care giver. MIL has a fall and moves in. Oldest kid has their own children, so now babysitting the gkids, etc.

There are many - valid - reasons that a couple can and do decide, jointly, that one will stay home for the duration, and the other will provide outside income.

And such couples tend to produce more future tax payers to help the system than the average family, so penalizing one of them doesn't help the big picture.

^I'm fine with all off that. So basically the SAHM/D hasn't contributed (financially) for the whole time these two have been a couple. When SS time rolls around I want ONE SS check coming into that family. They survived 30+ years with only one income so why should they get TWO SS checks? When the primary bread winner (who is now receiving SS) passes, I am fine with the non bread winner receiving the former (deceased) spouses SS check. But to receive a spousal (50%) check while the primary is still alive is wrong in my book.

 

[RetireBy90]

Too much politics here. Unsubscribe before I get thrown off again

 

[ivinsfan]

^I'm fine with all off that. So basically the SAHM/D hasn't contributed (financially) for the whole time these two have been a couple. When SS time rolls around I want ONE SS check coming into that family. They survived 30+ years with only one income so why should they get TWO SS checks? When the primary bread winner (who is now receiving SS) passes, I am fine with the non bread winner receiving the former (deceased) spouses SS check. But to receive a spousal (50%) check while the primary is still alive is wrong in my book.

How do you feel about people drawing SS with minor children. They will get additional money for each kid usually until the child turns 18. They can flush that one first IMO.

 

[pb4uski]

How do you feel about people drawing SS with minor children. They will get additional money for each kid usually until the child turns 18. They can flush that one first IMO.

^I'm fine with all off that. So basically the SAHM/D hasn't contributed (financially) for the whole time these two have been a couple. When SS time rolls around I want ONE SS check coming into that family. They survived 30+ years with only one income so why should they get TWO SS checks? When the primary bread winner (who is now receiving SS) passes, I am fine with the non bread winner receiving the former (deceased) spouses SS check. But to receive a spousal (50%) check while the primary is still alive is wrong in my book.

On the first part, I agree with respect to retirement benefits but not survivor benefits but I think ivansfan was referring to just retirement benefits.

On the second part, even though we will benefit some from the current practice since my PIA is more than twice DW's PIA since DW was a SAHM who did do some part-time work outside the home, I agree in principle that benefits should be based on your own work record. At the same time, I think the impact of such a change is negligible which is why you don't hear anything about changing that as a reform other than from GenXGuy and a few others on this forum.

 

[ivinsfan]

Yes my comments about minor children wouldn't include survivors benefits because that would be one check per earner not 2 per earner like spousal

 

[Gumby]

In the example of someone I know, they do have some income, which is why they were able to get by paying bills when they got Medicaid under the ACA. The assets are what allows the person to actually earn an income, so liquidating them would cause a whole other problem of no longer having an income. So basically, if people 65+ could get Medicaid under the ACA (or equivalent program) or if the person was able to get a benefit, such as SS, in order to pay for Medicare, the issue would be resolved.

I have been mulling over this post for the last day. If I understand you correctly, this person has heretofore gone through life as a capitalist (earning income from assets rather than labor), with all the financial benefits accruing to that status (most notably, not having to pay 7.65 % of that income straight off the top to Social Security and Medicare). And now you think that a program paid for by labor should help him out? I'm sure you can understand why those of us who have dutifully handed over a large chunk of our earnings to the system for 40+ years are reluctant to support that.

 

[NW-Bound]

I have been mulling over this post for the last day. If I understand you correctly, this person has heretofore gone through life as a capitalist (earning income from assets rather than labor), with all the financial benefits accruing to that status (most notably, not having to pay 7.65 % of that income straight off the top to Social Security and Medicare). And now you think that a program paid for by labor should help him out? I'm sure you can understand why those of us who have dutifully handed over a large chunk of our earnings to the system for 40+ years are reluctant to support that.

Yet, ACA provides assistance to this person who makes a living as a capitalist and not as a worker.

When I transitioned from ACA to Medicare, I learned that ACA could be continued if I did not qualify for Medicare. Or at least, that was what I understood the form was telling me.

If the above is true, then the above person should be able to continue the coverage with ACA.

 

[Gumby]

Yet, ACA provides assistance to this person who makes a living as a capitalist and not as a worker.

When I transitioned from ACA to Medicare, I learned that ACA could be continued if I did not qualify for Medicare. Or at least, that was what I understood the form was telling me.

If the above is true, then the above person should be able to continue the coverage with ACA.

As far as I know, the ACA is paid for out of general government revenues, which come from the tax dollars paid by everyone - capitalists and workers alike.

 

[NW-Bound]

As far as I know, the ACA is paid for out of general government revenues, which come from the tax dollars paid by everyone - capitalists and workers alike.

I don't disagree.

I was thinking this person could have continued with ACA, which even costs him less.

If he qualified for Medicare, then he had to transition out of ACA and to pay more.

 

[jollystomper]

I was bored so I went back and read a few OASDI reports from 1970 on. Here's what they said in each about when they would run out of money. Wonder what happened between 1995 and 2000?

One factor was the dotcom boom, which started pushing a salaries up at a much faster pace, there well even more well paying jobs and growing, downsizing had not yet hit so workers working a lot longer and not retiring as fast, etc. I guess they forecast with more workers and higher salaries coming into the future SS taxes would rise at a greater rate than those retiring.

 

[Bigdawg]

At the same time, I think the impact of such a change is negligible

Maybe. Here's what I found: Of the people receiving SS, 47,666,000 are retired workers. Spouses of retired workers is 2,113,000. So 4.4%. That would save a bit of money if spousal was eliminated. Obviously the problem would require many other tweeks. I would also eliminate children of retired (694,000)(1.5%). Not children of deceased.

 

[athena53]

For those so against a spouse with less than 40 quarters receiving any benefits, hopefully you are aware that in many cases, these are family decisions. Young parents decide, together, that one will stay home, usually the wife.

"She can go back to work when they go to school!" - maybe, maybe she has more than 2 children, maybe over several years, maybe home schools them, so there is no free time.

"She can go back when they are out!" - maybe, but you try getting a decent paying job at 50+ with no work history. <snip>Oldest kid has their own children, so now babysitting the gkids, etc.

I am really surprised at the number of my contemporaries who have ongoing commitments to taking care of grandchildren- especially those in HCOL areas. Typically it's not just one grandparent FT although that happens- more like day care is shared between two sets of grandparents (typically grandmothers). It's not just that the grandparents take care of kids for the day when they feel like it- they're on a fixed schedule and the family is depending on them for free daycare.

Very hard to get a well-paying job under those circumstances- and, if they're like me, I love my grandchildren to pieces but a day with them wears me out (they're 8, 5 and 3) and I'd need the off-days to rest.

 

[Magus]

It needs raised for who or starting when? For those under age 55+ when the change is implemented? Remember, the retirement age has already been raised from 65 to 67 for many of us.

It needs to be raised for everyone. If you need to modestly phase it in over time (like 2 months a year till we get 2-3 more years) and it still keeps SS solvent that's fine. The program was never supposed to be the majority of ones income in retirement and it was only supposed to be for about 3-5 years. Even with the 2 year increase the average person receiving SS is for 20+ years at this point, and nearly everyone qualifies even folks who didn't pay in much (like my wife will get half my SS) or at all. I'm only 40 so any age change will impact me fully but its the right thing to do. Yes, some people will have to work another year or two - so what- life isn't fair. The program is not self-sustaining and that needs to correct. It's the only even remotely fair pay in/receive program we have in government and even that is heavily skewed benefits for the bottom quarter and heavily reduced for the top quarter.

SS is less of a s!*^ show than medicare anyway. That's where the big issue is and honestly less good ways to fix that short of the dreaded "death" panels.

 

[GenXguy]

I have been mulling over this post for the last day. If I understand you correctly, this person has heretofore gone through life as a capitalist (earning income from assets rather than labor), with all the financial benefits accruing to that status (most notably, not having to pay 7.65 % of that income straight off the top to Social Security and Medicare). And now you think that a program paid for by labor should help him out? I'm sure you can understand why those of us who have dutifully handed over a large chunk of our earnings to the system for 40+ years are reluctant to support that.

Not in this case, the person only received the assets to earn the very low income a couple years ago and didn't go through life as a capitalist earning income from assets. Prior to these last couple years, no SS taxes had been paid for decades while the person worked at home taking care of the home and family.

There are many tax supported payouts out there (and otherwise proposed) that I don't support. The SS spousal benefits, college dept cancellation, UBI, large child tax credits, paid childcare, paid family leave, stimulus checks, and more, where money is given (or otherwise proposed to be given) to many well-off people that didn't earn it and don't really have the need for it. And then, poor people like I'm mentioning slip through the cracks. It's really unfortunate that the ACA Medicaid expansion has an age limit cap and that traditional Medicaid has an asset cap.

 

[GenXguy]

OK. The US laws are so complex and contradictory at times.

It's a screwball system that I don't think any other developed countries have.

You cannot make this up.

I agree with you completely on that.

Yet, ACA provides assistance to this person who makes a living as a capitalist and not as a worker.

Or more accurately and complete, the Medicaid expansion part of the ACA provided free healthcare for this very low income earner over just the last couple years.

When I transitioned from ACA to Medicare, I learned that ACA could be continued if I did not qualify for Medicare. Or at least, that was what I understood the form was telling me.

If the above is true, then the above person should be able to continue the coverage with ACA.

No, they can't. As I mentioned earlier, they have not earned the 40 quarters of credits to get "free" Part A (or even discounted) and will have to pay the $499/mo for that part alone. But they are still "eligible" to get Medicare, even though Part A won't be free. The cost this year for Part A is $499/mo for people who have not earned at least 30 credits. There is a partial discount for people who have between 30 and 40 credits, but this person doesn't even have 30.

I was thinking this person could have continued with ACA, which even costs him less.

If he qualified for Medicare, then he had to transition out of ACA and to pay more.

It was Medicaid expansion under the ACA specifically, so yes, the cost was much less (free) than it will cost for Medicare (with no free parts). And yes, they "qualify" for Medicare, which is why I mentioned that it will be very expensive to pay for Part A, B, D, and supplemental in my earlier post. They just don't meet the 30+ credits to get discounted Part A or 40+ credits to get free Part A.

Too bad it's an American citizen I guess. I understand if they were a foreign resident, they wouldn't be eligible for Medicare and could potentially stay on Medicaid under the ACA, although I'm not 100% if that only applies to marketplace plans or for expanded Medicaid as well, and there was no point in finding out that detail since this person is eligible for Medicare, albeit at much higher cost than most of us.

 

[GenXguy]

It needs to be raised for everyone. If you need to modestly phase it in over time (like 2 months a year till we get 2-3 more years) and it still keeps SS solvent that's fine.

OK, I would agree you regarding the slow phase-in if you start the change for people who are under 55 when implemented just as in previous SS changes that were proposed. An earlier poster stated for those born after about 1970 to see the increase in FRA since the older people had already seen an increase in their FRA age after they had already entered the workforce. And someone else mentioned holding off until the people born in 1980 or 1985 would see a change in the FRA, which is a pretty long delay, so it probably needs stepped up sooner than that. 55+ seems to be what I've heard mentioned the most for excluding from changes in SS benefits, and 60+ is cutting it close since a lot of people plan to take SS at 62.

Yeah, those spousal benefits you mentioned should be eliminated as mentioned in other posts. It doesn't make sense to be giving money to people who didn't pay in for 40+ quarters while cutting benefits for those that did. No one is getting "penalized" if you take away a benefit that they never earned in the first place.

 

[Magus]

OK, I would agree you regarding the slow phase-in if you start the change for people who are under 55 when implemented just as in previous SS changes that were proposed.

I'd prefer for it start for folks that are 60 and below if phased in slowly. There is nothing special about them vs someone 54 or 50 or even 30 for that matter. The end result is folks will have to have delayed benefits to keep the program solvent. Might as well rip the band aid off. That said, I'm aware of the reality that using 55 is less politically risking than 60.

 

[scrabbler1]

I'd prefer for it start for folks that are 60 and below if phased in slowly. There is nothing special about them vs someone 54 or 50 or even 30 for that matter. The end result is folks will have to have delayed benefits to keep the program solvent. Might as well rip the band aid off. That said, I'm aware of the reality that using 55 is less politically risking than 60.

I disagree. Someone who is 60 or even 55 is not only close to the earliest age for collecting SS (62) and would have difficulty changing his plans so late, but that person may have already left his or her job as early as age 55, the age at which someone can begin withdrawing from his 401k upon job separation. Such a decision to leave one's job is probably irreversible. Using 55 as the latest age to keep the FRA unchanged not only addresses my concern there, but it will (by the time any measure would pass) address my other concern about not having one's FRA change twice after entering the workforce and paying FICA taxes.