Article - 35% of Millionaires won't be able to retire

[isisdave]

Perfect candidates for arm chair travel.

Just today I was wafting down the Amazon in 4K: https://www.bbc.co.uk/programmes/b0bx73pk

No knowing where I'd fetch up tomorrow.

Oh, THAT Amazon ....

 

[wannabefire]

I'm surprised no-one picked up on the line in the article



I assume they mean SS. And I know there are plenty of people on this board (a very atypical selection of people compared to the general population) who could still be comfortable with no SS... But most folks (including myself) assume SS will be there... my retirement would be much more frugal if SS were taken away. I'm not collecting yet - but I input it in firecalc when I run firecalc...

I actually find it offensive to call SS "public assistance". That is my money. I paid in and I expect to be able to get paid out. Does anyone else think this way, or am I just cranky at the end of the week?

 

[Car-Guy]

I actually find it offensive to call SS "public assistance". That is my money. I paid in and I expect to be able to get paid out. Does anyone else think this way, or am I just cranky at the end of the week?

Maybe you are, I don't know, but anytime I see/hear/read about SS being called anything related to "assistance/charity/government aid/etc", it PO's me to no end. Entitlement is a better term but even that bugs me... Still sounds like some sort of give away program. I rather say, it's owed to me through a lifetime of forced payments/taxes. Maybe the Government Managed Annuity Program" (GMAP) or Government Re-Fund Program (GRFP) or something like that would be more acceptable (to me anyway). Good luck finding two people that would agree on such a name.

Now, anything/discussion that would cut my benefits, is another topic that PO's me even more or what they have done with Medicare and IRMAA.

 

[Fermion]

I actually find it offensive to call SS "public assistance". That is my money. I paid in and I expect to be able to get paid out. Does anyone else think this way, or am I just cranky at the end of the week?

No, you are correct. SS to me is no different from a public pension. It should be honored the same.

 

[Gumby]

Sorry to disappoint, but the U.S. Supreme Court has ruled that you have no Constitutionally protected property right in Social Security. Congress could take it away. See Flemming v. Nestor, 363 U.S. 603 (1960) https://caselaw.findlaw.com/us-supreme-court/363/603.html

 

[NW-Bound]

Sorry to disappoint, but the U.S. Supreme Court has ruled that you have no Constitutionally protected property right in Social Security. Congress could take it away. See Flemming v. Nestor, 363 U.S. 603 (1960) https://caselaw.findlaw.com/us-supreme-court/363/603.html

Even the Web site SS.gov had information on the case of Flemming v. Nestor. I saw it there, but don't know if it is still there.

 

[ejman]

I'm on two cancer meds. They work fabulously -- the otherwise-incurable cancer is in remission, no side effects -- but they don't come cheap. $1000 per DAY.

Medicare has about a $7000 "deductible" (not really but close enough) and after that part D pays 95%. But 5% of $30k per month is $1500 per month. Plus over $500 per month for the "deductible." So even though I have full coverage, it would be $25k out of pocket per year just for the meds.

Fortunately my doc got me into a program where the pharma cos provide the drugs for free. Don't ask me how that works, but I ain't complainin'.

Yes, I'm hopeful that the pharma co will help out with my deductible. I really don't understand how our system works. It seems Pharma charges these astronomical list prices. Then Insurance covers a portion of I guess the astronomical price and then pharma waives the rest of same astronomical price. It would be interesting to find out what portion of the astronomical price is collected by Pharma and who pays for what. We sure have a crazy system here particularly with these new drugs.

 

[explanade]

I'm on two cancer meds. They work fabulously -- the otherwise-incurable cancer is in remission, no side effects -- but they don't come cheap. $1000 per DAY.

Medicare has about a $7000 "deductible" (not really but close enough) and after that part D pays 95%. But 5% of $30k per month is $1500 per month. Plus over $500 per month for the "deductible." So even though I have full coverage, it would be $25k out of pocket per year just for the meds.

Fortunately my doc got me into a program where the pharma cos provide the drugs for free. Don't ask me how that works, but I ain't complainin'.

Drug companies provide coupons or have programs for those high priced drugs, but they may have income ceilings for the patients.

They didn't ask you to provide information about your financials?

 

[Car-Guy]

Sorry to disappoint, but the U.S. Supreme Court has ruled that you have no Constitutionally protected property right in Social Security. Congress could take it away.

I've heard this before and yep they could pull something like this I suppose, but it doesn't make it right. Personally, I won't be surprised[-] if ([/-]sorry when) they cut or eliminate benefits for some of us. Did I mention that PO's me?


I'd love to tell you how I feel about this but no doubt I'd violate most/all of the forum rules.

 

[NW-Bound]

During the Great Recession of 2008-2009, the fear of not having enough money to retire was a hot topic on this forum when the market got pummeled to 1/2 of its peak value. And of course people talked about how SS would hold up, and the case of Flemming v. Nestor was also brought up.

I remember that at that time, out of curiosity I looked into how other nations did their SS program. And if I recall correctly, I found out that Australia reformed its SS program to turn it into an assistance program with means testing. In return, they also turn the mandatory SS contribution into a portable 401k/IRA that people can move from job to job.

The above freed up the gummint from having to guarantee an SS income, which is tough because investment returns can vary all over the place. If the economy and the market tank, everybody takes a pay cut. Nobody gets guaranteed for anything. The only guaranty is for basic subsistence so that you don't become homeless.

I liked that a lot. It forces people to save like SS, but it goes into their real personal account. No Flemming v. Nestor here. In exchange, they have to live with the vagaries of the market. It will force them to learn more about the economy and business conditions.

And if they fail to provide for themselves in the old age, there's still that means-tested basic SS. I recall that it was higher than SSI in the US.

 

[Gumby]

....
I'd love to tell you how I feel about this but no doubt I'd violate most/all of the forum rules.

I'm sure we feel much the same about this, but I spent an entire professional life knowing that the law is what it is, not what I would like it to be.

 

[Samsung4321]

40237.6

Australia reformed its SS program to turn it into an assistance program with means testing. In return, they also turn the mandatory SS contribution into a portable 401k/IRA that people can move from job to job.

And if they fail to provide for themselves in the old age, there's still that means-tested basic SS. I recall that it was higher than SSI in the US.

Aus SS seems to directly encompass more welfare benefits than USA SS:
https://en.wikipedia.org/wiki/Socia...l_Security_Act_and_the_Student_Assistance_Act

Age pension has been means tested since inception, non-contributary and not related to employment - hence is welfare; max couple:

= (26 * 1547.6) * ((935000 - MIN(935000, MAX(419000, 419000))) / (935000 - 419000))
= $A40,237.60 / y

where 419000 = assessable assets (not including home).

Additional and separate is Superannuation - tax concessional (15%) mandatory (10% of wage) and voluntary (<= $A27,500 / y), and non-concessional (< = $A110,000 / y) contributions for retirement. Owned by the individual. Can be Self Managed Superannuation Fund and / or accounts in pooled funds. Retirement withdrawals tax free.

I think there's a misplaced parenthesis in your formula.

Computed correctly, was a superfluous ().

 

[NW-Bound]

^^^ Thanks. This confirms what I remember.

The public assistance pension of $A 40K is way higher than SSI in the US, which is $15,132 for a couple who are both eligible. Additionally, the means-tested assets of $A 419K is HUGE, particularly as it does not include one's house. I don't happen to know the means-tested value for the US SSI but remember that it is minuscule.

By the way, I think there's a misplaced parenthesis in your formula. It does not look right, but I have not tried to correct it.

 

[Pellice]

Perfect candidates for arm chair travel.

Just today I was wafting down the Amazon in 4K: https://www.bbc.co.uk/programmes/b0bx73pk

No knowing where I'd fetch up tomorrow.

Sorry, this is OT for this thread, but I really, really want to watch this series and especially this episode (I am planning to gradually travel the whole length of the Amazon), but it says on the site that the episode is not available. I suppose this is something you need an extra BBC subscription for?

 

[athena53]

I rather say, it's owed to me through a lifetime of forced payments/taxes. Maybe the Government Managed Annuity Program" (GMAP) or Government Re-Fund Program (GRFP) or something like that would be more acceptable (to me anyway). Good luck finding two people that would agree on such a name.
(

Remember when your SS contribution was labeled "FICA" on your pay stub? It stood for Federal Insurance Contributions Act, which always steamed me because no insurance company would be permitted to run on a pay-as-you go basis. Regulators would declare it insolvent.

<snip> I found out that Australia reformed its SS program to turn it into an assistance program with means testing. In return, they also turn the mandatory SS contribution into a portable 401k/IRA that people can move from job to job.

The above freed up the gummint from having to guarantee an SS income, which is tough because investment returns can vary all over the place. If the economy and the market tank, everybody takes a pay cut. Nobody gets guaranteed for anything. The only guaranty is for basic subsistence so that you don't become homeless.

I liked that a lot. It forces people to save like SS, but it goes into their real personal account. No Flemming v. Nestor here. In exchange, they have to live with the vagaries of the market. It will force them to learn more about the economy and business conditions.

And if they fail to provide for themselves in the old age, there's still that means-tested basic SS. I recall that it was higher than SSI in the US.

Does the government make the investment decisions? Just curious- a large % of the population just isn't equipped to make those decisions, some through lack of interest, some through lack of smarts.

 

[Time2]

Remember when your SS contribution was labeled "FICA" on your pay stub? It stood for Federal Insurance Contributions Act, which always steamed me because no insurance company would be permitted to run on a pay-as-you go basis. Regulators would declare it insolvent.

Oh don't worry, the taxpayers have plenty of money to tap.

 

[NW-Bound]

Does the government make the investment decisions? Just curious- a large % of the population just isn't equipped to make those decisions, some through lack of interest, some through lack of smarts.

I believe the trustees offer some investment choices that are safe and similar to those available in the US 403b or FERS TSP.

And similarly, people cannot put retirement money in individual stocks, or crypto.

 

[marko]

I believe the trustees offer some investment choices that are safe and similar to those available in the US 403b or FERS TSP.

And similarly, people cannot put money in individual stocks, or crypto.

Serious question: who are these "trustees"? I hear about them but they never seem to be identified.

 

[NW-Bound]

Serious question: who are these "trustees"? I hear about them but they never seem to be identified.

I think Australians can have their accounts with a bank, a brokerage, a financial institution. It would be similar to the administration of 401k and 403b here.

Samsung who's an Australian can tell us more.

PS. The main difference is that Australian accounts are said to be portable. This would mean that the trustee you choose is not associated with your current employer. I could be wrong.

 

[Crabbyjerry]

Northern Italy

How long were you gone?

After spending 1 month in northern Italy, we both decided that doing that once per year was plenty. In the past, we took European trips as long as 6 weeks.

When RV'ing, we could be gone for 1-1/2 to 2 months.

May I ask what town or towns you visited in northern Italy?

 

[Fermion]

Sorry to disappoint, but the U.S. Supreme Court has ruled that you have no Constitutionally protected property right in Social Security. Congress could take it away. See Flemming v. Nestor, 363 U.S. 603 (1960) https://caselaw.findlaw.com/us-supreme-court/363/603.html

Well yes, but there is law and then there is reality. Take for example the recent bailout of some union pensions to the tune of $90 billion:

https://thehill.com/opinion/finance/3559022-bidens-pension-guarantee-stretches-the-law-to-bail-out-unions/

This was not required by law but still happened because to do otherwise would risk stability. It would be the same with SS. To dissolve it now would cause a great uprising, so they won't do that. Most likely they will dump a ton of money into the system when absolutely nothing else has worked.

 

[NW-Bound]

May I ask what town or towns you visited in northern Italy?

To avoid hijacking the thread more than necessary, please see:

https://www.early-retirement.org/forums/f46/flight-snafu-at-ba-and-aa-114876-2.html#post2868287

 

[Gumby]

....

This was not required by law but still happened because to do otherwise would risk stability. It would be the same with SS. To dissolve it now would cause a great uprising, so they won't do that. Most likely they will dump a ton of money into the system when absolutely nothing else has worked.

I make no prediction about what our representatives in Congress will or won't do, but I do think it wise for retirement planning to keep in mind that it will be a political choice to do anything and that we have no legal right to continued, unreduced social security.

And a minor quibble, if I may. We already know what will work. Things like increasing the wage cap, delaying full retirement age, increasing the SS tax rate, etc. The effects have been quantified for some time. And the sooner we start on them, the smaller the magnitude of the change required. But I am convinced that some of them are inevitable.

So it won't be "dump a ton of money into the system when absolutely nothing else has worked." It will be when Congress finally bows to the inevitable and makes changes that will work, but the changes will be larger than they could have been if they had acted sooner.

 

[marko]

I make no prediction about what our representatives in Congress will or won't do, but I do think it wise for retirement planning to keep in mind that it will be a political choice to do anything and that we have no legal right to continued, unreduced social security.

And a minor quibble, if I may. We already know what will work. Things like increasing the wage cap, delaying full retirement age, increasing the SS tax rate, etc. The effects have been quantified for some time. And the sooner we start on them, the smaller the magnitude of the change required. But I am convinced that some of them are inevitable.

So it won't be "dump a ton of money into the system when absolutely nothing else has worked." It will be when Congress finally bows to the inevitable and makes changes that will work, but the changes will be larger than they could have been if they had acted sooner.

Why we don't eliminate the wage cap and make it open-ended is beyond me. The argument is that it becomes 'unfair' to higher earners, and yes, I was a higher earner and reached my cap sometime each February. I wouldn't have cared if it went all year.

The fact is there are a lot of taxes placed upon high earners that nobody seems to care about. I just never could understand this one.

 

[Gumby]

I also used to reach the cap in February and would never have noticed or cared if I didn't. The way I see it, if you just create another bend point so that people get a little something back, it will be palatable to most who are over the current limit.