ziggy29
Moderator Emeritus
Since when? I thought it was 42....And the answer is ...
20
Since when? I thought it was 42....And the answer is ...
20
* Even if it's more than you need, withdraw just enough from IRAs and 401Ks to be just below some threshold of increased tax rates or means-testing, and transfer it into your bucket of already-taxed wealth to withdraw from later.
But, if your tax rate is the same when you withdraw it as when you would have withdrawn it (later), then it's (almost) a wash, right?The problem with that is the money is taxed as income when you take it out, and then the gain is taxed again if you don't need it all. UGH!
But, if your tax rate is the same when you withdraw it as when you would have withdrawn it (later), then it's (almost) a wash, right?
*excepting the effects of compounding you lose when you pay the tax on the growth every year vs paying the tax on the accumulated gain when it is withdrawn. This is a small amount, IIRC, under most timeframes/growth rates. Or, I could be wrong.
I had the same question. How will means testing be done? I don't see how it would work if its based on AGI. That can be manipulated. Seems like it would have to consider your net worth in some fashion. But that gets complicated quickly as well.
It's sad to see this being discussed. But I understand why even if it is all so regretable.
My projected ER date will be drastically off base should SS be unavailable as currently planned.
I think it's a good idea. SS was started when the life expectancy was much lower than it currently is. I also think any changes should have a fairly long phase in period. So those who are within 10-15 years of retiring, wouldn't have any changes to their system. Then phase it in over the course of five or six years. Raise all ages for SS. Even the early retirement age should get raised by two or three years. If it were up to me, and I know it isn't, I'd try to tie it to life expectancy at a selected age, so it wouldn't need to be adjusted again.
Do away with cushy Congessional pensions and replace them with the same SS benefits, age requirements, and means testing they are proposing for the rest of us... Problem solved.
Go back and read what you are responding to. Nowhere was it asserted that Congress doesn't pay into SS. You're reading something into it that wasn't said.Do you really believe that virtually Members of Congress are not in social security?
This is such an incredibly old urban legend that I'll reprint the whole thing
Go back and read what you are responding to. Nowhere was it asserted that Congress doesn't pay into SS. You're reading something into it that wasn't said.
The point is that if Congress wants to means test SS and raise the full age to 70, they should do the same to their own Congressional pensions or forego their own pensions. (Which would mean most of them, regardless of party, would get nothing from them in either case.)
Lead by example, y'know?
I guess that wasn't covered in the part where I said "or forego" their Congressional pensions.This is a demand to eliminate congressional pensions, not change them as you suggest
the request is that the Pensions be REPLACED
Go back and read what you are responding to. Nowhere was it asserted that Congress doesn't pay into SS. You're reading something into it that wasn't said.
The point is that if Congress wants to means test SS and raise the full age to 70, they should do the same to their own Congressional pensions or forego their own pensions. (Which would mean most of them, regardless of party, would get nothing from them in either case.)
Lead by example, y'know?
Thanks, Ziggy. At least you read the post before responding with a diatribe. I say forego Congressional pensions altogether- Congress was never intended to be a full-time Government career, with lifetime perks and benefits. If they were relying on SS for their retirement like 99% of their constituents, they might get serious about fixing and funding the problem. Just like the health care issue.
It may be that Americans are living longer. However this chart doesn't support that conclusion. This chart mainly supports the better infant mortality stats than that we are living longer.
To support your conclusion you need a mean age at death chart or something equivalent.
I'm sorry, but you not me, misread the post
the precise quote was
"Do away with cushy Congessional pensions and replace them with the same SS benefits, age requirements, and means testing they are proposing for the rest of us... Problem solved."
This is a demand to eliminate congressional pensions, not change them as you suggest
the request is that the Pensions be REPLACED
The total claim was that there were Cushy Congressional pensions that should be "replaced" with "The same SS etc." That is clearly a statement that Congress is not covered by SS.
According to the neat WolframAlpha knowledge engine Martha recently steered us to:
-- In 1935, the average person reaching 65 in the US could expect to live to be 77.76 years old, thus drawing on SS for 12.76 years.
-- In 2005. the average person reaching 65 in the US could expect to live to be 83.82 years old, thus drawing on SS for 18.82 years.
So, the average senior is drawing checks for about 1/3 longer now than when the program started. Add in all the other benefits that SS didn't have in the beginning (for kids, disability, etc) plus the demographic changes, and it's easy to see why the Ponzi scheme (beloved as it is) is in trouble.
(snip)And exactly where are all these extra jobs going to come from, to say nothing about the rampant age discrimination that already exists even below age 65?
That, to me, is the main hurdle which is often ignored in this discussion. Mathematically, yes, raising Social Security's retirement age makes sense. People live longer, they should work longer, I have no problem with that logic. Reality is a tad different though. I already know too many people whose career imploded in their 50's and that are just fighting for survival until they can get some relief from a SS check. But perhaps, surviving is all we should expect in the future...
IIRC (and I don't - not old enough to know this first hand) - one of the original selling points of social security was the idea that many older workers would leave the workforce and open up jobs for younger folks. Before social security, I think most people worked until they died.
I think it's a good idea. SS was started when the life expectancy was much lower than it currently is. I also think any changes should have a fairly long phase in period. So those who are within 10-15 years of retiring, wouldn't have any changes to their system. Then phase it in over the course of five or six years. Raise all ages for SS. Even the early retirement age should get raised by two or three years. If it were up to me, and I know it isn't, I'd try to tie it to life expectancy at a selected age, so it wouldn't need to be adjusted again.
If the average 65 YO can now expect to live 18 more years, then allowing someone to start taking withdrawals at 50 would mean a monthly check of less than 1/2 of the full retirement amount. For many workers, that will be below the government poverty line, which will mean more transfer payments from the taxpayers for these "can't afford it but want to quit" early retirees. Plus the already mentioned taxpayer subsidies for health insurance for low income folks (who,because they quit work at 50 haven't yet reached 65 and the Medicare eligibility). Once you start piling on the gravy, it's hard to stop.Maybe adding another level of Social Security benefits would address this issue. Set the ages for early retirement, "full" retirement and late retirement (currently 62, 65-67, and 70) to float with increasing life expectancy, but make "emergency retirement" available to anyone who has paid into the SS system for enough quarters to be eligible for benefits and is over 50. I would leave that as a fixed age, because it's more a function of what age makes it difficult to find another job than of life expectancy. Make the amount actuarially equivalent to full retirement, so the cost to the system will be the same regardless of the age a person retires at.