Changes Americans are willing to make to fix Social Security

[FANOFJESUS]

How about means testing say if you are worth more than 5-10 million you do not receive social security.

 

[athena53]

On the other hand recent reports have some of our leaders saying there is enough to expand the SS expenses. When younger I tried to manage my credit card debt with another credit card. I'm not sure giving more money to a dysfunctional system is a good thing. Hrmmm

That's why I'm not convinced that "allow more immigration so we have more younger people paying into the system" is a solution. That was in a video by Robert Reich that someone posted on FB years ago. Making unsustainable promises to more people to get their payroll taxes into the system is kicking the can down the road.

 

[almost there]

How about means testing say if you are worth more than 5-10 million you do not receive social security.

Net worth? Real-estate puts many over that.

No idea how it will end.

(a) Those that paid in do not want to take a reduction.

(b) Those paying taxes have had it paying taxes.

SS and Medicare tax was 2.2% in 1952.
14% in 1984. 1990 to 2022 its 15.3%.

 

[RetireBy90]

That's why I'm not convinced that "allow more immigration so we have more younger people paying into the system" is a solution. That was in a video by Robert Reich that someone posted on FB years ago. Making unsustainable promises to more people to get their payroll taxes into the system is kicking the can down the road.

I'm not convinced that any of the suggestions here or in the press are the answer either. The basic problem is more expenses than income.

Immigration has been part of the American experience and seems to have served us well. We need workers and immigrants want or need to be able to support families so seems on the surface to be a win-win solution. I know there are lots of downsides and I'm certainly not qualified to propose any details of how to accomplish this. My opinion is that first we need to know who we are allowing to live in the country then we can deal with the millions of people here undocumented or in violation of immigration law and welcome those who wish to contribute to society.



I don't have any sources but my understanding and I'm open to being wrong as I often am, is that we have the baby boomer generation to get through the system and the number of workers will revert to a more sustainable number of workers per retiree.

 

[almost there]

This kind of reminds me of when private Companies got rid of pensions in the 80's and 90's. I do not believe it was pure corporate greed, Its simply unsustainable if with 30-40 years retirement's. (Unlike the 5-10 years ret. paid prev.) In the end, its just math... Math that does not like to be talked about.

 

[camfused]

I hate math: it just does not add up. It's a sine of bad things. In the end, it divides us.

 

[athena53]

Immigration has been part of the American experience and seems to have served us well. We need workers and immigrants want or need to be able to support families so seems on the surface to be a win-win solution.

Totally agreed that legal immigration is a good thing for the US as a country- it's just not a solution to SS.

This kind of reminds me of when private Companies got rid of pensions in the 80's and 90's. I do not believe it was pure corporate greed, Its simply unsustainable if with 30-40 years retirement's. (Unlike the 5-10 years ret. paid prev.) In the end, its just math... Math that does not like to be talked about.

Sadly, those risks (fluctuating rates of return, longevity risk) ended up being passed on to the employees, most of whom are not equipped to handle it.

 

[Car-Guy]

I hate math: it just does not add up. It's a sine of bad things. In the end, it divides us.

Pretty good...

 

[pb4uski]

Totally agreed that legal immigration is a good thing for the US as a country- it's just not a solution to SS. ...

Legal immigration to the US is pathetically low... as I recall about 1 million immigrants a year and not near enough to, along with those already here, provide the workers that we'll need. We need to allow more legal immigrants... like my grandparents who came to the US to chase the American Dream and did it. The only thing that I ask is that like my grandparents that they work hard, obey the law, pay their taxes and most importantly, learn to read and speak English.

The fact that the SS taxes that they pay will help SS is the cherry on top.

 

[pb4uski]

How about means testing say if you are worth more than 5-10 million you do not receive social security.

That a bad idea for three reasons.

First and foremost, public support for SS is largely based on it being an entitlement program and not a welfare program since those who receive benefits are those who paid into the program. While the benefit formula is skewed to lower income workers, to add means testing would effectively make SS a welfare program and erode public support for the program.

The second reason is that we have no reliable way of doing means testing like that proposed so it would mean a whole new bureaucracy to administer it.

Finally, it is just a matter of time before the hurdles get lowered from $5-10 million to $1 million.

 

[JoeWras]

That a bad idea for three reasons.

First and foremost, public support for SS is largely based on it being an entitlement program and not a welfare program since those who receive benefits are those who paid into the program. While the benefit formula is skewed to lower income workers, to add means testing would effectively make SS a welfare program and erode public support for the program.

The second reason is that we have no reliable way of doing means testing like that proposed so it would mean a whole new bureaucracy to administer it.

Finally, it is just a matter of time before the hurdles get lowered from $5-10 million to $1 million.

And then there is the whole issue of what a pension is worth, and so on.

 

[copyright1997reloaded]

How about means testing say if you are worth more than 5-10 million you do not receive social security.

How about no.

As of Feb. 22 my social security contributions were $154,417 and from my employers $155,133 for a total of $309,550. None of this was I able to save or spend nor was I able to get a deduction for it. And I am still contributing with every pay check (at age 64+). Let's say my net worth is $5 million - you are saying that I shouldn't get social security because I was frugal all my life, scrimped on buying things, drove old cars, didn't take vacations, and worked longer and was able to accumulate $5 million in wealth, while someone else who earned the same but spent money like a drunken sailor does?

So I repeat, how about no.

 

[athena53]

The second reason is that we have no reliable way of doing means testing like that proposed so it would mean a whole new bureaucracy to administer it.

Well, we COULD tax SS based on MAGI. That, to me, is a means test.

 

[almost there]

That a bad idea for three reasons.

First and foremost, public support for SS is largely based on it being an entitlement program and not a welfare program since those who receive benefits are those who paid into the program. While the benefit formula is skewed to lower income workers, to add means testing would effectively make SS a welfare program and erode public support for the program.

The second reason is that we have no reliable way of doing means testing like that proposed so it would mean a whole new bureaucracy to administer it.

Finally, it is just a matter of time before the hurdles get lowered from $5-10 million to $1 million.

Agree, its all fun and games saying "tax the rich". Until they determine that, "you are rich". Making over say: 100k a yr. or what ever.....
I am against taxes. All added up, many pay 50%+ today. Thats not what it what it was supposed to look like. And yet, here we are.

 

[pb4uski]

Well, we COULD tax SS based on MAGI. That, to me, is a means test.

We've had threads on this before. It's actually the opposite of what you wrote.

Everyone would be taxed on 85% of SS benefits because on average 15% of benefits received represent the recipient's contributions and 85% represent employer contributions and interest... so taxation would be the same as contrbutory pension plans or non-deductible IRA withdrawals... but very broad brush.

However, to get it passed, they included a sweetener that less than 85% of SS would be taxed for lower income recipients so taxpayers with a low MAGI get a break. I don't have any problem with this.

 

[pb4uski]

Agree, its all fun and games saying "tax the rich". Until they determine that, "you are rich". Making over say: 100k a yr. or what ever.....
I am against taxes. All added up, many pay 50%+ today. Thats not what it what it was supposed to look like. And yet, here we are.

50% eh? So you're claiming that "many pay 50%+ today"... that there is someone somewhere out there with $100k of income that pays $50k in taxes? Or with $300k of income that pays $150k in taxes?

I think you need to provide examples and calculations because that is not believable.

 

[GenXguy]

Well, we COULD tax SS based on MAGI. That, to me, is a means test.

Instead of phasing out SS benefits based on savings or net worth, I think it would make more sense to reduce benefits based on other income. So, someone with a nice pension or a lot of passive investment income would see big cuts in SS benefits, for example, if they had a household income of $50K from other income sources. But, it would never cut the benefit completely, so rich people would still get a $1 and couldn't complain it was a welfare system.

I would just hate to see any change to the SS that would be a cut in benefits in the short or long term, such as reducing COLA, for current retirees or those within 10 years of SS age, unless they have $50K/yr of other income to supplement SS. After Medicare and taxes, SS benefits are already being cut every year. The formula for taxation of SS benefits is not indexed to inflation, so more benefits are taxable each year, affecting more people with higher taxes. And this is when they're being hit with higher living expenses than ever. For those without sufficient additional income, they actually need an increase in benefits vs. what is currently being done, so a lot of the suggestions I've seen about cutting benefits aren't good. Maybe for those that are at least 10 years from SS, the full retirement age should be raised slowly and give those people more time to prepare. I would be willing to pay higher FICA taxes to help shore up SS for those that really need it and cutting SS beneftis for households with $50K/yr in other income.

 

[pb4uski]

Instead of phasing out SS benefits based on savings or net worth, I think it would make more sense to reduce benefits based on other income. So, someone with a nice pension or a lot of passive investment income would see big cuts in SS benefits, for example, if they had a household income of $50K from other income sources. But, it would never cut the benefit completely, so rich people would still get a $1 and couldn't complain it was a welfare system.

I would just hate to see any change to the SS that would be a cut in benefits in the short or long term, such as reducing COLA, for current retirees or those within 10 years of SS age, unless they have $50K/yr of other income to supplement SS. After Medicare and taxes, SS benefits are already being cut every year. The formula for taxation of SS benefits is not indexed to inflation, so more benefits are taxable each year, affecting more people with higher taxes. And this is when they're being hit with higher living expenses than ever. For those without sufficient additional income, they actually need to an increase in benefits vs. what is currently being done, so a lot of the suggestions I've seen about cutting benefits aren't good. Maybe for those that are at least 10 years from SS, the full retirement age should be raised slowly and give those people more time to prepare. I would be willing to pay higher FICA taxes to help shore up SS for those that really need it.

NO! That would totally destroy the public's support for SS and effectively turn it into a retirement welfare program.

As previously mentioned by copyright1997reloaded in post#112, you could have two people with identical earnings records where one saved prudently for retirement and ends up with a nice retirement nestegg and the other spent and lived paycheck-to-paycheck and had no retirement savings and you would penalize the person that did what society encourages him to do... it would be stupid to reward fiscally reckless behavior.

 

[almost there]

50% eh? So you're claiming that "many pay 50%+ today"... that there is someone somewhere out there with $100k of income that pays $50k in taxes? Or with $300k of income that pays $150k in taxes?

I think you need to provide examples and calculations because that is not believable.

Quick math..Single person. Fed 15-25%?, state (3-4-5-6-7%?_ SS FICA 15%, Prop tax, sales tax, gas tax, dmv reg tax, I could go on and on. (caswt, cavsdi,fedwt,fedoasdi, fedmc) Easy to see when you add it all up. Side note: I live in a high tax state.

 

[MichaelB]

It’s an interesting discussion on Social Security, so let’s please not turn this into another generic discussion against taxes.

 

[Chuckanut]

I hate math: it just does not add up. It's a sine of bad things. In the end, it divides us.

In this world there are 10 kinds of people. Those who understand binary and those who don't.

 

[FANOFJESUS]

How about no.

As of Feb. 22 my social security contributions were $154,417 and from my employers $155,133 for a total of $309,550. None of this was I able to save or spend nor was I able to get a deduction for it. And I am still contributing with every pay check (at age 64+). Let's say my net worth is $5 million - you are saying that I shouldn't get social security because I was frugal all my life, scrimped on buying things, drove old cars, didn't take vacations, and worked longer and was able to accumulate $5 million in wealth, while someone else who earned the same but spent money like a drunken sailor does?

So I repeat, how about no.

I hear you. Maybe we need to get the level above where most frugal folks could reach. Say 10-15 million? I think it will happen one day.

 

[Andre1969]

I hear you. Maybe we need to get the level above where most frugal folks could reach. Say 10-15 million? I think it will happen one day.

When you get to a level like that, it's just virtue signalling for the masses, acting like you're sticking it to the "rich", but with no real benefit. $10-15M would be such a small amount of people, that cutting them out of their SS benefits by means testing would save virtually nothing. Plus, at that level, they're probably paying income tax on most of that SS.

Of course, with the way inflation is going, the time when $10-15M isn't considered a lot of money will probably be here sooner than you think!

 

[Chuckanut]

The bend point in the SS payout system are there to tilt the table towards a bigger check for lower income people relative to what they paid into the system. That is the social part of Social Security. I have no problem with it, but people should understand that it is only part of what they will need in old age.

 

[GenXguy]

The bend point in the SS payout system are there to tilt the table towards a bigger check for lower income people relative to what they paid into the system. That is the social part of Social Security. I have no problem with it, but people should understand that it is only part of what they will need in old age.

But there are many that have little to no retirement savings or pension. I even know some older people that don't have enough credits to get any SS benefits or free Medicare part A! The system needs reworked so that these people aren't homeless without healthcare while wealthy people with other retirement income are getting benefits.