Social Security Benefits Could Get Their Biggest Boost in 40 Years.

[daylatedollarshort]

And then there's the real world. My son would love to know where he can find that job that gives him a 10% raise if inflation rises 10%. This oversimplified example is not indicative as to how the real world works.

Ours are capped as well but probably not like yours. Ours are capped to 1% of assessed valuation. Inflated house prices are not our friend when it comes to property taxes.

One of our kids is in a tech field and they are getting pay increases above inflation. The other one plans to change jobs. Their partner has already done so and makes much more at the new job. DH and I lived through high inflation years working in IT and never had an issue with our salaries keeping up with inflation. Those in lower demand fields, especially if they can't change jobs easily, can be hurt by inflation because they don't have much bargaining power.

Property taxes really vary by state. If you have high property taxes with no caps that can hurt with inflation, which is why Prop 13 passed here. Median property taxes in the U.S. are around $2K, so that isn't going to be a budget buster for most homeowners if they go up 8% while income goes up 8% as well.

Property Taxes by State - https://www.rocketmortgage.com/learn/property-taxes-by-state

Home prices went up crazy amounts in some place last year more due to historically low mortgage rates rather than inflation. In our area the home prices are reverting back to more normal year over year increases as mortgage rates go up.

 

[camfused]

This Social Security Calculator has been updated with the new AWI numbers for next year.

If you copy and paste your earnings from the my Social Security site it will display your new benefit amounts.

https://ssa.tools/

and also has the new COLA number.

Edit: But, it appears that the tool will not change the number for you until the end of this year

 

[Koolau]

But what if your last 5 years are higher (on an indexed basis) than some other 5? Then it DOES provide a benefit!

I was a dishwasher from ages 16-18, making very low wages. So for every year I worked past 35, I was replacing one of the "dishwasher" years' earnings.

Thankfully those "less productive" years are the ones that SS will "throw away" for me as I w*rked at megacorp for 36 years. Not all were at the max for SS, but I never missed it by too much, so my SS check is pretty healthy - just about to get back to health here next year.

 

[youbet]

That is a good point, but there are tons of ways which people get around inflation without true decrease in quality/quantity. We switched cable providers, phone providers, insurance companies, etc.

Does this mean that some folks are lax in shopping for the best deals when inflation is low? I mean, if you already kept tabs on what you were paying for the services you mentioned, how could you find lower prices now? Unless you were previously lax?

But I see your point. It might be that folks do get lax on pricing when prices are more stable than these days. Seeing prices increase motivates them to get off their butts and find the lowest rates available.

 

[11522914]

Does this mean that some folks are lax in shopping for the best deals when inflation is low? I mean, if you already kept tabs on what you were paying for the services you mentioned, how could you find lower prices now? Unless you were previously lax?

Great point. When I purchase almost anything I make sure I get the lowest price. So yes, it is quite difficult, but not impossible to find lower prices for the same products or services one buys. You just never know when an opportunity arises.

One quick example. I switched to Mint Mobile and pay one year in advance for the lowest cost. Not a lot of opportunity to save unless I switch providers who typically don't offer the benefits I get with Mint Mobile. But an American Express credit card offer came out where you can save $45 if you spend $90 at Mint Mobile. Boom, I was able to save 22% using this offer on my plan by purchasing another year.

Generally I save on groceries by shopping at Aldi which by far offers prices much lower than other chains. But they are raising prices too.

So because of rising prices I changed from using heavy cream to half n half for my coffee. Now I have extra savings to pay for the increase in the coffee I get there. But you can only get so far doing this.

 

[Golden sunsets]

My Dad's neighbors were always so excited to see home values increase which we never understood as they were in their "forever home" and it only meant increased taxes and other carrying costs. They moved into that house in 1980 and are still there so I wonder if they are still happy with the ridiculous value increases over the last few years?

I never understand why taxes increase for some folks just because the value increases. Why is that? What does the town do with all the extra money over and above their actual expenses, which of course do increase over time, but dont necesarily increase as much as the home values increase? We just went through a revaluation in 2022. Our Assessment increased by about 70%, but our tax bill actually decreased by a few dollars, because the mill rate plummeted.

 

[youbet]

Won't your cabin value and property taxes drop now that mortgage rates have increased? Home prices hear skyrocketed when mortgage rates hit historic lows and now they are dropping back down as mortgage rates increase.

In Illinois, real estate taxes don't work that way. Each taxing district (schools, fire dept, library, etc.) gets a budget approved and the sum of those budgets is collected from us hapless tax payers. Who pays how much is determined by the relative value of your home vs others.

If all homes went up 10% in market value but the budgets don't change, taxes don't rise. And similarly, if homes all go down 10% in market value, taxes don't decrease. Our problem here is that the taxing districts seem to have unbridled power over their budgets!

Also, at least in my local area, small details about your home such as "curb appeal," details of landscaping, etc. don't impact your accessed valuation. It seems to be based more on type of construction, sq ft, amenities such as airco, fireplace, and that sort of thing. For example, your ugly landscaping and the fact the trim on your house needs painting won't get you a break.

 

[youbet]

Great point. When I purchase almost anything I make sure I get the lowest price. So yes, it is quite difficult, but not impossible to find lower prices for the same products or services one buys. You just never know when an opportunity arises.

One quick example. I switched to Mint Mobile and pay one year in advance for the lowest cost. Not a lot of opportunity to save unless I switch providers who typically don't offer the benefits I get with Mint Mobile. But an American Express credit card offer came out where you can save $45 if you spend $90 at Mint Mobile. Boom, I was able to save 22% using this offer on my plan by purchasing another year.

Generally I save on groceries by shopping at Aldi which by far offers prices much lower than other chains. But they are raising prices too.

So because of rising prices I changed from using heavy cream to half n half for my coffee. Now I have extra savings to pay for the increase in the coffee I get there. But you can only get so far doing this.

Yeah, I'm the same way. The savings you and I are getting were available with or without the motivation of inflation, but the actual increase in spending to accomodate higher prices got us off our butts to do some shopping or finding substitutes!

 

[daylatedollarshort]

In Illinois, real estate taxes don't work that way. Each taxing district (schools, fire dept, library, etc.) gets a budget approved and the sum of those budgets is collected from us hapless tax payers. Who pays how much is determined by the relative value of your home vs others.

If all homes went up 10% in market value but the budgets don't change, taxes don't rise. And similarly, if homes all go down 10% in market value, taxes don't decrease. Our problem here is that the taxing districts seem to have unbridled power over their budgets!

Also, at least in my local area, small details about your home such as "curb appeal," details of landscaping, etc. don't impact your accessed valuation. It seems to be based more on type of construction, sq ft, amenities such as airco, fireplace, and that sort of thing. For example, your ugly landscaping and the fact the trim on your house needs painting won't get you a break.

I have two words for you, youbet - Tiny House. I have read about people doing that in Illinois to get around the property tax issues.

 

[youbet]

I have two words for you, youbet - Tiny House. I have read about people doing that in Illinois to get around the property tax issues.

Yeah, my house is already quite small (about 1.4k sq ft) and most houses in my neighborhood are accessed more and therefore pay higher taxes. But I think I'd move to another area rather than get anything smaller than this.

Although, thinking about it, we do camp for weeks at a time in a tiny Aliner camper!

 

[daylatedollarshort]

Yeah, my house is already quite small (about 1.4k sq ft) and most houses in my neighborhood are accessed more and therefore pay higher taxes. But I think I'd move to another area rather than get anything smaller than this.

Although, thinking about it, we do camp for weeks at a time in a tiny Aliner camper!

The tiny houses I read about were on wheels so I don't think they were even subject to property tax at all, but then there is the issue of zoning.

 

[11522914]

I never understand why taxes increase for some folks just because the value increases. Why is that? What does the town do with all the extra money over and above their actual expenses, which of course do increase over time, but dont necesarily increase as much as the home values increase? We just went through a revaluation in 2022. Our Assessment increased by about 70%, but our tax bill actually decreased by a few dollars, because the mill rate plummeted.

Same happens here. When values are assessed higher the mill rate goes down and your property taxes are relatively the same.

What happened here and why are property taxes keep going up is I live in a top 20 city that people are moving to. The county every year has bonds they asked the voters to approve for school, parks, affordable housing, etc that are paid by a property tax increase.

10 years ago this rarely happened and what few bonds came up they rarely passed.

Now every bond passes and property taxes increase. But I love where I live and an average 4% yearly increase over the last 5 years is acceptable to me since they're relatively low to start off with.

 

[4legsgood]

I never understand why taxes increase for some folks just because the value increases. Why is that? What does the town do with all the extra money over and above their actual expenses, which of course do increase over time, but dont necesarily increase as much as the home values increase? We just went through a revaluation in 2022. Our Assessment increased by about 70%, but our tax bill actually decreased by a few dollars, because the mill rate plummeted.

One reason, you may live in an area where prices went up disproportionately more than the rest of the county. That happened here due to Covid, prices went up more in 1st and 2nd maybe 3rd tier suburbs as people could work from home and didn't need to worry about commute.

 

[finnski1]

Yeah, my house is already quite small (about 1.4k sq ft) and most houses in my neighborhood are accessed more and therefore pay higher taxes. But I think I'd move to another area rather than get anything smaller than this.

Although, thinking about it, we do camp for weeks at a time in a tiny Aliner camper!

Hah. Same here although we just sold the Aliner(Classic) last week. Got $3000 more than we paid for it 3 years ago and got about 60 nights in it. Not bad.

Not rushing into a replacement yet.

 

[11522914]

Hah. Same here although we just sold the Aliner(Classic) last week. Got $3000 more than we paid for it 3 years ago and got about 60 nights in it. Not bad.

Not rushing into a replacement yet.

Now that's what I call a great deal. Enjoyed it for 3 years and sell it for more than you paid.

I've had 2 people offer to buy my 2004 Avalon for the same price I paid for it in 2014 with 55,000 additional miles. At this time, not for sale.[emoji16]

 

[finnski1]

Now that's what I call a great deal. Enjoyed it for 3 years and sell it for more than you paid.

I've had 2 people offer to buy my 2004 Avalon for the same price I paid for it in 2014 with 55,000 additional miles. At this time, not for sale.[emoji16]

Yeah I drove a hard bargain when I bought it and the market has gone up some since. No complaints

 

[Koolau]

Does this mean that some folks are lax in shopping for the best deals when inflation is low? I mean, if you already kept tabs on what you were paying for the services you mentioned, how could you find lower prices now? Unless you were previously lax?

But I see your point. It might be that folks do get lax on pricing when prices are more stable than these days. Seeing prices increase motivates them to get off their butts and find the lowest rates available.

I admit that I typically find something I want at a price that seems fair. I rarely go further than that to find the absolute lowest price or best deal. However, when a company suddenly ups their price dramatically, I'll look for a better price. To me, it's the jump in price that gets my attention. YMMV

 

[folivier]

Why aren't property taxes frozen or reduced for people over 65?
We paid our dues many times over the years, we deserve a break. It should not matter how much assets we have. We (for the most part) aren't working and earning income anymore.
Just about every election cycle in our state this issue comes up and is always voted down.

 

[braumeister]

Why aren't property taxes frozen or reduced for people over 65?

They are, in just about every place I've lived. It's called a homestead exemption and for me it's a 35% reduction in the assessed valuation if you're over 65.

 

[copyright1997reloaded]

Why aren't property taxes frozen or reduced for people over 65?
We paid our dues many times over the years, we deserve a break. It should not matter how much assets we have. We (for the most part) aren't working and earning income anymore.
Just about every election cycle in our state this issue comes up and is always voted down.

I would vote it down.

The more things are exempted from property taxes or certain groups of people getting reduced taxes, the higher the taxes are for everyone else. I also don't like systems where some people pay much lower property taxes because they have lived there longer. If we are going to have a tax system that is based on a properties value, then it should (as much as possible) be based on its current value (or at least the same assessment timeframe).

If you want lower property taxes, vote against excessive spending.

 

[Music Lover]

Why aren't property taxes frozen or reduced for people over 65?
We paid our dues many times over the years, we deserve a break. It should not matter how much assets we have. We (for the most part) aren't working and earning income anymore.
Just about every election cycle in our state this issue comes up and is always voted down.

I'm 60 and when I'm 65 I expect to pay my way instead of dumping it off on someone younger. If you can't afford the property taxes go back to work or sell your house. No one owes you anything, especially some 25-year-old that you've never met.

 

[folivier]

In our state we have a homestead exemption, but it's available for everyone.
I'm talking about going beyond that for people over 65.

 

[orchid55]

We have an age 65 property tax reduction in my county. You no longer have to pay the school taxes which are 80% of the bill. However, you can only get this break if you are 65 and you don't have any 18 or under kids at home. Quite a few people were having grandparents move in and putting the house in the grandparents name, so the rules were modified.

 

[4legsgood]

I'm 60 and when I'm 65 I expect to pay my way instead of dumping it off on someone younger. If you can't afford the property taxes go back to work or sell your house. No one owes you anything, especially some 25-year-old that you've never met.

I have never met that 25-year-old, no one I know and that age can afford to buy property around here.

 

[daylatedollarshort]

Property taxes in California have been largely determined by statewide votes on Propositions, like 13 and more recently 19. The majority of voters have opted not to vote against their future selves and voted to keep the property tax caps largely in place.

I'm sure those who are upset about not having their property taxes go up more could always make donations to their local governments to make up the difference, or start GoFundMe pages to help pay the property taxes of their neighbors who more recently bought expensive homes.