Lakewood90712
Thinks s/he gets paid by the post
- Joined
- Jul 21, 2005
- Messages
- 2,223
dont see any significant changes from previous years
I agree that the perception that "I paid for my benefit" is a big part of the political appeal of SS. (In spite of the fact that I think it's obvious that SS is a paygo system where each generation pays for the prior generation's benefits.)The public perception of Social Security since its inception (I think) is that it isn't a welfare program since the benefit everyone gets bears some relation to what they contributed, with the calculation structured so that the lowest earners get proportionally more. If the cap is removed without proportionately increasing the benefit for higher earners to some extent relative to their contributions, it becomes a welfare program financed by the rich. That's a very significant change that could erode popular support.
The trust fund was designed to reduce the pure PAYGO aspects of the system.In spite of the fact that I think it's obvious that SS is a paygo system where each generation pays for the prior generation's benefits.
Yes, jimandthom and Crabby Mike have it right. There seems to be an urban myth out there about congressional pensions... the worst are ignorant conservative friends of mine (I'm conservative too) that seem to think that if you serve one term in congress that you get paid for life... a total myth.. the pension benefits are similar to other federal employees... but if you have a 20+ year congressional career then you do get a nice pension.
However, removing the cap tends to poll better than other potential solvency solutions (like cutting benefits or raising the tax rate).
I agree that the perception that "I paid for my benefit" is a big part of the political appeal of SS. (In spite of the fact that I think it's obvious that SS is a paygo system where each generation pays for the prior generation's benefits.)
However, removing the cap tends to poll better than other potential solvency solutions (like cutting benefits or raising the tax rate).
How does it poll with those making over 135,000 per year?
I think that is the simplest solution myself along with gradually raising the age FRA.
For less physical jobs that would not be a big deal, however, as a 69 YO I can definitely tell that I do not have the stamina for physical work that I had just 5 years ago. So I have mixed feelings about raising the FRA??
I was a Federal contractor for most of my career, then a Fed employee for a few before I retired. As I recall, the Feds I knew (mostly CSRS) felt they were lucky to be grandfathered in that system, as opposed to the later hires that were in FERS by default. I don't know what % of salary a typical CSRS pension is, but since the maximum SS at FRA is around $34k, I'm pretty sure CSRS is significantly higher. On the other hand, SS can include a 50% spousal benefit (if spouse earned no benefit of their own) and 100% survivor, so there's that. Also, CSRS employees paid more into their pension system than FERS (which has a small pension component, in addition to TSP (401k equivalent).In the late 80s, when the change from CSRS to FERS occurred, we had no clue what to do. The new FERS program probably would have been better, mostly due to the TSP match that the old system does not get.
For yucks, I entered my spouses earnings from his SS record going back to 1972. I did have to "guestimate" for the 7-8 years before Medicare tax was withheld. He worked 2 years in a SS and non SS job at the same time and about 6 years before Medicare tax was withheld.
In retrospect, it may have been better to switch to FERS. His SS estimate, using reasonably accurate $$ for the mentioned few years, came in at about 70-75% of his CSRS pension.
Throw in a TSP match, not given to CSRS people, and a very reduced defined pension through FERS, it may have been better to switch.
Either way, we are good to go.
I would think pretty well if it avoided a 20% haircut for everyone.
I was a Federal contractor for most of my career, then a Fed employee for a few before I retired. As I recall, the Feds I knew (mostly CSRS) felt they were lucky to be grandfathered in that system, as opposed to the later hires that were in FERS by default. I don't know what % of salary a typical CSRS pension is, but since the maximum SS at FRA is around $34k, I'm pretty sure CSRS is significantly higher. On the other hand, SS can include a 50% spousal benefit (if spouse earned no benefit of their own) and 100% survivor, so there's that. Also, CSRS employees paid more into their pension system than FERS (which has a small pension component, in addition to TSP (401k equivalent).
I found that handling stress became much more difficult as I aged. My brother was in a similar job and found the same thing. It could be that the level of stress increased as we aged though. Either way, my health greatly improved once I left the workforce.
I don't think raising the FRA is a good way to go.
We could remove the cap and add another "knee" or bend in the SS formula so that higher wage earners get an even lower %age replacement benefit on higher wages. This maintains the apparently useful notion that "everyone pays in based on their earnings, and the payout is based on what I paid in," but does more to fix the shortfall than just removing the cap.
That's not my favored solution, but it seems like the kind of compromise that might find acceptance.
The public perception of Social Security since its inception (I think) is that it isn't a welfare program since the benefit everyone gets bears some relation to what they contributed, with the calculation structured so that the lowest earners get proportionally more. If the cap is removed without proportionately increasing the benefit for higher earners to some extent relative to their contributions, it becomes a welfare program financed by the rich. That's a very significant change that could erode popular support.
+1 although that alone would not totally solve the problem it would be a useful first step... increase the cap and add a new bend point so those paying in more at least get something for their additional payments. This would be a good first step, in addition to increasing the FRA to reflect mortality improvements since it was last reset in 1982 (I think?).
+1 although that alone would not totally solve the problem it would be a useful first step... increase the cap and add a new bend point so those paying in more at least get something for their additional payments. This would be a good first step, in addition to increasing the FRA to reflect mortality improvements since it was last reset in 1982 (I think?).
The House bill that I referenced in post #30 uses this approach. That bill has 203 co-sponsors.+1 although that alone would not totally solve the problem it would be a useful first step... increase the cap and add a new bend point so those paying in more at least get something for their additional payments.
Note that most of the mortality gains in recent years have come from high income workers. See chart 1 here: https://www.ssa.gov/policy/docs/ssb/v67n3/v67n3p1.htmlThis would be a good first step, in addition to increasing the FRA to reflect mortality improvements since it was last reset in 1982 (I think?).
Note that most of the mortality gains in recent years have come from high income workers. See chart 1 here: https://www.ssa.gov/policy/docs/ssb/v67n3/v67n3p1.html
It seems odd to decrease all retirees' monthly benefits to offset the additional cost created by the higher income workers.
OK, seems like we've got S.S. figured out.... Has anyone figured out how to deal with the 1 Trillion Dollar Deficits that we are currently running up? - This seems to be a little more important as it is Happening NOW... Rather than a 20% shortfall 15 YEARS FROM NOW!
Yes, that's a good point. I think it's worth an explicit discussion because we may or may not think it's a good package.Wouldn't the removal of the cap go a >long< way toward addressing this disparity (to the degree it exists)?
It's tougher to get female data. The SS actuaries have individual earnings records handy. They don't have family incomes. The cohorts in their study contained a lot of stay at home moms who had low individual earnings but high household incomes.The study at the link only covered high income males (who still, presumably, had lower life expectancy than high income females).
That number is so big that I kind of wonder about the accuracy.Between 2001 and 2014, life expectancy increased by 2.34 years for men and 2.91 years for women in the top 5% of the income distribution, but increased by only 0.32 years for men and 0.04 years for women in the bottom 5%
How's this wording? We can connect raising the FRA to the fact that longevity has increased. That increase in longevity increases SS total benefit costs. So it seems that raising the FRA is a "fair" way of dealing with that fact. I think it's worth recognizing that the increased longevity comes primarily from higher earning workers, with the lower earners seeing little increase.And "additional cost created by higher income workers" is maybe a stretch. Plenty of high-income workers still die young. It was also "created" by people who quit smoking (rich or poor), increased their use of seat belts, drove safer cars, ate healthier food, exercised, treated their high blood pressure and diabetes, etc, etc . . .