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      10-04-2015, 01:41 PM   #1
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Social Security

What are your thoughts on Social Security?
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      10-04-2015, 01:49 PM   #2
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      10-04-2015, 04:08 PM   #3
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Apparently the Social Security trust fund will be depleted in 2033, and recipients will face a 23% reduction in benefits. The Disability Income fund will be depleted next year (2016), and Medicare will run out of money in 2026.
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      10-04-2015, 04:37 PM   #4
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Quote:
Originally Posted by bbbbmw View Post
Apparently the Social Security trust fund will be depleted in 2033, and recipients will face a 23% reduction in benefits. The Disability Income fund will be depleted next year (2016), and Medicare will run out of money in 2026.
Can you please post this source? Thanks!
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      10-04-2015, 04:43 PM   #5
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Quote:
Originally Posted by URBAN LEGEND View Post
Can you please post this source? Thanks!
http://www.ssa.gov/oact/trsum/

After 2019, Treasury will redeem trust fund asset reserves to the extent that program cost exceeds tax revenue and interest earnings until depletion of total trust fund reserves in 2034, one year later than projected in last yearís Trustees Report. Thereafter, tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2089.

(I was off by a year, in this most current report).

DI [Disability Income] Trust Fund reserves expressed as a percent of annual cost (the trust fund ratio) declined to 40 percent at the beginning of 2015, and the Trustees project trust fund depletion late in 2016, the same year projected in the last Trustees Report. DI costs have exceeded non-interest income since 2005, and the trust fund ratio has declined in every year since peaking in 2003. While legislation is needed to address all of Social Securityís financial imbalances, the need has become urgent with respect to the programís disability insurance component. Lawmakers need to act soon to avoid automatic reductions in payments to DI beneficiaries in late 2016.
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      10-05-2015, 10:52 AM   #6
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The SS shortfall has been predicted by the trustee's for quite some time. Increase FRA for people born after 1975, increase the OASDI Maximum Earnings level, fix a few redundancies (File & Suspend, cap the # of ex-spouse beneficiaries, etc.) and we would see that shortfall get very, very narrow if not completely eliminated.
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      10-06-2015, 11:40 AM   #7
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Raising the retirement age is a start but won't have nearly a big enough impact, so I think young people better get ready to pay higher employment and income taxes for a long time. Fortunately there seem to be plenty of them to pay and since they seem to demonstrate a voting tendency that favor socialists like Obama, they shouldn't mind.
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      10-06-2015, 11:44 AM   #8
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Quote:
Originally Posted by RickFLM4 View Post
Raising the retirement age is a start but won't have nearly a big enough impact, so I think young people better get ready to pay higher employment and income taxes for a long time. Fortunately there seem to be plenty of them to pay and since they seem to demonstrate a voting tendency that favor socialists like Obama, they shouldn't mind.
Raising FRA would cut the shortfall by nearly 20%.....that's a significant amount, but you are correct, more would need to be done. There's no single magic bullet.

The SSA rejiggered some things back in the earkly 80's....it'll have to happen again, but if done right, it would be fairly painless.
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      10-06-2015, 11:53 AM   #9
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Quote:
Originally Posted by other_evolved View Post
Raising FRA would cut the shortfall by nearly 20%.....that's a significant amount, but you are correct, more would need to be done. There's no single magic bullet.

The SSA rejiggered some things back in the earkly 80's....it'll have to happen again, but if done right, it would be fairly painless.
Depends on how and when we raise the retirement age. Immediately raising it (politically impossible) would have a much more meaningful impact than, for example, exempting everyone over 55 and then very slowly phasing in a minor increase.

More taxes paid over a lifetime = less to save for retirement, perpetuating the problem. However, the biggest threats IMO are time and the fact it is a political land mine few are brave enough to tackle.
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      10-06-2015, 12:00 PM   #10
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Quote:
Originally Posted by RickFLM4 View Post
Depends on how and when we raise the retirement age. Immediately raising it (politically impossible) would have a much more meaningful impact than, for example, exempting everyone over 55 and then very slowly phasing in a minor increase.

More taxes paid over a lifetime = less to save for retirement, perpetuating the problem. However, the biggest threats IMO are time and the fact it is a political land mine few are brave enough to tackle.
The 20% figure came from The Washington Post, and if I recall, was a pretty painless scenario wherein people who are born after 1975 would see their FRA go from 67 to 70.

The OASDI wage base is increased with inflation as it is, but I get your point.
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      10-06-2015, 12:17 PM   #11
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I expect it to be useless to me when I retire in 40 years. Most people with decent paying jobs have retirement plans whether it's an investment fund or property. I feel like it's just a another welfare type program to contribute to for people that are making at least $100k a year at age 30 and will continue to work until retirement.

If it's still available to me when I retire, it won't do much. Maybe pay my property tax.
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      10-06-2015, 01:23 PM   #12
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Quote:
Originally Posted by RickFLM4 View Post
Raising the retirement age is a start but won't have nearly a big enough impact, so I think young people better get ready to pay higher employment and income taxes for a long time. Fortunately there seem to be plenty of them to pay and since they seem to demonstrate a voting tendency that favor socialists like Obama, they shouldn't mind.
I am going to vote for Bernie Sander because he promises everything will be FREE (healthcare, daycare, college,etc...)
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      10-06-2015, 02:39 PM   #13
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I've pretty much accepted that the money I have paid and will pay into SS will be completely gone by the time I actually reach retirement age.
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      10-07-2015, 07:24 AM   #14
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Raising the retirement age is often mentioned. But, as the Washington Post stated, there are not many companies rushing to hire 65 or 69 year olds. Also, people with lower incomes don't tend to live as long, so it could disproportionately impact lower incomes. Today you can retire and collect SS at age 62 (the benefit is about 75% of what it is at 65 though) - might make more sense to increase that to 65.
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      10-07-2015, 08:47 AM   #15
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Quote:
Originally Posted by RickFLM4 View Post
More taxes paid over a lifetime = less to save for retirement, perpetuating the problem.
The sad fact is that most people will never save for retirement no matter what their tax situation is. Social Security was at its inception, and remains today, a necessary means to save us from ourselves.

Quote:
Originally Posted by rcracin View Post
I expect it to be useless to me when I retire in 40 years. Most people with decent paying jobs have retirement plans whether it's an investment fund or property. I feel like it's just a another welfare type program to contribute to for people that are making at least $100k a year at age 30 and will continue to work until retirement.

If it's still available to me when I retire, it won't do much. Maybe pay my property tax.
I had to laugh at this. I made the same assumption ~40 years ago. The only thing that changed is that the retirement age went up one year. If the limit were raised on max income that can be taxed for SS, the fund becomes solvent more than long enough to service your needs at retirement. Although if your property taxes are *that* high you may not care.

Dagnabit, I posted to another political thread. Gotta stop doing that.
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      10-07-2015, 09:44 AM   #16
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Quote:
Originally Posted by wdb View Post
The sad fact is that most people will never save for retirement no matter what their tax situation is. Social Security was at its inception, and remains today, a necessary means to save us from ourselves.

I had to laugh at this. I made the same assumption ~40 years ago. The only thing that changed is that the retirement age went up one year. If the limit were raised on max income that can be taxed for SS, the fund becomes solvent more than long enough to service your needs at retirement. Although if your property taxes are *that* high you may not care.

Dagnabit, I posted to another political thread. Gotta stop doing that.
I hope to live in place where my property taxes will be in the 20-30k range. It's not because I want to spend that much money. It's just that everywhere I look and like, the taxes are in that range. I'm still a good 10 years away from that and possibly longer if I opt for the starter home route.

Even if the limits are raised, it won't mean more money for those who contribute more. It will just be more solvent as you said. I'd rather pay higher taxes that will go towards education or other social welfare programs.
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      10-07-2015, 02:15 PM   #17
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Stupid comments are stupid. The problem is the sheer amount of people who are retiring (baby boomers) by the time next generation gets to retire, they are going to be putting significantly less strain on the system. Simple tweak can fix this non problem - including paying back all the money borrowed.
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      10-07-2015, 02:47 PM   #18
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Quote:
Originally Posted by TheAxiom
Stupid comments are stupid. The problem is the sheer amount of people who are retiring (baby boomers) by the time next generation gets to retire, they are going to be putting significantly less strain on the system. Simple tweak can fix this non problem - including paying back all the money borrowed.
Money to pay back what was / is being borrowed needs to come from somewhere... Unlikely it will all come from budget cuts or taxing 1% of the population.
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      10-07-2015, 04:15 PM   #19
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Originally Posted by RickFLM4 View Post
Money to pay back what was / is being borrowed needs to come from somewhere... Unlikely it will all come from budget cuts or taxing 1% of the population.
Well, we'll keep borrowing like we always do. Haven't paid it back yet in almost 100 years, let's not pretend we will now.
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      10-07-2015, 04:43 PM   #20
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Right, just stay on the Greek program.
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      10-07-2015, 04:50 PM   #21
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Quote:
Originally Posted by wdb
Quote:
Originally Posted by RickFLM4 View Post
More taxes paid over a lifetime = less to save for retirement, perpetuating the problem.
The sad fact is that most people will never save for retirement no matter what their tax situation is. Social Security was at its inception, and remains today, a necessary means to save us from ourselves.

Quote:
Originally Posted by rcracin View Post
I expect it to be useless to me when I retire in 40 years. Most people with decent paying jobs have retirement plans whether it's an investment fund or property. I feel like it's just a another welfare type program to contribute to for people that are making at least $100k a year at age 30 and will continue to work until retirement.

If it's still available to me when I retire, it won't do much. Maybe pay my property tax.
I had to laugh at this. I made the same assumption ~40 years ago. The only thing that changed is that the retirement age went up one year. If the limit were raised on max income that can be taxed for SS, the fund becomes solvent more than long enough to service your needs at retirement. Although if your property taxes are *that* high you may not care.

Dagnabit, I posted to another political thread. Gotta stop doing that.
You do realize that SS is an insurance program, not really a tax? You collect in retirement based on what you paid into it. To increase or remove the cap on income means those people, when they retire, will be owed more; it's scaled on income.
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      10-07-2015, 05:39 PM   #22
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Quote:
Originally Posted by bbbbmw View Post
You do realize that SS is an insurance program, not really a tax? You collect in retirement based on what you paid into it. To increase or remove the cap on income means those people, when they retire, will be owed more; it's scaled on income.
Sorry but i have to disagree with you! Even though they called it the Federal Insurance Contributions Act (FICA), it is still a Tax (if it is insurance then everyone would have option to not participate). It is even state as a tax on my paycheck.
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