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Some may have missed this portion of the linked article - something I find interesting:
However, the more important dates are when Social Security and Medicare begin paying out more in benefits than they are receiving in taxes because that represents the time the government must start redeeming the bonds in the trust fund
For Medicare, the threshold when benefits exceed program income occurred last year.
For Social Security, that threshold will be crossed in 2017, one year earlier than the 2018 date projected in last year’s report.
Some may have missed this portion of the linked article - something I find interesting: However, the more important dates are when Social Security and Medicare begin paying out more in benefits than they are receiving in taxes because that represents the time the government must start redeeming the bonds in the trust fund
For Medicare, the threshold when benefits exceed program income occurred last year. For Social Security, that threshold will be crossed in 2017, one year earlier than the 2018 date projected in last year’s report.
Highly misleading. Receipts "from taxes" are not the only receipts that the SS Trust Fund has. Interest earnings on the corpus of the fund will mean that the corpus itself will continue to grow for a further decade or more, peaking in the vicinity of 2030. Meanwhile, the Treasury must redeem securities held by the SSTF as they mature. This is contract debt, the terms of which do not vary. Some SSTF securities were redeemed last month. More will be redeemed this month. This is the exact same process as is carried out with respect to any of the rest of the public debt. When the securities mature, they are redeemed, financed either by a rollover into a new security if the original investor wishes, or by the sale of securities to a new investor.
Medicare, meanwhile, is in much worse shape than Social Security. It's down there along with things like employment-based pensions and personal savings. Yet Medicare ran a roughly $30 billion surplus last year...
I suspect a combination of means testing for benefits, raising the income contribution levels, raising the retirement age, slightly increasing the tax rate (somewhat on the order of .25% for both employees and employers) and modifying the cost of living formula will eventually be done to provide a long term fix.
May I suggest EVERYONE open a Roth IRA if you don't already have one? (take the tax bite NOW, instead of LATER...tax rates could be 80% by the time you retire! Chew on THAT)
Please do not rely on anything other than your own retirement funds for your living. If you aren't already investing, do something to change that on MONDAY! You can open that IRA with $50 or $100 bucks and put in that much (or MORE) each month. Even if you are unable to contribute the full $4,000 per year, at least you will have SOMETHING to build on. I know a lady who was stretched so tight financially, she got an 8 hour job on Saturdays and every PENNY she makes from that 2nd job goes into her retirement account.
May I suggest EVERYONE open a Roth IRA if you don't already have one? (take the tax bite NOW, instead of LATER...tax rates could be 80% by the time you retire! Chew on THAT)
Please do not rely on anything other than your own retirement funds for your living. If you aren't already investing, do something to change that on MONDAY! You can open that IRA with $50 or $100 bucks and put in that much (or MORE) each month. Even if you are unable to contribute the full $4,000 per year, at least you will have SOMETHING to build on. I know a lady who was stretched so tight financially, she got an 8 hour job on Saturdays and every PENNY she makes from that 2nd job goes into her retirement account.
And how do you know that the Roth IRA will continue to not be taxed? What makes you so certain about the rules for retirement savings not being changed? How do you know that a threshold (similar to a means test) won't be established for tax exempt savings, and if your savings are over the threshold amount you would be subject to a "special set of tax rules" (similar to the AMT process today)?
If you don't believe the tax rules can be changed in midstream, I suggest you speak with anyone who has held investment real estate during the past 30-40 years.
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