News, Social Security heading for insolvency even faster. (relatives, coverage, ADHD)
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It is not the top 1% it is the top 20% that pays for everything and in some states they are starting to go after the top 20 as targeted sources of additional revenue. Those folks who pay the max in SS taxes are carrying the system.
Maybe. I read an actuarial report that sounded the alarm about the increase in life expectancy for educated males in relation to its negative impact on Social Security. More specifically, the guys who are earning more than the cap are significantly outliving their brethren. They are not only drawing more benefits than expected but also substantially more than their less heeled brothers and sisters. Not saying it's wrong, but it is food for thought.
In addition, it has been known since at least 2006 that undocumented workers (illegal immigrants, if that floats your boat) have contributed billions into the trust fund. I'm guessing that source of funds is drying up.
As an aside, last year was the first time I was completely self employed. I have a few medical issues and decided I'd try working part time, flexible hours, rather than apply for disability benefits. And I did. Much to my surprise, after completing my 2011 tax return, the CPA advised me that although my returns indicated I had a 15% marginal rate, I also had a 42.2%effective rate. The FICA taxes killed me. So, I either lie about my income (not gonna happen), earn six figures (not gonna happen) or apply for disability benefits. At this point, the latter seems the only viable option. This is one example why Social Security is so messed up. Ugh!
One of the reasons we plan for 20% reduction in both SS and pension benefits is because after those approx deductions the programs are sustainable.
I do not have a pension or substantial savings. (O.k., my savings would probably be considered insignificant by most C-D posters, but are significant to me.) I, too, have made plans based on a similar scenario. I'll cut costs by moving in with a friend and/or family. IOW, I have always planned for the worst and hoped for the best. Good for us!
The social chaos and human misery that would descend on society, should SS and Medicare be significantly cut, would be a nightmare. (Of course the pensioners will be okay.) How would the country handle the millions who are disabled and already low income and depend primarily on SS??
The social chaos and human misery that would descend on society, should SS and Medicare be significantly cut, would be a nightmare. (Of course the pensioners will be okay.) How would the country handle the millions who are disabled and already low income and depend primarily on SS??
Your point is excellent and has been noted by some of the posters here they intend to spend all their money prior to passing, leaving enough to be buried with. That if not timed right creates even more possibly in need. The question becomes who has the money to be redistributed to others. We are running out of people with money and as his been noted seniors are one of the few groups other than the wealthy with appreciable assets to be used.
In addition, it has been known since at least 2006 that undocumented workers (illegal immigrants, if that floats your boat) have contributed billions into the trust fund. I'm guessing that source of funds is drying up.
What we can see from this thread and many others is that we as a society have issues that are not on the front burner and need to be. It is a travesty that we are not having a full national dialog on this issue with full honest engagement by all of our elected officials. Unfortunately so much of this will pit the elderly against the poor with the elderly poor bearing the worse of it. Sorta like up until the earlier parts of the 20th century.
Social Security: Increased longevity of high earners
Quote:
Originally Posted by lenora
Maybe. I read an actuarial report that sounded the alarm about the increase in life expectancy for educated males in relation to its negative impact on Social Security. More specifically, the guys who are earning more than the cap are significantly outliving their brethren. They are not only drawing more benefits than expected but also substantially more than their less heeled brothers and sisters. Not saying it's wrong, but it is food for thought.
I've heard that before about the longevity difference based on income, but I've never seen any numbers attached to it. Do you recall if the actuarial report you read compared, in the aggregate, the increased benefits drawn by high earners through their added longevity with the increased benefits (as a percent of earnings) drawn by low earners through the advantageous benefit computation formulas for low earners? That would be a very interesting thing to know, although a bit complicated to calculate as one would have to average the benefit formulas and calculate the "deficit" benefits for the high earners as well as the "bonus" benefits for the low earners and then add in the longevity "bonus" for the high earners. If you could link to the report, I would be ever so grateful.
I struggled to express all that clearly - not sure I succeeded. So sorry if not.
I've heard that before about the longevity difference based on income, but I've never seen any numbers attached to it. Do you recall if the actuarial report you read compared, in the aggregate, the increased benefits drawn by high earners through their added longevity with the increased benefits (as a percent of earnings) drawn by low earners through the advantageous benefit computation formulas for low earners? That would be a very interesting thing to know, although a bit complicated to calculate as one would have to average the benefit formulas and calculate the "deficit" benefits for the high earners as well as the "bonus" benefits for the low earners and then add in the longevity "bonus" for the high earners. If you could link to the report, I would be ever so grateful.
I struggled to express all that clearly - not sure I succeeded. So sorry if not.
One of the links I posted discusses that exactly. Over the same time period low income folks get a higher percentage out than they put in. However over a lifetime the results are different as the higher income aggregate lives longer.
I've heard that before about the longevity difference based on income, but I've never seen any numbers attached to it. Do you recall if the actuarial report you read compared, in the aggregate, the increased benefits drawn by high earners through their added longevity with the increased benefits (as a percent of earnings) drawn by low earners through the advantageous benefit computation formulas for low earners? That would be a very interesting thing to know, although a bit complicated to calculate as one would have to average the benefit formulas and calculate the "deficit" benefits for the high earners as well as the "bonus" benefits for the low earners and then add in the longevity "bonus" for the high earners. If you could link to the report, I would be ever so grateful.
I struggled to express all that clearly - not sure I succeeded. So sorry if not.
Dang not sure where I posted the link. Gotta find as I thought Lenora was responding to it. It was in the other thread related topic, http://www.nber.org/digest/mar02/w8625.html
Quote:
The pattern of redistribution that occurs through Social Security is complicated because lifetime taxes and benefits are influenced by the different mortality rates of people in different demographic groups, by differences in marital status, and by variations in the earnings levels of secondary earners in married couples, among other factors. Thus the income-related redistribution that occurs because of the progressive benefit formula is partially offset by the longer life expectancies of higher income individuals and by the larger spouse-and-survivor benefits received by the spouses of higher earners.
Personal accounts are inevitable.
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Social Security: Increased longevity of high earners
