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Ok, lets see a single person has a income of $70K from a pension or annuity and it is income as determined by the Christie proposal. They have 1 million in their tax sheltered retirement account. At age 70 1/2 RMD's will take them over the threshold. Lets crunch the numbers and we come up with take SS at age 62 and get the full SS for 9 1/2 years and recalculate the SS break even point under Christie America math. What did you say that wasn't the intended consequence? Government has a knack for that.
It's not reform at all. It's a bandaid really. The fund is going broke so start eliminating people from collecting their benefits. The broker the fund gets the wider the net of people who don't get.
If I were 20 and just starting out today hearing this then I'd be looking for a job with an alternate FICA plan.
It's not reform at all. It's a bandaid really. The fund is going broke so start eliminating people from collecting their benefits. The broker the fund gets the wider the net of people who don't get.
If I were 20 and just starting out today hearing this then I'd be looking for a job with an alternate FICA plan.
That's another problem. Public employees with pensions who aren't in SS. Why work in a state with pensions and SS when you can get s larger pension elsewhere and not worry about SS.
For all of you people who are bashing Christie (and the worst ones who are calling him fat)....
WHAT WOULD YOU DO TO FIX SOCIAL SECURITY?
I'm waiting.
Here is a menu of choices, with the % of the funding gap they are estimated to close:
1. Raise the earnings cap on taxes to $215k (90% of all earners fall below this): Closes 36% of the gap
2. Remove the earnings cap altogether: Closes 86% of the gap
3. Starting in 2016, raise the FRA by 3 months each year until it reaches 68: Closes 18% of the gap
4. #3, but extend the FRA to 70: Closes 44% of the gap
5. Change the way COLA is calculated to use a chained COL: Closes 23% of the gap
6. Raise the tax rate from 6.2% to 6.45%: Closes 22% of the gap
7. Over a 20 year period raise the tax rate from 6.2% to 7.2%: Closes 64% of the gap
I'll take #'s 1, 3, 5, and 6 to close 99% of the gap. That balances benefits adjustments (3 & 5) with tax adjustments (1 & 6). If you wanted to get that last % you could bump the tax rate up a little more in #6, or extend the FRA a little more, say to 68 and 3 months.
Some of these interact with each other to increase the benefit to the program, for example raising the tax rate and increasing the cap.
Here is a menu of choices, with the % of the funding gap they are estimated to close:
1. Raise the earnings cap on taxes to $215k (90% of all earners fall below this): Closes 36% of the gap
2. Remove the earnings cap altogether: Closes 86% of the gap
3. Starting in 2016, raise the FRA by 3 months each year until it reaches 68: Closes 18% of the gap
4. #3, but extend the FRA to 70: Closes 44% of the gap
5. Change the way COLA is calculated to use a chained COL: Closes 23% of the gap
6. Raise the tax rate from 6.2% to 6.45%: Closes 22% of the gap
7. Over a 20 year period raise the tax rate from 6.2% to 7.2%: Closes 64% of the gap
I'll take #'s 1, 3, 5, and 6 to close 99% of the gap. That balances benefits adjustments (3 & 5) with tax adjustments (1 & 6). If you wanted to get that last % you could bump the tax rate up a little more in #6, or extend the FRA a little more, say to 68 and 3 months.
Some of these interact with each other to increase the benefit to the program, for example raising the tax rate and increasing the cap.
Curious your source for this data, which is very helpful in thinking about the SS issue.
That's another problem. Public employees with pensions who aren't in SS. Why work in a state with pensions and SS when you can get s larger pension elsewhere and not worry about SS.
Not really because there are limited jobs that have alternate FICA plans.
And many are not even aware of it that work in jobs with alternate FICA until they are close to retirement and realize if they worked FICA jobs vs non FICA jobs they are screwed tax-wise.
I made sure I had my "30 years of substantial earnings" before I ventured into the education world and started working non FICA jobs.
Not really because there are limited jobs that have alternate FICA plans.
And many are not even aware of it that work in jobs with alternate FICA until they are close to retirement and realize if they worked FICA jobs vs non FICA jobs they are screwed tax-wise.
I made sure I had my "30 years of substantial earnings" before I ventured into the education world and started working non FICA jobs.
Um, no thanks. I'd rather work in my FICA job with a pension and retire many years earlier.
Not really because there are limited jobs that have alternate FICA plans.
And many are not even aware of it that work in jobs with alternate FICA until they are close to retirement and realize if they worked FICA jobs vs non FICA jobs they are screwed tax-wise.
I made sure I had my "30 years of substantial earnings" before I ventured into the education world and started working non FICA jobs.
States in Which Public Employees Are Not Covered by Social Security
Alaska
California
Colorado
Connecticut
Georgia (certain local governments)
Illinois
Kentucky (certain local governments)
Louisiana
Maine
Massachusetts
Missouri
Nevada
Ohio
Rhode Island (certain local governments)
Texas
Thats a lot of folks with pensions and no SS who would not be impacted and also who tend to have higher pensions because their governments had additional money for pension benefits. Imagine the teacher and public employee recruitment issues that could come up in the North East and South West! Heck forget about teachers what about skilled in demand state workers? Dang those states would look good compared to the private sector in some cases with high in demand workers.
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