Reduction in SS check, how can we prevent this from happening? (spouse, welfare)

[Petunia 100]

Originally Posted by HappyTexan

The cap was raised this year to a little over $118K/year.
FRA is already at 67. You have people getting layed off in their 50's today and can't find work never mind expecting them to work until 67 or older. That's one reason SSDI is running a deficit.

The cap is indexed to inflation so rises a bit each year. This doesn't help close the projected shortfall as benefits are also indexed to inflation.

[Mircea]

Originally Posted by Petunia 100

That is not going to solve the problem. Where is the "borrowed" money going to come from? Either from issuing more debt (which will then need to be paid back) or from raising taxes.

I don't know, why don't we ask the US Treasury Department?

The Treasury Department has this to say on the matter:

The U.S. Treasury does not set aside financial assets to cover its liabilities associated with the OASI and DI Trust Funds. The cash received from the OASI and DI Trust Funds for investing in these securities is used by the U.S. Treasury for general Government purposes. Treasury special securities provide the OASI and DI Trust Funds with authority to draw upon the U.S. Treasury to make future benefit payments or other expenditures. When the OASI and DI Trust Funds require redemption of these securities to make expenditures, the Government finances those expenditures out of accumulated cash balances, by raising taxes or other receipts, by borrowing from the public or repaying less debt, or by curtailing other expenditures. This is the same way that the Government finances all other expenditures.

What we want to focus on is this part:

When the OASI and DI Trust Funds require redemption of these securities to make expenditures, the Government finances those expenditures out of accumulated cash balances, by raising taxes or other receipts, by borrowing from the public or repaying less debt, or by curtailing other expenditures.

Let's break it down:


accumulated cash balances = Annual Budget Surplus, something you'll never see.

by raising taxes or other receipts = Self explanatory.

by borrowing from the public = Converting the Special US Treasury Securities to transferable securities and then selling the securities as debt on the open market. Note that this does not increase the federal debt, it merely shifts the debt on the balance sheets from intragovernmental debt to public debt.

or repaying less debt = defaulting on debt or debt obligations

by curtailing other expenditures = reducing the $1.3 TRILLION spent on redundant Welfare Programs, or reducing the military budget, the education budget or the budget of another Department or by simply reducing the amount of Social Security benefits.

Those are the options the former federal government has.

Optionally...

Mircea

[Mircea]

Originally Posted by Petunia 100

Eliminating the SS wage cap will nearly solve the problem, a bit more tweaking (slight increase in payroll tax rate, slight increase in full retirement age, slight decrease in future benefits, or some combination thereof) will get us the rest of the way there. The solution is no secret, it's just that no one wants to propose it, for fear of voter backlash.

Originally Posted by Petunia 100

It is a pay as you go system. Right now, current payroll taxes cover current benefits. We are fast approaching the time when that will no longer be the case. That is the problem. Elimination of the wage cap will come very close to fixing it.

That will not work. Do the math.

Eliminating the wage cap will fund 4 weeks (barely one month) of payments, assuming you can actually collect the amounts anticipated. You still have to pay for the other 11 months of the year.

Furthermore, eliminating the wage cap will cause serious financial harm to people in the $100,000 to $150,000 income bracket. These people who earn $100,000 to $150,000, but live in high Cost-of-Living areas are not rich by any stretch of the imagination.

Eliminating the cap would crush them, many of which are living paycheck-to-paycheck and barely making it.

You all need to understand that the ratio of workers-to-beneficiaries started at a ratio of 46:1.

You're now at 2.3 workers-to-beneficiaries.

The Silent Generation was slammed with a 520% FICA tax increase to make sure Social Security would be there for them.

The Boomers suffered a 71% FICA tax increase to make sure Social Security would be there for them.

If Generation X-Box and Generation Whine can't handle a 44.6% increase to make sure Social Security still exists for them, then my recommendation is Wilkinson Bonded or Gillette Silver Blues.

Mathematically....

Mircea

[Petunia 100]

Try this tool, it's kind of fun:


The Reformer: An Interactive Tool to Fix Social Security


Note that doing nothing but removing the wage cap will close 71% of the shortfall.

[HappyTexan]

Originally Posted by Petunia 100

Try this tool, it's kind of fun:


The Reformer: An Interactive Tool to Fix Social Security


Note that doing nothing but removing the wage cap will close 71% of the shortfall.

FICA must be increased as it has been for every other generation.

[Mircea]

Originally Posted by SOON2BNSURPRISE

If you want to save Social Security then maybe lets change how it works.

Other than the former federal government managing Social Security, there is nothing wrong with it in principle.

Originally Posted by SOON2BNSURPRISE

Here is what I would propose.

Let people have the option of opting out.

Social Security is an insurance plan, not an investment plan.

Originally Posted by SOON2BNSURPRISE

If that never happens then lets index it to the average death rate of elderly people. Not sure what that is but if people live to be 75 years old then don't allow any pay outs untill 75 years of age. For those that want to retire earlier? Save up for it or get a government job.

France tried that and failed. Raising the retirement age will skew the Life-Time Earnings Curve of younger people to a lower figure, leaving them with even less Wealth.

Originally Posted by Retire in MB

The other item to watch for is to "privatize" SS. This will allow Wall Street and their buddies to gouge Seniors with fees and reduce their available funds.

Under no circumstances should Social Security be privatized, unless it is privatized as an insurance program under supervision of each of the 50 States.

Originally Posted by flyonpa

Then Give my and my employer's all the money I gave it back, with interest.

Title 42 United States Code Section 402 - Old-age and survivors insurance benefit payments

(a) Old-age insurance benefits Every individual who—
(1) is a fully insured individual (as defined in section 414 (a) of this title),
(2) has attained age 62, and
(3) has filed application for old-age insurance benefits or was entitled to disability insurance benefits for the month preceding the month in which he attained retirement age (as defined in section 416 (l) of this title), shall be entitled to an old-age insurance benefit for each month, beginning with—


Which part of "insurance" do you not understand?

Originally Posted by GeoffD

This bears repeating because the ignorance is strong in this thread.

Okay, which part of "insurance" do you not understand?

Originally Posted by GeoffD

Low income people get back far more than their employers and they contributed in Social Security.

Social Security has never been based on what you pay in. It has always been based on your average wages.

That's because it is retirement insurance.

Originally Posted by GeoffD

High income people would need to live to 100+ to get back what they and their employers paid into the system.

It's an insurance program, not a retirement savings investment pension plan.

Call your insurance agent and tell them you want a refund on your auto and homeowner's insurance.

Originally Posted by GeoffD

When I run my spreadsheet, my max Social Security check I start collecting at age 70 is going to be my dominant source of income.

So, like many people, you chose not to build any substantial Wealth for retirement.

I guess it's a good thing you got retirement insurance via Social Security.

Insuring...

Mircea

[Petunia 100]

Originally Posted by HappyTexan

FICA must be increased as it has been for every other generation.

Do you mean the tax or the benefits?

[HappyTexan]

Originally Posted by Petunia 100

Do you mean the tax or the benefits?

The tax.

FICA tax was last raised in 1990. Look at the previous years before that and you'll see that raising FICA tax incrementally was the norm every 2-3 years.

Then it stopped in 1990 and hasn't been raised since.


FICA & SECA Tax Rates

[Petunia 100]

Originally Posted by Mircea

That will not work. Do the math.

Eliminating the wage cap will fund 4 weeks (barely one month) of payments, assuming you can actually collect the amounts anticipated. You still have to pay for the other 11 months of the year.

Mathematically....

Mircea

What math? How are you calculating this?

[Paka]

Originally Posted by wintersbone

stop handing out money to people who didn't pay into the system.

UNFORTUNATELY, those that most want to "revise" SS are the very ones wanting all the illegals to get all the benefits (to include voting) the moment they arrive....