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Old 03-06-2016, 07:20 AM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,945,286 times
Reputation: 6717

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Quote:
Originally Posted by DaveinMtAiry View Post
My feelings exactly. Dramatic benefit reduction is political suicide, they'll find a way. But the real problem is one fewer people are talking about, Medicare.
But Medicare and SS are intertwined. Sometimes in surprising ways (like we saw last year). The program in the biggest hole these days is Social Security disability. Which was scheduled to run out of money this year. There was a deal in Congress last year to shore it up - but I don't think anyone considers it a perrmanent fix. Note that the deal involved making changes to both Social Security disability and Medicare in an attempt to preserve the overall integrity of both programs:

Future Work Still Needed after Budget

My general opinion is we're going to see more means testing in both Social Security and Medicare in the future. And I don't think reducing benefits for wealthier seniors would provoke any cries of outrage from the general public - especially from younger people who are paying through the nose to fund the benefits:

Druckenmiller on entitlements rich get - Business Insider

Robyn
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Old 03-06-2016, 07:21 AM
 
33,046 posts, read 22,083,092 times
Reputation: 8970
Quote:
Originally Posted by lenora View Post
Everyone keeps forgetting (or is in denial) that benefits will probably be reduced by about 21-23% in 2033-2034. All of a sudden, 2033-2034 doesn't seem that far off to me. IF the cuts are made, the biggest cuts will be borne by those with the largest benefits. In 2014, the Chief Actuary stated:

"[i]f changes are made that only reduce benefits and not a nickel more is brought into the system, but all adjustments done on the benefit reduction side, we could see on the order of a 23 percent reduction. Not 23 percent for everyone (because of the progressive nature of benefits), but across the board, 23 percent." Top insider helps evaluate security of Social Security - tribunedigital-chicagotribune

In 2012, Congressman Paul Ryan asked the Chief Actuary "Does the 23% cut hit a low income worker just as much as it hits a high income individual?" Goss never directly answered this question although he did suggest that there were no regulations that prevented SSA from fashioning its own solution. However, it does appear that Ryan and Goss (see above) are acknowledging that it's not feasible to apply the cut equally to everyone.

I ran some numbers using the current federal poverty levels and the moderate to average annual benefit and I can't see where Congress could cut the benefits equally among the recipients without sending more low and moderate income beneficiaries below the poverty level. Practically speaking, we would be shifting SS retirement beneficiaries into the welfare based SSI program. (BTW, for a single person household, the current poverty level is $11,880.)

This is my long winded explanation for why I would probably not bother waiting until I am 70 to claim my benefits.

Because the current maximum SSI benefit is $733 per month, I think more SS retirement beneficiaries will be pushed down but not quite to the level at which SSI would help them, e.g. $1,000 cut by 23 percent would be $770, with no help from SSI.
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Old 03-06-2016, 08:19 AM
 
Location: Gilbert, AZ
3,186 posts, read 1,965,390 times
Reputation: 3328
Quote:
Originally Posted by lenora View Post
Everyone keeps forgetting (or is in denial) that benefits will probably be reduced by about 21-23% in 2033-2034.
Certainly the system needs to change, as it has changed many times in the past. I can't guess exactly what those changes will look like. I am, however, pretty certain that there will not be a huge one-time cut as the statement implies. Big changes will be phased in over time.
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Old 03-06-2016, 08:24 AM
 
Location: Baltimore, MD
3,745 posts, read 4,222,137 times
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Quote:
Originally Posted by mathjak107 View Post
my feeling is ss is such an important part of american culture and life it will be fully funded in a heart beat . they may push out retirement age or raise pay roll taxes but some how they will fund it . like everything else the gov't does at the 11th hour they find a way . medicare is the bigger issue to worry about
Just as those who wait until the last minute to save for retirement belatedly discover, that ship has sailed. (See, https://ssa.gov/oact/solvency/index.html )
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Old 03-06-2016, 12:00 PM
 
2,296 posts, read 1,564,167 times
Reputation: 2737
Quote:
Originally Posted by mathjak107 View Post
I was always going to play it by ear . If markets really tanked i would take it earlier. But the more i worked with the numbers the more i liked delaying and not being held hostage as much by the markets
Gotcha. Never a cut and dried decision with all the variables.
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Old 03-06-2016, 01:47 PM
 
519 posts, read 431,327 times
Reputation: 981
Quote:
Originally Posted by Robyn55 View Post
But Medicare and SS are intertwined. Sometimes in surprising ways (like we saw last year). The program in the biggest hole these days is Social Security disability. Which was scheduled to run out of money this year. There was a deal in Congress last year to shore it up - but I don't think anyone considers it a perrmanent fix. Note that the deal involved making changes to both Social Security disability and Medicare in an attempt to preserve the overall integrity of both programs:

Future Work Still Needed after Budget

My general opinion is we're going to see more means testing in both Social Security and Medicare in the future. And I don't think reducing benefits for wealthier seniors would provoke any cries of outrage from the general public - especially from younger people who are paying through the nose to fund the benefits:

Druckenmiller on entitlements rich get - Business Insider

Robyn
Do you really care what impact a billionaire and his wife's draw on SS is?

The problem with means testing SS is it will not work from a practical standpoint. To have any real impact the thresholds would have to dip so low into middle America as to be a non starter. And to go symbolically after the "rich" for optics changes the basic nature of SS and pushes it toward welfare.
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Old 03-06-2016, 04:40 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,945,286 times
Reputation: 6717
Quote:
Originally Posted by larsm View Post
Do you really care what impact a billionaire and his wife's draw on SS is?

The problem with means testing SS is it will not work from a practical standpoint. To have any real impact the thresholds would have to dip so low into middle America as to be a non starter. And to go symbolically after the "rich" for optics changes the basic nature of SS and pushes it toward welfare.
You don't get it. Even though there are a lot of billionaires talking about means testing - they're not talking about restricting means testing to billionaires.

Today - Medicare is means tested (in terms of premiums paid) for singles who earn more than $85k/year. And you're hardly a billionaire at that income level.

I expect this means testing to increase - not decrease - in the future. Robyn
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Old 03-06-2016, 04:59 PM
 
519 posts, read 431,327 times
Reputation: 981
Quote:
Originally Posted by Robyn55 View Post
You don't get it. Even though there are a lot of billionaires talking about means testing - they're not talking about restricting means testing to billionaires.

Today - Medicare is means tested (in terms of premiums paid) for singles who earn more than $85k/year. And you're hardly a billionaire at that income level.

I expect this means testing to increase - not decrease - in the future. Robyn
I do get it. Go reread what I wrote.

For means testing SS to have any real impact on numbers you have to phase out not just rich people, but a substantial portion of what is considered middle class. Put another way, there are not enough rich people.

You cite $85,000 a year for Medicare. That is hardly rich.
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Old 03-06-2016, 08:14 PM
 
Location: Paranoid State
13,047 posts, read 10,454,884 times
Reputation: 15684
Quote:
Originally Posted by GeoffD View Post
If I remarry, I will have to re-plan.
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Old 03-06-2016, 08:20 PM
 
Location: Paranoid State
13,047 posts, read 10,454,884 times
Reputation: 15684
Quote:
Originally Posted by mathjak107 View Post
that dollar is still inflation adjusted in ss , dollars should remain constant . everything in life is a gamble and has risk . we all just go with the perceived lower risk . i would sooner bet on our longevity as a couple and ss not changing much then markets and interest rates if i had to pick one .
While the dollar is inflation adjusted in SS, when you receive the dollar today you can invest in a higher EV asset by incurring more risk so that its future value would be higher than it otherwise would have been had you left it in SS. And of course, while the EV would be higher, actual mileage may vary.
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