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If ever there were an argument for privatizing Social Security... I am 55 years old. For over 20 years I have made over six figures a year. My mother, who is still alive at 86 and is getting my deceased father's social security, receives $1200 a month from the government. My father was an uneducated blue collar worker who never made more than 8 bucks an hour base pay. He retired at 62 back in the mid 80s, so he didn't get the full benefit. My mother never worked...a home maker her entire life. So...$1200 a month...which is based on meager increases over the last 15 years. Now me, I have worked constantly since I was 15 years old, the only gap is when I took a year off while going to school when I was in my early 20s. Over 20 years now I have made over $100K a year each year. According to the SSA.gov web site, my benefit if I retire at the same age that my dad did will be $1900 a month. Yes, only $700 more than my mother who never worked and my father who was a low income worker who retired early over 30 years ago.
I am speechless. Where the heck has all our money gone for these decades paying into the government fund? This is a lesson to everyone out there in their 30s and younger. Don't even consider SS as potential income in retirement. Save as much as you possibly can as early as you can and take advantage of as many investment opportunities as you can - like 401K and Roth IRAs. Your government is squandering your social security so do not expect to get anything resembling a return on what you are paying in.
Shame on your mother for taking that $1200. She should return the money and tell her son to give her $1200 a month so she doesn't have to sponge off the govt. like the welfare recipients do.
folks would just find ways of getting around the means testing rather than pay a lifetime in to ss and get nothing or near nothing . so far means testing has been pretty poor because it disregards roths .
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right now you can avoid taxes on roths , pay less medicare premiums , get aca subsidy's etc all from a roth which really should only escape being taxed itself and nothing else . even the money in roths should have to come out like traditional money oin rmd's , only not be taxed .
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there is just to much roths escape in reality that have nothing to do with the separate issue of just the fact you prepaid the taxes
A little OT, but I want to address your "rant" against Roths here.
How would you propose means-testing for other assets, like gold, land, or cash? Not the interest from cash, but just the underlying asset itself?
None of those assets necessarily generate income, and like a Roth IRA, they would be funded with "post-tax" dollars.
One reason means-testing is based on income and not wealth is to prevent the penalizing of savers. Longstanding policy has been to encourage saving and investment. And that was the point behind the Roth IRA also.
There is also the secondary issue, that the IRS doesn't get a "wealth" report from taxpayers, it gets an "income" report, the 1040.
Frugality and investment are rewarded by our tax code, and I think the plurality of taxpayers agree with that approach.
Indeed, the reason why a surviving spouse gets to collect their partner's social security is because of a value that society places on the home and on families. Rightly or wrongly, the policy is that marriage and family create a certain stability that is good for society. There is some truth to it. Life insurance companies have statistics indicating married men live longer than unmarried men do. Some people think family doesn't count. I couldn't disagree more. Marriage and family are the central fact in my life.
i can certainly see survivor benefits for a spouse . but what i think is wrong is the way spousal benefits are handled while both are alive .
A little OT, but I want to address your "rant" against Roths here.
How would you propose means-testing for other assets, like gold, land, or cash? Not the interest from cash, but just the underlying asset itself?
None of those assets necessarily generate income, and like a Roth IRA, they would be funded with "post-tax" dollars.
One reason means-testing is based on income and not wealth is to prevent the penalizing of savers. Longstanding policy has been to encourage saving and investment. And that was the point behind the Roth IRA also.
There is also the secondary issue, that the IRS doesn't get a "wealth" report from taxpayers, it gets an "income" report, the 1040.
Frugality and investment are rewarded by our tax code, and I think the plurality of taxpayers agree with that approach.
i wouldn't means test by assets . but i would close the loophole where roths and money over funded in life insurance is borrowed out and does not count as income for means testing . whether it gets taxed or not is a different issue .
to many are house rich and cash poor for asset means testing .
^^^ house rich and cash poor is just plain stupid. We didn't learn anything from 2008? They still have to pay to take care of a big house, dumbest way to have money. Won't have it long.
Quote:
Originally Posted by dcfas
Wow. I'm surprised more folks haven't chimed in on this one. With all due respect, I believe many spouses feel that their marriages amount to a bit more than "sleeping with someone for x number of years." A spouse, in my mind, is a partner, without which many would find success in life to be unobtainable, and some would find pointless.
Cheers,
DC
I didn't read the whole thread. Yes what you linked to would of got my drawers in a wad.
Guess they aren't married or just hate women. Doing without, is it any surprise.
If ever there were an argument for privatizing Social Security... I am 55 years old. For over 20 years I have made over six figures a year. My mother, who is still alive at 86 and is getting my deceased father's social security, receives $1200 a month from the government. My father was an uneducated blue collar worker who never made more than 8 bucks an hour base pay. He retired at 62 back in the mid 80s, so he didn't get the full benefit. My mother never worked...a home maker her entire life. So...$1200 a month...which is based on meager increases over the last 15 years. Now me, I have worked constantly since I was 15 years old, the only gap is when I took a year off while going to school when I was in my early 20s. Over 20 years now I have made over $100K a year each year. According to the SSA.gov web site, my benefit if I retire at the same age that my dad did will be $1900 a month. Yes, only $700 more than my mother who never worked and my father who was a low income worker who retired early over 30 years ago.
I am speechless. Where the heck has all our money gone for these decades paying into the government fund? This is a lesson to everyone out there in their 30s and younger. Don't even consider SS as potential income in retirement. Save as much as you possibly can as early as you can and take advantage of as many investment opportunities as you can - like 401K and Roth IRAs. Your government is squandering your social security so do not expect to get anything resembling a return on what you are paying in.
Calm down. Your full paycheck doesn't get figured into the SS tax, unlike the paycheck of people who make much less than you. There's a ceiling. So you got to keep more of your paycheck than most other people did. Which means you had the option of saving more, so you probably don't even need a SS check. Many people in the higher brackets don't, and some are vocal about it, believe it or not.
And you're right; EVERYONE should save as much as they can, and invest wisely. But that SS check for some makes a big difference. Don't knock that.
What are you talking about? It is the average of your 35 highest COLA adjusted earning years that you paid SS in to. Your earnings from middle school, which unless you lied about your age, or worked for a family business to game taxes, would never have had any SS removed from them. I started working for other companies at age 15, in High School, and never paid in to SS until I was 16. For the vast majority of people, the last 35 years worked are the 35 highest, except for the partial last year unless retired on Dec 31. So I would have had to stop working and paying in to SS at 51 for the SS at age 16 to count. Making $25k in 1980 maxed out SS, with a SS calculated earning level of around $95k, IIRC. So making greater than $118k in 2016 would only be replacing a $95k earning with a $118k earning, not a huge amount to significantly raise the average.
And for tb9, I don't know anyone that made over $100k for 20 years, (which would extrapolate to greater than max FICA for 35 years) that would call $26k (file age 62 in 2017, years with max FICA for 35 years) "beer money". And if you have enough saved to delay filing to 70 (in 2025) then $48k is certainly not "beer money"!! If you are wealthy enough for those amounts to be beer money, then you are talking 7 figure incomes the last ten years plus. Not low 6 figures. Just saying, lots of people made 6 figures for many years and SS is still going to be a very high percentage of their retirement income.
I stand corrected. I didn't realize it was 35 years. As for gaming it with my small business, you couldn't be further off the mark. I get to pay not only my share of social security and medicare, but I also get to match it, so my contribution comes in at 15.3%, which I max, but not in tremendous excess. My wife doesn't quite max it.
Let's not forget in that range, we're starting to see the larger tier of the income tax payments as well for both Federal and State...
So basically, I bill $1 and the government and I split it about evenly. My wife and I will have paid nearly $1M into this SS program by the time I'm ready to retire and will likely have nothing more than a benefit that is taxed back to the government. I'd like my even share to be honest, and to not have it hauled back by taxes, after paying twice my share all these years. If it's $1500 across the board so be it. How big would anyone's 401K be if they'd saved 15.3% in it every year? How much harder is it to save your own 15% 2nd...not to mention business expenses.
CA just passed a new rule for businesses with as few as 5 employees to pay into their state retirement program. It's mandatory to sign up employees and up to them to get through the state. The program isn't ERISA qualified and people have no control. Sound familiar?
As the government keeps putting more on employee benefits, companies are going to keep shifting work to contracted arrangements and while we are law abiding and can handle the reporting responsibilities, many people aren't. Income will be underreported and taxes will be underpaid.
A little OT, but I want to address your "rant" against Roths here.
How would you propose means-testing for other assets, like gold, land, or cash? Not the interest from cash, but just the underlying asset itself?
None of those assets necessarily generate income, and like a Roth IRA, they would be funded with "post-tax" dollars.
One reason means-testing is based on income and not wealth is to prevent the penalizing of savers. Longstanding policy has been to encourage saving and investment. And that was the point behind the Roth IRA also.
There is also the secondary issue, that the IRS doesn't get a "wealth" report from taxpayers, it gets an "income" report, the 1040.
Frugality and investment are rewarded by our tax code, and I think the plurality of taxpayers agree with that approach.
ISTM there is a big exception to the bolded above. And that is the effect of taxation of Social Security benefits caused by RMDs from IRAs and 401ks. What some bloggers refer to as the "Tax Torpedo".
Last year was my first RMD year, and I effectively "returned" about 6% or $2000 of my SS checks. This year appears to be about the same. And AFAIK will go on "forever".
Roth IRAs do not have RMDs, and do not add to SS taxation. However, in my career, Roths came along too late for switching from Trad. IRA to make financial sense. IRAs and 401ks were touted on the premise of avoiding a high (say 25%) current income tax bracket, in favor of later withdrawal (at say 15%) tax bracket. Until it was too late, I had not seen any info on the taxation of SS benefits.
So here I am now definitely being penalized for having saved for retirement as one of the so-called "3 legs of the stool". (I also do have small employer pension, and it also adds to the SS taxation).
So I ask, why am I being penalized for saving ?
Oh, BTW, my current AGI puts me in the 15% bracket, so its not like I'm living high off the hog on current "income". And I have no assets other than a car and my "cash" savings.
I stand corrected. I didn't realize it was 35 years. As for gaming it with my small business, you couldn't be further off the mark. I get to pay not only my share of social security and medicare, but I also get to match it, so my contribution comes in at 15.3%, which I max, but not in tremendous excess. My wife doesn't quite max it.
Let's not forget in that range, we're starting to see the larger tier of the income tax payments as well for both Federal and State...
So basically, I bill $1 and the government and I split it about evenly. My wife and I will have paid nearly $1M into this SS program by the time I'm ready to retire and will likely have nothing more than a benefit that is taxed back to the government. I'd like my even share to be honest, and to not have it hauled back by taxes, after paying twice my share all these years. If it's $1500 across the board so be it. How big would anyone's 401K be if they'd saved 15.3% in it every year? How much harder is it to save your own 15% 2nd...not to mention business expenses.
CA just passed a new rule for businesses with as few as 5 employees to pay into their state retirement program. It's mandatory to sign up employees and up to them to get through the state. The program isn't ERISA qualified and people have no control. Sound familiar?
As the government keeps putting more on employee benefits, companies are going to keep shifting work to contracted arrangements and while we are law abiding and can handle the reporting responsibilities, many people aren't. Income will be underreported and taxes will be underpaid.
My kid owns a small business and I cringe when people keep wanting to raise FICA tax.
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