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Old 03-02-2018, 09:01 AM
 
71,861 posts, read 71,942,576 times
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Quote:
Originally Posted by Bodie_Bunk View Post
Social security is the only income that cannot be garnished by debt collectors. Insolvency has no bearing upon it. These rules are not set in place for ethical reasons. This is to protect the economy.

.
not true according to forbes :

"At a Senate Committee hearing this week, the Government Accountability Office, a research arm of the Congress, reported that 155,000 people last year had their Social Security checks docked to pay off a delinquent student loan. ."

https://www.forbes.com/sites/jasonde.../#3f90e7a734d6
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Old 03-02-2018, 09:14 AM
 
3,630 posts, read 7,250,172 times
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Always assume you are solely responsible for your retirement. Then everything else is bonus.
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Old 03-02-2018, 09:51 AM
 
Location: Silicon Valley
3,632 posts, read 1,639,372 times
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Quote:
Originally Posted by Mircea View Post
Political winds are not shifting against Social Security, and nothing will happen except that Congress will wait until the last possible minute to increase the FICA Payroll Tax to keep it solvent until the next crisis happens.
I'd expect this to be cut once the boomers lose significant voting power. Gen X is a fraction of the size. The time to end the program would be politically easiest then.

It's unlikely that they'll end the program, but they'll find a way of letting the purchasing power inflate away and likely raise the retirement age. Medical cuts would be the harder piece to swallow, but perhaps innovation will make healthcare much cheaper then compared to what it is now.

Otherwise you've got 3 DIY ways to get it done:

1. Save 15-20% and invest it. Keep employed and relevant. By checking your consumption the math will work out if you get a reasonable return for your money.
2. Real Estate
3. Starting a Business
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Old 03-02-2018, 09:51 AM
 
251 posts, read 114,519 times
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Quote:
Originally Posted by mathjak107 View Post
not true according to forbes :

"At a Senate Committee hearing this week, the Government Accountability Office, a research arm of the Congress, reported that 155,000 people last year had their Social Security checks docked to pay off a delinquent student loan. ."

https://www.forbes.com/sites/jasonde.../#3f90e7a734d6
Thanks, this seems like a unique problem because most Boomers don't have lingering student loan debt. I expect this loophole to be fully closed soon - Otherwise this will create the same de facto result, an economic catastrophe we cannot afford.

In this case it would be ironic because the fed themselves are ultimately responsible for the whole thing. They are the ones who decided to lend money to people believing that private employers would then hire those people because of credentials obtained on federal dollars. I think the fed should eat that cost if that risk doesn't pan out in their favor, now I will accept a tax increase in the future if they accept the defaults. Essentially all it is a negative line item on the fed balance sheet. But I'm not concerned, because student loan interest payments on federal loans are literally pennies on the dollar. The government is not making any money on interest for those loans compared to other income sources for the government.

We have to look at the net effective result after everything is "settled". Let's say we Garnish Grandpa #4,446,008 and he checks into a homeless shelter that is - You guessed it - Paid for by the State which then tries to pass that cost onto the Fed.

SS was paying him contributing to his $500 a month rent in a low COLA area (let's ignore inflation) in today's dollars. That same bed in the homeless shelter the State is passing the cost on to the Fed through various means and being marked up to say maybe 50% of what his individual rent would be for a studio apartment at a Senior rate. It does NOT cost $2500 a year to maintain a mattress in a homeless shelter even when factoring in staff labor costs and facility maintenance. The problem then becomes, you are garnishing $1500 a month to pay back money that was originally owed. You only make money on the interest which was maybe 2-3% at best. Guess what that interest gain you received off of the payment is now being offset completely because the State will inevitably mark up the bill it gives to ask the Fed for money because it now has to support all of these Seniors plus pad the budget for high city council salaries and their own pensions and retirement packages.

The bill becomes much higher than if we simply let the loan go into default forgo the original balance as well as the paltry interest typically owed on Fed loans. At best depending on the original balance, best case scenario you become made whole again. But at what cost? There is an extremely high likelihood that Senior will die earlier due to poor living conditions. It is commonly known senior life expectancy drops dramatically after entering into a standard nursing home. So imagine a homeless shelter or other state sponsored facility. What happens then? You can't just artificially keep paying yourself to balance the books post-mortem. So now you have on average 15 years of a net negative balance compared to what you would have made on their average life expectancy because they died too soon.

Had you continued leaving the social security and written off the debt (let's say it's $10k) here's what would have happened.


Scenario A (Write Off)


You lost $10k principal and factoring in interest and any other fees maybe $15k
The Senior lives to be 80 years old and through SS they pump $1500 a month for 15 years into the economy. That is a whopping $270,000 not adjusting for inflation. Let's say that money was spent on potato chips in NYC. On the sales tax alone you are generating $20k in State income on that money. That is not factoring in federal income tax from highly paid nurses that administer care over the duration of that Senior's life. Conservatively, that is an additional $20k.

Scenario B (Garnishment):
The Senior died 6 months later from stress from being harassed and abused at the homeless shelter. You got about 6 months of loan payments from SS. About $9k so you were almost made whole again. But unfortunately the State billed you $10k for anti-anxiety meds, social worker billable hours, and handling of the body post-mortem. So you ended up in the red again. Remember they marked the hell up out of those costs. Now I know what you are thinking. The Fed will simply decline and ask the State to revise and try to negotiate. Well in a populated State like NY or FL which supplies the Fed with millions in revenue per year that is not going to be possible.

The money making difference for the fed here is high federal income tax on jobs related to Senior care in advanced age. Vs. a Social worker in a homeless shelter who makes peanuts. When discussing this scaled x10 of the original 155k garnishments today that is an astronomical difference.

155k is enough. Imagine that number is anything close to x10 the amount: 1.5 million. Now I am thinking the States will buckle under the surge in demand for living quarters for basically insolvent Seniors instantly and go bankrupt before they can bill the Fed. You are exchanging nurses for social workers at scale. This is not sustainable.

Ethics, morality and emotions aside. We simply cannot afford to garnish social security for much of anything. We don't have the appropriate infrastructure to accommodate. Unless of course you want to see hundreds of Grandpas and Grandmas begging for quarters on the street coughing, congesting hospitals for easily treatable ailments caused by exposure to the elements and clogging up florida beaches and other warmer states where homeless populations outside are traditionally larger.

It will become more than just an economic or moral issue but a social issue. A 40 year old prime age working adult will not want to take their children to Disney land if it means that their children have to see old people in tattered clothing walking around like zombies begging for food, water, prescription drugs and spare change.

Last edited by Bodie_Bunk; 03-02-2018 at 10:03 AM..
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Old 03-02-2018, 10:11 AM
 
Location: Silicon Valley
3,632 posts, read 1,639,372 times
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Quote:
Originally Posted by Bodie_Bunk View Post

It will become more than just an economic or moral issue but a social issue. A 40 year old prime age working adult will not want to take their children to Disney land if it means that their children have to see old people in tattered clothing walking around like zombies begging for food, water, prescription drugs and spare change.
Not really. Old people are forgotten all the time. The very concept of independent retirement for all is relatively new and more expensive in America because each generation of a family lives in a different home.

The terrible option not mentioned is a return to the status quo...when the aged surrender their independence not to a home or care center, but to the 40 year old's home....those without solid connections/families will find that zombies live much longer than starving and unmedicated old people...and the streets are tough on anyone, and there's plenty of disenfranchised youth that will move faster to get those handouts begging.
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Old 03-02-2018, 10:48 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
5,532 posts, read 4,123,594 times
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Quote:
Originally Posted by MurphyPl1 View Post
Always assume you are solely responsible for your retirement. Then everything else is bonus.
I think this is the best approach.
It like hope for the best but prepare for the worse.
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Old 03-02-2018, 02:46 PM
 
Location: Central Massachusetts
4,800 posts, read 4,857,647 times
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Quote:
Originally Posted by Serious Conversation View Post
I'll be 32 next month. It's conceivable that I won't be retiring for another 30-35 years, and I've only been in the professional workforce for about eight years. With that said, I've seen some changes.

When I hired in at Northrop Grumman in 2010, the company had just done away with the pension for new hires. My dad hired in at the same facility a few years back and qualified for the pension. New hires just got a 401k.

Over time, they began to outsource work done at that site, with fewer full time employees, and a greater reliance on contractors. Most of the contracting firms offer no benefits of any kind.

I've changed jobs several times since then. No company offers a pension, and it seems that fewer seem to offer any retirement savings plan or company match at all. My current employer matches just 3% as an annual lump sum. Due to timing of when I was hired, I still haven't received any matching funds, and I've been here twenty months. The plan is completely DIY.

Who knows if, or what form, SS will take in another couple of decades. The political winds are currently shifting against SS and other government services seniors rely on. Medicare is in worse shape.

How do you think the next few decades will go?
I actually think it will go back the other way. Yes it will still depend upon the individual to actually work but more and more I think the universal 401k idea is going to come about. It will be something simple like your name and the company you have your fund in. It follows you around in that you just have your employer make the deposits directly to that account if they don't offer their own. If they do and match then you roll your fund to the new one or keep it separate until you retire or leave that and roll it into your own account. Simple and portable.
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Old 03-02-2018, 03:15 PM
 
Location: Ohio
19,968 posts, read 14,268,565 times
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Quote:
Originally Posted by artillery77 View Post
I'd expect this to be cut once the boomers lose significant voting power. Gen X is a fraction of the size. The time to end the program would be politically easiest then.
Without defined pension plans and with fewer people having access to an employer-based 401(k) program, and with fewer people saving money, Generations X and Why Work? will be jumping on the band-wagon to save Social Security.
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Old 03-02-2018, 03:33 PM
 
Location: Florida and New England
1,235 posts, read 1,421,404 times
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Quote:
Originally Posted by TwinbrookNine View Post
Rule #1 is never underestimate. 12 years ago 1.2 mil + SS at 65 was OK to retire at 55. I figured, heck, I would have to actually try to spend it all before I died (so I thought). But much of that vanished rapidly due to exorbitant health insurance, escalating HOA's, food 40% up in price, continuously increasing electricity costs, and services (like landscaping, pool maintenance, contractors) all 2 - 3X what they cost just 10 years ago. CD's paid 5 - 6%; today they are useless.
I have been slowly browsing and shredding old files for the past year or so. I was quite a packrat back in the 1980s and 1990s and kept every receipt. Anyhow, the relevance is this:

1990s Food/ Restaurant costs. Appetizers were routinely $6-$7; cocktails were $5.
Today's Food/ Restaurant costs. Appetizers often $15-20; cocktails are $12+ now.

1990s Electric bills. 1000 square foot apartment -- $50/ month
Today's Electric bills. Similar apartment -- $200/ month

1990s Rent. 1000 square foot apartment, prime location, high COL city -- 1200/ month
Today's Rent. Similar apartment -- 4000/ month

One thing that is cheaper in real dollar terms -- phone service. Back then you paid $60 per month for long distance plus $50 for landline service plus various fees and taxes. That is all now rolled into the single cell phone bill, often less than $100/ month.

Health insurance is the real unknown. I won't retire until I know how this will be handled long-term (or at least until I'm 65 and Medicare kicks in). I co-paid around $200/ month in the 1990s. My all-in costs are now greater than $1000/ month for health insurance.
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Old 03-02-2018, 04:29 PM
 
28,287 posts, read 39,953,793 times
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Not to worry. Everyone will be on the dole. As robotics and AI take over the jobs humans do now the governments (hopefully) will give everyone what's required for a basic existence.

Very glad I will be dead by then. It's going to get real ugly out there.
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