Um, I don't want to be the bearer of bad news, but Social Security
is already means tested.
If you are single and your income exceeds $25,000 then 85% of your income is taxable. If I'm not mistaken, 50% goes directly to the Social Security Administration and not to the General Fund. The other 35% goes directly to the HI (Medicare) Trust Fund.
If you file jointly and your income exceeds $32,000 then your
If you file separately, then the threshold is $0.
Note that those amounts are fixed (not floating or adjusted) and so each year more and more people are means tested.
Why don't you read this very informative section of United States Code...
42 USC § 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—
I took the liberty of high-lighting the operand, so you can understand better.
PS...your poll sucks.
Testing...
Mircea
Formula. Singular. I don't really see where lower wage earners are subsidized, but then I'm too damn lazy to throw it on a spread sheet and look at it.
This is
the formula (singular)....
To compute PIA: (1) 90% of AIME below the first bend point; plus (2) 32% of AIME in excess of the first bend point but not in excess of the second; plus (3) 15% of AIME in excess of the second bend point.
The first bend point changes annually. It is currently $767 but is projected to increase to $792 for 2013.
You get your print-out from SSA showing your monthly earnings (the calculation actually starts at age 21). Then you adjust your monthly earnings to the Wage Index. That converts all of your earnings to Year 20
NN Dollars (the year in which you file for retirement benefits), because $2,000 in 1983 is not the same as $2,000 today.
Once you do that, you calculate your average monthly earnings. Monthly, not yearly, Monthly.
Having determined your average monthly earnings, let's say $1,000 per month, then...
1] you get 90% up to the first bend point of $767, or......$717.30
2] you get 32% of the amount over $767, but less than the 2nd bend point of $4,624.
$1,000 - $767 = $233 * 32% = $74.56 + $717.30 = $792 per month as a benefit.
Note that someone who has never earned more than minimum wage, and worked 40 hours per week from age 21 to full-retirement date will receive $763/month at present.
Let's say someone had average monthly earnings of $4,000 per month.....
1] you get 90% up to the first bend point of $767, or......$717.30
2] you get 32% of the amount over $767, but less than the 2nd bend point of $4,624.
$4,000 - $767 = $3,233 * 32% = $1034.56 + $717.30 = $1,752/month.
Any subsidy there?
I think not.
Let's say someone had average monthly earnings of $6,000 per month....
1] you get 90% up to the first bend point of $767, or......$717.30
2] you get 32% of the amount over $767, but less than the 2nd bend point of $4,624.
$4,624 - $767 = $3,857 * 32% = $1234.24 + $717.30 = $1951.54
3] you get 15% in excess of the 2nd bend point....
$6,000 - $4,624 = $1,376 * 15% = $206.4 + $1,951.54 = $2,158
Subsidy?
Nope.
The maximum monthly benefit is $2,513. Just eye-balling it, if you earn more than $85,000 per year then you might be able to possibly make an argument that you are subsidizing low class people. I mean low income people (sorry).
Those who take retirement at age 62
never get 100% of their calculated benefits. Those born after 1960 who retire at 62 only get 70% of their calculated benefits for the rest of their lives (and their spouse only gets 35% of the benefits).
Formulating...
Mircea
Fair? So, you're claiming that the cost-of-living is uniform throughout the US?
How is it fair that one person gets $1,000/month, but due to the cost-of-living $1,000 is only worth $650/month?
How is it fair that one person gets $1,000/month, and due to the cost-of-living $1,000 is worth $1,500/month?
Can you explain that? If States ran their own Social Security programs, cost-of-living would not be an issue.
Also, explain how it is fair that a minimum wage worker should pay $96/month in FICA taxes and get only $763/month in benefits, when the very same worker could be paying $21/month in insurance premiums to a private insurance fund and receive $1,600/month in benefits?
Is there some kind of Lib-logic at work here?
Paying 400% less in premiums and getting 200% more in benefits is evil?
How is that evil?
You already
are means testing.
Not exactly well-informed are you?
You just said Social Security was
insurance. Make up your mind.
Do you have some kind of crystal ball that let's you see how people's lives will turn out in the future?
You really out to stay out of economic discussions. Anyone earning $85,000/year will get the maximum monthly benefit of $2,513/month or $30,156/year.
Someone earning $85K is a millionaire. Imagine that.
And since the threshold is $25,000 then that means 85% of their income is taxable.
Yeah, that would be the means test that you pretend doesn't exist.
Not impressed...
Mircea
Actually they wouldn't need welfare. A minimum wage worker would pay about $21/month for a privately funded retirement insurance plan ---- 400% less than they're paying now --- while getting 200% more in benefits.
The problem with that is Liberals would not be able to lord over people and hold them hostage with threats of cutting their COLA or reducing their benefits or raising the payroll tax rates.
Realistically...
Mircea