Likelihood of future changes to Soc. Sec. and Medicare rules, taxation, etc. (spouses, marriage)
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Main problem with "reforming" Social Security in USA is that unlike other developed countries with vast national social programs that can be tapped for seniors/elderly. SS is pretty much it for USA, as such loud cries to turn the thing into something it was never supposed to be; a sort of welfare system.
SS in this country was designed to replace part of a worker's income in retirement. Not all or even half, but more like one-third. If someone never earned more than $30k for most of their working career, that's it then. Except it isn't far as some are concerned. They would have others pay more (in taxes) in order that those getting less in SS can receive more.
They already do get more in the sense that the lowest paid levels get up to 6x the benefit of the highest levels per dollar paid in
Surveys always show a gap between average age of when people expect to retire and when they actually do retire. There are an awful lot of early retirees in their late 50s and early 60s who lost their job and can't find a new one due to age or being physically incapable of doing their job anymore. I'd assume a lot of these would switch to ACA and get subsidies, which I'm not sure is any cheaper for the government than them being on Medicare.
Not saying I advocate lowering the Medicare age since it is a program built for retirees, just questioning whether most who would take it between 55-65 would usually be heavy asset folks who retired on their schedule instead of a few bad hands of cards dealt their way.
Medicare is already on the ropes - it is just a couple of years from being not able to pay already. Adding younger folks will do two things, both will make the situation worse. It will add many more to the system already straining to pay and it will encourage more to retire early that will put less funds into the system.
The main differences between Medicare and ACA are how they are funded / who pays. Technically ACA is private insurance, only subsidized by the government for those that are poor. Medicare is paid mainly out of a trust fund funded by payroll taxes collected from retirees when they worked. Retirees paying approx 20% of the costs of the policy out of SS and 80% comes out of the trust fund. They are not funded the same way or from the same funds, it is not just a simple trade off for costs. You would kill Medicare if added many more.
In the last couple of years, I have been hearing from among my neighbors, there is a growing sentiment who want medicare to be open to everyone. regardless of age.
As a spectator to all of the political debates that have been going on. I suspect that Medicare will get opened to everyone a long time before they decide to tweak SS.
I agree that SS does need to be tweaked. But the far-left has not been making speeches for SS to be fixed. They want a guaranteed minimum income, free healthcare, and free housing.
The far left are a small minority, loud but not in the majority by any means - policy is not made by those at the extremes on either end of the spectrum. Younger folk do not talk about SS fixes because it is not impacting them yet. We know where SS money comes from and it will get fixed, otherwise the older folks will complain about the roughly 25% cuts in a few years.
The minority on the left want free everything, socialized everything that is expensive - the issue is where does the money come from, Paying for these items requires more taxes and currently they are looking at BBB - for climate change programs, expanded child care credits for those with kids and subsidized day care - not medical care, housing and UBI. Their only answer is tax the "rich" more, the thing is that they are already taxed heavily. BTW - Guaranteed minimum income already kind of exists with EITC, SSI, TANF and the current child care tax breaks - the current proposals would expand those tax credits.
Main problem with "reforming" Social Security in USA is that unlike other developed countries with vast national social programs that can be tapped for seniors/elderly. SS is pretty much it for USA, as such loud cries to turn the thing into something it was never supposed to be; a sort of welfare system.
SS in this country was designed to replace part of a worker's income in retirement. Not all or even half, but more like one-third. If someone never earned more than $30k for most of their working career, that's it then. Except it isn't far as some are concerned. They would have others pay more (in taxes) in order that those getting less in SS can receive more.
What is often overlooked is that in those "other developed countries" is that everyone pays into those programs with very high tax rate at even very low income levels - often up to almost half of their income at even a below average income level. Not the progressive system in the US that taxes almost half almost nothing and the top 10% pay well over half the total taxes. In Denmark the tax burden is about 45% for even a fairly low income - how will the majority react if someone making $40K was paying $19K in taxes - that is how these programs are funded.
Most of these countries DO have a program like SS but their payouts are often much smaller than in the US. In the UK, the full State Pension is £179.60 per week ($242.25 per week or $12,597/year) - and unlike US, can't even start to collect until full retirement age (66) and no bump for waiting.
What is often overlooked is that in those "other developed countries" is that everyone pays into those programs with very high tax rate at even very low income levels - often up to almost half of their income at even a below average income level. Not the progressive system in the US that taxes almost half almost nothing and the top 10% pay well over half the total taxes. In Denmark the tax burden is about 45% for even a fairly low income - how will the majority react if someone making $40K was paying $19K in taxes - that is how these programs are funded.
Most of these countries DO have a program like SS but their payouts are often much smaller than in the US. In the UK, the full State Pension is £179.60 per week ($242.25 per week or $12,597/year) - and unlike US, can't even start to collect until full retirement age (66) and no bump for waiting.
Joke is that for most Scandinavian countries they take nearly your entire annual income in taxes, then give it back in benefits.
"While there is little doubt that the Swedish people have benefited from the "Swedish Model," they also have one of the heaviest tax burdens in the world. Today, an average Swedish working family pays about half its earned income in national and local taxes. Swedes also pay taxes on investment income. In addition, Sweden has a national 25 percent sales tax that is built into the price of consumer goods. Beyond this, employers must pay corporate taxes and make payments into government pension, unemployment, and other social welfare funds. The resulting tax burden is so heavy that Swedes have a special word for it, skattetrat, which means "tax tiredness."
Medicare For All is not happening. Our embedded health care system is too vast and too complex. All they can do is tinker around the edges (like with ACA)... Too many people would not want to be forced onto Medicare. Like someone said Medicare as it stands is insolvent much sooner than SS (within a couple of years instead of 13 years). It would be easier to put retirees on ACA than put everyone on Medicare.
SS will be fixed; they will increase the Percentage we pay (FICA) and the income amount subject to the FICA tax. It will also tax it more fully as income when your receive SS.
1960 and above already got hit with an age adjustment from 65 to 67. The death rates are skewed by the simple fact that less people die in the first year of life and has nothing to do with adults living longer. They will find more opposition to monkeying around with the Full Retirement Age.
Medicare is already on the ropes - it is just a couple of years from being not able to pay already. Adding younger folks will do two things, both will make the situation worse. It will add many more to the system already straining to pay and it will encourage more to retire early that will put less funds into the system.
The main differences between Medicare and ACA are how they are funded / who pays. Technically ACA is private insurance, only subsidized by the government for those that are poor. Medicare is paid mainly out of a trust fund funded by payroll taxes collected from retirees when they worked. Retirees paying approx 20% of the costs of the policy out of SS and 80% comes out of the trust fund. They are not funded the same way or from the same funds, it is not just a simple trade off for costs. You would kill Medicare if added many more.
Actually the Medicare Part B premiums amount to 25% of the cost. 75% is picked up in the HI payroll tax. Not sure how many pay IRMAA. In the higher brackets you also have to include Part D charges. Expecting HI taxes to go to 2% range. Since there is no income limit can't use soak the rich argument. Big shock in this year's 14% increase. Nobody seems to care.
There is something else stirring with the new Alzheimer's drug that may or may not have any benefit. At a $68,000 cost something is up here.
They already do get more in the sense that the lowest paid levels get up to 6x the benefit of the highest levels per dollar paid in
Cut the welfare program called Spousal Benefits by 25% then apply that 25% to an actual poverty level WORKERs income to increase I Not to someone who is able bodied who didn't lift a finger to earn it.
Technically ACA is private insurance, only subsidized by the government for those that are poor. Medicare is paid mainly out of a trust fund funded by payroll taxes collected from retirees when they worked. Retirees paying approx 20% of the costs of the policy out of SS and 80% comes out of the trust fund. They are not funded the same way or from the same funds, it is not just a simple trade off for costs. You would kill Medicare if added many more.
"Only" 87% of people on individual ACA plans get subsidies. As for the rest, I'm honestly not sure what point you're trying to make. I was questioning your claim that most pre-medicare retirees have a lot of assets because it's my understanding that a large portion of them didn't plan on retiring.
Most of these countries DO have a program like SS but their payouts are often much smaller than in the US. In the UK, the full State Pension is £179.60 per week ($242.25 per week or $12,597/year) - and unlike US, can't even start to collect until full retirement age (66) and no bump for waiting.
Yep, this is often overlooked when people point to the wonderful public pension schemes of countries in Europe. It's a lot less than people think, and many people who collect full SS will have a larger "pension" despite it not having that name.
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