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It is like if you had a room full of people, who have all decided to signup for a SS policy each in their own names. All of us in this room all pay 6.5% of our income into our SS policies along with a matching 6.5% contribution from our employers.
You might want to assume that all of our money earns interest at the same rate. But that is not true. The formula has bend-points in it.
If you were relatively low-income through all of your working career, your money will be invested at a much higher interest rate than someone else who is a high-income earner. Of course that high income person is going to contribute a much higher amount of money into his policy.
It takes a long time to learn the SS formula so my antennas are way up about anyone who can read about it thinking they understand it.
Truly, it takes a lot of steps to understand it. To calculate it. This is not for the faint of heart and cannot be summarized accurately in any article. To manually do it was grevous, not something I would recommend. I believe the SS calculator is pretty close
The higher income people often have spouses that are being paid with free dollars they never earned, that is not factored in either. Low income couples must both work in order to survive, no free SS money for them. The only difference is those NON WORKERS Who are gifted this money free and clear, well they cannot earned delayed SS credits.
Also the higher income people put in more money into SS yet were often unfairly paid more and to boot, they complain the SS formula won't credit them as much $. When they were too often credited way more via their sit at home spouse. They feel like they are owed SS money they were never promised. I say then stop contributing to the SS system. They have a choice afforded to them to stop where the poor WORKERS do not.
All Earners accumulate interest on delaying SS equally. Or taking SS early docking us a percentage.
Last edited by BalloonLady; 12-31-2021 at 08:10 PM..
Have you ever considered doing a bit of research on this matter? Or are you just so comfortable that your considered view is correct yammering on will force rest of us to believe?
"But Social Security was never meant to be the
only source of income for people when they retire.
Social Security replaces a percentage of a worker’s
pre-retirement income based on your lifetime earnings.
The amount of your average wages that Social Security
retirement benefits replaces varies depending on your
earnings and when you choose to start benefits. If you
start benefits in 2021 at your “full retirement age” (see our
“Full retirement age” section), this percentage ranges
from as much as 78 percent for very low earners, to about
42 percent for medium earners, to about 28 percent for
high earners. If you start benefits after full retirement
age, these percentages would be higher. If you start
benefits earlier, these percentages would be lower. Most
financial advisers say you will need about 70 percent of
pre-retirement income to live comfortably in retirement,
including your Social Security benefits, investments, and
personal savings."
"PIA formula
For an individual who first becomes eligible for old-age insurance benefits or disability insurance benefits in 2022, or who dies in 2022 before becoming eligible for benefits, his/her PIA will be the sum of:
(a) 90 percent of the first $1,024 of his/her average indexed monthly earnings, plus
(b) 32 percent of his/her average indexed monthly earnings over $1,024 and through $6,172, plus
(c) 15 percent of his/her average indexed monthly earnings over $6,172."
Yes, I know it like the back of my hand. I do not need to cut and paste the information but you are free to. As you can see, my info mirrors what you posted for good reason. I stated 1/3 and 30% (being lazy) when it is 32%. Ok my husband was in the 32% category, not 30%. A pretty close memory if do say so myself
In fact, the SS min benefit you posted is hardly in effect anymore. it is almost eliminated due to the min wage being higher. So it sorta got phased out, hardly anyone is on that. That is an article you can post with complete accuracy if you choose to correct that. Go find it ok?
Do you do any research or just cut and paste articles? Have you ever actually calculated your own SS benefit prior to taking it? Do you truly understand the steps taken?
The special minimum benefit is something Biden wants to increase, by the way. Most likely the Republicans will not allow it
You're welcome...
Last edited by BalloonLady; 12-31-2021 at 08:04 PM..
Yes, I know it like the back of my hand. I do not need to cut and paste the information but you are free to. As you can see, my info mirrors what you posted for good reason. I stated 1/3 and 30% (being lazy) when it is 32%. Ok my husband was in the 32% category, not 30%. A pretty close memory if do say so myself
In fact, the SS min benefit you posted is hardly in effect anymore. it is almost eliminated due to the min wage being higher. So it sorta got phased out, hardly anyone is on that. That is an article you can post with complete accuracy if you choose to correct that. Go find it ok?
Do you do any research or just cut and paste articles? Have you ever actually calculated your own SS benefit prior to taking it? Do you truly understand the steps taken?
The special minimum benefit is something Biden wants to increase, by the way. Most likely the Republicans will not allow it
You're welcome...
Repeating the same thing over and over does not make it anymore correct .
The lowest wages earners get back far more than they paid in per dollar then higher wage earners
The fact is the difference per dollar paid in to ss can be 6x for the lowest end worker than the higher worker ..period
The bend points create points of diminishing returns as you get less back per dollar .
So a lower wage earner gets a bigger percentage in ss vs their income paid to them .
There are even special minimum benefits that pay more then a worker would get from their record alone
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.
You apparently misread what I wrote so your data is wrong - the Medicare premiums are not close to 25% of the costs of Medicare. The fund/taxes pays almost all of Medicare Part A for all but a few and the majority of parts B and D. The data is 79% is from fund and payroll taxes, 15% is from premiums, 3% is from taxes on benefits and 3% is other sources. I rounded a little - 18% comes from beneficiaries and 79% from fund/taxes which is why I said approx 20% and 80%. About 7% of retirees on medicare pay IRMAA and D surcharges. The rich are already soaked on Medicare and SS by how it is structured - they pay much more for less benefit.
If look at only part B, then premiums are about 26% of that portion but that is less than half (47%) of medicare's total costs and was not what I was referencing wich was all of Medicare. FYI - only 1% of Part A costs and 17% of Part D is covered by premiums.
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.
Lower paid workers are already heavily favored as far as benefits - SS was not really designed as welfare program, lets not make it one now.
"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.
The post was implying that Medicare and ACA were interchangeable as far as how funded, they are not - getting a partial subsidies is very different from how Medicare is funded through work taxes. Those that retire early without a plan still have coverage through ACA and Medicaid without putting a larger burden on an already stressed system.
I did not claim anything about assets, only that changing to make Medicare available early will be something else to encourage those that do have assets to quit paying payroll taxes (helping fund) and moving into Medicare early (receiving funds) because it will make medical care more affordable.
Where is the data about "large portion of them" are forced to retire early - losing a job is not "forcing" one to retire unless that is their choice - they can still go to work elsewhere. You act like they are being forced to retire, that is really true for very very few - it may mean they are looking for a job when older but that is a choice to not do so. If someone is let go at 30, are they being "forced" to retire? How about 40, 50, 60 - when does it become forced and when is it that not planning is the individuals responsibility?
The post was implying that Medicare and ACA were interchangeable as far as how funded, they are not - getting a partial subsidies is very different from how Medicare is funded through work taxes. Those that retire early without a plan still have coverage through ACA and Medicaid without putting a larger burden on an already stressed system.
No it wasn't. It was pointing out I don't know which put more burden on the government, the rest about them being interchangeable you invented. Source = I wrote the post.
Quote:
Originally Posted by ddeemo
I did not claim anything about assets, only that changing to make Medicare available early will be something else to encourage those that do have assets to quit paying payroll taxes (helping fund) and moving into Medicare early (receiving funds) because it will make medical care more affordable.
You said:
"2) Medicare age lowering is very unlikely because will be too expensive and will benefit mostly those that have the assets so they can retire early."
In what alternate reality is that no claiming anything about assets?
Quote:
Originally Posted by ddeemo
Where is the data about "large portion of them" are forced to retire early - losing a job is not "forcing" one to retire unless that is their choice - they can still go to work elsewhere. You act like they are being forced to retire, that is really true for very very few - it may mean they are looking for a job when older but that is a choice to not do so. If someone is let go at 30, are they being "forced" to retire? How about 40, 50, 60 - when does it become forced and when is it that not planning is the individuals responsibility?
If you can't find a new job because you're 63, you are forced to retire early.
No it wasn't. It was pointing out I don't know which put more burden on the government, the rest about them being interchangeable you invented. Source = I wrote the post.
I guess you really missed the point.
You said: "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."
That is about which is the cheaper alternative for the government but that ignores that they are different funding sources - it doesn't really matter about cheaper - Government funds are not interchangeable - they have specific mechanisms of taxes and uses. ACA is mainly funded by premiums and the rest is out of federal and state general tax funds. Medicare is mainly payroll taxes collected from the beneficiaries and is already not collecting enough to cover - adding more to the rolls will just cause it to be even more at risk.
Funding source and who/what it covers is often much more important than overall cost - I spent years dealing with federal allocation of funds for purpose - "color of money" issues.
BTW the overall cost would be more by lowering the coverage age - not even close to being cheaper since ACA subsidies are much lower on average than Medicare coverage from the funds.
Quote:
Originally Posted by lieqiang
You said:
"2) Medicare age lowering is very unlikely because will be too expensive and will benefit mostly those that have the assets so they can retire early."
In what alternate reality is that no claiming anything about assets?
I was not commenting about retirees assets or having/not having assets - it was not about assets. Go back and read, it is clear what I was referring to - those WITH assets, in other words, those that can afford to retire early - it has the same meaning in the context of what I wrote.
I was responding to what you said:
"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."
I said NOTHING like "most pre-medicare retirees have a lot of assets" because I said nothing about most peoples assets - it was only about those that HAVE assets/can afford to retire. It was you that misread it as a comment about everyone's assets - it was not.
Quote:
If you can't find a new job because you're 63, you are forced to retire early.
You can go onto unemployment instead of SS, it is still a personal choice to retire or not. What if can't find a job at 40, 50 or 60, before SS is an alternative - is that still "forced to retire"? ACA and Medicaid are available also whether 40 or 63 to cover medical care. It is a cop out to say "can't find a job", it may not be the job or pay you want - but jobs are still available so not "forced to retire".
You said: "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."
That is about which is the cheaper alternative for the government but that ignores that they are different funding sources - it doesn't really matter about cheaper - Government funds are not interchangeable - they have specific mechanisms of taxes and uses. ACA is mainly funded by premiums and the rest is out of federal and state general tax funds. Medicare is mainly payroll taxes collected from the beneficiaries and is already not collecting enough to cover - adding more to the rolls will just cause it to be even more at risk.
Funding source and who/what it covers is often much more important than overall cost - I spent years dealing with federal allocation of funds for purpose - "color of money" issues.
BTW the overall cost would be more by lowering the coverage age - not even close to being cheaper since ACA subsidies are much lower on average than Medicare coverage from the funds.
I didn't miss the point nor did I imply they are interchangeable, that is your own construct that you're now arguing against. Bottom line one is always going to more of a burden on government expenses.
Quote:
Originally Posted by ddeemo
I was not commenting about retirees assets or having/not having assets
Hah, except you specifically mentioned reitrees having assets. You know e can just scroll up, right?
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