High earners/savers: How do you feel about social security?

[Anonymous]

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Anonymous wrote:I would like to benefit from SS in a few years. I spent many years scraping by as a journalist, always paying into the system. Spouse and I are now pretty well set financially, but the thousands each month to which we will be entitled is not just chump change--it will pay for groceries, gas, home repairs, etc. It may even allow our investments to grow untouched, which is important because at least one of us will likely need assisted living.

And you like everyone who has paid in should be entitled to what they earned for sS. It's a program everyone pays into.
Just because you manage to save for retirement doesn't change that.

You paid in to support current retirees. Future workers will pay in to support you as a retiree.

How many times does this need to be repeated.

I get that. But just because we were high earners and saved does not mean we shouldn't get our "SS support payout" for our retirement. Fact is everyone is entitled to their SS even if they were a higher earner

I agree with this. I think the math should be straightforward. You put in x/you get y without any other commentary.

Maybe there should be an option for those who wish to forgo their SS and a plan for how it could be used for the most needy. But that would be ripe for trouble and a hot mess.

The math on your federal income, property and state tax (if applicable) isn’t straightforward in terms of how it is spent. Why should it be for this?

I think what needs to be reiterated is that SS exists primarily to keep elderly people out of poverty, which is what the plan was designed for.

There is a calculator on the SS website. It should be the same for all. There are other programs that are poverty based.

Don’t even know what you are saying. SS is by far the largest income contributor for poor elderly people.

Are you saying everyone should receive the same amount of SS? Thats one idea put forth.

SS is based on an algorithm. We contribute, our employers contribute, and we receive the contributions based on math. Everyone is entitled to their SS.

For those who can’t survive on SS as calculated, there is SSI.

It’s not that easy. My Dad’s SS is about $1500/month. His housing alone is 1000. He does not qualify for SSI. He doesn’t even qualify for heating assistance etc. because he has some equity in a cheap house (not here) that would be dumb to sell because rent on a 1br apartment would cost more than his mortgage.

That’s really hard. But it also should not have been a surprise. We are repeatedly told what our benefits will be. I hope that isn’t his only source of income.

DP. Some people worked to the maximum their health and abilities allowed and saved the max they could and ended up relying on SS.. It doesn't mean they were lazy or made poor financial decisions. Divorces, health issues, disabilities and other misfortunes often derail plans.

But plenty end up their thru poor choices. At some point, it is not the responsibility of everyone else to fix their poor choices. Like how do you "own a home for 30+ years" and not have the mortgage paid off when you retire? It's a bad financial choice to not work towards paying it off and to borrow against it.
If you choose not to do that, well then retirement/final years might not be that nice for living....but you had a choice

Well it's SS. The person paid into it, and the amount they get is based on how many years that they worked and the income they earned, so no one is bailing them out. And if they did refinance and take money out of their house, you have no idea why, could have been medical debt.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just fix it. Pay on all income. Continue to pay out larger percentage for lower income earners and have a means tested cap that is inflation adjusted for those with $500K or more annual income from other sources outside social security.

Something like this, except the means tested cap idea seems overly complicated. You can just give those people their money.

So many people don't even know there is a point where wages aren't subject to social security and if you eliminate that it solves like 3/4 of the funding deficit.

The current max payout for retiring at 70 is about $62k per year. The social security tax is 12.4% (half paid by employer.) If you remove the cap, the government will collect as much money on someone making $500k in today's dollars as they will pay out in 30+ year future dollars.

You can't remove the cap on the tax while maintaining the cap on the future payout. As it is, the benefit is taxed at a much higher rate for people collecting the max or near the max, especially if married.

I have no idea what you mean by “you can’t”. We certainly could.

Would it mean take home pay for people earning $500k in wages might be 10% lower? It might but that’s not my problem. We could let them have an extra $1k/month in benefits if we wanted to I suppose, but not sure there’s much reason for that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would like to benefit from SS in a few years. I spent many years scraping by as a journalist, always paying into the system. Spouse and I are now pretty well set financially, but the thousands each month to which we will be entitled is not just chump change--it will pay for groceries, gas, home repairs, etc. It may even allow our investments to grow untouched, which is important because at least one of us will likely need assisted living.

And you like everyone who has paid in should be entitled to what they earned for sS. It's a program everyone pays into.
Just because you manage to save for retirement doesn't change that.

You paid in to support current retirees. Future workers will pay in to support you as a retiree.

How many times does this need to be repeated.

I get that. But just because we were high earners and saved does not mean we shouldn't get our "SS support payout" for our retirement. Fact is everyone is entitled to their SS even if they were a higher earner

I agree with this. I think the math should be straightforward. You put in x/you get y without any other commentary.

Maybe there should be an option for those who wish to forgo their SS and a plan for how it could be used for the most needy. But that would be ripe for trouble and a hot mess.

The math on your federal income, property and state tax (if applicable) isn’t straightforward in terms of how it is spent. Why should it be for this?

I think what needs to be reiterated is that SS exists primarily to keep elderly people out of poverty, which is what the plan was designed for.

There is a calculator on the SS website. It should be the same for all. There are other programs that are poverty based.

Don’t even know what you are saying. SS is by far the largest income contributor for poor elderly people.

Are you saying everyone should receive the same amount of SS? Thats one idea put forth.

SS is based on an algorithm. We contribute, our employers contribute, and we receive the contributions based on math. Everyone is entitled to their SS.

For those who can’t survive on SS as calculated, there is SSI.

It’s not that easy. My Dad’s SS is about $1500/month. His housing alone is 1000. He does not qualify for SSI. He doesn’t even qualify for heating assistance etc. because he has some equity in a cheap house (not here) that would be dumb to sell because rent on a 1br apartment would cost more than his mortgage.

That’s really hard. But it also should not have been a surprise. We are repeatedly told what our benefits will be. I hope that isn’t his only source of income.

DP. Some people worked to the maximum their health and abilities allowed and saved the max they could and ended up relying on SS.. It doesn't mean they were lazy or made poor financial decisions. Divorces, health issues, disabilities and other misfortunes often derail plans.

But plenty end up their thru poor choices. At some point, it is not the responsibility of everyone else to fix their poor choices. Like how do you "own a home for 30+ years" and not have the mortgage paid off when you retire? It's a bad financial choice to not work towards paying it off and to borrow against it.
If you choose not to do that, well then retirement/final years might not be that nice for living....but you had a choice

But all welfare payments fix “poor choices”. Why would anyone single out SS?

I mean, I have zero tolerance for giving farmer bailouts when they vote for someone who tells them he will destroy their business…and then he does…and then they cry for a bailout.

We are singling it out because it’s the one they are proposing to change. Right now it at least feels somewhat fair - most people pay in and most people get a benefit. If you start charging an higher amount to more people so you can pay less our to them, it’s going to cause a stir.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would like to benefit from SS in a few years. I spent many years scraping by as a journalist, always paying into the system. Spouse and I are now pretty well set financially, but the thousands each month to which we will be entitled is not just chump change--it will pay for groceries, gas, home repairs, etc. It may even allow our investments to grow untouched, which is important because at least one of us will likely need assisted living.

And you like everyone who has paid in should be entitled to what they earned for sS. It's a program everyone pays into.
Just because you manage to save for retirement doesn't change that.

You paid in to support current retirees. Future workers will pay in to support you as a retiree.

How many times does this need to be repeated.

I get that. But just because we were high earners and saved does not mean we shouldn't get our "SS support payout" for our retirement. Fact is everyone is entitled to their SS even if they were a higher earner

I agree with this. I think the math should be straightforward. You put in x/you get y without any other commentary.

Maybe there should be an option for those who wish to forgo their SS and a plan for how it could be used for the most needy. But that would be ripe for trouble and a hot mess.

The math on your federal income, property and state tax (if applicable) isn’t straightforward in terms of how it is spent. Why should it be for this?

I think what needs to be reiterated is that SS exists primarily to keep elderly people out of poverty, which is what the plan was designed for.

There is a calculator on the SS website. It should be the same for all. There are other programs that are poverty based.

Don’t even know what you are saying. SS is by far the largest income contributor for poor elderly people.

Are you saying everyone should receive the same amount of SS? Thats one idea put forth.

SS is based on an algorithm. We contribute, our employers contribute, and we receive the contributions based on math. Everyone is entitled to their SS.

For those who can’t survive on SS as calculated, there is SSI.

It’s not that easy. My Dad’s SS is about $1500/month. His housing alone is 1000. He does not qualify for SSI. He doesn’t even qualify for heating assistance etc. because he has some equity in a cheap house (not here) that would be dumb to sell because rent on a 1br apartment would cost more than his mortgage.

That’s really hard. But it also should not have been a surprise. We are repeatedly told what our benefits will be. I hope that isn’t his only source of income.

DP. Some people worked to the maximum their health and abilities allowed and saved the max they could and ended up relying on SS.. It doesn't mean they were lazy or made poor financial decisions. Divorces, health issues, disabilities and other misfortunes often derail plans.

But plenty end up their thru poor choices. At some point, it is not the responsibility of everyone else to fix their poor choices. Like how do you "own a home for 30+ years" and not have the mortgage paid off when you retire? It's a bad financial choice to not work towards paying it off and to borrow against it.
If you choose not to do that, well then retirement/final years might not be that nice for living....but you had a choice

Well it's SS. The person paid into it, and the amount they get is based on how many years that they worked and the income they earned, so no one is bailing them out. And if they did refinance and take money out of their house, you have no idea why, could have been medical debt.

Sure if it's for medical debt, but most people I know don't use it for that. They refinance to renovate, take a vacation, etc. When the ultimate goal should be to own your home before retirement, so you can sell (if needed) and downsize/something less expensive. But most are obsessed with borrowing and always having debt.

[Anonymous]

The high earners/contributors are going to keep getting paid out. They will just keep raising retirement age and keep raising the cap. It’s not politically tenable to tell a huge group of wealthy influential people that you are singling them out to raises taxes on them. Just look what happens if they try to increase the marginal tax rate, which this is just another version of.

[Anonymous]

Anonymous wrote:The high earners/contributors are going to keep getting paid out. They will just keep raising retirement age and keep raising the cap. It’s not politically tenable to tell a huge group of wealthy influential people that you are singling them out to raises taxes on them. Just look what happens if they try to increase the marginal tax rate, which this is just another version of.

+1

It's a 12%+ tax (between them and the employer). At some point, you cannot just tax the Rich (not talking about those worth $200M+) more and more and expect them to accept it without voicing complaints, and without expecting something in return.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would like to benefit from SS in a few years. I spent many years scraping by as a journalist, always paying into the system. Spouse and I are now pretty well set financially, but the thousands each month to which we will be entitled is not just chump change--it will pay for groceries, gas, home repairs, etc. It may even allow our investments to grow untouched, which is important because at least one of us will likely need assisted living.

And you like everyone who has paid in should be entitled to what they earned for sS. It's a program everyone pays into.
Just because you manage to save for retirement doesn't change that.

You paid in to support current retirees. Future workers will pay in to support you as a retiree.

How many times does this need to be repeated.

That’s the definition of a Ponzi scheme. New contributors pay for earlier contributors until there isn’t enough new contributors to keep the scheme running and it collapses. This is what’s happening with SS.
The only difference is that the government is running the Ponzi. Any private company running something similar would have been shut down already.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The high earners/contributors are going to keep getting paid out. They will just keep raising retirement age and keep raising the cap. It’s not politically tenable to tell a huge group of wealthy influential people that you are singling them out to raises taxes on them. Just look what happens if they try to increase the marginal tax rate, which this is just another version of.

+1

It's a 12%+ tax (between them and the employer). At some point, you cannot just tax the Rich (not talking about those worth $200M+) more and more and expect them to accept it without voicing complaints, and without expecting something in return.

What they are getting is a functioning society— one where people would stop cheering when CEO’s get killed in the street and warehouses get burned down. They already get the lion’s share of wealth. You do not need to go to people worth $200 M or even $20 million to cover the top 1% who currently own one-third of all the wealth— leaving crumbs for everyone else.

[Anonymous]

We pay significantly more in federal tax than most people make in a year so no we don’t feel like we need to pay more or that we are not paying our “fair share.” Our effective tax rate this year was 33% so it’s not like we are avoiding taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We should have enough without. I don't understand why they have a wage cap. Just take it from all wages and that will solve the insolvency problems pretty quick.

I wish they would just tax all earnings instead of having a cap there - that would also solve the problem!

Will it though (serious question)?

The ultra high net worth and above folks derive far more from investments and capital gains that aren’t subject to SS taxes.

it’s so discouraging when all
people understand and can focus on are the high W2 people when it’s the Form 1041 people who are the problem. Until Americans understand what and who the problem is this will never get fixed. We are so ignorant we kinda deserve this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We should have enough without. I don't understand why they have a wage cap. Just take it from all wages and that will solve the insolvency problems pretty quick.

I wish they would just tax all earnings instead of having a cap there - that would also solve the problem!

Will it though (serious question)?

The ultra high net worth and above folks derive far more from investments and capital gains that aren’t subject to SS taxes.

it’s so discouraging when all
people understand and can focus on are the high W2 people when it’s the Form 1041 people who are the problem. Until Americans understand what and who the problem is this will never get fixed. We are so ignorant we kinda deserve this.

This. The people with earned income are not the problem.

Did you know the Uber rich take loans against their stock to live off of and don’t pay any taxes at all?

[Anonymous]

I’m saving enough to retire at 45-50 and I’m counting on at least 75% of social security expected income starting at age 67. It’s not going away. The number might change but it’s foolish to not plan on getting some amount. The country would collapse if SS goes away: I’m talking riots and political violence.

[Anonymous]

Anonymous wrote:I’m saving enough to retire at 45-50 and I’m counting on at least 75% of social security expected income starting at age 67. It’s not going away. The number might change but it’s foolish to not plan on getting some amount. The country would collapse if SS goes away: I’m talking riots and political violence.

Similar. We know it will be less but we expect something. Honestly we figure it will mostly go toward our Medicare supplement payments that we will be assessed based on income. Once spouse will receive the max and the other spouse will take 50% of the spouse because it will be more than their own.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We should have enough without. I don't understand why they have a wage cap. Just take it from all wages and that will solve the insolvency problems pretty quick.

I wish they would just tax all earnings instead of having a cap there - that would also solve the problem!

Will it though (serious question)?

The ultra high net worth and above folks derive far more from investments and capital gains that aren’t subject to SS taxes.

it’s so discouraging when all
people understand and can focus on are the high W2 people when it’s the Form 1041 people who are the problem. Until Americans understand what and who the problem is this will never get fixed. We are so ignorant we kinda deserve this.

This. The people with earned income are not the problem.

Did you know the Uber rich take loans against their stock to live off of and don’t pay any taxes at all?

Even the WSJ editorial board thinks something has to be done about the fact that the ultra, ultra wealthy don't really pay that much in tax.

The don't believe in a wealth tax, but at the same time, they think the super wealthy need can't just fight every proposal or that's where it's headed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The high earners/contributors are going to keep getting paid out. They will just keep raising retirement age and keep raising the cap. It’s not politically tenable to tell a huge group of wealthy influential people that you are singling them out to raises taxes on them. Just look what happens if they try to increase the marginal tax rate, which this is just another version of.

+1

It's a 12%+ tax (between them and the employer). At some point, you cannot just tax the Rich (not talking about those worth $200M+) more and more and expect them to accept it without voicing complaints, and without expecting something in return.

What they are getting is a functioning society— one where people would stop cheering when CEO’s get killed in the street and warehouses get burned down. They already get the lion’s share of wealth. You do not need to go to people worth $200 M or even $20 million to cover the top 1% who currently own one-third of all the wealth— leaving crumbs for everyone else.

The top 1% pay about 40% of total income taxes while the bottom 50% (!) pay about 3%.

I don’t think the top 1% is the problem or the solution.