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

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This doesn’t seem like it will save any money. You basically get the highest benefit by waiting til 70 to take the benefit. Once people know their benefit is capped they’ll just claim earlier. So, yes, they will get a lower annual benefit but they will start getting paid earlier. So unless social security hasn’t properly adjusted the age 70 payout, it doesn’t seem like this would save much.

An excellent point. High earners, lots of retirement savings, not planning to take SS until 70. If there was a cap we'd take it at 65.

why i. the world would you wait to take it? you are just giving the government more time with your money. You make way way more if you are actually wealthy and don’t need it and invest it yourself. The math is quite basic.

DP here. If you don’t need the money any way, have a non working spouse and the second spouse lives a long time, you come out ahead with the higher amount, because the second spouse will receive the higher amount after the first spouse dies.

No, when the first spouse dies, the spouse who worked without pay will only get the Full Retirement Amount of the spouse who worked for pay. FRA is the amount a worker is entitled to at 65 or 67, depending on birth year.

So, even if working for pay spouse waits to 70 to get the highest possible amount, the spouse who worked without pay will get the FRA amount, not the age 70 amount.

[Anonymous]

We’d be better off forcing people to save more of their income every year for retirement and then have it be their own money to use (and rely on). Like they do in Australia for example - I think they tax people around 10% as a forced retirement savings plan (superannuation).

This system we have where people are taxed but they don’t actually call it a tax and yet we can’t actually rely on the money is ridiculous.

[Anonymous]

Anonymous wrote:We’d be better off forcing people to save more of their income every year for retirement and then have it be their own money to use (and rely on). Like they do in Australia for example - I think they tax people around 10% as a forced retirement savings plan (superannuation).

This system we have where people are taxed but they don’t actually call it a tax and yet we can’t actually rely on the money is ridiculous.

Agreed. What are the pros and cons to Australia’s approach? Generally speaking, I don’t like a command approach to saving but given our problem, it might be worthwhile to try it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This doesn’t seem like it will save any money. You basically get the highest benefit by waiting til 70 to take the benefit. Once people know their benefit is capped they’ll just claim earlier. So, yes, they will get a lower annual benefit but they will start getting paid earlier. So unless social security hasn’t properly adjusted the age 70 payout, it doesn’t seem like this would save much.

An excellent point. High earners, lots of retirement savings, not planning to take SS until 70. If there was a cap we'd take it at 65.

We plan to tax at 62. Might as well maximize how much we get. We can reinvest what we get and if we live to 78+ we will definitely be ahead (possibly earlier). Given all the discussion of proposed changes we figure might as well get what we have put in before they take a portion away from us

Unless they shrink all the pay outs proportionately.

Either way, if we don't need it now, we will take it at 62 and invest it. Start taking what we have paid in and get as much back as we can.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This doesn’t seem like it will save any money. You basically get the highest benefit by waiting til 70 to take the benefit. Once people know their benefit is capped they’ll just claim earlier. So, yes, they will get a lower annual benefit but they will start getting paid earlier. So unless social security hasn’t properly adjusted the age 70 payout, it doesn’t seem like this would save much.

An excellent point. High earners, lots of retirement savings, not planning to take SS until 70. If there was a cap we'd take it at 65.

why i. the world would you wait to take it? you are just giving the government more time with your money. You make way way more if you are actually wealthy and don’t need it and invest it yourself. The math is quite basic.

This 1000%

Also, take it before the govt cuts it back or moves the eligibility ages. We plan to take at 62 and invest. we don't need it

[Anonymous]

Anonymous wrote:We’d be better off forcing people to save more of their income every year for retirement and then have it be their own money to use (and rely on). Like they do in Australia for example - I think they tax people around 10% as a forced retirement savings plan (superannuation).

This system we have where people are taxed but they don’t actually call it a tax and yet we can’t actually rely on the money is ridiculous.

Yes it is! And beyond ridiculous that the govt likes to "borrow" from it and not keep it solvent. Now I get that part of issue is it also is used for children who had a parent die, disabled kids and adults, and spouses who SAHP and now get benefits because their spouse worked. But Keep a portion for that (a tax for social programs) and let the rest be forced investing, but give me good options for investing it....and by that I mean Vanguard/TrowePrice 10 MF investment choices (including SP500, Total Stock market fund)---low cost funds )

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This doesn’t seem like it will save any money. You basically get the highest benefit by waiting til 70 to take the benefit. Once people know their benefit is capped they’ll just claim earlier. So, yes, they will get a lower annual benefit but they will start getting paid earlier. So unless social security hasn’t properly adjusted the age 70 payout, it doesn’t seem like this would save much.

An excellent point. High earners, lots of retirement savings, not planning to take SS until 70. If there was a cap we'd take it at 65.

why i. the world would you wait to take it? you are just giving the government more time with your money. You make way way more if you are actually wealthy and don’t need it and invest it yourself. The math is quite basic.

I did the math and for me the difference between 67 and 70 is a little over $1000/month. The $140k in payments I forgo by delaying until 70 I make back in 10 years. Adding a couple of years for investment gains on the $140k still puts me ahead if I live past 83-84ish. But I may still take it at 67 (2 years away) just to get some of my SS contributions back. I am high income so fully expect to be capped or cut down the road.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This doesn’t seem like it will save any money. You basically get the highest benefit by waiting til 70 to take the benefit. Once people know their benefit is capped they’ll just claim earlier. So, yes, they will get a lower annual benefit but they will start getting paid earlier. So unless social security hasn’t properly adjusted the age 70 payout, it doesn’t seem like this would save much.

An excellent point. High earners, lots of retirement savings, not planning to take SS until 70. If there was a cap we'd take it at 65.

why i. the world would you wait to take it? you are just giving the government more time with your money. You make way way more if you are actually wealthy and don’t need it and invest it yourself. The math is quite basic.

DP here. If you don’t need the money any way, have a non working spouse and the second spouse lives a long time, you come out ahead with the higher amount, because the second spouse will receive the higher amount after the first spouse dies.

No, when the first spouse dies, the spouse who worked without pay will only get the Full Retirement Amount of the spouse who worked for pay. FRA is the amount a worker is entitled to at 65 or 67, depending on birth year.

So, even if working for pay spouse waits to 70 to get the highest possible amount, the spouse who worked without pay will get the FRA amount, not the age 70 amount.

Not according to AARP:
“As noted above, if you have reached full retirement age for survivors, you get 100 percent of the benefit your spouse was (or would have been) collecting.”

https://www.aarp.org/social-security/faq/when-spouse-dies/?cmp=PDSYM3485VFD4&&utm_source=bing&utm_medium=cpc&utm_campaign=SocialSecurity-Questions-NonBrand-Exact&utm_term=if%20your%20spouse%20dies%20do%20you%20get%20their%20social%20security&utm_content=Survivor%20Benefits&gclsrc=3p.ds&gad_source=7&gad_campaignid=15911172175

[Anonymous]

Anonymous wrote:

Anonymous wrote:We’d be better off forcing people to save more of their income every year for retirement and then have it be their own money to use (and rely on). Like they do in Australia for example - I think they tax people around 10% as a forced retirement savings plan (superannuation).

This system we have where people are taxed but they don’t actually call it a tax and yet we can’t actually rely on the money is ridiculous.

Yes it is! And beyond ridiculous that the govt likes to "borrow" from it and not keep it solvent. Now I get that part of issue is it also is used for children who had a parent die, disabled kids and adults, and spouses who SAHP and now get benefits because their spouse worked. But Keep a portion for that (a tax for social programs) and let the rest be forced investing, but give me good options for investing it....and by that I mean Vanguard/TrowePrice 10 MF investment choices (including SP500, Total Stock market fund)---low cost funds )

I don’t think the borrowing part is the problem. The SS money is being held in government bonds, which doesn’t have any impact on its solvency. But I suppose the law could be rewritten to eliminate that. It would be a pointless gesture.