What Would You Be Willing to Do to Save SS?
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Anonymous
Retirement security person here. Many eager researchers have looked for this relationship, but they haven't found it. |
Anonymous
'Grandma' poster here. I am against it. As it is, after working for 50 years not only is my benefit capped, it's taxed. There is also a much higher premium for Medicare Part B as well as an added premium to a prescription drug plan. And I am actually fine with that. But as to reducing my benefit, if it were not for the cap then I would be in favor of a cap but to take away something I have paid into since my early teens, no. BTW, it took my 40 years of my adult life to reach a higher income. Most of those were spent lower to middle income. So I know what it's like to not have much and live paycheck to paycheck and have more month at the end of my money. |
Anonymous
Retirement security person here. For really low income people, the annual benefit is about 90% of their wages when they were working. For middle income people, the rate is about 35-40%. For the highest earners at the cap, their annual benefit is about about 25% of their salary before they retired. I haven't seen your figures for low earners as a ratio to high earners for contributions. If you have a link I'd be happy to take a look. It's true that living standards vary by area. |
Anonymous
Why exactly is it "unfair." |
Anonymous
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I posted about the contribution and benefits. Medicare:
https://www.medicare.gov/your-medicare-costs/part-a-costs/part-a-costs.html Part A-hospital- $411 per month if you have not paid into it. Part B premiums MAGI above $85,000 up to $107,000[married 214k]>standard premium121.80+48.70+12.70prescription=183.20. Amt extra annually is 994/person. Through states people NOT eligible for SS and those eligible can receive income based help for paying Part A and Part B. |
Anonymous
Please don't confuse people with actual facts. 
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Anonymous
Please, we just got people to stop with the ad hominems every time someone corrects them. No need to stir the pot and get the insults flying again! |
Anonymous
Retirement security person here. Sorry, but Medicare is not my thing and I don't know much about the numbers! Those numbers do seem high to me. On the other hand, it's expensive to insure older people, and Medicare is in worse financial shape than SS. Here's something I do know about. The SS "benefit cap" you mention is actually calculated as the benefit you would receive if you earned more than the contribution cap each year. So even if I was Bill Gates, I wouldn't contribute more than somebody else who earned more than the cap, and I wouldn't get higher benefits. |
Anonymous
Numbers are actuals from real people so no links. Medicare premiums are on it's website. What would I do? Remove all medicare freebies at the state level for Part A. Change Part B base so there are no income based surcharges and have all pay prescription. You can do sample amt paid v benefits. Use 40 quarters only annual max income for 10 years and then use a lower number for 10 years. Try 120k v 10k. |
Anonymous
Retirement security person here. Somebody who pays on over just 10 years would get a low benefit no matter their income. SS benefits are calculated over 35 years, so it would be better to use 35 years. 10 years is the minimum you can pay in and get any benefit. |
Anonymous
Yes but those parameters are easier for data entry on this exercise based on the calculators I can find. We are interested in pay in, income, benefits. 3 things and any calc I have found [except actuals] just shows income and payout. DOB 1/1/1954 with 10 years of earnings ending 2014. 10,000/year 62=181>pay in exceeded in 3.5 years max per year at 62=1046>pay in exceeded in 6.5 years. |
Anonymous
Retirement person here. Here's a way to get quick results for benefit levels without sacrificing accuracy. Take those replacement rates I posted earlier (25%, 40% and 90%) and apply them to whatever income you're considering. Income is the average income of this person over 35 years. For a low income like $25,000, use 90%. For a medium income like $50,000 use 50%. For a high income at the cap use 25%. For something in between one of these income levels, use a rate that's in between. The result of income*rate will be the benefit level for this person. Then divide by 12 to get the monthly benefit and subtract off the monthly Medicare premiums you gave above. If I've misunderstood what you're trying to do, let me know. |
Anonymous
Back again. I forgot: pay-in equals the average income you used above * 6.2 or 12.4 depending on your goal * 35 years. Obviously these are very rough calcs, and applying the SS benefit formula would give you a more precise answer. It doesn't sound like you need that, though. So if you go with what's above, you get rough, but you don't have the issue of 25 years of zero income in the benefit calculator you're using, which really would lower benefit results. |
Anonymous
Really, because the research is out there, despite what "many people are saying". Guess The Social Security Administration and Bureau of Economic Analysis don't count as 'eager" researchers. 
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Anonymous
That's a chart on benefits as a percent of GDP during 1957 to 2004. It's silent about what happens to us from 2016 through 2034 or later. It's also agnostic about productivity's role, by which I mean those rises and dips in the line could be due to anything from wage growth to productivity growth to changes in GDP (the denominator) itself for any number of reasons affecting GDP. If there was some narrative accompanying that graph that talked about productivity that might be interesting. But the SS Trustees take productivity growth into their projections for the future based on "intermediate" (basically, most likely, although that's been debated) and it doesn't solve the problem. Signed, retirement person |