What Would You Be Willing to Do to Save SS?

[Anonymous]

Medicare Part B update: http://www.cnbc.com/2016/08/22/average-retiree-will-see-social-securtiy-benefit-decrease.html

Note 1 impact retirement advisors don't touch is any hold harmless on Part B premiums for those already receiving social security. How high could that go and it already has an income based premium.

[Anonymous]

Anonymous wrote:SS, in its current form, is projected to run dry by 2034. (And while some people are talking about increasing benefits, it's obvious we need to cut.) From what I understand, a couple of minor "tweaks" can save the program. What would you be willing to sacrifice? I would vote for three changes:

1) Gradually increase the full retirement age to 68. ?There should be no change for people within 10 years of retirement, but for others, we could add a month every year until we get to 68. When SS was introduced, people barely lived 5 years past retirement age (on average), and now we have people claiming for 20 to 30 years.

2) Increase the cap on the amount people pay the SS tax.

3) Lower the benefits for people in the uppermost brackets - in retirement - by about 25%. My parents have a retirement income of about $150k - no pensions, just responsible lifelong savings and investments - and they tell me they wouldn't miss a SS cut of a few hundred dollars a month.

Opinions?

SS tax is currently stopped when your income exceeds $120,000. This is absurd. Eliminating the upper limit would completely solve the issue.

[Anonymous]

I don't think raising the age to 68 will help at all. DH, age 60, has faced rampant age discrimination since age 50. It's pretty hellish out there for a lot of people over age 45 who have to get a new job - there are many who have given up.

The cap should have been removed a long time ago - why the heck is it even there?

[Anonymous]

Anonymous wrote:Medicare Part B update: http://www.cnbc.com/2016/08/22/average-retiree-will-see-social-securtiy-benefit-decrease.html

Note 1 impact retirement advisors don't touch is any hold harmless on Part B premiums for those already receiving social security. How high could that go and it already has an income based premium.

Retirement person here....

The hold harmless provision only affects SS benefits and premiums in years when there's no SS COLA. In normal years growing premiums do take a growing bite out of SS checks. As you say, it doesn't help anybody new to SS that year, or high-income people.

[Anonymous]

Anonymous wrote:

Anonymous wrote:SS, in its current form, is projected to run dry by 2034. (And while some people are talking about increasing benefits, it's obvious we need to cut.) From what I understand, a couple of minor "tweaks" can save the program. What would you be willing to sacrifice? I would vote for three changes:

1) Gradually increase the full retirement age to 68. ?There should be no change for people within 10 years of retirement, but for others, we could add a month every year until we get to 68. When SS was introduced, people barely lived 5 years past retirement age (on average), and now we have people claiming for 20 to 30 years.

2) Increase the cap on the amount people pay the SS tax.

3) Lower the benefits for people in the uppermost brackets - in retirement - by about 25%. My parents have a retirement income of about $150k - no pensions, just responsible lifelong savings and investments - and they tell me they wouldn't miss a SS cut of a few hundred dollars a month.

Opinions?

SS tax is currently stopped when your income exceeds $120,000. This is absurd. Eliminating the upper limit would completely solve the issue.

Yes but would those very real people get any return? Are you cognizant of the fact that these are many of the same people unfairly paying more for medicare part B? What about people who never paid into medicare getting the low rates and even state subsidies?

[Anonymous]

Anonymous wrote:I don't think raising the age to 68 will help at all. DH, age 60, has faced rampant age discrimination since age 50. It's pretty hellish out there for a lot of people over age 45 who have to get a new job - there are many who have given up.

The cap should have been removed a long time ago - why the heck is it even there?

Because benefits are also capped.

[Anonymous]

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Anonymous wrote:8:15 here. My mom has a Jitterbug and this does seem like a problem.

You're also talking about the progressive benefit formula. Do you have a source for your numbers on contributions vs. benefits, because they don't seem right.

Social security website was the source. Actual numbers from friends and relatives. Because of the max earnings people feel free to discuss it-not a subject like actual earnings. Retired teachers /cops etc in major cities [high cola areas] should really be complaining via unions to elected officials about medicare premium surcharges beginning at 85k retirement. Now that is just grossly unfair.

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.

Please don't confuse people with actual facts.

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.

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.

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.

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.

Oops, I meant to put 40% for the medium income person.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Kill it and make it optional

Making it optional would be a disaster because so many people would opt out, fail to save anything for retirement - I believe I read that half the people 50+ have less than $10,000 saved - and when retirement came about, then what? Are we going to let those people starve? 0f course not! They'd get some form of welfare (in lieu of SS they opted out of). But what about the people who DID participate in the program - and with less in their paychecks had to forgo a new car....expensive vacation....larger house, etc......how is that fair? Or what about people who DID opt out, but knowing they had no SS, saved on their own? Not fair to them, either. With an opt-out option, there's no incentive to save for retirement, knowing there will be a safety net there regardless.

In a free country they should be free to opt out. They are also free to suffer the consequences if they fail to otherwise plan. I don't like being forced into something because of what someone else may or may not choose to do for themselves.

There is a cap on earnings because there is a cap on benefits. It's not supposed to be a welfare program. The lower income already receive more than they paid and those having paid the most receive the least in proportion to what they paid in. The whole let's make the rich pay or those who actually lived frugally and made smart choices mantra is rather sad.