Reply to What is the maximum possible future SS payment?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]The max possible social security payment if you hit The earnings cap for 35 years and retired at age 67 in 2024 is 3,822. If you waited until 70 and had 35 years of max earnings it would be $4,873[/quote]

I would recommend that you assume that you will only get 75% of this benefit for retirement planning purposes given the current underfunding of The social security program. [/quote]

Stop with the fear mongering.

The SS benefit will be funded from the general treasury if necessary.  Further the money “raided” from the trust fund is owed back and if it’s not paid it destroys the treasury’s credit rating.[/quote]

I am 20-iah years from taking benefits, and that's about what I am assuming. Not that Treasury wouldn't fund payments, but that they will be reduced by legislation. I assume that those at the upper end of benefit will get a haircut in the 20-25% range, through means testing or just slow benefits cuts.[/quote]

You can assume that all you want.  But even if they reduce the benefit, it would be from the date enacted, which means whatever you put in before would be calculated at the current rate.

What will actually happen, if anything, is the retirement age will be raised, the cap will be increased, and any short falls will be covered by appropriations.  But the most likely scenario is simply the latter, if the trust fund runs out (including the significant debt owed by the treasury) then Congress will write a check.  If they do not write a check, the US goes bankrupt.

If social security is ended in some form, it will also only go into effect, at the earliest, the date enacted.

The government can’t just retroactively take away social security benefits already accrued.  It’s a mandatory program with debts accrued for every worker who has contributed.

[/quote]

[b]Congress can do whatever it wants[/b], if they get the buy in of 218 reps, 61 senators (51 if no filibuster?) and the president. [b]Social security is not in the Constitution.[/b] You want to lower benefits to.lower costs? Push down the COLA formula. Make it means tested.

Now those will be hard things politically, I agree. But sooner or later something has to give.[/quote]

You are wrong.

Congress cannot take benefits away that have already been accrued.  It can only change benefits from the date enacted and going forward.

[/quote]

I don't understand how the United States Congress couldn't pass a bill making changes in taxes and benefits as enacted by a previous Congress.

Politically they may not want to call it a "benefit cut", but there are tons of ways they could do it through formula changes, taxation changes, etc. The 1983 revisions made SS payments taxable, which they were not before. That's a benefit reduction. They also gradually increased the retirement age, and those born after 1960 had their raised to 67. Those people were 23 and some had already been paying in for 6-7 years. Their benefits were cut. Yes it was done in a graduated way, but it was a benefit cut, however you want to frame it.[/quote]

You don’t understand it.  But that doesn’t mean it can happen.

Raising the full retirement age and making the benefits taxable isn’t taking benefits away.

This is why raising the full retirement age and increasing the cap are the 2 ways Congress can legally increase the balance of the trust fund.  They can also reduce the benefits paid on future contributions. They cannot just start paying .80 on the dollar, as this would impact the credit rating and it’s extremely tricky to pass retroactive laws, there are multiple constitutional arguments that could be made[b].  While retroactive laws have been passed in a limited number of instances,[b] a blanket benefit cut on SSI would undoubtedly be an unprecedented retroactive taking without due process and would be unlikely to survive[/b].  Congress knows this and would be extremely unlikely to even go down this road with the high risk of failure.  Especially with how relatively inexpensive the gap will be.  It will be much more straightforward to essentially print money to dig out of the  debt rather than try an untested, unlikely to succeed, high risk gambit to cut benefits retroactively.

[/quote]

https://en.wikipedia.org/wiki/Flemming_v._Nestor

"Flemming v. Nestor, 363 U.S. 603 (1960), was a United States Supreme Court case in which the Court upheld the constitutionality of Section 1104 of the 1935 Social Security Act. In this Section, [/b]Congress reserved to itself the power to amend and revise the schedule of benefits.[/b]"

I agree with you that it's unlikely, with odds verging on zero, for political reasons.  Which was why I argued above that Congress would almost certainly take other avenues that would be de facto cuts in benefits, as they did in 1983.[/quote]

You’re referencing the same argument.  Yes, changing the retirement age was upheld in 1960 (by the Warren court, which is an important footnote).  Retroactively reducing benefits will not survive a court challenge.  Take your pick of constitutional clauses that it violates.  Some laws have been enacted retroactively, narrowly survived Supreme Court challenges, but are vastly different than the U.S. government reneging on a social insurance program.  If the Supreme Court allowed this, U.S. government ability to make any promise will be destroyed.  It’s not going to happen.[/quote]

I will give you that with the current Court, it really doesn't matter what the precedent is, they will come up with whatever justification they want to get to where they want to get to.  Even if it's "we found a pamphlet from 1548 Nottingham that indicates the King cut a payment to the local squire, thus establishing that it would be consistent with the historical tradition" or the opposite, of course.[/quote]

The fear mongering about Congress one day just taking away social security benefits is so embedded in collective conscious.

Congress will not, and also will not be able to, take away accrued benefits in an insurance program.  [/quote]

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