GOP introduces proposal to reduce Social Security

[PhreeZone 15]

https://finance.yahoo.com/news/gop-introduces-plan-to-massively-cut-social-security-222200857.html

For most workers, the bill would cut Social Security benefits substantially. As Michael Linden, associate director for tax and budget policy at Center for American Progress, pointed out on Twitter, a letter from Social Security’s Office of the Actuary calculated workers making around $50,000 would see checks shrink by between 11% and 35%.

Nearly every income bracket would see a reduction, save for the very bottom. People making around $12,280 in 2016 who have worked for 30 years would see an increase of around 20%. But young people making the same amount would be hit hard by the changes. If they had 14 years of work experience by 2016, they would see their benefits cut in half.

The plan would also cut entirely cost of living adjustments (COLA) for retirees earning above $85,000.


If this passes the mid-term elections might be more interesting...

Yesterday is history
And tomorrow is a mystery

Parachutemanuals.com

[headoverheels 291]

I've been expecting means testing for some time. I'm also expecting that Roth IRA withdrawals will be indirectly taxed, by including them in the amount of "income" that is used when calculating SSI payments, and the taxes on them.

[TriGirl 268]

I'd really like to see an adjustment to the income subject to SS tax. First $30,000 is untouched. $30,001 to $300,00 pays (or something like that). Perhaps the cap is tied to the tax brackets? It pays for more than retirees. People with certain disabilities get Social Security, including families with eligible children. Regardless of the worker input/retiree benefit, there are certain beneficiaries who will receive much more than they will ever contribute. I'm 100% on board with that and have no problem whatsoever with my money contributing to their welfare.

Personally, I have structured my retirement planning around the assumption that I'll never get a penny from Social Security. Any working person in their 20s, IMHO (especially people making a good living) should consider that will be the case as well and go from there. If it turns out later you really need SS, then let's hope it is still available. It you don't need it, let someone else use it.

See the upside, and always wear your parachute! -- Christopher Titus

Shut Up & Jump!

[TriGirl 268]

Iago

None of the SS problems would be issues if they would index the contribution limits with inflation. The politicians won't do that because they want to drag the issue out every election cycle and use it to scare voters.

Agreed. I'm also in favor of adjusting the age brackets, to be applicable to people currently age 35 and younger (those who still have 20 years to establish employment that may offer retirement benefits after that amount of time). But the lobbyists for the older generation currently receiving SS keep the scare tactics up, trying to claim it will affect anyone in the eligible or soon-to-be eligible age range immediately. As we've seen, that's the age demographic that shows up to the polling places in droves, so they are a perfect target demographic. Do voters really think legislators are that stupid, that they would write a bill that snatches money out of the hands of an elderly person, forced to wait another two years to age back into the new system? Then again, voters don't bother reading the bills before going off on how messed up the bills are, so they'll believe just about anything the mouthpieces want to say.

See the upside, and always wear your parachute! -- Christopher Titus

Shut Up & Jump!

[gowlerk 1,903]

Voters have not had a chance to vote on these issues. Ever. They may be smarter than you think. With age comes wisdom I've heard. Then dementia later on, but that's another story. At age 59 I understand that we are all living longer. I would support changes along those lines in Canada.

Always remember the brave children who died defending your right to bear arms. Freedom is not free.

[Bob_Church 7]

And if anyone is wondering why the government hasn't tried to fix this in the past, just watch the way the media spins it to stir up trouble. "Government going after Retirees money! Have they no soul???"
The phone's ringing, it's probably AARP warning me about how the republicans are about to desecrate me.

[TriGirl 268]

gowlerk

Voters have not had a chance to vote on these issues. Ever. They may be smarter than you think. With age comes wisdom I've heard. Then dementia later on, but that's another story. At age 59 I understand that we are all living longer. I would support changes along those lines in Canada.

Not on the issues, but certainly on the members of congress who might vote for that legislation. It's a threat that the members of congress really fear: getting labeled as wanting to hurt seniors during their elections (representatives most of all, as they have to be re-elected every two years).

See the upside, and always wear your parachute! -- Christopher Titus

Shut Up & Jump!

[ryoder 1,381]

Iago

***Voters have not had a chance to vote on these issues. Ever. They may be smarter than you think. With age comes wisdom I've heard. Then dementia later on, but that's another story. At age 59 I understand that we are all living longer. I would support changes along those lines in Canada.

Well, what needs to happen is a redefinition of 'retirement.' In the future people aren't going to retire at 60 or 65 and live to be 80. They're going to work until 75 or 80 and live to 100 or 120 due to advances in medicine and exponential technologies.

Not if life expectancy is declining: https://www.washingtonpost.com/national/health-science/us-life-expectancy-declines-for-the-first-time-since-1993/2016/12/07/7dcdc7b4-bc93-11e6-91ee-1adddfe36cbe_story.html

"There are only three things of value: younger women, faster airplanes, and bigger crocodiles" - Arthur Jones.

[kallend 1,622]

gowlerk

Voters have not had a chance to vote on these issues. Ever. They may be smarter than you think. With age comes wisdom I've heard. Then dementia later on, but that's another story. At age 59 I understand that we are all living longer. I would support changes along those lines in Canada.

I worked full time until 71 and still work part time. My wife is 69 and still working full time. Our retirement planning includes the social security that we've paid for all our working lives.

Any politician who tries to renege on these for people who've passed the point at which they can make adjustments deserves to have seniors vote against them, regardless of a "R" or "D" by their name.

...

The only sure way to survive a canopy collision is not to have one.

[ryoder 1,381]

No one has yet mentioned an obvious fixable flaw in SS: Maximum Taxable Earnings.
i.e. only the first $118,500 of income is taxed.
Any income beyond that is free of SS tax.
So people making < $118,500 pay a higher percentage of their income, than those making > $118,500.

"There are only three things of value: younger women, faster airplanes, and bigger crocodiles" - Arthur Jones.

[kallend 1,622]

Iago

******Voters have not had a chance to vote on these issues. Ever. They may be smarter than you think. With age comes wisdom I've heard. Then dementia later on, but that's another story. At age 59 I understand that we are all living longer. I would support changes along those lines in Canada.

I worked full time until 71 and still work part time. My wife is 69 and still working full time. Our retirement planning includes the social security that we've paid for all our working lives.

Any politician who tries to renege on these for people who've passed the point at which they can make adjustments deserves to have seniors vote against them, regardless of a "R" or "D" by their name.

When I was 25 or so I had the opinion that you couldn't be too young to retire. I thought it would be great to be semi-retired at 40. Now that I'm 40+, my attitude has changed and I'll probably keep working in some capacity well into my 60s or 70s. I'd be bored silly without some type of daily work.

My wife and I would be quite happy to keep working until no longer able. We'd just like more vacation time so we can travel more.

...

The only sure way to survive a canopy collision is not to have one.

[DrewEckhardt 0]

Iago

None of the SS problems would be issues if they would index the contribution limits with inflation. .

The wage limit is indexed to average wages and increases faster than inflation

In 1996 it was $62,600 ($96,295 in 2016 dollars).
In 2006 it was $94,200 ($112,775 in 2016 dollars).
In 2016 it was $118,500.

That's an extra $6931 annually in nominal dollars and $2753 inflation adjusted for employer and employee shares of Social Security for some one earning more than the limit.