OT: Property tax relief coming for those over 65
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See my other post. Increase taxation limit for SS from $170K to truly high income. Pay SS taxes for incomes over $100M. That will pay for SS.
I guess we don't care about seniors, which you will be some day. If you can't save $10M for retirement, you may need SS too. . .
I'm not endorsing (or attacking) this idea, but I do want to point one thing out: it means higher benefits for the rich because one's Social Security pension is based on the amount of tax one paid. The system comes out ahead because the formula for calculating benefits is graduated; one gets more bang out of the first amount paid into the system than succeeding amounts. But still the rich will get higher benefits absent a very radical change in the system.
And what is the current average 401 K account of those currently working in the USA. How many don’t have a pot to pee in? Wishful thinking of 10million at retirement? Some yes most would need that SS in the future. For those of us with a pension and 401 K and SS it certainly makes life much easier. Also having no marked debt, mortgage and student loans is a plus. We still know seniors who owe $$$$ on a student loan. People who have paid into this SS debacle should be able to recoup some of those funds.
That post was from 1 yr ago. You know if you don’t cap the earnings, you can’t cap the benefits. It might save it for the short term but in the long run, it would get crushed. The wealthy have the means to live longer.
"Why should only the low incomes pay for it?" Wealthy don't pay in? Their employers don't match that amount? Is their benefit not tied to the amount paid in and not their total income? Their is a slight bias in the benefit calculation towards lower income recipients, but the operating word is "slight".
In theory, Soc. Sec. at inception was supposed to work like a government 401 (k) for all workers. The concept was great, the execution was lousy. Congress would raise the benefit and not raise the withholding rate or the salary subject to FICA. All gain, no pain and invest the funds collected in special federal bonds with a lower than market interest rates to keep the federal deficit down. Well the shit hit the fan in the late 70s after a bill was passed adding an annual COLA increase without an equivalent increase of the SSI tax rate. And then came stagflation. And seniors who paid in 1% of $3000 (matched by the employer) essentially got the equivalent of getting a piece of the Microsoft IPO. That would likely be your grandparents. Problems for the rest of us, and both parties are responsible.
So if you want to blame the rich, include the rich congressional Democrats who were part of the problem You can exclude Tip O'Neill if you also exclude Ronald Reagan.
May I disagree? Social Security was sold to the public as though it was a pension plan. But it never was in reality. After all, benefits started immediately. So the workers of the 1930s were paying for the benefits being received in the 1930s by people who had never paid a cent into the system because it hadn't existed. That pattern continues to this day; today's social security taxes go to pay today's benefits. The problem right now is that the working population is low compared to the number of beneficiaries -- baby boomers like me. That problem will get worse as the birth rate drops and people like me live longer. It's actually worse in Europe or South Korea and Japan than here because the birth rates there are even lower.
The bias toward lower income recipients isn't that slight. To determine a worker's "primary insurance amount," (the amount the worker would get at full retirement age), the Social Security Administration first calculates the worker's "average indexed monthly earnings." (AIME) It then gives the worker 90% credit for the first (roughly) $1800 per month, 32% credit for the amount of the AIME between $1800 and roughly $7000 a month, and only 15% credit for everything over that.
https://www.fool.com/retirement/social-security/benefits-formula/
If you can’t see it as a good thing for many going forward as well as other younger property owners then you need to take a closer look. We always seem to find a dime somewhere. Maybe NJ and others need to make better use of all tax $$$$$.
Agreed with @RUskoolie - SS is the textbook definition of a ponzi scheme. There's no debate on this. Sure, you can say it's the only legal ponzi due to the backing of the federal gov, but the inherent inefficacies and problems with it are all rooted in SS being a ponzi (need to take in new money or pay out former commitments). If the money was better invested 20 years ago when last proposed, we would be in an amazingly different situation now.
Ah I see, just tax the rich some more. That will solve all the problems!
It's a Ponzi scheme and will collapse shortly. I do not know any Millenial who is banking on social security when they retire. We all understand it was a Ponzi scheme dumped on us by the Boomers.
Very good point. The taxes are capped because the benefit is capped. If you change one you gotta change the other.
The easiest (and most cowardly) thing to do is support raising someone else's taxes.
You certainly can disagree, especially when it's a discussion and not a diatribe. Yes, at the beginning of Social Security people got benefits who hadn't paid in. BTW, even more so with Medicare. But the number of working people contributing was much larger. There was a surplus that formed the SS trust fund, that was invested to provide future benefits to participants. If still exists,but I believe it's supposed to run out in the early to mid 2030's. Since it's inception Congress has raised both benefits and costs a number of times. The first problem is the increase in benefits is retroactive, it applies to retirees no longer paying in. The increase in costs is only prospective, to those paying in. It was the most problematic in the 70s, when annual COLA's were applied benefits and not to payments. That didn't change until Reagan-O'Neill circa 1983. Also the investments by the trust fund had been less than optional, and I am talking about Treasury securities an not the more risky (and more rewarding) equities. And now, as you pointed out, the increase in benefiaries vs. paying in. Ironically, the Boomers who saved the system in the early 80s now are beginning to put it in peril.
So my position is "sort of" a pension which has an element of governmental meddling
It seems like just a modest increase in return would make/have made a huge difference in the program. But DC is full of cowards and partisans.
Well as an old Boomer I maintain …. Ask any of your elder parents, grandparents , relatives if they want to give it up. The last 5 years the term it’s a Ponzi scheme has once again has been tossed about. why? Because most don’t truly understand the term Ponzi scheme. Take anyone aside and ask. Can you explain a Ponzi scheme to me? 90 % won’t have clue.
I don't think a huge difference, but no doubt a difference. Sometime I'll dig into what the trust fund invested in in the late 70s early 80s. 30 year Treasury bonds at 9-13% would have been nice
+1
It's been a long time since I read about the proposed options of the 80s and 2000's (obviously with the latter being more about equities). But I remember the changes making a big enough impact that benefits could actually be increased over time. IIRC!
This subject was fixable and should have been done by a number of administrations. Problem was… how could politicians themselves benefit? That’s part of the problem. What do I get out of this ? Know this we have heard all the sides and reasonings. If we are having issues with elderly getting back money they paid into for 30-40 years or more then think what you it will be like for others entering the SS system within 20 years. Going to be the land of the wealthy and NOT so wealthy. Instead of bolstering the world how about we solve this boondoggle here first.
-Cut cost of living increases by 1%
-Raise the retirement age to 68 or 69
-Increase the max limit for social security deduction with lower % deduction
-Eliminate or reduce dependent social security and spouse social security benefits
-Reduce payout by 3-5% for everyone
Easy solutions that politicians won’t agree upon. Way too many retirees that don’t have enough saved. Social Security was only suppose to be part of someone retirement income. People can’t afford living even when they were working. I’ll take the 5% cut in my social security.
I remember the story of Detroit going thru bankruptcy and the employee pensions were scared but in the end retirees only had to give up like 3-5% of their pension to solve the problem.
-Raise the retirement age to 68 or 69
-Increase the max limit for social security deduction with lower % deduction
-Eliminate or reduce dependent social security and spouse social security benefits
-Reduce payout by 3-5% for everyone
Easy solutions that politicians won’t agree upon. Way too many retirees that don’t have enough saved. Social Security was only suppose to be part of someone retirement income. People can’t afford living even when they were working. I’ll take the 5% cut in my social security.
I remember the story of Detroit going thru bankruptcy and the employee pensions were scared but in the end retirees only had to give up like 3-5% of their pension to solve the problem.
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I would rather not increase the retirement age, but focus on making a better return on SS tax money through investment. This has been the problem with the program since the beginning.
If you increased the age to 70 it would make a substantial difference. It was changed before I believe. Now we have 30-40-50 year olds who can’t understand the actual SS system but are already worried about retirement. What one should do is make an effort to open an investment portfolio with a reputable company and start putting money away into it. Force feed yourself to SAVE… 20-30 -40 years of this can make retiring quite nice. All who have payed into the current system should be able to get $$$$ out of it. We give enough of our monies to everyone else .
Ponzi scheme dumped by you by the Boomers? The Boomers voted in the 1930's to set up the program? The Boomers voted for changes in the programs benefits and costs in the 40's, 50's and 60's? Remember the voting age was 21 until 1970. The Boomers put people in Congress in the 1970s who set up COLA increases without corresponding pay-ins in 1973. Those born in 1964 must be especially responsible as they were 9 years old at the time.
I'd sign on to 1, 2 (if it's done gradually with notice like Reagan-O'Neill did in '83) or 4, but try it and you'll find out why they call it the 3rd rail of politics. For both parties.
It's hard to believe that the number of working people contributing was higher. The population in 1940 was about half of the present population and a much lower proportion of women were in the workforce.
Investing in equities is indeed riskier. Social Security is supposed to be a safety net -- it doesn't make sense to gamble with a safety net. The worse the stock market is doing, the more important Social Security becomes to supporting people in their old age, and so it's crucial that Social Security not be subject to the same risk.
The trust fund is now scheduled to run out of money in 2034, which would reduce benefits to 80% of their current level. It's an issue that needs to be addressed sooner rather than later. But it's not a reason to panic. Perhaps the worst idea (you didn't suggest it) is to increase the retirement age, which hurts people, many of them low-income, who have done physical work over their lifetimes.
To clarify, I meant the number of workers paying into the system in 1940 was far larger than the number than the number getting benefits. Clearly both numbers are far larger now, particularly recipients over 70.
Yes, the problem is that baby boomers like me didn't have enough kids, and the generations that followed us haven't made up for it. So we will have a smaller working population supporting a larger retired population. It's not a crisis, but it needs to be dealt with.
Also expecting "the big donors" to pay for everything too. I see that one all the time on here.
This could have been course corrected decades ago, don't be obtuse.
You want to blame the Greatest, Silents. Boomers, Gen X and Millenials, ALL OF THEM, feel free But if you think this is solely the blame of a single group then you're the one who is being obtuse
It was course corrected decades ago by Reagan and Tip O'Neil. But a generation has passed and we have a new set of problems. No one in the early 1980s could have anticipated how low the birth rate would turn out to be and how much life expectancy has increased for the elderly. And, again,there is no crisis -- we have a decade to fix the problem although of course the sooner the better.
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Full page story in today's WSJ about couples increasingly choosing not to have kids.
As a WSJ subscriber, I'm sharing this story -- it's timely and important. Pundits assume that economics are the reason, but that's only one. Rather, young people no longer see becoming parents as an essential goal. https://www.wsj.com/lifestyle/relat...r4lh7vw8bbi&reflink=desktopwebshare_permalink
no worries, we have 12 million new citizens from around the world who have joined us the last few years
Indeed, the big advantage the U.S. has over the rest of the developed world is its willingness and ability to accept immigrants.
I don’t think he and others on the board think it’s an advantage.
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