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Social Security won't be able to pay full benefits by 2034 (1 Viewer)

Stealthycat

Stealthycat

Footballguy
https://www.cnn.com/2021/08/31/politics/social-security-medicare-report/index.html

Anyone care ? I bet in 2033/34 as a last second measure our Fed Govt will look at doing something

How much did ya'll pay into SS last year? $15,000 ?  $30,000 ? more ?

Washington (CNN)Social Security will have to cut benefits by 2034 if Congress does nothing to address the program's long-term funding shortfall, according to an annual report released Tuesday by the Social Security and Medicare trustees.

That's one year earlier than reported last year. By that time, the combined trust funds for Social Security will be depleted and will be able to pay only 78% in promised benefits to retirees and disabled beneficiaries.

 
Stealthycat said:
https://www.cnn.com/2021/08/31/politics/social-security-medicare-report/index.html

Anyone care ? I bet in 2033/34 as a last second measure our Fed Govt will look at doing something

How much did ya'll pay into SS last year? $15,000 ?  $30,000 ? more ?

Washington (CNN)Social Security will have to cut benefits by 2034 if Congress does nothing to address the program's long-term funding shortfall, according to an annual report released Tuesday by the Social Security and Medicare trustees.

That's one year earlier than reported last year. By that time, the combined trust funds for Social Security will be depleted and will be able to pay only 78% in promised benefits to retirees and disabled beneficiaries.
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The way this goes now, that is what the printing presses are for.  The way we are acting, we no longer want to be the world's reserve currency so by then who knows.

 
dkp993 said:
Been hearing this same thing for decades.  The only thing that changes is the date in which it will run out.  Keeps getting pushed.  
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It has the same amazing symmetry as the end of the world warnings & the mypillowguy telling us Trump is about to be reinstated. They just keep moving the date down the road and the same group just keeps lapping it up.

 
IMO, such an 'easy' fix: Just increase the income cap (or restart it again for a higher income range).  Someone who is regularly making a six-figure income is probably also eligible for an employer pension and/or retirement match.  I.e., they won't be hurting come retirement age.  Let 'em pay in more, even if that means they're effectively subsidizing some of those who are less well off (the horror!).  Starting this now would call for a less extreme adjustment than waiting 15-20 years.

 
HellToupee said:
Retirement match and a pension are 2 totally different things. I have both, my wife who is a 6 figure earner only has a match. Pensions are few and far between today
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Hence the "and/or."  

Kind of funny ...my wife is retired, and found out almost by accident last year that she was due a pension from the bank where she worked at the start of her career.  That was a pleasant surprise.

 
tri-man 47 said:
IMO, such an 'easy' fix: Just increase the income cap 
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This is what needs to happen.  As long as we're comfortable when 10 years from now that Mr. Tom Brady gets a 10k/month SS check this will work fine.  After the last bend point the monies flowing in subsidize the rest.  I'd also be a proponent of doing away with "starting at 62" and moving to "starting at 20 years from the average age of death" to capture that variable and make SS expense more predictable.

Leroy Hoard said:
Voting breakdown. Good luck being a politician from either party who ever votes for cuts.
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There would be no vote for this.  Once the fund runs dry the decrease is automatic.

 
dkp993 said:
Been hearing this same thing for decades.  The only thing that changes is the date in which it will run out.  Keeps getting pushed.  
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Well, that and the "side" claiming "concern" that it's going to happen.  Two sides of the same coin all fighting desperately to ignore that reality :lol:  

 
Stealthycat said:
are you ok with being taxed way way more to help all those making less than you ? lets say .. 15% more 
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Yes.  As it is right now, SS taxes have been withheld for decades ...and in five years, I'll start collecting.  I have *no* idea how well the amounts withheld over the decades (plus interest??) compare to what I'll be receiving.  Is it a wash?  Dunno.  So if it's imbalanced to some degree (15%?), I wouldn't notice.  

And if I were making more than the current cap of $142,800 (which I'm not because I work in higher education  :rolleyes: ) the benefit of having the extra 6.2% in some late-year paychecks wouldn't have a significant effect.

 
tri-man 47 said:
IMO, such an 'easy' fix: Just increase the income cap (or restart it again for a higher income range).  Someone who is regularly making a six-figure income is probably also eligible for an employer pension and/or retirement match.  I.e., they won't be hurting come retirement age.  Let 'em pay in more, even if that means they're effectively subsidizing some of those who are less well off (the horror!).  Starting this now would call for a less extreme adjustment than waiting 15-20 years.
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No thanks.  Those folks already pay way too much in taxes.

 
tri-man 47 said:
Yes.  As it is right now, SS taxes have been withheld for decades ...and in five years, I'll start collecting.  I have *no* idea how well the amounts withheld over the decades (plus interest??) compare to what I'll be receiving.  Is it a wash?  Dunno.  So if it's imbalanced to some degree (15%?), I wouldn't notice.  

And if I were making more than the current cap of $142,800 (which I'm not because I work in higher education  :rolleyes: ) the benefit of having the extra 6.2% in some late-year paychecks wouldn't have a significant effect.
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Yes it would

 
tri-man 47 said:
IMO, such an 'easy' fix: Just increase the income cap (or restart it again for a higher income range).  Someone who is regularly making a six-figure income is probably also eligible for an employer pension and/or retirement match.  I.e., they won't be hurting come retirement age.  Let 'em pay in more, even if that means they're effectively subsidizing some of those who are less well off (the horror!).  Starting this now would call for a less extreme adjustment than waiting 15-20 years.
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Such an easy fix= tax other people a lot more. 

 
tri-man 47 said:
Yes.  As it is right now, SS taxes have been withheld for decades ...and in five years, I'll start collecting.  I have *no* idea how well the amounts withheld over the decades (plus interest??) compare to what I'll be receiving.  Is it a wash?  Dunno.  So if it's imbalanced to some degree (15%?), I wouldn't notice.  

And if I were making more than the current cap of $142,800 (which I'm not because I work in higher education  :rolleyes: ) the benefit of having the extra 6.2% in some late-year paychecks wouldn't have a significant effect.
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ok, well then yeah, since you're 5 years away, you wouldn't care that 25-30 year olds who've earned their higher paying jobs get gigged hard to provide you with money 

I understand that view

 
Gilroy34 said:
Very selfish view
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isn't social security like a pyramid scheme ? I mean we don't recruit people, rather the Govt mandates everyone to pay in when they get a job paying taxes but the premise remains ...

pyramid schemes rely on recruitment of new members to bring in money, the schemes often collapse when the pool of potential recruits dries up

 
tri-man 47 said:
IMO, such an 'easy' fix: Just increase the income cap (or restart it again for a higher income range).  Someone who is regularly making a six-figure income is probably also eligible for an employer pension and/or retirement match.  I.e., they won't be hurting come retirement age.  Let 'em pay in more, even if that means they're effectively subsidizing some of those who are less well off (the horror!).  Starting this now would call for a less extreme adjustment than waiting 15-20 years.
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I would prefer that we simply allow anyone who wants to opt out of SS be allowed to do that and have their SS deductions put into a fund(s) of my choosing instead of going into a pool.  Heck, it could even be one of those generic funds like Retirement 2040 things that auto adjust your risk level based on age.  If I put in 6.2% of my salary with an 1.5% salary increase every year and an 8% return, by the time I'm 70 (23 years) I'll have $1M.  If I spread that out over 20 years I would get $4,100 a month.  I can only imagine what I would have in my retirement account if it took all the money I contributed since I began working.  If I continue putting in money to SS, by the time I'm 70, I'll get $3,200 a month.  Plus, if I die, my estate gets nothing.  That sucks.    

 
Stealthycat said:
How much did ya'll pay into SS last year? $15,000 ?  $30,000 ? more ?
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Unless people are self-employed, the max anyone will pay in this year is $8,854.   Their employer will pay the same amount on their behalf.   So you could $17,707 if you want to.

SS has some serious problems.   The biggest is that life expectancy has risen rapidly since SS was created, but the age people start receiving benefits has barely budged in comparison.  The 2nd biggest problem is that far too many folks treat it like their sole retirement plan, and it was never intended to serve that purpose.

 
Alex P Keaton said:
Unless people are self-employed, the max anyone will pay in this year is $8,854.   Their employer will pay the same amount on their behalf.   So you could $17,707 if you want to.

SS has some serious problems.   The biggest is that life expectancy has risen rapidly since SS was created, but the age people start receiving benefits has barely budged in comparison.  The 2nd biggest problem is that far too many folks treat it like their sole retirement plan, and it was never intended to serve that purpose.
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link to the first please ( I didn't know there was a max??)

and on the second, what do you think SS's purpose was and why is it still around etc ?   asking for information/opinion 

 
Godsbrother said:
A guy 5 years away from collecting SS was likely once the 25 year old that earned his higher paying job and has provided previous generations with money. 
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true 

and he likely hated being taxed heavy and money being reallocated with promises of in the future, having money/health security and hey ... here it is, looming

and its not going to be there unless the Fed Govt borrows more money because they mismanaged it all like they always do

trust the Fed Govt right ?  :(

 
Stealthycat said:
true 

and he likely hated being taxed heavy and money being reallocated with promises of in the future, having money/health security and hey ... here it is, looming

and its not going to be there unless the Fed Govt borrows more money because they mismanaged it all like they always do

trust the Fed Govt right ?  :(
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It's been looming for decades but the our elected officials in Washington haven't done squat to address the obvious issues. 

I'm nearing retirement myself and as much as I hate to say it they need to take drastic steps to keep it afloat, including upping the qualifying age, putting a cap on people collecting that don't need it and likely upping the SS tax.

I think it will still be around in 2034 but I'm not counting on it.

 
Godsbrother said:
It's been looming for decades but the our elected officials in Washington haven't done squat to address the obvious issues. 

I'm nearing retirement myself and as much as I hate to say it they need to take drastic steps to keep it afloat, including upping the qualifying age, putting a cap on people collecting that don't need it and likely upping the SS tax.

I think it will still be around in 2034 but I'm not counting on it.
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remember when GW was in and there was talk of privatizing ?

imagine if all the money we put into SS were instead invested in 401K's ?

its not our choice because so many people don't put into the system :( but take vastly from it 

 
Stealthycat said:
link to the first please ( I didn't know there was a max??)

and on the second, what do you think SS's purpose was and why is it still around etc ?   asking for information/opinion 
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https://www.ssa.gov/oact/cola/cbb.html
 

I think the purpose was to give older Americans (who theoretically couldn’t work anymore) a minimum basic income that prevented them from living in extreme poverty.

It was structured in a way — with everyone included — so that it would never go away.  

 
Stealthycat said:
remember when GW was in and there was talk of privatizing ?

imagine if all the money we put into SS were instead invested in 401K's ?

its not our choice because so many people don't put into the system :( but take vastly from it 
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If we just had Welfare for the Old, we could do exactly what you suggest.  I would much rather pay for elderly welfare and keep whatever is left as my share and invest it independently.

 
Godsbrother said:
A guy 5 years away from collecting SS was likely once the 25 year old that earned his higher paying job and has provided previous generations with money. 
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So, yes.  When I was young, I didn't think about SS or, more generally, about retirement.  I don't recall when I started tucking away funds or using the employer match of 401K contributions.  That's arguably a positive aspect of SS ...the gov't is essentially 'forcing' us to save, starting at an early age when we otherwise might not prioritize it.

 
My guess is at some point age of withdrawal will be moved back - initially with some factors such as if you are considered wealthy influencing who gets the hit.

Some choices will have to be made for sure. 

 
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tri-man 47 said:
So, yes.  When I was young, I didn't think about SS or, more generally, about retirement.  
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Wait, really?  Man, I find this shocking coming from you!!  Don't worry, I won't mention this judgment lapse to Mrs APK.  ;)

Sadly, I've been aware of and obsessed with both SS and retirement since....oh, about age 19.....when I wrote a college research paper about SS Reform.

BTW - I still recall one of my BFFs getting his first job ever, and when his paycheck came his comment was "Who is this FICA guy and why is he taking my money?"

 
Eliminating payouts to those with sufficient net worth (say $10 million) would be one way to stretch those funds some.  

 
Alex P Keaton said:
Wait, really?  Man, I find this shocking coming from you!!  Don't worry, I won't mention this judgment lapse to Mrs APK.  ;)

Sadly, I've been aware of and obsessed with both SS and retirement since....oh, about age 19.....when I wrote a college research paper about SS Reform.

BTW - I still recall one of my BFFs getting his first job ever, and when his paycheck came his comment was "Who is this FICA guy and why is he taking my money?"
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My overall awesomeness was rather late-blooming.   :D

I actually did exceed the SS cap for the last paycheck in 1986 ...and then entered higher ed and have been chasing it ever since.

Fun fact: College student workers are exempt from social security withholding (makes sense ...part-time work, and a long way from retirement).  Also exempt, as I recall, are newspaper delivery workers, fishing boat operators, and members of the Communist party.  When I was a university controller, I explained all this to a parent at one point.  He went crazy ...all his kids had delivered newspapers when they were young, and he had diligently paid in SS for all of them.  Oops.

 
Stealthycat said:
link to the first please ( I didn't know there was a max??)

and on the second, what do you think SS's purpose was and why is it still around etc ?   asking for information/opinion 
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Social Security Maximum Taxable Earnings.  Because there is a maximum taxable there is a maximum benefit, as well.  On your second, the system is designed to be a baseline to keep our seniors out of poverty and on the whole it serves this purpose very nicely.

johnnycakes said:
Eliminating payouts to those with sufficient net worth (say $10 million) would be one way to stretch those funds some.  
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The number of people this affects (well less than 1%) makes this just about negligible.  And I'd be wholly against a scheme like this.  For most wealthy folks SS benefits are 85% taxed, so the government is already getting it's second bite.  Also, the whole idea about social security is that it is a universal program - the promise has always been that you pay in and you get funds out.  It would be incredibly detrimental to the program to have this promise stripped away. 

Let's not forget that wealthy folks are already funding the benefits of poor folks thanks to the bend point structure of how SS is paid out.  The system itself is fine - longevity increases and low birthrates have made the fund challenged.  We need to tweak the retirement age and expand the income levels that are exposed to the tax and this problem largely goes away.

 
tri-man 47 said:
My overall awesomeness was rather late-blooming.   :D

I actually did exceed the SS cap for the last paycheck in 1986 ...and then entered higher ed and have been chasing it ever since.

Fun fact: College student workers are exempt from social security withholding (makes sense ...part-time work, and a long way from retirement).  Also exempt, as I recall, are newspaper delivery workers, fishing boat operators, and members of the Communist party.  When I was a university controller, I explained all this to a parent at one point.  He went crazy ...all his kids had delivered newspapers when they were young, and he had diligently paid in SS for all of them.  Oops.
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Workers in Galveston also can be exempt from SS - they have their own private system there.

Besides, you're in good shape.  I have it on good intelligence that Jimmy Hoffa's real vault is in your basement.   :moneybag:

 
Not directly related to SS but more the retirement crisis that we are driving straight into - Washington State, in what I believe is the first state to do so, is beginning to charge a tax to cover long term care at end of life. 

You have to either sign in or opt out in a month or so.

 
The General said:
Not directly related to SS but more the retirement crisis that we are driving straight into - Washington State, in what I believe is the first state to do so, is beginning to charge a tax to cover long term care at end of life. 

You have to either sign in or opt out in a month or so.
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Cool.  Here's the NYT article on that one.

https://www.nytimes.com/2019/05/13/business/washington-long-term-care.html?.?mc=aud_dev&ad-keywords=auddevgate&gclid=CjwKCAjwybyJBhBwEiwAvz4G79TJmqNzoGXCfZZwZWabkIPI4938IWUgbNltCZFnzsnelBUEtqe4yRoCTP0QAvD_BwE&gclsrc=aw.ds

 
The General said:
Yup that’s it. 

I’d expect a lot more of these type of taxes to be implemented to offset people’s lack of preparation.
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I reckon so.  Long-term care is incredibly expensive and now people are living longer than ever expected back when Social Security and Medicare were first implemented.  Personally, I think the retirement age needs to be raised, there needs to be increases in the SS wage base, and like I alluded above, benefits to wealthy people who do not need it should be stopped.  

 
johnnycakes said:
I reckon so.  Long-term care is incredibly expensive and now people are living longer than ever expected back when Social Security and Medicare were first implemented.  Personally, I think the retirement age needs to be raised, there needs to be increases in the SS wage base, and like I alluded above, benefits to wealthy people who do not need it should be stopped.  
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Yup. It’s a reality that will have to be addressed at some point.

 
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