Social security insolvency 2033

[Morgana]

I feel if I stop working so much my health will decline lol.

Yeah but imagine, you could work on your own projects instead...

 

[bullfrog !]

It’s harder for me to get up and get going on my own projects unless I make an appointment with a freind or am required to be somewhere, almost like work!

 

[SLB_SA]

Do you really believe “you put into it”? To me the gov is taking it from workers for their “future benefit”……..

I dont have a problem with it, tho, because most people cant take care of themselves - they are lifelong babies; children at best.

I also never got sucked into the 401 80’s scam either.

jonny boi takin care of hisself.

And they say "Men never grow up!"

 

[Morgana]

It’s harder for me to get up and get going on my own projects unless I make an appointment with a freind or am required to be somewhere, almost like work!

(a) me too
(b) bullfrog, your whole life (and the way you write about it here) is a project!

 

[BlueMarkOhio]

That is not insolvency.

The current version of the SS Trust fund was created in the 1980s in order to invest excess FICA taxes to get SS through the "Baby Boomer Bulge". It is now expected to last until 2035 before being depleted - which is longer than originally expected.

For the 1st 5 decades of its existence, SS ran on a Pay As You Go (PAYGO) basis, where each year's FICA revenues funded that year's benefits. This is the normal way for government programs to run - each years spending funded by each year's taxes. It is highly unusual for a government program to accrue large year to year surpluses intended to fund future expenditures. In this respect SS is the best funded large government program that has ever existed.

After 2035 SS will return to PAYGO, which at current FICA revenue levels will fund 83% of expected benefits. Sometime in the next 11 years Congress will have to cut benefits or increase revenues. The simplest method would be to reduce or remove the exemption from FICA taxes given to the very wealthy - popularly called "raise the cap".

Ever since the Boomer Bulge trust fund was created in the 80s Wall Street has been sowing FUD by talking about "bankruptcy" and lies about losing benefits. What is really happening is that Wall Street is furious that the Trust Fund was invested in US Treasury bonds instead of with them so they could gamble with it. They wanted the Trust Fund transferred to the same Wall Street Wizards who nearly destroyed the world in 2008.

You aren't going to lose your SS benefits. But they might be reduced in order to protect the very wealthy from FICA taxes. And you shouldn't count on living on just your SS benefits if you can help it - it does not provide enough for most people to rely on as their sole source of retirement income.

 

[dhuff]

That is not insolvency.

<snip>

Thanks very much for this. I was gonna go into a long(-ish) post about this "insolvency" nonsense, but your explanation was clear and succinct. Besides, when the gov't "borrows" from the SS trust fund, the fund essentially purchases a gov't bond. Just like you or I can buy. If U.S. gov't bonds become "no good," then we have much worse problems than reduced SS benefits.

The best way to make sure Social Security is well-funded is, IMHO, two fold:

1. Reduce Federal spending that requires the gov't to borrow. Our Defense budget is hugely out of line, and we can easily go with fewer carrier battlegroups in the Navy for instance. And more importantly,...
2. Increase revenue. The FICA cap hasn't been raised meaningfully in ages. The very wealthy can afford to pay FICA on all their income as far as I'm concerned. Also, capital gains above certain amounts should be considered income subject to FICA as well ("above certain amts" so as not to penalize the avg person who is investing to help fund their own retirement, save for a house, etc...)

 

[BlueMarkOhio]

Social Security’s ‘biggest myth’ leads people to claim early, expert says. Even a slight delay can boost retirement income​

https://www.cnbc.com/2024/05/19/del...-security.html?utm_source=pocket-newtab-en-us

 

[SLB_SA]

Social Security’s ‘biggest myth’ leads people to claim early, expert says. Even a slight delay can boost retirement income​

https://www.cnbc.com/2024/05/19/del...-security.html?utm_source=pocket-newtab-en-us

That's why I waited untiI I turned 69 to claim my SS benefits. Now I can make "69" jokes for the rest of my life!!

 

[Fork King]

That's why I waited untiI I turned 69 to claim my SS benefits. Now I can make "69" jokes for the rest of my life!!

Nice

 

[WanderingRose]

My husband and I took ours at 62, as many others advised us this was the best way to get back what you had paid in.

My husband then died a month after his 65th birthday.

You know what happens with your SS when you die, right? Unless you leave dependents, all that you have paid in stays in the system.

As his surviving widow, I got the difference between my SS and his, which was $100 per month.

 

[Red Leg]

We I am about 11 years from retirement. I know it seems kinda far away. I would like to know what is your plan if / when they cut down the payments by 17%.

Retirees will only receive 83% of their full benefits.

I know some solely depend on SS and others have multiple retirement incomes which probably will not affect you as much. But still a 17% pay cut is huge.

Technically SS is already insolvent. Congress has counted the trust fund as part of the federal budget since the mid 1960s. It's basically a ponzy scheme. If any business practiced such accounting principles, they would be prosecuted by the government.

 

[Red Leg]

Thanks very much for this. I was gonna go into a long(-ish) post about this "insolvency" nonsense, but your explanation was clear and succinct. Besides, when the gov't "borrows" from the SS trust fund, the fund essentially purchases a gov't bond. Just like you or I can buy. If U.S. gov't bonds become "no good," then we have much worse problems than reduced SS benefits.

The best way to make sure Social Security is well-funded is, IMHO, two fold:

1. Reduce Federal spending that requires the gov't to borrow. Our Defense budget is hugely out of line, and we can easily go with fewer carrier battlegroups in the Navy for instance. And more importantly,...
2. Increase revenue. The FICA cap hasn't been raised meaningfully in ages. The very wealthy can afford to pay FICA on all their income as far as I'm concerned. Also, capital gains above certain amounts should be considered income subject to FICA as well ("above certain amts" so as not to penalize the avg person who is investing to help fund their own retirement, save for a house, etc...)

About 25 percent of the federal budget is a category called "Other" It is larger than the defense budget; about $1.5 TRILLION/ year. We the American public deserve to know what this money is spent on.

 

[Dirtrider]

I actually do believe that the government will take of me. What that care will look like is always changing as the politicians change. I have worked for the federal government for over 40 years, having served in the Army and USPS. I have managed my retirement funds over years and I have a nice little nest egg. We have 7 streams of retirement income, not counting any retirement funds (thrift savings, 401k, and such). This allows our retirement funds to grow without having to withdraw them yet. My wife and I both choose to draw SS at 62. Its harder to do away with SS when you are in fact drawing it already. I know you get more if you wait, but the government is banking on you waiting and then dying early. When you die....any future SS funds die with you. They can't be inhereted by your family. Yes there is spousal benefit, but the spouse forfiets their SS. So I say take what you can, when you can.

Having anything left in the account when you die go back to "the government" pisses me off. Everything else I have goes to my kids. Nothing wrong with what you did but it sounds like triple dipping with pensions from the army, USPS, and SS. Play by their rules when you can.

I get that. I wish I could withdraw @ 62. But full retirement age for me is 67. However, then your limited how much you can make per year. You can only make $22,320/year ($1,860/month). That is ridiculously low.

If you are "retired" you aren't working so that doesn't matter


I pulled mine at 66.6 which is full and still work because the limit doesn't apply after 65 and I never planned on living long enough to draw it down so I'm taking it, even though it's not needed at all thankfully.

The biggest problem we all have is almost 50% do not pay taxes, including SS. This will all work out perfectly until we run out of other peoples money!!

 

[tx2sturgis]

But full retirement age for me is 67. However, then your limited how much you can make per year. You can only make $22,320/year ($1,860/month). That is ridiculously low.

There is actually a formula for allowable income you can earn before FRA (full retirement age) and yes if your income is too high, then they will withhold some (or possibly all) of your SS benefits.

But the money is not lost. It is 'credited' back to your account.

Assuming you are still alive at FRA, then that money that was withheld will be added back into your remaining benefits.




Source:
https://www.ssa.gov/pubs/EN-05-10069.pdf

 

[Fork King]

There is actually a formula for allowable income you can earn before FRA (full retirement age) and yes if your income is too high, then they will withhold some (or possibly all) of your SS benefits.

But the money is not lost. It is 'credited' back to your account.

Assuming you are still alive at FRA, then that money that was withheld will be added back into your remaining benefits.

View attachment 35692


Source:
https://www.ssa.gov/pubs/EN-05-10069.pdf

Ahhh cool. I want to keep working in some capacity. I can work 6mo, 9mo, or year round where I'm at. However I have been here quite a while and tired of the same old grind.

I really just want to camp host in a few years and work 6 months a year.

 

[bullfrog !]

Ahhh cool. I want to keep working in some capacity. I can work 6mo, 9mo, or year round where I'm at. However I have been here quite a while and tired of the same old grind.

I really just want to camp host in a few years and work 6 months a year.

Not that they are great to work for but you may want to take a look at Aramark for jobs in locations you may want to see and usually a full hookup site or cheap substandard housing is available. They hire lots of kitchen and restaurant staff on a seasonal basis.

 

[Fork King]

Not that they are great to work for but you may want to take a look at Aramark for jobs in locations you may want to see and usually a full hookup site or cheap substandard housing is available. They hire lots of kitchen and restaurant staff on a seasonal basis.

Cool beans. I will check them out.

 

[SLB_SA]

The biggest problem we all have is almost 50% do not pay taxes, including SS. This will all work out perfectly until we run out of other peoples money!!

This claim is interesting; I'll certainly encourage my twin 2-yead old granddaughters to get jobs!! But can you give a reference in support of this claim? I cannot say if the claim is true or false but I know that the 2024 tax year might (MIGHT) be the first year in 50 years that I didn't pay income tax.

 

[wanderlust]

The biggest problem we all have is almost 50% do not pay taxes, including SS.

Is it the famous 47% not paying federal income taxes, as said by Mitt Romney in 2012 (and easy to google to be debunked), or do you have some other sources?

BTW I am also VERY concerned that servicing the national debt will take bigger part of the federal budget than defense, but that is a different problem - I just want to show you I am trying to understand the problem.