Social security

[WanderingRose]

I think it’s important not to view anything thru a narrow lens, nor to judge those who might have done things differently and are dealing late in life with the consequences of bad decisions.

Judgments don’t help anyone now, and are not particularly likely to help anyone on this forum.

 

[WanderingRose]

And on a related note, a widow is allowed to keep the SS benefit paid their spouse in the month the spouse dies, as benefits owed for one month are paid in the one following.

Banks, however, can choose to follow Treasury rules that disallow accepting payments after a person dies, and return said benefit to SS.gov, where it may languish for years if the widow is unaware they are entitled to this and asks for it.

This apparently happens with great regularity.

Until an internal audit catches it, and a mysterious extra benefit check appears in a widow’s bank account.

When all else fails, be a cautionary tale.

 

[RvNaut]

SSI was specifically targeted to allow low income Americans to have a retirement fund. It is not a hand out. It does not affect the budget or the deficit ( or it shouldn't)
.
SSI is a target because of the enormous amount of money processed through it. Much like the public education system, there is just gobs and gobs of money flowing though the system.
.
We need to recognize that this level of money attracts those that want that money, thus we have the efforts we see to change SSI and education, so that money becomes available to those that want some of it.

 

[mpruet]

This post is more about threads.

I know these threads (topics) often wander. I may be as guilty as anyone. I thought this one was about Social Security - threats to reduce benefits, as a retirement plan, etc. But it keeps being sidetracked

Nope, it was initially about someone that waited until 69 to start SS. And asking if most folks notified SS where they were currently living.

 

[tx2sturgis]

I know these threads (topics) often wander. I may be as guilty as anyone. I thought this one was about Social Security - threats to reduce benefits, as a retirement plan, etc. But it keeps being sidetracked to things we might have done differently in the past, why would working people want or need to change jobs, or why don't they? Add in what we could have/should have/still can change about our own budgeting. Admittedly, there is some benefit to many of those topics as well. Since we are generally talking about income, it might be more beneficial to most of us to toss in the gig economy, remote employment, and possible nomadic opportunities. When, if ever, should we ask a moderator to split off and start a new thread?

Are we done talking about Social Security? Does it even matter, except to those like me more interested in the original conversation?

Threads often detour off the rails, but a thread about 'Social Security' will always occupy several pairs of rails at the same time.

Talking about the SS program itself is directly on-target but the SS program itself is related to employment and jobs, income levels, retirement plans, shoulda-coulda-woulda events, government actions, and a lot more.

Since all of these postings tend to be inter-related, it's very time consuming and difficult to go thru 300 posts and figure out what goes, what stays, and how to create and arrange several new threads to accommodate all the topics covered.

Users are always free to absorb the information they find useful, and ignore the rest. And anyone can always start a new topic, with a narrower focus, by selecting words or terms for the title which will define a narrow path forward for that thread.

And as always, our members with their wide variety of life experiences keep it interesting!

 

[SLB_SA]

This Young Americans Turn Against Boomers Over Social Security article might be of interest.

 

[WanderingRose]

From that article: “if the system does turn out to need more money, it can be quickly and equitably raised by simply removing the income cap on paying Social Security taxes”.

Yes to this, and why is this so difficult, is always my thought, why such a leap for the wealthy to pay SS taxes on all of the income they enjoy???

 

[RvNaut]

why is this so difficult,

Who writes the laws? Hint, it isn't poor people.

 

[RonDean]

Threads often detour off the rails, but a thread about 'Social Security' will always occupy several pairs of rails at the same time....
And as always, our members with their wide variety of life experiences keep it interesting!

I knew that but occasionally saw some topics in other threads broken away. I think I'll start ignoring the attempts to derail this thread and only pay attention as it interests me. As to that...

A Google search says :
* "The Government Has Borrowed $1.7 Trillion From The Social Security Trust Fund." and "The government has borrowed the total value of the Trust Fund to pay for other government spending."
*As of December 2022 (estimated), the intragovernmental debt was $6.18 trillion of the $31.4 trillion national debt. Of this $6.18 trillion, $2.7 trillion is an obligation to (repay) the Social Security Administration.

To have politicians now say the system is going broke and the only way we can fix it is to cut benefits to regular folks who were always told it would be there for them is ridiculous. It's called a TRUST fund.

 

[WanderingRose]

To have politicians now say the system is going broke and the only way we can fix it is to cut benefits to regular folks who were always told it would be there for them is ridiculous.

I don’t think anyone with the power to make changes is advocating for that, and quite honestly don’t feel it is helpful to present that the house is on fire when it is not.

Not everyone reads newspapers or gets their information from credible sources, many are only places like this forum and I feel strongly we who post here need to act responsibly. FWIW

The wealthy don’t want to pay more, by and large, but the time will come when politicians will have to do something to maintain benefits for the millions of voting Americans who rely on SS in retirement.

They may wait to zero hour, but across the board benefit reductions are not only unlikely, imho, these changes would be a well publicized process, not an event that just surprises us one day.

A process, not an event.

We do need to remain vigilant, advocate for ourselves as needed and get our feet to the polls to vote.

 

[Morgana]

If the big guys keep succeeding at getting us little guys to fight each other over made-up BS, they can eventually do almost anything they want. Pickpockets succeed by distraction.
Don't panic.
Stay informed.
VOTE.

 

[Morgana]

PS Instead of saying "A Google search," how about giving the exact source?
You can find almost anything on Google, including proof the earth is flat and bomb recipes. Saying "Google" is like saying "either the library or a dumpster behind a biker bar."

 

[RonDean]

PS Instead of saying "A Google search," how about giving the exact source?
You can find almost anything on Google, including proof the earth is flat and bomb recipes. Saying "Google" is like saying "either the library or a dumpster behind a biker bar."

Many times I have posted links. And I have been told fairly recently that I need to research things myself. So I am often torn between TMI or not enough. But I do agree that exact links are better and going forward I will try to lean into TMI.

Wandering Rose seems to think I/we are being alarmists. She says, "I don’t think anyone with the power to make changes is advocating for that, and quite honestly don’t feel it is helpful to present that the house is on fire when it is not."

I found "The House Republican Study Committee (RSC), a caucus of 176 House Republican members, has proposed multiple harsh changes to Social Security in its fiscal year 2024 budget." https://www.americanprogress.org/ar...et-proposes-harsh-changes-to-social-security/ But maybe that source is too Progressive.

How about "A Social Security funding crisis could be on the horizon if policymakers fail to take action to protect the program in the next decade, threatening a 23% cut to all 70 million recipients' annual benefits, a new report claims." https://money.com/social-security-benefits-cut-2033/

 

[WanderingRose]

Just scanning this Republican proposal you cited, the changes proposed are for FUTURE beneficiaries, RonDean.

And as for “failing to take action”, we’ve discussed that, too.

With all due respect, I rest my case.

 

[Gr8ful]

That's Exactly what I said in my "Sky is falling" post!

 

[mpruet]

I knew that but occasionally saw some topics in other threads broken away. I think I'll start ignoring the attempts to derail this thread and only pay attention as it interests me. As to that...

A Google search says :
* "The Government Has Borrowed $1.7 Trillion From The Social Security Trust Fund." and "The government has borrowed the total value of the Trust Fund to pay for other government spending."
*As of December 2022 (estimated), the intragovernmental debt was $6.18 trillion of the $31.4 trillion national debt. Of this $6.18 trillion, $2.7 trillion is an obligation to (repay) the Social Security Administration.

I believe this is a little misleading. I seem to recall that by law the SS trust surplus is required to be invested in the most secure way possible, and that’s in government bonds. The reason is that it’s considered fairly secure while earning some interest.

 

[mpruet]

From that article: “if the system does turn out to need more money, it can be quickly and equitably raised by simply removing the income cap on paying Social Security taxes”.

Yes to this, and why is this so difficult, is always my thought, why such a leap for the wealthy to pay SS taxes on all of the income they enjoy???

<Being devil’s advocate>

Maybe, but the SS benefits for a person is based on the 35 years with the highest payroll taxes, but using a reversed progressive plan in which the first dollars paid into SS in a given year have a higher yield than the higher taxed person. This results in folks who are not able to pay as much into the system get a higher yield back than the folks paying higher taxes. I’m not opposed to favoring the system to folks less fortunate.

But if it is to be equitable, then why should a person paying much more into the system with no income cap not be able to receive a payout which has no benefit cap? And why should a person that is paying a lower amount into the system get a higher return yield than a person paying a higher amount?

Things can get really complicated by just trying to use a simple solution.

 

[dhuff]

I believe this is a little misleading. I seem to recall that by law the SS trust surplus is required to be invested in the most secure way possible, and that’s in government bonds. The reason is that it’s considered fairly secure while earning some interest.

Which is one way the gov't funds itself. So yeah, sure, "the Fed gov't owes money to the SS trust fund" because of this. That's how bonds work.

Yes, I know you know this, I just get tired of the arguments others make about how this means the trust fund is broken/empty/etc...

 

[RonDean]

Yes, I know about trust funds, bonds, and investments. And I also do NOT believe the sky is falling right now in regard to SS. But I DO think there are some politicians that would be willing to cut back on SS benefits if they can get away with it. Nor do I buy into the idea that we need to cut SS benefits because the government "might" be spending too much overall. Maybe if certain politicians stopped cutting taxes on the wealthy this would not be an issue. After years of trying to convince us otherwise, I think we have had ample proof the trickledown never seems to trickle down.

This link ( https://www.fool.com/retirement/2018/10/14/republicans-and-social-security-4-facts-you-need-t.aspx ) says "By 2034, following 16 years of outflows, the $2.89 trillion in excess cash is expected to be completely gone. Should this happen, Social Security would survive, but payouts to then-current and future retirees could be cut by up to 21%. That's not a pleasant forecast given the noted reliance of seniors on the program."

Because I might be dead by then does not make me less concerned. This also assumes cutting such benefits is the ONLY solution to a projected shortfall. I think we need to let our representatives know they should prioritize looking for other sources in income from sources that are doing well rather than cutting assistance to people that need and depend on social security.

With the disappearance of pensions and lifelong employment (Ie: treating employees as short-term ad-hoc commodities) or any other reasonable retirement options, social security has become the only dependable avenue for most people. Yes, I know that if one makes and enjoying wise investments and avoids catastrophic financial reverses throughout one's life, SS may not be necessary at all. But that is not the reality in most people's lives.

 

[WanderingRose]

By 2034, following 16 years of outflows, the $2.89 trillion in excess cash is expected to be completely gone. Should this happen, Social Security would survive, but payouts to then-current and future retirees could be cut by up to 21%."

“Could be cut by up to 21%”, if nothing else is done to make up the shortfall.

As for the federal government borrowing from SS, state governments are known to do this from retiree pension funds, and to give themselves “holidays” from paying their required share for employees whose contributions are taken automatically from their paychecks.

They don’t ever seem to pay it back, but bemoan the shortfall as if they hadn’t played a part in it.