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Author: workwayless Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1498  
Subject: SS conclusion Date: 11/5/2003 11:30 AM
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I look to SS to one day augment my income. One thing I have been convinced of is that SS will eventually be means-tested--probably by the time my fellow boomers are eligible. OTOH I read how posters like RetiredVermonter are able to use SS to meet most of his family's living expenses.

So I have come to the following conclusion: during the pre-SS years, it couldn't hurt to try to meet most of your fixed living expenses equal to what you'd draw from SS and any applicable pensions.

If you did this, I see two probable outcomes when you reach SS eligibility age:

1) Your portfolio's value is high enough so that SS gets means-tested away.

2) You're eligible for SS so you reduce your investment withdrawals by the amount of your SS payments.

Either way, there's no impact to your lifestyle.
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Author: phantomdiver Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 200 of 1498
Subject: Re: SS conclusion Date: 11/5/2003 11:38 AM
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One thing I have been convinced of is that SS will eventually be means-tested--probably by the time my fellow boomers are eligible.

I think so, too. FYI, I was born in 1956, and I hope to retire in 2013.

So I have come to the following conclusion: during the pre-SS years, it couldn't hurt to try to meet most of your fixed living expenses equal to what you'd draw from SS and any applicable pensions.

You mean you should try to meet the fixed living expenses from your nut, right? That's what I'm going to do.

Then when I'm 62, if I'm still allowed to do it, I'm going to file for SS. If I get it, great! If I don't, well, I have a safety net in place.

phantomdiver

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Author: Evelynk Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 201 of 1498
Subject: Re: SS conclusion Date: 11/5/2003 9:15 PM
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Shoot- I was born in 1972. I'm pretty much counting on not getting SS.

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Author: jennynoel Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 202 of 1498
Subject: Re: SS conclusion Date: 11/6/2003 4:46 AM
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Shoot- I was born in 1972. I'm pretty much counting on not getting SS.

An emphatic ditto. I was born in 1981 and consider SS a compulsory generous donation. My grandparents are getting it, so it's not so bad.

-jennynoel

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Author: phantomdiver Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 203 of 1498
Subject: Re: SS conclusion Date: 11/6/2003 8:49 AM
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Shoot- I was born in 1972. I'm pretty much counting on not getting SS.

I'm planning as if I won't get it, because I really doubt I will, even though I may. I think you're right, though -- you're not going to get it. :-(

phantomdiver

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Author: Volucris Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 205 of 1498
Subject: Re: SS conclusion Date: 11/6/2003 12:21 PM
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One thing I have been convinced of is that SS will eventually be means-tested--

It darn well better not be means tested!!!! What the heck have I been paying all this money all these years for if not to get it back when I am 62 or 67 or whatever? Does this mean if I spend all my money and live check to check, then because I was stupid I get SS, but if I was smart and saved and invested I don't get it?

Grrrrrrrrrr. If you are right and this happens, there will be an uprising from the SS payers like you will not believe. There are few things that get me fired up politicalkly, but this would be one of them. Clean air and water is another.

Volucris

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 208 of 1498
Subject: Re: SS conclusion Date: 11/8/2003 8:03 PM
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<<Grrrrrrrrrr. If you are right and this happens, there will be an uprising from the SS payers like you will not believe. There are few things that get me fired up politicalkly, but this would be one of them. Clean air and water is another.

Volucris
>>


Why are people ready top get upset at the prospect of cuts in Social Security? People take increases in benefits that are funded by other people for granted but don't think cuts should be permitted? This is like my dog, who wags her tail if I offer her a bone but gowls at me if I try to take it back.

<<It darn well better not be means tested!!!! What the heck have I been paying all this money all these years for if not to get it back when I am 62 or 67 or whatever? >>


Paying early retirement benefits is the first thing that should be eliminated altogether. That was an add on to the program that inflates costs.

Here's another reform that should be made: at present, Social Security benefits are computed based on the income from the 35 highest years of earned income. If you work additional years you pay more taxes but collect no more in the way of benefits. Instead, Social Security should be figured on years of income from 18 through 67 at present. If you don't work some years or retire early, you get goose eggs for computing benefits for those years.

And you've been paying taxes all those years. You have no contractual right to any benefit from Social Security. The Congress is free to change or abolish the program at any time.

And the problem is that in order to keep paying all those benefits, including skyrocketing medical care costs under Medicare, taxes would have to increase enormously on Gen X, Y and Z. I'd rather take it easy on young people raising families and cut benefits to the well off middle class who don't need them anyway. Social Security just subsidizes the cruise ship industry as it is now.



Seattle Pioneer
Age 53 and one of the well off middle class who wouldn't be eligible for Social Security benefits.



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Author: InLivingColor Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 209 of 1498
Subject: Re: SS conclusion Date: 11/9/2003 2:12 AM
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Why are people ready top get upset at the prospect of cuts in Social Security? People take increases in benefits that are funded by other people for granted but don't think cuts should be permitted? This is like my dog, who wags her tail if I offer her a bone but gowls at me if I try to take it back.

It's a mixed bag, I think. Part of the problem is that, unlike most other programs, folks get to see what they're putting into SS, so it's a little more concrete than most other taxes. Some folks don't realize it's a pay-as-we-go system, thinking that their SS is a contribution into their own pension plan which only happens to be run by the government. Many folks who do understand how it works, in general have not been hit hard by the "what the government gives today, it can take back tomorrow" bug, and so, I think, do not fully internalize that possibility. There's also a bunch of folks who have grown up with this particular expectation, and long-ingrained thought patterns are usually the hardest to change.

Now your dog has the luxury of concentrating only on that bone. Folks thinking about SS, in comparison, have to varying degrees been aware of various political campaigns and may even have voted for folks who have promised not to cut SS. So there's a certain feeling of betrayal, for some, I think.

Only speculations, nothing more. M'self, I never counted on SS, and see no reason to begin doing so.
ILC

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 210 of 1498
Subject: Re: SS conclusion Date: 11/9/2003 7:49 AM
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<<It's a mixed bag, I think. Part of the problem is that, unlike most other programs, folks get to see what they're putting into SS, so it's a little more concrete than most other taxes. Some folks don't realize it's a pay-as-we-go system, thinking that their SS is a contribution into their own pension plan which only happens to be run by the government. Many folks who do understand how it works, in general have not been hit hard by the "what the government gives today, it can take back tomorrow" bug, and so, I think, do not fully internalize that possibility. There's also a bunch of folks who have grown up with this particular expectation, and long-ingrained thought patterns are usually the hardest to change.

Now your dog has the luxury of concentrating only on that bone. Folks thinking about SS, in comparison, have to varying degrees been aware of various political campaigns and may even have voted for folks who have promised not to cut SS. So there's a certain feeling of betrayal, for some, I think.

Only speculations, nothing more. M'self, I never counted on SS, and see no reason to begin doing so.
ILC>>



Heh, heh! There's always a slight sense of frustration when a good rant produces a well reasoned response!


I think you explanation is very reasonable. Unfortunately at its core is the fact that people are woefully ignorant about the nature of a program many are betting their lives upon.

For some generations of Americans (all through the WWII generation) Social Security paid enormously, at the expense of younger generations. The 'boomer generation ought to expect the reverse, since follow on generations aren't going to be able to afford the taxes to keep 'boomers in a style of life they were promised ---not without crushing the younger generations with much higher taxes.

My hope is that 'boomers and others receiving Social Security and Medicare recognize that fact and accept the cuts in benefits that will be necessary. My hope is that by means testing Social Security and Medicare those who need the benefits will get them, and those who don't will get the cuts. I would be in the second group, myself, I hope.



Seattle Pioneer




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Author: telegraph Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 211 of 1498
Subject: Re: SS conclusion Date: 11/9/2003 1:46 PM
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Paying early retirement benefits is the first thing that should be eliminated altogether. That was an add on to the program that inflates costs.


Actually, I'd like to see the 'costs'. If you retire early at 62, you will get the same money by age 76 or so...whether you get it over 14 years, or over 10 years..the benefit is reduced by roughly 30%. YOu don't get any more money if you survive to age 75 (which is what they plan. If you live longer than 76, you 'lose' money long term since your monthly benefit is lower. If you expect people to live longer, it is cheaper for the gov't to pay them less per month!

I think you might actually have it backwards...


<>Here's another reform that should be made: at present, Social Security benefits are computed based on the income from the 35 highest years of earned income.

Yes, and you only need 10 years (40 quarters of earnings) to qualify for some SS.


If you work additional years you pay more taxes but collect no more in the way of benefits.

You get credit for 10-35 years worth of contributions...after that you get less. So? Lots of folks are then working for no additional benefits. As the gov't, you should be happy!....free money....



Instead, Social Security should be figured on years of income from 18 through 67 at present.

Hmmm. not everyone starts work at age 18...like 60% of kids, who decide to attend college for a few years? Isn't it in the gov't interest to have them attend college, make more money upon graduation, and pay HIGHER taxes for their working career (as opposed to an unskilled worker making less)? After you make more than $40,000 or so, you actually get less for your money, so it is very beneficial for the gov't to have workers max out on SS contribution ($80K/yr now?). The ones that pay the most get the least percentage back when they retire.


If you don't work some years or retire early, you get goose eggs for computing benefits for those years.

Ah, but not all jobs are covered by SS, including but not limited to military, many 'teacher plans', govt' plans...and you could be in gov't for 10 years, then private industry for 20.....and the military for six years.....not qualifying for much in 'pensions' from any of them.... how do you fix that problem? worked 40 years, but peanuts to live on?


And you've been paying taxes all those years. You have no contractual right to any benefit from Social Security. The Congress is free to change or abolish the program at any time.

The Congress is supposed to legislate based upon the will of the people.... and what the 'people' are willing to pay for.


And the problem is that in order to keep paying all those benefits, including skyrocketing medical care costs under Medicare, taxes would have to increase enormously on Gen X, Y and Z.

And everyone else, including retirees, who pay a lot in federal income taxes each year..... whether they like it or not.....

I'd rather take it easy on young people raising families and cut benefits to the well off middle class who don't need them anyway.

There's a lot of 'middle class' folks who don't have a whole lot of assets, having counted on SS to provide them 1/3rd or 1/2 of their retirement income...as the gov't has 'prommised them'for the 20-30-40 years they've been working.

I'd worry more about medical costs......


Social Security just subsidizes the cruise ship industry as it is now.

Cruise ship vacations can be real cheap.....you get excited about $800/person cruises? Heck, you can make that much picking up aluminum cans along the road and selling them, or getting the nickel deposits back......

ANd do you really think the 'cruise ship' industry is funded by SS?

THe problem is more the deficeit and how it is going to get repaid,...or the interest on it paid...forever.....and at higher rates as the dollar devalues, and we keep selling our assets to overseas interests through an out of kilter trade balance.....



Tele...





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Author: cliff666 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 212 of 1498
Subject: Re: SS conclusion Date: 11/9/2003 2:35 PM
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Paying early retirement benefits is the first thing that should be eliminated altogether. That was an add on to the program that inflates costs.

Gadzooks! This is the second time in recient memory that I have agreed with you, SP.. Does this mean the end of the world is near?

They are on the right track to gradually escalate the retirement age more in tune with our longevity pattterns, and the early-out should be eliminated. I also think it is foolish to let someone draw SS and continue to work. The original idea was (partly at least) to bribe people to get out of the work force and let younger people have the jobs.

cliff
... drawing SS. Thanks, guys!

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Author: InLivingColor Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 213 of 1498
Subject: Re: SS conclusion Date: 11/9/2003 5:49 PM
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Heh, heh! There's always a slight sense of frustration when a good rant produces a well reasoned response!

Oh, dear, how thoughtless of me! Would this be any better

How DARE you take away my social security?!? I paid it, they PROMISED I would get it, and I will HAVE it, by golly!! You are nothing less than a cur to compare ME to your DOG. Did your DOG vote you into the office of Bone Giver? Is your DOG smart enough to PAY social security? How can you compare a BONE to my SOCIAL SECURITY RIGHTS anyway? This is so much MORE important than your dog's bone, SP, and don't you forget it!!!

??
*InLivingColor composes herself while straightening her tie*

I think you explanation is very reasonable. Unfortunately at its core is the fact that people are woefully ignorant about the nature of a program many are betting their lives upon.

Why yes, ignorance is at the core. It usually is. What do you propose we do about it?
ILC
who tends to go for the "lighting candles" method of dealing with darkness, but who acknowledges that others' MMV

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Author: Volucris Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 214 of 1498
Subject: Re: SS conclusion Date: 11/9/2003 6:02 PM
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<i<Why are people ready top get upset at the prospect of cuts in Social Security?

You missed my point. I wasn't talking about cuts in SS per se. What I was protesting was "means testing". To me, this indicates that if you spend every penny you make while working, you can count on SS later in life to bail you out. On the other hand, if you work hard, save, invest, and deprive yourself of that new BMW or DVD player along the way, then you will get your SS cut because you have greater means. This would be Bu** Sh**.

Unfortunately, there are no easy answers, but I imagine the retirement dates will have to be increased so that people cannot retire until well into their 70's. I am all right with this because this would treat all people equally regardless of their means.

Volucris

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Author: LudditeAndroid Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 215 of 1498
Subject: Re: SS conclusion Date: 11/9/2003 8:20 PM
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if you work hard, save, invest, and deprive yourself of that new BMW or DVD player along the way, then you will get your SS cut because you have greater means. This would be Bu** Sh**.

My thoughts exactly. The problem I see with means testing is: are we going to base a person's needs on lifetime income, lifetime savings, or something else? Why reward personal irresponsibility, or refuse to pay back money rendered when someone of modest means has made sacrifices to build up some personal savings? It seems to me that a means-testing scenario that would actually take into account these dynamics would be an expensive labyrinthian bureaucratic nightmare.

I imagine the retirement dates will have to be increased so that people cannot retire until well into their 70's. I am all right with this because this would treat all people equally regardless of their means.

This seems easier to implement to me as well. It means the people who don't plan will not get special treatment. The people who have made sacrifices to build up personal savings can still retire before age 70, on their non-SS savings, but also not be punitively treated at the age of 70 for having planned ahead.





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Author: workwayless Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 216 of 1498
Subject: Re: SS conclusion Date: 11/9/2003 11:11 PM
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SP says,

Paying early retirement benefits is the first thing that should be eliminated altogether. That was an add on to the program that inflates costs.


<tongue-in-cheek>
Actually aren't people who draw SS the longest most responsible for the rising costs?

Most of my relatives worked like dogs paying into SS and collected SS only 4 or 5 years before they died. Some died before even reaching age 62. The longest time any of my relatives ever collected SS was 14 years.

So wouldn't it be most fair to reform SS to base payments on ones anticipated life expectancy?

</tongue-in-cheek>

Do you see how complicated and ludicrous SS reform can be?



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Author: cliff666 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 217 of 1498
Subject: Re: SS conclusion Date: 11/9/2003 11:17 PM
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My thoughts exactly. The problem I see with means testing is: are we going to base a person's needs on lifetime income, lifetime savings, or something else? Why reward personal irresponsibility, or refuse to pay back money rendered when someone of modest means has made sacrifices to build up some personal savings? It seems to me that a means-testing scenario that would actually take into account these dynamics would be an expensive labyrinthian bureaucratic nightmare.

The jury is still out on means testing. If a person has $10 Mil in assets, and an income from those assets of $1 Million, that person hardly needs SS. Yeah, he paid his chits, and should not be denied.

And, yes the guy who frittered away a lifetime earnings and is now destitute is a scumbag. A stupid, irresponsible scumbag.

But what are the choices? Let the improvident person starve in the street? Or raise the taxes on Gen-X so that Mr. Multi-Millionaire can get his $1700 a month?

To me the answer is clear. Means testing is the only reasonable way out. I may well be aced out of my SS, but it would go against my grain to let someone starve in the street, no matter how big a jerk he is.

cliff

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Author: Volucris Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 218 of 1498
Subject: Re: SS conclusion Date: 11/10/2003 12:59 AM
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But what are the choices? Let the improvident person starve in the street? Or raise the taxes on Gen-X so that Mr. Multi-Millionaire can get his $1700 a month?

To me the answer is clear. Means testing is the only reasonable way out. I may well be aced out of my SS, but it would go against my grain to let someone starve in the street, no matter how big a jerk he is.


Yup, I can't say I disagree with you. Somewhere in there a happy medium exists with which no one will be happy. I'd hate to be the short lived politician that will have to find it it in the future.

Volucris

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 219 of 1498
Subject: Re: SS conclusion Date: 11/10/2003 10:25 AM
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<<Heh, heh! There's always a slight sense of frustration when a good rant produces a well reasoned response!

Oh, dear, how thoughtless of me! Would this be any better

How DARE you take away my social security?!? I paid it, they PROMISED I would get it, and I will HAVE it, by golly!! You are nothing less than a cur to compare ME to your DOG. Did your DOG vote you into the office of Bone Giver? Is your DOG smart enough to PAY social security? How can you compare a BONE to my SOCIAL SECURITY RIGHTS anyway? This is so much MORE important than your dog's bone, SP, and don't you forget it!!!

??
*InLivingColor composes herself while straightening her tie*
>>


Heh,heh! again. (Double Heh, heh!s in serial posts are very rare!)


Ahhh, yes, that's the emotional reaction I see so often!


I suppose you can't blame people too much though. They have been fed lies by politicians for decades and it's not too surprising that people believe them after a while. And of course, it keys into our self interest and ability to fool ourselves, frequently very powerfull.



Seattle Pioneer




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Author: WilliamChrisman One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 220 of 1498
Subject: Re: SS conclusion Date: 11/11/2003 1:22 PM
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Speaking of lies, Seattle P., how's this one: THE rich need tax breaks!!!!

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Author: decath Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221 of 1498
Subject: Re: SS conclusion Date: 11/11/2003 3:48 PM
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cliff666
And, yes the guy who frittered away a lifetime earnings and is now destitute is a scumbag. A stupid, irresponsible scumbag.

But what are the choices? Let the improvident person starve in the street? Or raise the taxes on Gen-X so that Mr. Multi-Millionaire can get his $1700 a month?


Letting the destitute, irresponsible scumbag who frittered away his earnings to buy SUV's and McMansions starve to death sounds pretty good to me! At least if he expects people like me who have paid into the system since the age of 15 to pay for his retirement!

decath

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Author: cliff666 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 222 of 1498
Subject: Re: SS conclusion Date: 11/11/2003 3:53 PM
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Letting the destitute, irresponsible scumbag who frittered away his earnings to buy SUV's and McMansions starve to death sounds pretty good to me! At least if he expects people like me who have paid into the system since the age of 15 to pay for his retirement!

decath

He paid, too. Didn't we all?

cliff

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Author: decath Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 223 of 1498
Subject: Re: SS conclusion Date: 11/11/2003 4:05 PM
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Seattle is probably my favorite poster on these boards but when he talks about SS being means tested, I have to cringe a bit!

This argument reminds me of the Biblical story of the prodigal son where the irresponsible young son wastes away his inheritance on luxury spending and the oldest does the right thing and stays home working for his dad. In the end, the father rewards the young son with a ring, clothes and party when he returns home (after only being broke, busted and disgusted) while the “good son” basically eats crow.

Those of us on these boards are mostly responsible, hardworking, tax paying citizens that would be the “responsible son” in the Bible story.

Here is my solution!

If the government can't make its obligations when they come do then do the following:

Pay a fraction of the benefits. Perhaps 50% if that would balance the books.

If Mr/Mrs Saver should have gotten $1700 then give them $850. They can supplement their earnings with their savings!

If Mr/Mrs Spending should have gotten $1700 then give them $850. They can supplement their earnings as a Wal-Mart greeter!

decath


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Author: decath Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 224 of 1498
Subject: Re: SS conclusion Date: 11/11/2003 4:23 PM
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If Mr/Mrs Saver should have gotten $1700 then give them $850. They can supplement their earnings with their savings!

If Mr/Mrs Spending should have gotten $1700 then give them $850. They can supplement their earnings as a Wal-Mart greeter!


I should have added that we are both sacrificing for government mismanagement. But I'll be danged if the responsible among us should be the only ones sacrificing!

I whole-heartedly agree with Volucris! Means testing would create a gigantic class of people in this country that would be mad as hornets!

decath

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 225 of 1498
Subject: Re: SS conclusion Date: 11/11/2003 10:09 PM
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<<Speaking of lies, Seattle P., how's this one: THE rich need tax breaks!!!!
>>


Only if you want us to work, save and invest.

The marginal tax rate on the income from my business is close to 50%, including 15% self employment tax. With that kind of tax load, my aim is to do only the work that makes ME happy. If that means people can't find someone to fix their furnace, tough.

I'm sure there are a wide array of doctors, other professionals, tradesman and others who have cut back on their work effort because tax rates discourage working.

So-- the next time you need your furnace fixed and can't find anyone to help you ---call your Congressman.



Seattle Pioneer

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 226 of 1498
Subject: Re: SS conclusion Date: 11/11/2003 10:16 PM
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<<Here is my solution!

If the government can't make its obligations when they come do then do the following:

Pay a fraction of the benefits. Perhaps 50% if that would balance the books.

If Mr/Mrs Saver should have gotten $1700 then give them $850. They can supplement their earnings with their savings!

If Mr/Mrs Spending should have gotten $1700 then give them $850. They can supplement their earnings as a Wal-Mart greeter!

decath
>>


Shucks, I'd throw Social Security and Medicare in the dumper right now if I had my druthers. I'd be glad to see your plan adopted, if it prevented Gen X, Y and Z from being dumped on by higher taxes.

But neither solution above would sell politically. Means testing Social Security and Medicare might.

And do the well off middle class baby boomers get shafted if means testing is enacted? Yes indeed ---no question. But these are the same people who ignored the developing problem for the past thirty years or more. WE are culpable!

My priority is to protect Gen X, Y and Z from ever higher tax loads. If well off baby boomers who don't need government benefits lose them, tough. And I'm one who WOULD lose them, I hope.



Seattle Pioneer





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Author: WilliamChrisman One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 227 of 1498
Subject: Re: SS conclusion Date: 11/12/2003 12:25 AM
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I have no problem getting a tradesman or a physician. Your tax rate rhetoric is just that, a phrase that if repeated often enough has convinced you of its veracity. Next time you need your special interest funded, call your congressman; he is no doubt a member of that none existence species, a compassionate conservative.

WilliamChrisman

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Author: decath Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 229 of 1498
Subject: Re: SS conclusion Date: 11/12/2003 9:05 AM
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Seattle:
My priority is to protect Gen X, Y and Z from ever higher tax loads. If well off baby boomers who don't need government benefits lose them, tough. And I'm one who WOULD lose them, I hope.


I would never propose increasing the taxes on Gen X, Y and Z. After all, I'm near the border line between the boomers and Gen X being born in 1961.

The government has made promises that it just can't keep. Most of us agree on that. The government will have to either raise the retirement age to receive benefits, reduce those benefits, means test them or a combination of all 3. I'm willing to go for raising the age and a reduction of benefits but I'll never agree to means testing unless the bar is set for those who are really “rich”.

I can easily foresee how a future pack of politicians would define those who are rich and should receive SS. You got $500,000 in an IRA/401k? You be rich! Never mind that at a 4% SWR you only get $20,000 a year! If both you and your wife worked for 45 years and paid the 15.3% into SS and Medicare, too bad. But across the street you have poor “Mr./Mrs. Keep Up with the Jones” who were forced to move out of their 400k home, sell both their SUV's and had to stop going to Europe when they retired because they no longer could afford it. The sale of their big home, which they refinanced repeatedly, may generate some cash to move into a smaller dwelling, but their net assets are minimal. Those poor people deserve their SS but not you decath who never went to Europe, drove a used Honda Civic and made your lunch everyday before work so you could put in 20-30% of your income into FIRE investments.

I've had self-employment income as well over my working life and am well aware of the raping of 15.3% off the top that the SE are rewarded for being entrepreneurial minded. If the government did not take so much out of our checks then you probably would see less people complain. But you are talking about roughly 13% of a persons income that he has had forcefully put away for SS his entire life (for those of us that started working in the early 80's; I don't remember when Dole and his bunch increase the SS deductions).

Depending on where you draw the “Means testing” line, you are basically punishing the responsible and rewarding the irresponsible. We have all paid into the system. If one of has to take a cut in bene's then so do the rest. If the most that the SSA can pay a recipient is $400 a month, then so be it. Those that saved can make it. Those that did not should start a business, teach a class or work in a grocery store. If they were that short sited then tough! They don't deserve retirement! It is not a right anyway!

decath


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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 230 of 1498
Subject: Re: SS conclusion Date: 11/12/2003 9:10 AM
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<<I have no problem getting a tradesman or a physician. Your tax rate rhetoric is just that, a phrase that if repeated often enough has convinced you of its veracity. Next time you need your special interest funded, call your congressman; he is no doubt a member of that none existence species, a compassionate conservative.

WilliamChrisman
>>


Actually my Congressman id Jim McDermott, wacky liberal Dem.


My tax rate rhetoric helped convince me to substantially cut the amount I work. If you think that doesn't happen among skilled people who save they money instead of spending it, vist the early retirement board or the MOOTFL board.



Seattle Pioneer




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Author: cliff666 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 231 of 1498
Subject: Re: SS conclusion Date: 11/12/2003 9:41 AM
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The government has made promises that it just can't keep. Most of us agree on that. The government will have to either raise the retirement age to receive benefits, reduce those benefits, means test them or a combination of all 3. This will likely be the case. I don't see any alternatives, other than raising SS taxes, which would mean death to a politician's career. One possible way to increase the tax without alienating too many is to keep raising the taxable income limit. What is it now, over $80K? Let it increase (Won't bother me all that much!) I'm willing to go for raising the age and a reduction of benefits but I'll never agree to means testing unless the bar is set for those who are really “rich”. Unfortunately, if the bar is set too high, the money saved won't be very much. We read that only ~3.5% of American families are worth more than 1 Million, so cutting benefits off at 1 Million assets would only save 3.5%.

I've had self-employment income as well over my working life and am well aware of the raping of 15.3% off the top that the SE are rewarded for being entrepreneurial minded. If the government did not take so much out of our checks then you probably would see less people complain. But you are talking about roughly 13% of a persons income that he has had forcefully put away for SS his entire life (for those of us that started working in the early 80's; I don't remember when Dole and his bunch increase the SS deductions).

Those who are employed by someone else also get taxed at the 15.3% rate, it's just that the employer gets to pay half of if, so the wage-earner doesn't feel the pain. The tax still gets paid and it is still a payroll tax. If you want to be really taxed, just own a small business with employees. You get to pay your 15.3% PLUS 7.65% of your employees' tax.

just sayin' there's an old saying about "free lunch" and there ain't none.

cliff

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Author: decath Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 232 of 1498
Subject: Re: SS conclusion Date: 11/12/2003 10:02 AM
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seattle:
And do the well off middle class baby boomers get shafted if means testing is enacted? Yes indeed ---no question. But these are the same people who ignored the developing problem for the past thirty years or more. WE are culpable!


I don't have a problem with getting shafted! I'm used to it! I've gotten the short end of the stick more times than anyone on this board would like to hear. We all get shafted in life, some more than others.

As far as SS goes, we have all been shafted equally as we have had a huge chunk of earnings taken from us on every paycheck or quarterly SE tax payments.

If I'm going to get shafted again when I'm eligible to receive SS payments in 20 years at the age of 62, then I want everyone to get shafted!<grin>

Let us all "feel the pain"!

decath

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Author: decath Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 233 of 1498
Subject: Re: SS conclusion Date: 11/12/2003 10:49 AM
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cliff666:
Unfortunately, if the bar is set too high, the money saved won't be very much. We read that only ~3.5% of American families are worth more than 1 Million, so cutting benefits off at 1 Million assets would only save 3.5%.


This is an intersting point Cliff and brings up several problems with how you decide who gets the SS benefits and those that don't. How would the government calculate your net worth? Would it include real estate and pensions?

I will not recieve a pension so my 401k, IRA's and taxable investments will certainly be included into any governmental net asset calculation. Will they include the pensions of military and government personel? Probably not! They will get to continue to double and tripple dip into the treasury!

What about an inheritance of land you receive. Will that be included in the calculations?

I they based the need on assets, then you would have all kinds of asset hiding going on. It would be pretty easy transfer you assets to your kids so you look poor.

The government would have to base the SS payments on your total income from pensions, trusts and investment returns.

I still see lots of ways for the the rich to get around it though. A rich parents could give under the table gifts to supplement their children's income while they remain under the income levels for SS. Once again, the lower class gets what they did not earn, the rich find loop wholes and the middle class gets screwed!

Whether you base limits on wealth or income, it would create a big disinsentive to save money. Why save beyond a certain point when you know that the government will only take away your SS contributions? If the wealth tax limit was 300k, then why save beyond that? People will spend every penny they have over 300k so the max SS checks keep coming.

Everything about it encourages more irresponsibility.

decath

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 234 of 1498
Subject: Re: SS conclusion Date: 11/12/2003 10:58 AM
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<<cliff666:
Unfortunately, if the bar is set too high, the money saved won't be very much. We read that only ~3.5% of American families are worth more than 1 Million, so cutting benefits off at 1 Million assets would only save 3.5%.


This is an intersting point Cliff and brings up several problems with how you decide who gets the SS benefits and those that don't. How would the government calculate your net worth? Would it include real estate and pensions?
>>


The system isn't set up to tax assets, and I don't think Social Security would be means tested that way. It would be based on income. It's already partially means tested, since low income people receive a higher rate for calculating benefits and Social Security is included for income tax purposes above a certain income. Just more of the same.

And I'd have a fairly low threshhold for reducing benefits too.

Once Social Security is reduced to a welfare program for the poor, instead of a welfare program for the middle class, its magic with the voters will go away.



Seattle Pioneer

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Author: workwayless Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 236 of 1498
Subject: Re: SS conclusion Date: 11/12/2003 1:31 PM
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More thoughts on means testing SS:

- Perhaps the guvmint will make it more palatable (and defer the payday to yet another generation) by giving the rich some sort of tax incentives to make up for losing SS.

- One potential problem I see with means testing SS is the increased outflow on pensions. Some companies reduce pension payments when a e a retiree is eligible for SS. If a retiree's SS gets "means-tested" away then the pension will have to make up the difference. This could cause more pension plans to go belly-up.

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Author: workwayless Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 237 of 1498
Subject: Re: SS conclusion Date: 11/12/2003 2:00 PM
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decath says,

Here is my solution!

If the government can't make its obligations when they come do then do the following:

Pay a fraction of the benefits. Perhaps 50% if that would balance the books.

If Mr/Mrs Saver should have gotten $1700 then give them $850. They can supplement their earnings with their savings!

If Mr/Mrs Spending should have gotten $1700 then give them $850. They can supplement their earnings as a Wal-Mart greeter!



Since I'm Ms Saver, your solution is perfectly acceptable to me personally.

However, what about when Mr/Mrs Spending become too old and/or sick to work at Wally world? They can't survive on the $850. What then?
Now one can argue that SS was never meant to become a safety net but it has become one for many people. How's it going to fly when people start dying while the rich are still collecting their checks?

Another equitable solution that has been mentioned is to tie the COLAs to a more realistic index.

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Author: cliff666 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 239 of 1498
Subject: Re: SS conclusion Date: 11/12/2003 4:20 PM
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This is an intersting point Cliff and brings up several problems with how you decide who gets the SS benefits and those that don't.

Big puzzle to me is why they decided to let people start taking SS while they still work, with no deduction, at a time when SS is predicted to go broke soon. SS is supposed to be for retired people, no? Not folks who are still working.

cliff
... who cheerfully accepts the SS handout.

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Author: decath Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 240 of 1498
Subject: Re: SS conclusion Date: 11/12/2003 4:29 PM
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workwayless:
However, what about when Mr/Mrs Spending become too old and/or sick to work at Wally world? They can't survive on the $850. What then?
Now one can argue that SS was never meant to become a safety net but it has become one for many people. How's it going to fly when people start dying while the rich are still collecting their checks?


They would probably do what they do now. Go on some type of welfare. My grandma is a good example of someone who can't live on the SS with the lifestyle she was accustomed to (middle class and frugal). 6 months after her and grandpa retired, grandpa died and left her a small life insurance pay-out and pension. She refused to go back to work so she sold her home, bought into a modest retirement community and lived quite happily. That is, until she unsuccesfully timed the stock market. She quickly turned 120k into about 30k. Then cds went from paying 10% to 2%. By the time she was 75, she could no longer meet her financial obligations with the pittance of SS she got and 1/2 of Grandpa's postal worker pension.

Her 3 kids made a decision to support her with monthly checks so she would not have to change anything or go on welfare.

decath (I like your name 'workwayless' BTW) <grin>

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Author: workwayless Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 242 of 1498
Subject: Re: SS conclusion Date: 11/12/2003 7:08 PM
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My grandma is a good example of someone who can't live on the SS with the lifestyle she was accustomed to (middle class and frugal). 6 months after her and grandpa retired, grandpa died and left her a small life insurance pay-out and pension. She refused to go back to work so she sold her home, bought into a modest retirement community and lived quite happily. That is, until she unsuccesfully timed the stock market. She quickly turned 120k into about 30k. Then cds went from paying 10% to 2%. By the time she was 75, she could no longer meet her financial obligations with the pittance of SS she got and 1/2 of Grandpa's postal worker pension.

Her 3 kids made a decision to support her with monthly checks so she would not have to change anything or go on welfare.


My grandmother ran into a similiar situation after her husband died and my family supplemented her income as well. We did it on the sly and she never knew.


I like your name 'workwayless' BTW

Thanks! I choose that handle because I'm an early retiree who hasn't ruled out working ever again--as long as it not too often and it's fun.


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