The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing


Subject:  Another 2015 budget proposal impacting retirees Date:  3/23/2014  11:20 AM
Author:  inparadise Number:  74592 of 101543

President Barack Obama’s 2015 budget includes this provision:

…the Budget proposes to eliminate aggressive Social Security claiming strategies, which allow upper-income beneficiaries to manipulate the timing of collection of Social Security benefits in order to maximize delayed retirement credits.

No one seems to know what this means or whether it will take an act of Congress to enact whatever it’s referring to.


My guess is that the administration is going after the ability of married and divorced workers to receive full spousal benefits (equal to half of their spouse’s full retirement benefit provided he or she has filed for retirement benefits) between full retirement age and 70 while permitting their own retirement benefit to grow due to the delayed retirement credit.

Most likely, the administration will let high-income households collect a full spousal benefit, but somehow, deduct it from their retirement benefit once they start collecting it. This would add yet another level of unbelievable complexity to a system that could not be more complex and incomprehensible.

Because of our age difference, file and suspend is not much of an issue, particularly since we want to have time to convert our TIRAs to Roths. But along with this budget's proposal to force Roth RMDs, make recipients of inherited IRAs dissolve within 5 years instead of over lifetime, and last years budget proposing a limit to max value of retirement funds, there is a clear trend from the Obama camp to make it harder to save for retirement.

While it is easy to say that this will only affect high income earners, other than a couple of years of insanely good bonuses from what is essentially a start up, we do not fit in that camp. Instead, we educated ourselves, took decent jobs that have most certainly required personal sacrifice, saved hard and invested well. We have not raised our standard of living in over 20 years, instead putting increases in pay into investments. This was the same path to early retirement that my teacher parents with 6 kids took. It is not an impossible dream that requires you to be born with a silver spoon in your mouth.

Looking ahead to the next generation, to me the writing on the wall is clear....defend your sacrifice from the grasshoppers that want to consume your food stores. But the question is, how is that done?

Copyright 1996-2021 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us