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Old 12-14-2012, 09:53 AM   #43
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I guess some folks on this site should look up the definition of entitlement. You paid into it so you are "entitled" to a monthly benefit. It is not welfare. Besides, I see very few if any pensions that include a cola.
I do feel for those of you that get the bulk of your income from social security. I know it must be hard to afford the increases in fuel, food and medicine.
Dave, if the payments stopped once you had received all that had been paid in by you, then I would agree with you. However, the payments will continue after all that you had paid in and all that your employers had paid in, which makes it an entitlement.

Actually most pensions that are governmental do include colas and some of those are pretty substantial. Private pensions and those of us that are self employed are the ones with no guarantees and no colas.
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Old 12-14-2012, 10:00 AM   #44
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Social (in)Security is now called an entitlement. It is an entitlement that I worked over 50 years to get and put an amount of money (after taxes - look at you W-2). If I had been allowed to put that same money into a passbook savings account, that account would now stand at well over one million dollars. I could live nicely on that. I will get it all back if I just keep collecting until I am 127.

Don't ever really figure out what taxes are costing you. I did and it was very depressing to know how much of my work went for nothing that should happen.

This would be political, but it happens with every party and all the time.

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Old 12-14-2012, 10:08 AM   #45
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Matt, the typical working person works until mid-May just to pay all the taxes that are incurred. You barely get to keep half of what you make and it is not going to get any better.

Social Security was originally intended to be a safety net for those who could not take care of themselves. When it first started the average life expectancy was around 64 years old, so sure, we'll give you money at 65. Now we live too long and there are not enough workers coming into the work force to pay for those that are drawing.

To add to the potential perfect storm, most of the debt of the federal government is not due to the Chinese, but to the Social Security Fund.
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Old 12-14-2012, 11:46 AM   #46
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Social (in)Security is now called an entitlement. It is an entitlement that I worked over 50 years to get and put an amount of money (after taxes - look at you W-2). If I had been allowed to put that same money into a passbook savings account, that account would now stand at well over one million dollars. I could live nicely on that. I will get it all back if I just keep collecting until I am 127.

Matt
Don't forget that your employer also contributed matching funds to your deduction, greatly adding to the amount. I too figure I would have had well over a million dollars accumulated in SS if the basic amounts could have benefited from reasonable investment and interest gains. There may well BE many incidents of "entitlement" payments, but anyone would have a hard time, and a vigorous argument, if they try to somehow convince me that my SS is an "entitlement" - some form of unearned and undeserved government "generosity and compassion"...
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Old 12-14-2012, 11:55 AM   #47
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We scoff at the measly 1.7% increase, but don't stop to think of the increased benefit you receive from Medicare. The increase in Medicare premium is far overshadowed by the rising medical costs the system has to pay. With the exception of very few, most of us will get back far more than we imagined on Medicare versus the payroll deduction and our premiums. I've not heard anyone complain they were getting too much from Medicare.

My father, being relatively healthy, got around $200,000 in benefits the last year of his life. I can just imagine the amounts paid out to people with chronic illnesses. There seem to be a lot of people on this site with total disabilities. Your benefits will far outweigh any amount you have contributed to social security and Medicare.

We live in a society. That means we take care of each other. We take care of people we don't know. We take care of people who we think are lazy, stupid or dishonest. We all know people who are "working" the system to get every benefit. These are the people that are hurting us all. The people on disability that make lots of money working under the table. If you don't believe it, just sit in a parking lot and watch the people parking in handicap spots. So many of these people just seem to jump out of their vehicles a walk effortlessly Into the store.

Sorry to be on the soapbox, but most everyone does not want to pay more in taxes, yet we complain that we are not getting a bigger increase in benefit.
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Old 12-14-2012, 12:07 PM   #48
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Well I just received my notification today. Went up a net $31.00 after adjusting Medicare. I don't have a pension but do have my IRA's and some stock investments as well which I don't intend to touch until being forced to at 70. I'll dabble at a savings I have as well when needed. What I really don't understand is how the goverment does not consider food or gas in their cost of living calculations. To me that's the biggest part of our spending budget. I guess I could go on a diet and lose a few pounds and maybe not drive this coach as much. NAH!!! THAT AIN'T GONNA HAPPEN!
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Old 12-14-2012, 12:09 PM   #49
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"We scoff at the measly 1.7% increase..."
NO, what we "scoff" at, is the inept management of what WE have long paid into, and THEN, to add insult to injury, the attempt by some to insist that what we later receive, is somehow "undeserved charity" granted by a gracious government...
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Old 12-14-2012, 12:26 PM   #50
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NO, what we "scoff" at, is the inept management of what WE have long paid into, and THEN, to add insult to injury, the attempt by some to insist that what we later receive, is somehow "undeserved charity" granted by a gracious government...

Gary, I don't think anyone is saying that SS is undeserved charity. If one can receive substantially more than one paid into the system then it would fall into the qualification of an entitlement. I think there is some confusion about what someone may be "entitled" to as opposed to an out and out handout.

Part of the problem, as I see it, is that we have become a nation that says that taxes should only be paid by someone else and benefits should only be received by us. We want better roads, but complain about tolls and fuel taxes. We want social benefits but we complain about the taxes we pay. We want the right to sue, but complain about lawyers. The list goes on and on. Somewhere along the line we seem to have forgotten that we are all in this together.
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Old 12-14-2012, 12:58 PM   #51
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Sadly for my generation, it is slated to run out 1 year before I retire. I'm glad to be working to aid those on it now, but have to plan as if it won't exist when I reach eligible age.
wanderso, I have heard that same story for the last 50 years. so tried not to plan on it, but glad it is here for us, and I would bet it wil lbe there for you also.
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Old 12-14-2012, 01:26 PM   #52
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Sadly for my generation, it is slated to run out 1 year before I retire. I'm glad to be working to aid those on it now, but have to plan as if it won't exist when I reach eligible age.
Can anyone see a possible solution to this problem?

For 2012, the maximum taxable earnings amount for Social Security (OASDI) taxes is $110,100. There is no limitation on taxable earnings for Medicare's Hospital Insurance (HI) taxes.

Employee/Employer
The Social Security tax rate for employees is 4.2 percent through the end of the year
The Social Security tax rate for employers is 6.2 percent. The Medicare tax rate is 1.45 percent for employees and employers

Self-Employment
The Social Security tax rate for self-employed is 10.4 percent through the end of the year. The Medicare tax rate is 2.9 percent for self-employed.

Possible options -
A get rid off all of it
B privatize all of it
C drop or raise the income cap.
D burry head in sand

Most work all year and never make the cap - some work a week and are done. Both collect according to what was paid in and years paying. Those making the most are probably able to collect the longest. Some say that's equitable. I'm not saying what I think as my political opinions like my vote are not subject for discussion. But math and finance are. Raise the cap. Floors open.
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Old 12-14-2012, 03:14 PM   #53
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Can anyone see a possible solution to this problem?

For 2012, the maximum taxable earnings amount for Social Security (OASDI) taxes is $110,100. There is no limitation on taxable earnings for Medicare's Hospital Insurance (HI) taxes.

Employee/Employer
The Social Security tax rate for employees is 4.2 percent through the end of the year
The Social Security tax rate for employers is 6.2 percent. The Medicare tax rate is 1.45 percent for employees and employers

Self-Employment
The Social Security tax rate for self-employed is 10.4 percent through the end of the year. The Medicare tax rate is 2.9 percent for self-employed.

Possible options -
A get rid off all of it
B privatize all of it
C drop or raise the income cap.
D burry head in sand

Most work all year and never make the cap - some work a week and are done. Both collect according to what was paid in and years paying. Those making the most are probably able to collect the longest. Some say that's equitable. I'm not saying what I think as my political opinions like my vote are not subject for discussion. But math and finance are. Raise the cap. Floors open.
The cap for social security wages for 2013 increases to $113,700. Now with the change in the tax laws the top personal rate becomes 39.6%. If that person is self employed, the first $113,700 is also subject to the self employment tax of 15.3%. As if all that is not enough we have the new Medicare tax to pay for the new health care law. That's another .9% on earned income over $250,000 and 3.8% on unearned income (interest, dividends, capital gains, etc.). So now we have a total tax bite of over 50% on just the federal and we still have the state to worry about.

Those on the lower end of the economic spectrum actually draw a greater percentage of social security benefit, based on what they paid in, than do upper income people. They will still have the same benefits and Medicare will still be the same, so what do we do?

My guess is that somewhere along the line SS will become more needs based than an entitlement. (I know some of you don't like that term, but that is what it is called.) Let's say you are on SS and still making over $150,000 a year. After that amount your SS will start to drop and after $250,000 you won't draw. Another proposal is that income that had not been subject to social security tax in the past would start to be subject to it. Things like carried interest, rental income, and certain types of gains would now become subject to the SS tax.

Here's the proposal I would love to see instituted. How about having corporations that have wags paid overseas, either directly or through sub contractors, be subject to that same 7.65% that US employers pay? Think about it. We would strengthen our own SS system and help level the playing field just a tad toward the US worker. Just an idea to float out there.
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Old 12-14-2012, 03:23 PM   #54
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Old 12-14-2012, 03:38 PM   #55
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Taxman - any idea how max rate possible equates to the max rate paid in aggregate.

Not suggesting we go back in time but can be instructive to look back. Top marginal rate in 1980 was 70% - went to 50% - prior to '80 was > 70% for years. We had wars on the books to pay for then and taxes and bonds were the way we paid for them. Even in inflation adjusted terms these are some pretty good times historically for high income earners. Again - no position taken and would have loved to have been a high earner then or now regardless of rate. And no, I wasn't lazy lol. Met my dads wishes - enlisted - graduated college - that's what he wanted for me - to serve as he did - and Graduate which he did not.
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Old 12-14-2012, 03:54 PM   #56
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Taxman - any idea how max rate possible equates to the max rate paid in aggregate.

Not suggesting we go back in time but can be instructive to look back. Top marginal rate in 1980 was 70% - went to 50% - prior to '80 was > 70% for years. We had wars on the books to pay for then and taxes and bonds were the way we paid for them. Even in inflation adjusted terms these are some pretty good times historically for high income earners. Again - no position taken and would have loved to have been a high earner then or now regardless of rate. And no, I wasn't lazy lol. Met my dads wishes - enlisted - graduated college - that's what he wanted for me - to serve as he did - and Graduate which he did not.

Wow, great question Steve. The rates were a lot higher back in the 50's and 60's and into the early 70's. The big difference was in the deduction area. In the early 70's you could deduct things like sales tax along with your income tax and even, are you ready for this, cigarette tax. Even though the rates were high, not many people paid that much.

I can remember when the SS wage cap was $4,500. I think the percentage back then was 2% for both the emplyee and the employer. However, at that time there was no disability benefit and there may have been some minor widows and survivors benefit. Now I believe the family maximum is somewhere around $4,000 a month. Also a SS beneficiary over the age of 66 can still work and earn unlimited income and not have his SS go down. A lot has changed in the time frame since SS started. Most were meant to improve life, but some of the benefits are pretty well abused also.
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