Social Security Changes

[greystroke]

Originally Posted by wnytaxman

Greystroke, the way you had it worded made it sound like you were already in the 28% bracket which would have made your SS income taxable. What you described is a pretty common situation. Many times I'll have a client who is drawing SS get some additional income which seems minor at the time but then they get hit with a big tax bill becuaser of the taxability of their SS income.

I must admit that I am curious about the tax professional that you used. Were they a licensed professional or a "tax preparer" or one of the chains? Just curious.

Sorry did not see your post. Found a site that has all the old 99data. I went into the 28 bracket at 43000!!! back in those days...no 10 bracket. I was making a lot more than that and was not at 85% for ss purposes. So for additional income I was in the rich bracket. Maybe if I get some time I will go to the ss table in 99 and compare the 85% value with today.

I think people just forget how it was before the cuts and now just blindly accept the cuts never going away. They were only temporary.

I can provide the site for the previous tables if you want.

[greystroke]

Originally Posted by wnytaxman

I must admit that I am curious about the tax professional that you used. Were they a licensed professional or a "tax preparer" or one of the chains? Just curious.

H&R Block. Friend of mind. Never let a friend do it because if he makes a big mistake you won't want to take action. IRS picked up on it immediately so I hired some other tax firm to help me.

[wnytaxman]

Quite a few on here have said that they will never get out of the SS system what they paid into it. I'm really sorry to hear that because that means you really are not going to be living very long at all.

I dug into the rates and maximum wage bases for the last 35 years to see what the numbers were. Assuming you are a Baby Boomer who was born in 1946 and you made the maximum taxable SS wages every year since 1977, you would have paid into the system $134,083. That means that you would be drawing the maximum benefit for someone who turns 66 in 2012. That benefit would be $2,513 per month. If you do the math, you'll see that in less than 5 years you will have drawn out everything you paid into the system. Double the time limit to take into account what your employer paid in to match your contributions. This doesn't take into account interest rates and compounding and inflation. It's just the raw numbers.

Now considering the average life expectancy for most of us is around 80 years old, that means that we will take everything out that was put into the system for us at least four years prior to us passing on to the great RV store in the sky.

As a reference point, the maximum wages subject to the tax in 1977 was $16,500 and the rate was 4.95%.

The first person who ever drew a month SS check was a lady from Vermont named Ida Mae Fuller. She paid in $24.75 into the SS system. By the time she passed away she had drawn out just under $23,000. Ahhh, America, What a Country!!

[steelheadbluesman]

Originally Posted by Paul R. Haller

I have read this entire thread and there are all kinds of theories on how to fix what's broken but not once in all these statements did anyone say that it's simply what our priorities are and where we, as a nation choose, to spend our resources.

Far and away the most expensive expenditure is our military and related spending on WAR. If we had chosen to prop up social security and give every American citizen free health care for life, it could have been done easily with trillions left over compared to what we spend on war. We, as a nation, spend more then any other country on defense and our ability to support a war effort. In fact, we spend more on war then the next 20 countries spent on the same endeavor combined. That's a lot of cash and it's all measured in tears, sorrow, and blood spilled. Had 1/2 of the 124 trillion been spent on social systems instead of war over the preceding 20 years we would be, by a very large margin, the richest nation in the world. It's not the police, or fire fighters, or teachers, or county workers, or baby boomers retiring to blame for our woes. It's simply that we choose to let people here at home suffer to support war.

Our president needs to say to people here that it costs a lot to wage war no matter the reasons and we simply can not afford it along with education, health care, social security, and medicare. We can not do it all. Voters must choose the decisions on where we put our resources. My bet is that if we had the choice, we would curb our spending on war and prop up social security.
-Paul R. Haller-

Spend our resources on health care and education rather than war???

I like that concept all the way around.

[wildtoad]

I agree that we can no longer (never could) be the policemen to the world, the Iraq war was not required, we should bring our troops home for S. Korea, Germany, and other places.

Not spending the money on wars does not mean that it will be spent on healthcare for all or education. It might go to repair our failing infrastructure. The only thing I know for sure is that it would get spent.

Most if not all the countries in Europe that are in deep doodoo don't spend a lot on their military. They do (or atleast did) spend a great deal on social programs and retirement benefits.

[mick]

wnytaxman, how much do you think I would have since I paid in SS since 1955 and began in 65 paying the max rate until 2005 when I retired? Now take that amount and just pay me 2 % on it for those years, except when Peanut man was in office and I earned 26% on my cds, and in your math , tell me what I would have in 2005?

[wnytaxman]

Originally Posted by mick

wnytaxman, how much do you think I would have since I paid in SS since 1955 and began in 65 paying the max rate until 2005 when I retired? Now take that amount and just pay me 2 % on it for those years, except when Peanut man was in office and I earned 26% on my cds, and in your math , tell me what I would have in 2005?

Mick, I just used the rates and maximum taxable wage base from '77 on. If you calculate the interest rates, particularly those in the late 70's, and inflation, you will come up with some vastly different numbers. My comment was based on those who say they will never get back what they put in. In pure raw numbers, most of us will get back much more than we put in. The calculation of what you receive is based on your last 35 years of work, which is why I used '77 as a start. My guess would be that a lot of folks on here weren't at the max in the early years of the SS system.

I'm not arguing about the wisdom of the system. Like so many things in our society, the SS system started out as a good idea, but it became politically expedient to keep on adding and adding to beneficiaries of the system. When the system started in the '30's it took three workers to pay for one beneficiary. Now it takes 15 workers to pay for one recipient. The Social Security system and its add on of Medicare have become a huge drain on the country and are literally becoming unsustainable. My question off the top was what are each of us willing to do to correct the situation. The answer from most posters have been nothing if it means less dollars in their pockets.

[mick]

wnytaxman, tks for the HONEST answer. However, I see people today drawing SS, SSI, medicaid and food stamps, and personally know some that have no need for it or even qualify for it , if they checked.

So here I am at age 70, thinking all my life that SS would be a great thing for me, thats why I maxed out every year, owned my own company , paid mathing sSS for over 240 employeees for many years, and yet I hear some say that SS was meant as a safety net. I call bull on that. I never in my life , until the 80s , ever heard that statement from anyone.

So now that I have met my obligations, done my duty, paid my taxes, etc, etc, like you are supposed to, I hear people saying, "will you give up some of you SS to fix the problem?"

Are you kidding me ? Wasnt me that broke the darned thing, and I think they should do to the current workers EXACTLY what they did to me and other millions, when they needed more money, they simply raised the tax rate.

Not my fault that the currect generations expect the world given to them in the "rights" is it?

No no no, dont touch my SS. If you do, I will be with the other 50 million in the streets ready to fight.

[RustyJC]

Originally Posted by wnytaxman

My question off the top was what are each of us willing to do to correct the situation. The answer from most posters have been nothing if it means less dollars in their pockets.

I wonder who would like to be the one to tell that 80 year old widow who is trying to live on $800/month that her benefit is going to be cut - what? 10%? 15%? 25%? Not me! There's nothing fair and right about that, IMHO.

Rusty

[Rubix cube]

Originally Posted by Davdeb1

....... There are actually people on here that think 50% of people pay no taxes.

The bottom 50% of our population, inflated by 25 million that have come into the country illegally, pay 2.5% of the Federal income taxes, and if you don't want to believe that, google “Nation Tax Payers Union.” They, as a whole, then reap back more in “Earned Income Credit” than they paid. If you give me $10 and I return $20, did you pay me, or did I pay you ?


And, why should I be told by the Federal Government how much I will give in charity for their 'earned' income credit ? Charity is best controlled at the local level with voluntary funding (and yes, I still do that.) Our Federal Charity systems are rife with corruption.


Make no mistake, April 15th is a payday for a lot of people.


Social Security was insurance until it was put into the general fund. I let you 'guess' what kind of a congress did that task. Medicare is an Insurance.

Originally Posted by Davdeb1

The person earning 1 million a year pays six tenths of one percent of their income for social security.

Social Security is capped because their benefits are also capped.

Originally Posted by Davdeb1

If you are getting your facts and figures from, FOX NEWS, POLITICAL ADS, Internet sites funded by the former or others with a political agenda, then it's time to look in the mirror.

And, WHY would I be looking in that mirror ? Are you going to tell me CBS, MSNBC, TIME/WARNER, ABC and the others are the only ones telling the truth ? PFFFTtttt. Then take your own advice.


And, the 80k earner is not the only person wanting the less expensive goods. Unless of course they come free from the government in the way of food stamps.

Originally Posted by Davdeb1

We are complaining about the people WE VOTED FOR, and we continue to vote for and keep in office. We say they are the ones screwing up everything, but we keep paying them and we let them keep their job.

This is our fault, WE THE PEOPLE. We keep taking everything they give us, and in return we let them keep their jobs. If everyone took less, and in return demanded a balanced budget amendment, term limits, and outlawed lobbying, then we could fix the problem.

I can agree, in part with these statements, except in that we are solely to blame. But I refuse to accept the recent 'Healthcare' ponzi scam that was passed into law. Our Children will pay ANOTHER tax for something they don't need or want until over 60, by which time will again be unfunded due to the moneys being put into the general fund.


I can not name the recent party which sprang up not wanting to pay any more taxes until the money being collected is used in a responsible way, as it will get taken off the comment. But, I believe it to be a step in the direction you speak of. It was a grass roots party from both ends of the spectrum wanting responsible spending.


I also believe EVERYONE should pay taxes – so that they will have skin in the game. Some should definitely pay less, but let's make sure it's really a tax and not something they directly get benefit from in any more amount than they contribute.


Socialism does not work.

[mick]

There is a perfect way to fix SS. Simply do not allow payments to people who have not paid in for so many years. Raise the rates of the poor working slobs, (you know those like all of us on SS now, was for many many years) . You say it took 3 workers when it began and now it takes 15. Well whats the problem, just raise the rates to where it again just takes 3 to pay SS benefits.

Oh you dont like that do you? Well I wasnt too happy either ever year or two when they raised my contribution requirement. But I didnt get all those "rights" stuff all those years either.

Dont mess With Texas OR MY SS.

[Lindsay Richards]

It's just the raw numbers.

What a statement. This means nothing because of compounding, a dollar doubles every 6 1/2 years (over this time period). A dollar from 1960 would be $60 dollars now. Inflation also must bee figured in. If I had been putting in 15% of my wages into investments for 45 years instead of into SS, it would be worth millions now. We put away less than that on our own and I know what that is worth now. SS is a horrible investment for most folks.

[wnytaxman]

Originally Posted by RustyJC

I wonder who would like to be the one to tell that 80 year old widow who is trying to live on $800/month that her benefit is going to be cut - what? 10%? 15%? 25%? Not me! There's nothing fair and right about that, IMHO.

Rusty

Rusty I agree that someone living on subsistance shouldn't be faced with a cut in benefits. However, if things continue the way they are going there will be NO benefits for anyone. As I said in an earlier post, What are we going to do when the money runs out? If we don't do something which may not be pleasant now, but will help the overall health of the system, then maybe we should look at doing it. We are the generation that is benefiting the most from the system. We are the generation that should be leading the charge to fix the system, even if it is to our own detriment.

[Rubix cube]

Originally Posted by RickO

Just curious... why didn't you deduct your gambling losses from your gambling winnings? My understanding is that you can't offset regular income with gambling losses but you can offset winnings with it.

Rick

I think you have to be a professional gambler to do this.