Social Security Changes

[wnytaxman]

Originally Posted by RustyJC

OK, how about some specifics? You ask the question, "Are we willing to take a reduction in our benefits?" How much would be required? 5%? 10%? 50%? Your question is like asking "Would you be willing to write me a check?" without bothering to tell me the amount. My response would be either "NO!" or "It all depends...."

Rusty

I think there are a number of changes that would help the system, if not make it healthy again.

1. I would raise the full retirement age to 69 and gradually raise the early retirement age to 64. In the past this was done by adding one or two month increments onto retirement benefits so that the change wasn't horrendous.

2. I would make the receipt of SS benefits to be more needs based. If you make over $150,000 and you are drawing SS benefits you would start to lose benefits and once you topped $250,000 you would receive no benefits.

3. I would raise the wage cap to $150,000. I would also start to include income that heretofore has been excluded from SS taxes such as rental income and personal service S corp. income.

4. I would make disability status more difficult to obtain. The inclusion of rental income would also remove some from the disability ledgers because they use the rental income exlusion as a way to still claim they are disabled.

5. I would get the politicians to admit that Social Security is not an annuity, but just another tax.

6. I would reform Medicare by allowing those over 65 to opt out of Medicare and continue with their Health Savings Accounts. Tort reform would go a long way to improve the cost of Medicare also.

In case you are wondering how many of these effect me, the answer is just about all of them. It wouldn't make sense to ask others to do what I am unwilling to do myself.

Okay, the asbestos suit is on. I'm ready!

[RustyJC]

Originally Posted by wnytaxman

I think there are a number of changes that would help the system, if not make it healthy again.

1. I would raise the full retirement age to 69 and gradually raise the early retirement age to 64. In the past this was done by adding one or two month increments onto retirement benefits so that the change wasn't horrendous. At what current age would these changes apply? For example, I'm soon to be 64.5 years old. My full retirement age has already been increased to 66, and I'll probably continue working until at least that age. Would this change apply to everyone who isn't already on SS, to those who are currently younger than 55, or ????

2. I would make the receipt of SS benefits to be more needs based. If you make over $150,000 and you are drawing SS benefits you would start to lose benefits and once you topped $250,000 you would receive no benefits. Are you talking about pre-retirement or post-retirement income that's subject to the needs test?

3. I would raise the wage cap to $150,000. I would also start to include income that heretofore has been excluded from SS taxes such as rental income and personal service S corp. income. Understood.

4. I would make disability status more difficult to obtain. The inclusion of rental income would also remove some from the disability ledgers because they use the rental income exlusion as a way to still claim they are disabled. Understood.

5. I would get the politicians to admit that Social Security is not an annuity, but just another tax. Well, that is a fundamental change for sure. If there's no assurance that SS will be there after one pays in for a working lifetime, would you support transitioning to personally-owned savings accounts with "forced" contributions a la the Singapore model? As a young person, SS wouldn't be that appealing to me under those conditions. Of course, if I opt out, then the inflow to SS is reduced accordingly.

6. I would reform Medicare by allowing those over 65 to opt out of Medicare and continue with their Health Savings Accounts. Tort reform would go a long way to improve the cost of Medicare also. That appears to be somewhat counterproductive as you would lose the Medicare tax/premium income (deducted from their SS in the case of those who are retired) from the healthy/wealthy individuals and just leave the sick and poor on Medicare.

In case you are wondering how many of these effect me, the answer is just about all of them. It wouldn't make sense to ask others to do what I am unwilling to do myself.

Okay, the asbestos suit is on. I'm ready!

See comments above.

Rusty

[roadstar99]

I'm with the people who think the SS cap should be removed. That would solve the problem and no one would have to take a cut. We already gets cuts in the form of eliminating COLAs.

[LadyFitz...]

Originally Posted by wnytaxman

...So to those of you who will not part with any single cent of your Social Security payments, I pose this question, What will you do when the money runs out and there is no Social Security anymore?

Why are you insisting that cutting my benefits is the only solution? It just happens to be the easiest one. Are you going to contribute to my support if my benefits are cut? I ask that because, if my benfits are cut, I'm planning on suing those who voted to cut my benefits and I would be happy to include you in the suit.

[LadyFitz...]

Originally Posted by wnytaxman

Rusty,

I have been dealing with taxation issues and government regulation for many more years than I care to remember. In that time frame there have been many instances where the government has changed course dramatically. You may remember a time when the statement was made that Social Security benefits willl never be taxable. Also I believe the statement was once made that Social Security funds were sacred and would never be used for any other purpose. Do you see where I'm going?

There are a whole series of changes that could be made to the system that will insure it's long term future. Are we willing to make those changes?

Just because the Feds have lied to us in the past doesn't make it right. Why not just hold them to their promises instead of penalizing those who were lied to?

[LadyFitz...]

Originally Posted by FRR2EYW

Paul,

Sorry to derail your train with pesky facts, but social programs (Social Security, Medicare/Medicaid, Food Stamps, Welfare, etc) and interest on the national debt are 60% of the federal budget. DOD does take another 20%, but they are there defending not only our nation, but our national interests.

How did the war in Iraq defend our nation and national interests?

[wnytaxman]

Rusty,

My apologies for not quoting you directly, but I don't know how to put the entire quote into my response.

For Item 1, that is already going into effect. If you were born in 1955, your retirement age is 66 and two months, 1956 is 66 and four months. Those born after 1960 have a 67 full retirement age. I would start with 1961 with 67 and one month and so on until I got to the 69 age limit. I would use the same method on the early retirements.

On Item 2 that would only include post retirement income. If you're making a quarter of a million and you are retired you don't need SS benefits. Sorry, but life's unfair sometimes. This would also tend to exclude late parenting individuals who had kids late in life and the kids start drawing SS income when the parent(s) do.

On #5, I'm looking more for an admission that the politicians have not consistently told us the truth on the Fund. If we went to the self administered funds, I think we need to add in some sort of safety net (there's that term again) for those that don't do well, which would be many.

On Item 6, what I'm looking for is the massive amount of Medicare funds that are paid to insurance companies for the Medicare add-ons. In an earlier post I referenced the "free" Medicare insurance that costs the taxpayers almost $900 a month. HSA's would eliminate that and the savings by eliminating the HMO's from their taxpayer funding would more than offset any loss of premiums.

Ed

[wnytaxman]

Originally Posted by roadstar99

I'm with the people who think the SS cap should be removed. That would solve the problem and no one would have to take a cut. We already gets cuts in the form of eliminating COLAs.

Removing the cap would be disasterous. Would you like to be on the receiving end of a 15% additional tax burden to pay for someone who is not working? Put yourself in the position of those that are paying for SS and see if you still think the same way.

[wnytaxman]

Originally Posted by LadyFitz...

Just because the Feds have lied to us in the past doesn't make it right. Why not just hold them to their promises instead of penalizing those who were lied to?

You already have that ability. Your votes are your way of holding someone accountable.

[FRR2EYW]

Originally Posted by LadyFitz...

How did the war in Iraq defend our nation and national interests?

The two most obvious ones are oil and state sponsored terrorism.

Oil is a world commodity now. Even a threat to the supply has the ability to drive up prices. Hurricane in the Gulf of Mexico, oil and gas prices around the world rise. Cut off the supply from a country and see what happens to the price. They don't have to be selling to us, just take their share out of the global market.

Terrorism, do I really have to say more? It is a delicate situation, but suffice it to say that if one believes that OBL was living in Pakistan without the knowledge of the Paki government I have some excellent oceanfront property in Kansas to sell. I am pretty sure that Iraq would have let the same situation continue.

[LadyFitz...]

Originally Posted by FRR2EYW

The two most obvious ones are oil and state sponsored terrorism.

Oil is a world commodity now. Even a threat to the supply has the ability to drive up prices. Hurricane in the Gulf of Mexico, oil and gas prices around the world rise. Cut off the supply from a country and see what happens to the price. They don't have to be selling to us, just take their share out of the global market.

Terrorism, do I really have to say more? It is a delicate situation, but suffice it to say that if one believes that OBL was living in Pakistan without the knowledge of the Paki government I have some excellent oceanfront property in Kansas to sell. I am pretty sure that Iraq would have let the same situation continue.

Oh, please! Iraq doesn't have enough oil to be an issue (the French and Brits had alreqady quit buying it). And it is their oil, not ours. They aren't obligated to sell it to anyone. Your logic would also have us invading Greece to ensure a steady supply of olives. After all, olives are a commodity. Btw, our govenment not only never claimed the Iraqi war was over oil, it denied it.

When Iraq invaded Kuwait, which is one of our allies, we went in and drove them out. Once that was done, we immediately left instead of invading Iraq so we wouldn't get embroiled in a long term, resource and life draining war. Hussein did a lot of saber rattling after that but even that mad man was intelligent to not do anything that would invite us back in, including harboring terrorists. Iran is far more of a threat.

Bin Laden was tracked down to Afghanistan, not Iraq. Iraq was never a terrorist threat, even when it invaded Kuwait. We simply had no business going into Iraq. If we had put the effort we put into Iraq into finding Bin Ladin, he would have been found a lot sooner and that war would be long since finished.

[LadyFitz...]

Originally Posted by wnytaxman

You already have that ability. Your votes are your way of holding someone accountable.

I do vote. Sadly, the choices of whom to vote for are too often limited to dumber and dumbest.

[Rubix cube]

Originally Posted by LadyFitz...

How did the war in Iraq defend our nation and national interests?

At the time it was started, everyone as in both sides of the aisle, thought it to be true that Saddam was going to develop nuclear weapons. There was a vote in Congress which overwhelming sent us in. It is ONLY with hindsight we found out he was bluffing because he was afraid of Iran.

[Kayjulia]

In twenty years a lot of people including baby boomers are going to be dead, dead people don't collect SS. So the demand for SS benefits will decline at a rapid rate solving part of the problem with SS. If the SS trust fund is left alone and not used as a slush fund for other expenses it will, with a few tweaks, can get well. There is the real problem keeping greedy pols hands off the money in the trust fund.