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Proposed SS fix

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  • Avatar okayplayer 
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    Splash Refinancing Bonus

    So glad my practice is starting a cash balance plan 1/2020.

    #188096 Reply
    CordMcNally CordMcNally 
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    Are these people giving more money going to get increased benefits? I don’t think so. It’s basically a wealth re-distribution move in order to extend solvency. Too bad the government can’t keep from taking that money for other things. Instead of continuing to increase taxes, why not make some real changes to social security. Oh, because politicians are afraid they won’t be re-elected and they can’t continue their “public service”. Social Security reform needs to be like a band-aid. Rip it off. It’s going to hurt, but it’ll allow the wound to heal.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #188147 Reply
    Lithium Lithium 
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    Republicans say that entitlement programs, not tax cuts, are the main reason for growing deficits. They have in recent years suggested unpopular changes in Social Security, including an increase in the retirement age and a new formula for computing cost-of-living adjustments that could reduce future benefits.

    As a presidential candidate, Mr. Trump said, “I’m not going to cut Social Security like every other Republican.” Mr. Larson praised Mr. Trump for that stand and said, “It’s no surprise that he carried the senior vote.”

    As president, Mr. Trump has proposed cuts in projected spending on Social Security’s disability benefits, on the assumption that more beneficiaries can return to work.

    In other words, this is politics in America.  Overpromising, populist pandering, and running up a tab for future generations are tactics that win elections.

    #188161 Reply
    jfoxcpacfp jfoxcpacfp 
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    Such an emotional issue. I hate to say this, but you will see this and/or other/more creative fixes, such as not beginning bene’s until later in life. I’ve told ppl this for years when they tell me they are afraid SS will go away. Can you imagine? It’s become the last frontier of benefits and there are many options for keeping it going. It’s either that or bye-bye SS and guess which will win out?

    The politician who supports an end to SS will find HIS/HER career over, simple as that. That is why it will never end.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
    https://fox-cpas.com/for-doctors-only/

    #188162 Reply
    Avatar MaxPower 
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    SS is like weight loss. You can have everyone in the world arguing something different, but truly the only way to lose weight is if caloric intake < caloric expenditure. So in terms of SS, you either have to increase taxes (exercise) or decrease benefits (don’t eat 6 donuts). Discussion can be had about ways to decrease benefits (extend age to benefits—probably the right answer since lifespan has increased significantly since SS was introduced; greater means testing, etc). It’s a math problem and to frame it any other way is disingenuous.

    #188169 Reply
    CordMcNally CordMcNally 
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    The politician who supports an end to SS will find HIS/HER career over, simple as that. That is why it will never end.

    Click to expand…

    A great reason for term limits. So politicians can try to make meaningful reform and protect the future instead of borrowing from the future with promises for today in order to get votes.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #188171 Reply
    Zaphod Zaphod 
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    Disability Insurance

    SS is like weight loss. You can have everyone in the world arguing something different, but truly the only way to lose weight is if caloric intake < caloric expenditure. So in terms of SS, you either have to increase taxes (exercise) or decrease benefits (don’t eat 6 donuts). Discussion can be had about ways to decrease benefits (extend age to benefits—probably the right answer since lifespan has increased significantly since SS was introduced; greater means testing, etc). It’s a math problem and to frame it any other way is disingenuous.

    Click to expand…

    They could also invest the money and make it a real fund instead of a ledger balance or whatever it is (idk what it is but have been led to believe it isnt a real thing per se).

    No reason we couldnt have a SWF like many other nations. Obviously we’d need some super regulations to keep hands off of it.

    #188176 Reply
    Liked by RosieQ, ITEngineer
    jfoxcpacfp jfoxcpacfp 
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    No reason we couldnt have a SWF like many other nations. Obviously we’d need some super regulations to keep hands off of it.

    Click to expand…

    I’m embarrassed to ask, but what is SWF? I know it’s surely obvious, but google tells me it is a file extension!

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
    https://fox-cpas.com/for-doctors-only/

    #188177 Reply
    CordMcNally CordMcNally 
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    No reason we couldnt have a SWF like many other nations. Obviously we’d need some super regulations to keep hands off of it. 

    Click to expand…

    I’m embarrassed to ask, but what is SWF? I know it’s surely obvious, but google tells me it is a file extension!

    Click to expand…

    Sovereign Wealth Fund.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #188178 Reply
    Liked by Zaphod, jfoxcpacfp
    Avatar Xeno 
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    SWF = https://en.m.wikipedia.org/wiki/Sovereign_wealth_fund

    Either way, in order to be fixed for long-term solvency they will have to tax a larger wage base or do means testing of recipients. Honestly, given that it is a safety net social insurance program I’m OK with either approach. A lot of millennials just assume it’ll be insolvent when the retire. My approach is that I hope it’ll be solvent but that I don’t expect it’ll pay folks like me that much. I expect to end up getting less out than what I put in due to high income in earning years and not being destitute in old age. The folks who get more than they put in are either poor or disabled, which I am hoping to avoid.

    Also, increasing retirement age isn’t entirely sustainable, especially if American life expectancy starts to increase again. What are we going to do, make people wait until they’re 75 to collect their maximum monthly amount?

    #188180 Reply
    Avatar FIREshrink 
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    I haven’t read the proposal but presume the higher taxes would lead to higher benefits, but past three second bend point those don’t count for much.

    I give the authors props for creativity, as they know taxing $135k+ would be political suicide.

    Since I make less than $400k I think this is a better idea than taxingn$135k+. 🙂

    I like the slightly higher tax rate.

    I would probably prefer a lesser tax rate hike, raising the $400k to ?$600k, and raising the retirement age for those with higher lifetime earnings.

    #188184 Reply
    Avatar MaxPower 
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    Yes, we wait until they’re 75. Why isn’t that sustainable? People are living longer now than in 1935 when FDR signed it into law, so why should people be getting benefits at the same age?

    #188185 Reply
    Lithium Lithium 
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    Yes, we wait until they’re 75. Why isn’t that sustainable? People are living longer now than in 1935 when FDR signed it into law, so why should people be getting benefits at the same age?

    Click to expand…

    I was about to type this response.  But what’s different in 1935 is that more able bodied people were dying of heart disease and colon cancer in their 50’s.  Now a lot of those people are getting laid off or retiring in their 60’s, and even if they have the energy to keep working until 75, age discrimination makes that unrealistic.

    I realize that these people need to be saving in their 401k’s and Roth IRA’s and withdrawing 4% until SS kicks in.  Good luck making that happen.

    #188186 Reply
    Liked by Anne, Zaphod
    Avatar Xeno 
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    Also, for better or for worse, the proposed doughnut-hole between $135K and $400K essentially makes this a slight incremental increase of the tax brackets to the highest earners, so the top bracket would be 37% +7.4% = 44.4%. Lower than AOC’s radical proposition of 70% and lower even than the 50% rate we had until 1986 tax reform, IIRC.

    It’s a politically savvy way of tweaking TCJA to make income tax more progressive, since anything that increases SS benefits for the 50 and older crowd will appeal to a lot of voters, most of whom make under $400K/year. So you get a huge group of voters whose ears perk up when they hear they’re getting a raise in social security now and then tune out when they hear payroll tax increases are being phased in over a couple of years, with the brunt carried by those earning over $400K. It seems very well calculated politically.

    #188189 Reply
    ENT Doc ENT Doc 
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    This proposal is being treated with kid gloves by the NYT, to no surprise. It ignores the fact that these social safety net programs are bankrupting America, haven’t been adjusted for age, fall short of funding and spend more than projections, politicians will grab the money for something else even if earmarked, it will affect job growth and hiring, that the current beneficiaries were undercharged and we are overcharged, and that the idea that these programs can be funded by only taxing the wealthy is a lie. Yes, adjust the age up. Life expectancy is longer. Signal that we expect people to save on their own. If anything this proposal makes people believe the lie that it’ll be there for them in a meaningful capacity, so why save? People also forget that disability payments from SS for younger folks have skyrocketed. No graft there.

    I’d love to hear any of these 200 tax and spend politicians tell us what happens when labor gets more expensive – on national TV, live, and make everyone watch.

    #188230 Reply

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