Haley: Raise the Retirement Age

[Clipper]

I can't believe Trump is the liberal on this issue in the GOP

He's not. He's a lying sack of shit who will screw SS recipients in a hearbeat if voter's are stupid enough to reelect that jerkoff.

And that also goes for Haley who's nothing but an idiot two bit hack.

 

[Couchpotato]

Social Security History

View attachment 764357

You aren't using a good metric. You base assumption on Average Life Expectancy (ALE). Now according to ALE we are living decades longer, but why?

The answer is that one of the major factors lowering ALE a century ago were high infant and children mortality rates. Infants and children werer dying young, which lowered the over all ALE. As mortality rates plummeted, ALE rose. However infants and children don't pay into social security. So their lives impacted ALE, but they didn't pay into SS.

The better metric is average months of receiving benefits. You can see from the table above the average in 1940 was about 13 years, the average in 1990 was about 17 years. A difference of only 4 years.

Averages haven't changed a lot since 1990 and in the early 80's the Full Retirement Age was changed (incrementally) to 67 which further muddies the waters because it it is delaying benefits for those retiring now. Meaning 2 LESS years of benefit payments before death for those retiring now.

WW

The number of people getting to 65 to start collecting is as if not more important than how many years you collect once you get there. Far more people are collecting now than ever before and for a much longer time. In 1990 there were 3.4 people paying into SS for every beneficiary. It's down to 2.9 now. There is a point where that is not sustainable. One could argue we are already at that point.

U.S. - seniors as a percentage of the population 2022 | Statista

In 2022, about 17.3 percent of the American population was 65 years old or over; an increase from the last few years and a figure which is expected to reach 22 percent by 2050.

www.statista.com

 

[WorldWatcher]

The number of people getting to 65 to start collecting is as if not more important than how many years you collect once you get there. Far more people are collecting now than ever before and for a much longer time. In 1990 there were 3.4 people paying into SS for every beneficiary. It's down to 2.9 now. There is a point where that is not sustainable. One could argue we are already at that point.

U.S. - seniors as a percentage of the population 2022 | Statista

In 2022, about 17.3 percent of the American population was 65 years old or over; an increase from the last few years and a figure which is expected to reach 22 percent by 2050.

www.statista.com

I don’t disagree with that. However that is a funding issue not an ALE issue.

So in simplest terms the fix to the equation is to cut benefits or increase revenues.

WW

 

[Couchpotato]

I don’t disagree with that. However that is a funding issue not an ALE issue.

So in simplest terms the fix to the equation is to cut benefits or increase revenues.

WW

How do you propose we increase revenue?

 

[WorldWatcher]

How do you propose we increase revenue?

I’ll get back later. Exercise time.

WW

 

[WorldWatcher]

How do you propose we increase revenue?

Options include:

• Raise the retirement age? (Which is a benefit cut.)
• Cut benefits (i.e. reduce the amount paid in checks)?
• Increase the Tax Rate on employees?
• Increase the Tax Rate on employers?
• Increase the Tax Rate on employees AND employers?
• Raise earnings caps (which you don't like)?
• Implement a new SS Tax on non-wage income such as interest, dividends, short term investment trades (stocks, commodities, etc.), and long term capital gains?
• A new national sales tax to fund the shortfall?

.
.
We have:

• Raise the Full Retirement Age (FRA) to 70 immediately to cut benefits years and reduce expenditures to be able to have an impact over the next decade. Sorry if your 65 now you are screwed. (Not politically doable as those 50 and holder are the most likely demographic to vote.)
• Raise the FRA to 70 to cut benefit years but grandfather it and phase it in over time (like was done when FRA was raised to 67 from 65 on the Boomers). Problem is that it would be 20 years before those that are now 50 would reach FRA at 70 so the earliest impact is 2045, 10 years after the SS Trust fund runs out. (Politically doable, but doesn't help the looming cuts in 2035.) (Assuming the law is passed in 2024 and begins changing the age in 2025.)
• Increase the cap from the current $160K on wages to at least double, probably $500K. Will extend the SS Trust fund beyond 2035 and is politically doable.
• Implement a small SS Tax on other forms of income besides "wages" to include interest, dividends, and capital gains. However in fairness, that portion subject to SS Tax should them be include in benefit earnings also. (I'm not smart enough to (a) know if this is politically doable or if it could be done in time for 2035.)
• Means Testing is another idea that gets floated. But what does that mean. Means testing based on retirement assets? Means testing based on retirement income? (Which are two different things.) How are assets and incomes treated for married couples? What are the levels where means testing kicks in? Will there be a phase out? Will there be grandfathers? (I don't think means testing is politically doable.)
• There is another poster in this threads that proposes a new national sales tax to fund SS and debt reduction. (I don't think that is politically doable.)
• Finally there is "do nothing". Which the projections show the SS Trust fund will be depleted in 2034 and the SSA will only be able to pay 77-80% benefits based solely on current revenues. I pity the politicians in office as there will be a bloodbath (politically speaking, not advocating violence). Take away 20-23% of an earned benefit and there will be hell to pay.

I've come to believe that we need a re-evaluation of SS Taxes in general. The workforce and economy are very different than they were in 1935 when the system was created. Now I'm leaning more toward, making SS Tax applicable to all income the same way it is determined for Income Tax (wage, interest, dividends, short term stock commodities, and long term capital gains) as a new revenue source. As such:

• Current SS tax of 12.4% would remain (6.2% by the EE and 6.2% by the ER).
• Non-wage income would be taxed at a rate equal to 25% of the total FICA rate or another way to say it as 1/2 of the individual EE rate. That would currently be 3.1%.
• Financial institutions would be required to collect the 3.1% at the time of posting, just like employers (ERs) collect it at the time of payment.
• Because the non-wage rate is 25% of the wage rate (3.1% compared to the FICA total of 12.4%), then 25% of non-wage income would be credited to SS Income for that year.
• Current cap of 160K on wage income could remain the same.
• A cap of 160K would also apply to non-wage income.
• The sum of the wage credit and non-wage credit is posted as the total SS Income for the year which is then used to determine SS benefit amounts.

Example:
A high wage earner make $300K in wages, taxes are collected on wages up to $160K for a total of $19,840 in wage tax. Applicable income credited for the year for future benefits calculations is $160K. If the same person has in additional $100K of passive investment income, the SS Tax would be $3,100 at 3.1%. Total SS Taxes would then be $22,940. 25% of the $100K passive income would be credited to SS Income for the year equaling $25K since the tax rate is 25% of the full FICA rate. So the individuals total SS Income credited for the year would be $160 + $25K = $185K.

So when we look at demographics based on income distribution, even though it's a flat tax on alternative income up to the same cap as SS wages, it would have less impact on the poor and low wage earners living paycheck because let's be honest that is the demographic LEAST likely to have savings, investments, stocks/bonds, and capital gains. The amount of revenue generated increases as one moves up the economic scale.

WW

 

[Admiral Rockwell Tory]

That's the end of Nikki's presidential campaign.

Why?

 

[Markle]

Social Security History

View attachment 764357

You aren't using a good metric. You base assumption on Average Life Expectancy (ALE). Now according to ALE we are living decades longer, but why?

The answer is that one of the major factors lowering ALE a century ago were high infant and children mortality rates. Infants and children werer dying young, which lowered the over all ALE. As mortality rates plummeted, ALE rose. However infants and children don't pay into social security. So their lives impacted ALE, but they didn't pay into SS.

The better metric is average months of receiving benefits. You can see from the table above the average in 1940 was about 13 years, the average in 1990 was about 17 years. A difference of only 4 years.

Averages haven't changed a lot since 1990 and in the early 80's the Full Retirement Age was changed (incrementally) to 67 which further muddies the waters because it it is delaying benefits for those retiring now. Meaning 2 LESS years of benefit payments before death for those retiring now.

WW

Bogus!

Showing the average life expectancy for those REACHING 65 is not a grossly misleading figure for the AVERAGE contributor to SS.

Obviously many paid for decades and have died before reaching the age of 65. A disproportionate number of men and blacks have died before that age.

The life expectancy in 1940 was 62.07.

United States: life expectancy 1860-2020 | Statista

Over the past 160 years, life expectancy (from birth) in the United States has risen from 39.4 years in 1860, to 78.9 years in 2020.

www.statista.com

 

[Markle]

Options include:

• Raise the retirement age? (Which is a benefit cut.)
• Cut benefits (i.e. reduce the amount paid in checks)?
• Increase the Tax Rate on employees?
• Increase the Tax Rate on employers?
• Increase the Tax Rate on employees AND employers?
• Raise earnings caps (which you don't like)?
• Implement a new SS Tax on non-wage income such as interest, dividends, short term investment trades (stocks, commodities, etc.), and long term capital gains?
• A new national sales tax to fund the shortfall?

ALL increases in the tax rate are on the employee. Imagining otherwise is just what the government wants you to believe. The employer would much prefer to simply pay the employee their half of the withholding taxes and eliminate all the bookkeeping.

Being self-employed for over 45 years, I paid both halves. Starting around 1984 I paid 14% and in 1988, over 15% for about $15,000 a year. Yeah, that stung!

FICA & SECA Tax Rates

 

[Nostra]

Work your whole life and pay into a system you were FORCED to pay in to, only to enjoy yourself for a couple years.
What a load of bullshit.

When SS was enacted the retirement age was above life expectancy. Today that would be 82.

 

[WorldWatcher]

Bogus!

Showing the average life expectancy for those REACHING 65 is not a grossly misleading figure for the AVERAGE contributor to SS.

Obviously many paid for decades and have died before reaching the age of 65. A disproportionate number of men and blacks have died before that age.

The life expectancy in 1940 was 62.07.

United States: life expectancy 1860-2020 | Statista

Over the past 160 years, life expectancy (from birth) in the United States has risen from 39.4 years in 1860, to 78.9 years in 2020.

www.statista.com

Social Security History

[Since you like to capitalize to emphasize words, I'll follow that lead.]

Nope not bogus at all, actually it's logic and understanding what the numbers are telling you.

The notes on your own link show "life expectancy (from birth) in the United States has risen from 39.4 years in 1860, to 78.9 years in 2020." In other words Average Live Expectancy - as normally presented - INCLUDE infants and children. People that die before reaching working age and contributing to Social Security and die before ever being able to claim Social Security benefits. Some people use this a reasoning to cut Social Security benefits by raising the retirement age.

However the true measure is "How long once someone reaches retirement age are they likely to draw benefits?" and the Social Security Administration's own number show that increase to be about 3.5 years circa 1990 and it increased a little bit in the interim years but has been going down in the last few years. From a benefits payout perspective knowing how long - on average - people will receive Social Security benefits is a vital factor.

This is NOT saying that knowing how many people will REACH Full Retirement Age (FRA) isn't important, it absolutely is. However it underminds the uninformed that claim "Social Security age must be because we are living decades longer!!!". Which is true from an ALE perspective, but false when you look at the more important factor of how long can the average person expect to RECEIVE benefits. It is not decades longer and has actually increased only 3-4 years since about 1940.

WW

 

[WorldWatcher]

ALL increases in the tax rate are on the employee. Imagining otherwise is just what the government wants you to believe. The employer would much prefer to simply pay the employee their half of the withholding taxes and eliminate all the bookkeeping.

Being self-employed for over 45 years, I paid both halves. Starting around 1984 I paid 14% and in 1988, over 15% for about $15,000 a year. Yeah, that stung!

FICA & SECA Tax Rates

Technically for wage earners employed by someone else the FICA rate is split between the employer and employee at 6.2% each. The rate could be changed together or independently. So you could increase the employee rate to 8% and leave employer rate at 6.2. So you could increase the employer rate to 8% and leave employee rate at 6.2. Or both rates can be raised to 8%.

You as self employed pay both the employee and employer portion.

WW

 

[Markle]

Technically for wage earners employed by someone else the FICA rate is split between the employer and employee at 6.2% each. The rate could be changed together or independently. So you could increase the employee rate to 8% and leave employer rate at 6.2. So you could increase the employer rate to 8% and leave employee rate at 6.2. Or both rates can be raised to 8%.

You as self employed pay both the employee and employer portion.

WW

As I said. The employer would happily pay the employee the percentage paid by the employer saving the employer the hassle and paperwork. The employer pays nothing the politicians know the average citizen is too dumb to know it is all coming out of their pocket.

Raise the employee portion to 8%, 10% or whatever and it is all coming out of the workers side. What part of that is not clear?

 

[WorldWatcher]

As I said. The employer would happily pay the employee the percentage paid by the employer saving the employer the hassle and paperwork. The employer pays nothing the politicians know the average citizen is too dumb to know it is all coming out of their pocket.

Raise the employee portion to 8%, 10% or whatever and it is all coming out of the workers side. What part of that is not clear?

And what part of raising the employer side 8%, 10%, or whatever is paid by the employer is not clear.

It appears you are being disagreeable just to be disagreeable.

WW