The war drums against your Social Security and Medicare benefits are faint but real.

[Admiral Rockwell Tory]

1. Worst case we get 80% of promised benefits. SS pays out what it takes in. Bad, but not zero.

2. Agreed unless SS is "fixed" benefits will be cut.

3. Agreed the "benefit" is years collecting benefits and not years worked.

4. Agreed that SS tax should be added to all income as you outline to generate more revenue. My alternate solution would be a new 4% sales tax to cover the Budget Deficit.

On top of our current inflation, how do you think that would be good for the economy?

 

[WorldWatcher]

1. Worst case we get 80% of promised benefits. SS pays out what it takes in. Bad, but not zero.

2. Agreed unless SS is "fixed" benefits will be cut.

3. Agreed the "benefit" is years collecting benefits and not years worked.

4. Agreed that SS tax should be added to all income as you outline to generate more revenue. My alternate solution would be a new 4% sales tax to cover the Budget Deficit.

My wife and I are very lucky. SS are two of our planned six revenue streams in retirement. Steams which do not touch long term retirement assets (401k, paid off House, IRAs). Being modest in our living all these years, with an eye toward planning for retirement will pay off and provide a modicum of security.

I’ve done the calculation. If in 2035 benefits checks are reduced by 25%, The impact will be a reduction of 9.3% in gross income, After taxes that will translate to a reduction of 7.6% in disposable income.

If that Happens, I’ll be pissed, but there will be a whole lot of people in real trouble.

WW

Note to all the guys out there. Marry someone smarter than you. Then work hard to take care of her.

 

[kyzr]

On top of our current inflation, how do you think that would be good for the economy?

The 4% sales tax would be better in the long run for the economy than the $32T and climbing DEBT, wouldn't it?
...and/or a new SS/Medicare tax on ALL income as WW suggests.

How would a $150T DEBT be for the economy?

 

[WorldWatcher]

The 4% sales tax would be better in the long run for the economy than the $32T and climbing DEBT, wouldn't it?
...and/or a new SS/Medicare tax on ALL income as WW suggests.

How would a $150T DEBT be for the economy?

I'm very leary about cracking that door open. Regarding Congress passing a Federal Sales tax. Once they have their fingers into transactional sales of consumer goods the prospects get very scary. Adding a targeted tax on non-wage income specifically for SS (as FICA is targeted to wage income) is scary but less scary (to me).

Oh, and the boomers passing through the SS stream are like a rat passing through the gullet of a snake. They are a bulge in the system, that will eventually pass (although that will take 20 years or so). So once the new revenue stream is implemented, it should be a requirement of the law that Congress re-evaluate the long term options for after the boomer crisis. By that I mean SS taxes will able to be reduced after the boomers are through the system. Now whether the wage and non-wage taxes would remain, go back to wage only, would be up in the air. I'd be for keeping the SS tax on wage and non-wage which ultimately would allow for actually lowering the SS Tax rate.

WW

 

[Admiral Rockwell Tory]

The 4% sales tax would be better in the long run for the economy than the $32T and climbing DEBT, wouldn't it?
...and/or a new SS/Medicare tax on ALL income as WW suggests.

How would a $150T DEBT be for the economy?

No.