# Baby Boomers Are Retiring  - And It's Going to Have a Huge Impact on the Economy



## MULTIZ321 (Sep 5, 2017)

Baby Boomers Are Retiring - And It's Going to Have a Huge Impact on the Economy
By Stephen McBride/ Mauldin Economics/ Markets/ Business Insider/ businessinsider.com

"Few investors understand the magnitude of the looming demographic crisis and its ramifications.

The first Baby Boomers turned 70 last year. At the same time, the US fertility rate is at its lowest point since records began in 1909.

This disastrous combination means by 2030, those aged 65 and older will make up over 20% of the population.

In the meantime, the percentage of working-age cohorts are in decline. Combined together, these trends create a perfect demographic storm for the US economy.

Here’s why..."








Richard


----------



## WinniWoman (Sep 5, 2017)

Wish I could be counted in the retiring group.


----------



## am1 (Sep 5, 2017)

Maybe there is a need to delay retirement age or limit benefits.  15 years ago we were learning about this in our business courses.


----------



## Talent312 (Sep 5, 2017)

I'm in the "retired just in time" class; thus, this monkey rests on the back of you working stiffs.

<retirement = endless weekend>


----------



## WinniWoman (Sep 6, 2017)

am1 said:


> Maybe there is a need to delay retirement age or limit benefits.  15 years ago we were learning about this in our business courses.



Uh- wasn't this done already? The way things are going, the retirement age will keep going up and up until there is no retirement age. Maybe get rid of SS altogether and let people keep their own money.


----------



## pedro47 (Sep 6, 2017)

I am retired, income is up for some that are working full time jobs; white collars jobs, high tech jobs & the military. We are still saving and investing and I pray that the new generation of workers in the USA will start saving early like at 21 or 22 years of age in a ROTH IRA.


----------



## vacationhopeful (Sep 6, 2017)

Mary Ann ...
The SS system is basicly a Ponzi scheme. The government is taking today's collected dollars and PAYING the owed benefits immediately to claimants. There is no investment or pot of gold.

Worked fine when most people did not live beyond 60-65+/- years old.


----------



## Tia (Sep 6, 2017)

am1 said:


> Maybe there is a need to delay retirement age or limit benefits.  15 years ago we were learning about this in our business courses.




There does need to be changes to preserve the system, one I think is if you didn't earn income and contribute into SS you don't collect off the system, unless your the surviving spouse collecting off the one who worked.

How many ex spouses can one workers SS be collected off anyone know?


----------



## Sugarcubesea (Sep 6, 2017)

mpumilia said:


> Uh- wasn't this done already? The way things are going, the retirement age will keep going up and up until there is no retirement age. Maybe get rid of SS altogether and let people keep their own money.


For me it was, I have to be 67 to collect full benefits.


----------



## WalnutBaron (Sep 6, 2017)

When the Social Security Act was passed in 1935, the average life expectancy was just 61 years (and only 58 years for the average male), making the system sustainable since benefits only began to be paid at age 65. In addition--as the OP points out in this thread--the median age of the U.S. population was 26, meaning there were many more payers into the newly-created system than those receiving benefits.

The demographic picture has completely flipped in 2017. The median age today is 38, and expected to climb to 40 by 2030. Average life expectancy today is 79, with the highest population of elderly people ever recorded.

Our policymakers haven't helped the situation. In the face of these changing demographics, one can now begin drawing Social Security benefits as early as 62 years of age, when clearly the correct policy would be to increase the starting age well above 65. (If the starting age had been tied to life expectancy using 1935 as a benchmark, it would be about 83 today.) The more farsighted politicians first began raising this issue as early as the 1980's, but organizations like AARP mounted significant pressure against such action, and the whole discussion of increasing the Social Security retirement age became known as "the third rail of American politics".

The best plan is for those of us under 70 years of age to be sure we have built a nest egg sufficient to fund our retirement for at least 20 years--and not to count on any proceeds from the Social Security Administration. If we end up getting benefits, it's icing on the cake, but it's best to plan for nothing and be pleasantly surprised if it happens.


----------



## geekette (Sep 6, 2017)

<<The best plan is for those of us under 70 years of age to be sure we have built a nest egg sufficient to fund our retirement for at least 20 years--and not to count on any proceeds from the Social Security Administration. If we end up getting benefits, it's icing on the cake, but it's best to plan for nothing and be pleasantly surprised if it happens.    >>
Yeah, that's how I started in my 20s, believing SS would not survive.  Past 50 now and more optimistic, but my FRA is a full 2 years past Dad's FRA.  That's a pretty drastic "correction" seen in one lifetime; further changes of this nature would need to be enacted on those under 30 at time of rule, preferably 25 yrs old, giving most all of career to prepare.  Raising age is not helpful to people that make their living with their bodies and today people do that, not robots.  I am a cube-dweller, planning to let it ride until 70 to get max as I have no pension so want SS as high as possible.

I'd prefer we raise the cap on wages subject to FICA as that bar does not move up much and infrequently yet we have a lot of people making well more than $125k (approx. guess for where the bar is set today).   To me it is better to increase inflow than cut benefits to retirees even tho this means a bit more for the highest paid.  

We could also start nudging up number of quarters contribution required to be eligible for benefits.  Not sure how many pay in but not collect, but many die before collecting; adding a bit to time worked further shuts out a few that don't qualify.  It's not much, but I think we only need small tweaks and not sure why none done in all this time.   Small incremental change is fairly easy to stomach while I could not abide any $ ripped from my mother's hands.  Whatever SS is for me, it's fine, my plan doesn't require SS, it's simply Nice To Have.


----------



## Sugarcubesea (Sep 6, 2017)

Each new year, they should raise the age by one year for full retirement age for those born in that year. In that way, an individual would have their working career to plan accordingly.

For those of us, close to retirement or 10 years away or less, I don't feel it's fair to change the rules for those in this age group as they will not have enough time to make up the difference prior to retirement. 

It's imparitive to raise the bar passed $125K.  It really should be raised to 300K to start and move up each year.


----------



## pedro47 (Sep 6, 2017)

Not everyone are earning between $125 between and $300K per year. There are many in low paying jobs earning less than $50k per year.


----------



## WinniWoman (Sep 6, 2017)

pedro47 said:


> Not everyone are earning between $125 between and $300K per year. There are many in low paying jobs earning less than $50k per year.



Exactly. In fact, most jobs.


----------



## Sugarcubesea (Sep 6, 2017)

pedro47 said:


> Not everyone are earning between $125 between and $300K per year. There are many in low paying jobs earning less than $50k per year.


I agree, right now SS contributions are capped once an employee reaches 127K earnings in a year. (I thought it was at 125K, my apologies)  I think the cap should be totally removed but for starters at least raise the income cap on SS Taxes to 300K, so that those individuals making more  would still have SS taken out of their paychecks.

I don't think I explained myself correctly in the earlier post above...

The Social Security Administration (SSA) announced that the maximum amount of wages in 2017 subject to the 6.2% Social Security tax (old age, survivor, and disability insurance) will rise from $118,500 to $127,200, an *increase* of more than 7%. By comparison, the 2016 wage base was unchanged from 2015. The cap should be raised each year, is my thought process.

Depending on how much money you earn, you may not pay Social Security taxes on your entire income. That's because a cap is set each year on the amount of income subject to Social Security taxes. Last year, that limit was $118,500, but in 2017, it jumped to $127,200. Now if you earn, say, $50,000 a year, that increase won't make a difference, because you'll still be paying Social Security taxes on your entire income no matter what. But if you're a higher earner making, say, $130,000, you'll pay an additional $539.40 in taxes this year because of that increase.


----------



## vacationhopeful (Sep 6, 2017)

Is Social Security Disability funded with taxpayer dollars or from worker contributions?


----------



## PigsDad (Sep 6, 2017)

The cap on earnings subject to SS tax is also tied to the max SS benefit one can receive when they start collecting, based on the current formulas SS uses.  Removing or raising that cap would also remove or raise the max SS benefit that those high-wage earners would receive in retirement.  Not sure if that would really help keep SS solvent or not.

If they raise the earnings cap but not raise the benefits cap, then that just becomes an additional tax for high-wage earners.  If that is the case, opponents would argue why tie it to the SS tax?  Why not just raise income taxes for those with higher incomes?  I'm not going to weigh in on this debate, in respect for TUG's non-political policy -- I just wanted to point out that raising the earnings cap may not really help the SS system, financially.

Kurt


----------



## WalnutBaron (Sep 6, 2017)

vacationhopeful said:


> Is Social Security Disability funded with taxpayer dollars or from worker contributions?


Because the Social Security trust fund disability insurance will be underwater beginning in 2028, it's still technically being funded by contributions. But with the looming insolvency of the fund in little more than ten years from now (and assuming Congress does not act to change current policy), the de facto answer is that it's supported by tax revenues.


----------



## Tia (Sep 6, 2017)

My grandmother died in 2001, lived to ripe old 88 yo. She collected for over 20 years, plus she had my grandfathers pension income , plus the health insurance provided by grandfathers former job. (Grandfather died at 81yo) She used to complain about $ but in reality she had it pretty good compared to many current day retirees. She did work but not sure for how many years before retiring.


----------



## Sugarcubesea (Sep 6, 2017)

Tia said:


> My grandmother died in 2001, lived to ripe old 88 yo. She collected for over 20 years, plus she had my grandfathers pension income , plus the health insurance provided by grandfathers former job. (Grandfather died at 81yo) She used to complain about $ but in reality she had it pretty good compared to many current day retirees. She did work but not sure for how many years before retiring.



I think about my parents, they both had pensions and SS and employer sponsored health care in retirement.


----------



## SmithOp (Sep 6, 2017)

Tia said:


> My grandmother died in 2001, lived to ripe old 88 yo. She collected for over 20 years, plus she had my grandfathers pension income , plus the health insurance provided by grandfathers former job. (Grandfather died at 81yo) She used to complain about $ but in reality she had it pretty good compared to many current day retirees. She did work but not sure for how many years before retiring.



I have a tax client with $100k pension from a university system, she did nothing but complain about not getting SS.  I tried to explain she didn't pay in during her working career but she kept on claiming poverty...


Sent from my iPad using Tapatalk


----------



## Blues (Sep 7, 2017)

PigsDad said:


> The cap on earnings subject to SS tax is also tied to the max SS benefit one can receive when they start collecting, based on the current formulas SS uses.  Removing or raising that cap would also remove or raise the max SS benefit that those high-wage earners would receive in retirement.  Not sure if that would really help keep SS solvent or not.



I used to argue the same thing, Kurt.  But on further analysis, I now realize that the increase in revenue from removing the cap will greatly exceed the increase in benefits payout.  IOW, yes, I think it would really help to keep SS solvent.

Why, you ask?  The secret is the graduated benefit calcuation, described in step 5 here:
https://www.ssa.gov/pubs/EN-05-10070.pdf

Those high earners almost certainly have an Average Indexed Monthly Earnings (AIME) in the highest bracket of over $5336 per month of average earnings.  For those of us in that bracket, each incremental dollar taxed for SSA yields just 15% of the base benefit.  The first $885 yields 90%, and then $885 to $5336 yields 32%.  Then you get just 15%.  Or, in other words, our incremental tax dollars yield just 1/6th of the benefit compared to those dollars from the lowest income bracket.  I'm not saying that's wrong (it makes a lot of sense).  But what I *am* saying is that the cost of providing benefits from that higher cap is much, much less than the dollars that the increased cap will bring in.


----------



## isisdave (Sep 7, 2017)

Tia said:


> There does need to be changes to preserve the system, one I think is if you didn't earn income and contribute into SS you don't collect off the system, unless your the surviving spouse collecting off the one who worked.Tia, you hav
> 
> How many ex spouses can one workers SS be collected off anyone know?



Tia, you have to have 40 quarters of earnings of a minimum amount (currently $1260) to get anything at all on your own work record.. If you earned just the minimum for 20 years, your benefit would be $415 a month ... enough to starve slowly on, if you had somewhere to do it.

An individual can claim spousal coverage only from his/her last spouse's account, if they were married 10 years and the claiming spouse hasn't remarried. There is no limit on how many such spouses can claim from the same worker.


----------



## am1 (Sep 7, 2017)

A quarter is this case is 3 months?  I have paid ss for a few years.  Is it worth it to "work" the last amount of quarters needed before 65 to get the minimum payout?  If I am in good health at that time of course.  I have no pension otherwise.


----------



## VacationForever (Sep 7, 2017)

A


am1 said:


> A quarter is this case is 3 months?  I have paid ss for a few years.  Is it worth it to "work" the last amount of quarters needed before 65 to get the minimum payout?  If I am in good health at that time of course.  I have no pension otherwise.


A quarter is $1300, max 4 quarters per year.  The 35 years of highest per annum contribution are used to compute SS benefit.  40 quarters is a test of eligibilty regardless of total earnings.


----------



## Roger830 (Sep 7, 2017)

am1 said:


> A quarter is this case is 3 months?  I have paid ss for a few years.  Is it worth it to "work" the last amount of quarters needed before 65 to get the minimum payout?  If I am in good health at that time of course.  I have no pension otherwise.



It should be worth it if you don't have a government pension. It also makes you eligible for medicare.

When ss started you only had to work 3 years to collect. My uncle that married to my oldest aunt retired from the post office, then worked for 3 years part time. He collected ss for over 30 years and used to laugh about receiving the benefit.


----------



## geekette (Sep 7, 2017)

am1 said:


> A quarter is this case is 3 months?  I have paid ss for a few years.  Is it worth it to "work" the last amount of quarters needed before 65 to get the minimum payout?  If I am in good health at that time of course.  I have no pension otherwise.


A quarter is in every case 3 months.   Whether or not it is worth it to you depends on your situation.  There are rules about double dipping so if your occupation does not contrib to SS you might take a peek at ramifications.

I never really thought about it, have always taken jobs that seemed interesting, and never ended up with a pension nor non-SS-contributing work.  At this point, the earliest, lowest-paid years, are dropping off my SS record as they are replaced with wages I make today.  Some people have 0s as salary year placeholders if they don't work the full 35 (I think it is) years.  I don't think it makes a huge amount of difference, except that I feel better knowing that what I made when I was 15 is no longer relevant ; )   

I'd say, go with your passion.  Why toil towards a benefit you're not sure you need?   One doesn't need to have a pension nor SS to have money set aside.


----------



## VacationForever (Sep 7, 2017)

geekette said:


> A quarter is in every case 3 months.   Whether or not it is worth it to you depends on your situation.  There are rules about double dipping so if your occupation does not contrib to SS you might take a peek at ramifications.
> 
> I never really thought about it, have always taken jobs that seemed interesting, and never ended up with a pension nor non-SS-contributing work.  At this point, the earliest, lowest-paid years, are dropping off my SS record as they are replaced with wages I make today.  Some people have 0s as salary year placeholders if they don't work the full 35 (I think it is) years.  I don't think it makes a huge amount of difference, except that I feel better knowing that what I made when I was 15 is no longer relevant ; )
> 
> I'd say, go with your passion.  Why toil towards a benefit you're not sure you need?   One doesn't need to have a pension nor SS to have money set aside.



I believe a quarter is $1300.  If you make $5200 in one month and worked only for that month, you get 4 quarters of credit for that year.


----------



## VacationForever (Sep 7, 2017)

I only contributed 18 years into the system before we retired.  My PIA is high enough that I will be drawing on my own SS as opposed to my spouse's.  I have been toying with the idea of whether to go back to work full time for 2 to 3 years to bump the SS contributions up but at this point in time it is unlikely.  The costs to do so makes it unlikely - we will need to get another car, by pushing us above the 15% tax bracket means capital gains are subjected to taxes.  We are travelling for fun about 4 months cumulatively in a year.  That will be no more cruising and limited timesharing.  The 2 positives to going back to work again is getting health insurance through the employer and beefing up SS benefits.


----------



## vacationhopeful (Sep 7, 2017)

I deal with a population of people who live off the 'government/system'.

My uncle's wife is a classic mooch.
...My uncle worked for Mobil Oil for enough years (over 10 before being disabled).
... Uncle died young before 50...I could go look up his grave or ask my 92yo aunt.
...Wife worked for many years .. way over 10 ... at a cemetery.
...Uncle, aunt, and 3 kids lived RENTED free in Grandmom's/then her sister's rental home .. and never paid anything. For 28-30+ years... including the oil to heat the house in the winter.
... Uncle's wife got his inheritance from the family estate of his parents ... move out of rent free home for a couple of years in to a 3bdr apr for just herself. Runs out of money(?) .. gets into a LOW INCOME senior building in the township she has lived forever. Pays under 30% of her Social Security income for everything. Senior building is less than 5 years old ... across the street from supermarket plus free bus service & activities.

If she is collecting on HIS earned income credits re:SS and/or his Mobil Oil pension .... she is doing GREAT. If she is ONLY collecting off her SS record, she is only paying 30% for anything connected as costs for her apt.

The costs for her HUD lodgings is still WAY less than a private 55 and older residence/community ...plus no buy in fees. Onsite home health aides, van transportation for all needs plus offsite activities.

And this aunt is NOT on my primary concern ... My other aunt ... Auntie who is 92 and lives in a 55+ apartment community with a $1250 rent PLUS everything else. And no extras like bus service, activities, apt cleaning .. .who pays separately for a person to help her for 2 hours per day ... to shop for her and pays someone to take her to doctors' appts. I am the weekend activities person ... every weekend (she is on a "go to church pickup" of other/rotating church members) ... usually 3 weekends a month. And Auntie does NOT FLY nor likes to go OVERNIGHT anywhere.

Took her to Midtown NYC once ... told me it was nice, but NOT AGAIN. Took her to Skyline Towers .. told me, not again. Took her to my sister's house for the weekend ... end up in the ER for 10 hours ... told me, NOT AGAIN. Won't FLY .. .because she had not flown in 46 years.

I really dread when I am OLD ...


----------



## spirits (Sep 7, 2017)

I have been working part time for the last 7 years......my husband has been retired for over 25 years.  One of the reasons I continued to work was the fear of outliving my money.  I had a stressful job and so decided to keep on working as long as possible.  Part time, with benefits, gave me peace of mind all these years.  I had half the problems to go with half the paycheck but those problems were manageable.  I was able to sleep at night but more importantly, I was with young people and loved their enthusiasm and energy.....and I was not their parent but their grandparent....I had lots love to give them and they took the time to keep me computer savvy (;
Anyway, many of my friends retired before me and over the years I noticed that all they do is complain.  Not just complain but they seem to resent everyone else....someone has a pension, someone has benefits, someone got an inheritance.  My god, I was so happy to just go back to work where the complaints were not as mean spirited.  I guess that was the main reason I kept on working.
As we age....and more people retire.....well....my prediction is that society is going to get real crabby.  Way more so than what I see in the media.  People will be looking to cut benefits.....in health care, pension benefits, and assisted living for the elderly. Rightly or wrongly, retirees are being seen as greedy manipulators who lucked out with great jobs, benefits, and a booming economy and who want to continue living an unaffordable lifestyle while a great portion of people struggle to get by.  
Anyway, I keep hearing about a coming political/financial storm.....and it is not so far fetched as I first thought.  
Darn....Tuggers...I just retired this June....and I am getting crabby......Time to look for a job.


----------



## WinniWoman (Sep 7, 2017)

SmithOp said:


> I have a tax client with $100k pension from a university system, she did nothing but complain about not getting SS.  I tried to explain she didn't pay in during her working career but she kept on claiming poverty...
> 
> 
> Sent from my iPad using Tapatalk




OMG. What I wouldn't do to have a pension of $100,000 per year! I would be retired now instead of having to try to slug it out until I am 65 or 66. Which the way I am feeling lately I don't think I will make it. I am at a point where I really feel I am past the working stage and should be moving on to the next phase of life but am stuck. Depressing.

That client of yours is one lucky woman!


----------



## WinniWoman (Sep 7, 2017)

spirits said:


> I have been working part time for the last 7 years......my husband has been retired for over 25 years.  One of the reasons I continued to work was the fear of outliving my money.  I had a stressful job and so decided to keep on working as long as possible.  Part time, with benefits, gave me peace of mind all these years.  I had half the problems to go with half the paycheck but those problems were manageable.  I was able to sleep at night but more importantly, I was with young people and loved their enthusiasm and energy.....and I was not their parent but their grandparent....I had lots love to give them and they took the time to keep me computer savvy (;
> Anyway, many of my friends retired before me and over the years I noticed that all they do is complain.  Not just complain but they seem to resent everyone else....someone has a pension, someone has benefits, someone got an inheritance.  My god, I was so happy to just go back to work where the complaints were not as mean spirited.  I guess that was the main reason I kept on working.
> As we age....and more people retire.....well....my prediction is that society is going to get real crabby.  Way more so than what I see in the media.  People will be looking to cut benefits.....in health care, pension benefits, and assisted living for the elderly. Rightly or wrongly, retirees are being seen as greedy manipulators who lucked out with great jobs, benefits, and a booming economy and who want to continue living an unaffordable lifestyle while a great portion of people struggle to get by.
> Anyway, I keep hearing about a coming political/financial storm.....and it is not so far fetched as I first thought.
> Darn....Tuggers...I just retired this June....and I am getting crabby......Time to look for a job.




I get it,, but I work at a place with mostly all young people and I honestly feel lost socially there. They are all very nice, but there is no one to relate to. They have relationships with each other outside of work and so on. 

A lot of our friends are starting to retire because they all have pensions, but we don't, so we are out of that loop as well. 

We keep going but honestly it is getting tough with commuting and the very long days. And then winter is just around the corner....


----------



## WinniWoman (Sep 7, 2017)

spirits said:


> I have been working part time for the last 7 years......my husband has been retired for over 25 years.  One of the reasons I continued to work was the fear of outliving my money.  I had a stressful job and so decided to keep on working as long as possible.  Part time, with benefits, gave me peace of mind all these years.  I had half the problems to go with half the paycheck but those problems were manageable.  I was able to sleep at night but more importantly, I was with young people and loved their enthusiasm and energy.....and I was not their parent but their grandparent....I had lots love to give them and they took the time to keep me computer savvy (;
> Anyway, many of my friends retired before me and over the years I noticed that all they do is complain.  Not just complain but they seem to resent everyone else....someone has a pension, someone has benefits, someone got an inheritance.  My god, I was so happy to just go back to work where the complaints were not as mean spirited.  I guess that was the main reason I kept on working.
> As we age....and more people retire.....well....my prediction is that society is going to get real crabby.  Way more so than what I see in the media.  People will be looking to cut benefits.....in health care, pension benefits, and assisted living for the elderly. Rightly or wrongly, retirees are being seen as greedy manipulators who lucked out with great jobs, benefits, and a booming economy and who want to continue living an unaffordable lifestyle while a great portion of people struggle to get by.
> Anyway, I keep hearing about a coming political/financial storm.....and it is not so far fetched as I first thought.
> Darn....Tuggers...I just retired this June....and I am getting crabby......Time to look for a job.




I get it,, but I work at a place with mostly all young people and I honestly feel lost socially there. They are all very nice, but there is no one to relate to. They have relationships with each other outside of work and so on. 

A lot of our friends are starting to retire because they all have pensions, but we don't, so we are out of that loop as well. 

We keep going but honestly it is getting tough with commuting and the very long days. And then winter is just around the corner....


----------



## spirits (Sep 7, 2017)

Yes, I was one of the oldest ones at my job.  Some days I felt ancient.....I loved my secretary though and we really got along.  I think the secret is to find one or two younger coworkers and get to know and support them emotionally.  I loved having their kids come in (very rarely) and always had a treat or two for them....

When I first started working my closest friends came from the job.  We would party, have weddings, had our kids at the same age....we are still in touch but our lives have gone in different directions so we do not socialize anymore.

About 10 years ago, I felt like you....I was an outsider....but I found that my friends were from outside work and I just decided to be friendly to everyone.  It worked for me....good luck to you.


----------



## isisdave (Sep 8, 2017)

am1 said:


> A quarter is this case is 3 months?  I have paid ss for a few years.  Is it worth it to "work" the last amount of quarters needed before 65 to get the minimum payout?  If I am in good health at that time of course.  I have no pension otherwise.



Well, yes, generally. If you don't, do you have some other source of retirement income?

Yes, a quarter is a three-month period, January-March, etc.  So you don't need ten full years, you only need $1260 (this number increases annually a little)  in each of any 40 quarters where you worked in a job covered by SS. For instance, teachers might tutor or work as test proctors, and so get a little SS-covered income if they work in a state (like California) with a non-SS private pension system.

What about health insurance? Generally, you or your spouse have to be getting (or be eligible for) SS benefits in order to get Medicare at 65.

We're making some assumptions here, like that you're a US citizen or permanent resident.


----------



## isisdave (Sep 8, 2017)

VacationForever said:


> I believe a quarter is $1300.  If you make $5200 in one month and worked only for that month, you get 4 quarters of credit for that year.



You're right! https://www.ssa.gov/pubs/EN-05-10072.pdf - $1260 was for 2016, for 2017 it's $1300.

I wonder when the "quarters" concept changed to "credits" -- it's been a very long time since I had to think about this. There are still sites on the web I found citing the quarter concept.


----------



## WinniWoman (Sep 8, 2017)

spirits said:


> Yes, I was one of the oldest ones at my job.  Some days I felt ancient.....I loved my secretary though and we really got along.  I think the secret is to find one or two younger coworkers and get to know and support them emotionally.  I loved having their kids come in (very rarely) and always had a treat or two for them....
> 
> When I first started working my closest friends came from the job.  We would party, have weddings, had our kids at the same age....we are still in touch but our lives have gone in different directions so we do not socialize anymore.
> 
> About 10 years ago, I felt like you....I was an outsider....but I found that my friends were from outside work and I just decided to be friendly to everyone.  It worked for me....good luck to you.




I am very friendly with everyone and generally liked, but still, not the same. Not to mention that these younger people end up quitting and move on to bigger or better things. It also gets to the point that you can't bear another baby shower. 

My husband and I also have little energy and time after work. Get up at 4am and get home after 5pm. Then the weekend comes and we have chores and things to do and catch up on and it flies by. The result is no time or opportunity to make friends. Hubby has belonged to a sportsmans' club for many years. Tries to go a couple of hours on a Sunday afternoon if he can. Some acquaintances there have died. Others- retired and moved away. Sigh......


----------



## puppymommo (Sep 8, 2017)

> How many ex spouses can one workers SS be collected off anyone know?



It is my understanding that there is no limit to the number of ex-spouses. However, if the ex-spouse worked, their own benefit must be less than 50% of the worker's benefit. A good deal if you were married to a sugar daddy or momma.


----------



## puppymommo (Sep 8, 2017)

am1 said:


> A quarter is this case is 3 months?  I have paid ss for a few years.  Is it worth it to "work" the last amount of quarters needed before 65 to get the minimum payout?  If I am in good health at that time of course.  I have no pension otherwise.



That depends. If you have a spouse or ex-spouse who paid into Social Security, you would be entitled to half of their benefit, which should be more than the minimum benefit. Just my understanding but I went to a SS presentation yesterday. Better to check with SS directly.


----------



## puppymommo (Sep 8, 2017)

Yesterday I went to a presentation by a Social Security representative. He said that there was enough money in the fund to pay full benefits until 2034 (I think that is right). After that, benefits might have to be reduced to 79%. That got me to thinking; if that is the case perhaps it is better for me  to retire earlier and get a lower benefit while I can in case the whole thing goes belly up. I was planning to retire at my FRA of 66 years 4 months.


----------



## Sugarcubesea (Sep 8, 2017)

puppymommo said:


> Yesterday I went to a presentation by a Social Security representative. He said that there was enough money in the fund to pay full benefits until 2034 (I think that is right). After that, benefits might have to be reduced to 79%. That got me to thinking; if that is the case perhaps it is better for me  to retire earlier and get a lower benefit while I can in case the whole thing goes belly up. I was planning to retire at my FRA of 66 years 4 months.


I think it would be political suicide for any politician not to take some kind of action to ensure SS payments continue to the current retires. Just my 2 cents


----------



## WalnutBaron (Sep 8, 2017)

Sugarcubesea said:


> I think it would be political suicide for any politician not to take some kind of action to ensure SS payments continue to the current retires. Just my 2 cents


Unlike other government programs, Social Security is one where most recipients can point to exactly how much they have paid into the system and, therefore, have an expectation of how much they should be able to extract from the program. The problem is that over time, it has become a huge social program with beneficiaries who have _not _paid into it or who have paid minimally and receive long-term benefits.

As I shared in earlier posts on this thread, the Social Security system is an actuarial disaster--too many retirees either in the system or who will enter the system in the next ten years who are living much longer and who are supported by far too few wage-earners who are paying into the system.

At some point, Congress is going to have to muster up enough political backbone to address the issue--and the answers will not be popular: increasing the retirement age, perhaps also linking it to life expectancy; increasing the maximum wage from which SS taxes can be drawn, or perhaps removing the wage cap altogether; removing non-contributing recipients from the rolls; and making the wealthiest Americans ineligible to receive benefits. As is always the case with Congress, however, no action is likely until it becomes a full-blown crisis, which is about 7 or 8 years away.


----------



## elaine (Sep 8, 2017)

_When I first started working my closest friends came from the job. We would party, have weddings, had our kids at the same age....we are still in touch but our lives have gone in different directions so we do not socialize anymore._ 
This is me! I  just realized the other day that I am 20+ years older than many in our working group--that I am not their peer, but more like their Mom. They have a young professionals bagel meeting every week--that I am not invited to. They're all getting married and my kids going to college. I have a few friends there still and everyone is nice, but it's not the same. Maybe it's like that for most?


----------



## VacationForever (Sep 8, 2017)

elaine said:


> _When I first started working my closest friends came from the job. We would party, have weddings, had our kids at the same age....we are still in touch but our lives have gone in different directions so we do not socialize anymore._
> This is me! I  just realized the other day that I am 20+ years older than many in our working group--that I am not their peer, but more like their Mom. They have a young professionals bagel meeting every week--that I am not invited to. They're all getting married and my kids going to college. I have a few friends there still and everyone is nice, but it's not the same. Maybe it's like that for most?


For many years I had always been the youngest in the division and the youngest manager amongst my peers.  That changed in my last 5 to 10 years with the company when I noticed that I was not the youngest amongst my peers anymore but still, more than half the people that I managed were older than me.  We then went off to start our own business and I stopped noticing age anymore.  I am glad we can afford to leave the workforce even though it is more than 10 years before Medicare and full SS age.  We are fairly private people so socializing was never our thing.  We enjoy spending time with a couple of close friends and neighbors so we really don't think about the age difference between us and those that we hang out with.


----------



## isisdave (Sep 9, 2017)

I agree with WalnutBaron, but there's more. Everything is connected. Legal immigration numbers are not very big, and if illegal immigration is reduced, and especially if any significant number already here are removed, there is going to be a sharp shortage of labor. Who will change our diapers (and I am not kidding)?Automation and robotics may have similar effects. It's all fine to talk about raising the retirement age, but anyone who's tried to get a job after 60 knows how easy that is, even when qualified and flexible.

There needs to be some new ideas about retirement, seniors, and life beyond full-time employment. As a retired person who still hasn't seen enough of the world, I want to travel while I can.  I'd be interested in working -- but not full days and not full years, and preferably from home or a finca in Costa Rica. Also, I don't need the salary I used to get -- I'd do it for a lot less, just to keep my brain in gear. Someone needs to organize and harness this resource. Some turn to volunteer work, but it has its own limitations.


----------



## vacationhopeful (Sep 9, 2017)

I believe changes can be handled.

Examples:
Mow your own grass.
Clean your own house.
Eat at home more than 20% of the time...eating out should be special occasions, not the norm.
Expect/demand your kids to do chores and/or earn income for their needs.
Instead of warehousing your (elderly) relatives, include them within your family.
"I want" does not translate into "I need".

If your household can NOT care for all that you have ... either downsize or spend MORE time & money to care for YOUR POSSESSIONS. What is the old say, "who owns who ... you or your possessions?".

And if you think you are an island and shouldn't have to put up with family, friends and neighbors, you better expect to spend MORE money to live on that "island".


----------



## vacationhopeful (Sep 9, 2017)

Yes, there are volunteer organizations and groups for useful and older people. Meals on Wheels, senior centers for lunches, hospitals, libraries, VOA, Habit for Humanity ... get on the web and look; ask at ANY churches; walk around your block or down the street.

Offer to just HELP a neighbor, your older friend(s) or drop in to visit an isolated relative .. before lunch to take them out (and YOU pay. I find if I have a gift card to pay for the meal, most guests accept w/o trying to give money towards the meal. So buy the GC beforehand).


----------



## Tia (Sep 9, 2017)

This is something that could easily be changed  imho , only one ex-spouse supported per SS  worker. 




puppymommo said:


> It is my understanding that there is no limit to the number of ex-spouses. However, if the ex-spouse worked, their own benefit must be less than 50% of the worker's benefit. A good deal if you were married to a sugar daddy or momma.


----------



## geekette (Sep 11, 2017)

Tia said:


> This is something that could easily be changed  imho , only one ex-spouse supported per SS  worker.


Ending this screws the ex-wife who may have raised the kids instead of having a career.  Which ex collects?


----------



## Blues (Sep 11, 2017)

I was just perusing some financial web sites this morning, and ran across several articles pertinent to this thread.

One factoid that surprised me.  In 1983, 90% of all wages were subject to Social Security taxes (i.e., were under the cap, which was only $35,700 at the time).  If you wanted to raise today's cap so that 90% of wages were taxed, you'd have to raise it to $270K.
http://time.com/money/4644332/maximum-social-security-benefit-2017/

That article references this scholarly publication, which confirms the $270K:
https://www.cbpp.org/research/socia...ayroll-taxes-would-strengthen-social-security

It discusses various proposals to increase SS revenue.  I didn't realize that there were serious proposals to raise the wage limit subject to taxes, while keeping the old limit in the benefit calculation.  That strikes me as eminently unfair.  But there are also proposals to raise the wage limit, but include those wages in the benefit calculation, which strikes me as the fair way to do it.  The article estimates that this would close about one quarter of the SS revenue gap.

The article also discusses proposals to include more fringe benefits in taxable SS wages, such as your employer-sponsored medical insurance.  I hate that idea.  As it is, I think that the 1983 change to tax 401(k) contributions was outright wrong.  I don't think they should double-down on a bad idea.


----------



## Jimster (Sep 11, 2017)

vacationhopeful said:


> The SS system is basicly a Ponzi scheme. The government is taking today's collected dollars and PAYING the owed benefits immediately to claimants. There is no investment or pot of gold.



So.......the solution is what?   Let's get rid of social security?   I don't think so.  Social Security was passed in 1935 and some of those who got benefits never paid in a cent.  It was designed to provide relief but also to provide for reform.  The idea is that those who get to old to work would not be penniless- that would be a serious drag on our economy.

Admittedly, there are more recipients and the recipients also draw benefits for a longer period of time.  Also it is obviously a burden on the young.  The point is what is the alternative.

First, congress should not raid the SS trust fund.  Second and believe me it hurts me to say this since i contributed more than my fair share to the SS fund, there should be a means test applied to the benefits.  Social security should not be a recipients total income- it was and should be a supplement to other savings or employment.  The problem is many want to live well and work not at all and reap the benefits.  That's not it.  SS is not designed to provide you with what you want it is designed to provide what you need.  Many people don't recognize the difference between want and need. 

I have been retired for 16 years and despite the fact I don't get all i deserve from social security i am doing fine and recognize its purpose.



PS The 40 quarters discussed is to make you eligible for the program and Medicare.  It does not fully describe your benefit.  You also must have what are called "significant years".  For me that means if i pay social security on about $40K a year.  So even though i have about 150 quarters not all are significant years so i don't get the benefit i otherwise would get.  This change went into effect in about 1985.


----------



## WinniWoman (Sep 12, 2017)

Other than the very wealthy, the only other people that can be fine without it or with very little of it are the people with decent pensions. The majority don't have pensions and never earned a 6 figure income. So- yeah- they need to live off ALL of their SS and whatever they have in savings.


----------



## geekette (Sep 12, 2017)

mpumilia said:


> Other than the very wealthy, the only other people that can be fine without it or with very little of it are the people with decent pensions. The majority don't have pensions and never earned a 6 figure income. So- yeah- they need to live off ALL of their SS and whatever they have in savings.


I don't necessarily agree with this.  

I can't speak for others, but the reason I have always invested aggressively is because I didn't feel it wise to expect SS to survive.  If SS goes bust, I have it covered, without a pension.  I realize that few began investing in their 20s but I think it is becoming more common since today's 20somethings have internet and discount brokers, which I didn't have.  I have never cracked 6 digit income, either, and no spouse.


----------



## PigsDad (Sep 12, 2017)

geekette said:


> I don't necessarily agree with this.
> 
> I can't speak for others, but the reason I have always invested aggressively is because I didn't feel it wise to expect SS to survive.  If SS goes bust, I have it covered, without a pension.  I realize that few began investing in their 20s but I think it is becoming more common since today's 20somethings have internet and discount brokers, which I didn't have.  I have never cracked 6 digit income, either, and no spouse.


I'm with you.  When I graduated college and started working over 28 years ago, I started saving as if there would be no Social Security for me when I retired.  I knew I wouldn't have have a pension, so it was up to me to save what I needed.  Most people I knew back when I started my career had the same ideas -- don't rely on SS.  

I definitely don't think that only the "very wealthy" or those with pensions are the only ones who are fine w/o SS.  If you start saving early and are disciplined, you have a very good chance of being just fine in retirement.

Kurt


----------



## Elan (Sep 12, 2017)

Jimster said:


> So.......the solution is what?   Let's get rid of social security?   I don't think so.  Social Security was passed in 1935 and some of those who got benefits never paid in a cent.  It was designed to provide relief but also to provide for reform.  The idea is that those who get to old to work would not be penniless- that would be a serious drag on our economy.
> 
> Admittedly, there are more recipients and the recipients also draw benefits for a longer period of time.  Also it is obviously a burden on the young.  The point is what is the alternative.
> 
> ...



  Very well put.


----------



## wilma (Sep 12, 2017)

geekette said:


> I don't necessarily agree with this.
> 
> I can't speak for others, but the reason I have always invested aggressively is because I didn't feel it wise to expect SS to survive.  If SS goes bust, I have it covered, without a pension.  I realize that few began investing in their 20s but I think it is becoming more common since today's 20somethings have internet and discount brokers, which I didn't have.  I have never cracked 6 digit income, either, and no spouse.



Totally agree with your response. While it's comforting to some to whine about having no pension & demonize those who do, it is more constructive to take control of your retirement planning & make smart financial decisions.


----------



## Sugarcubesea (Sep 12, 2017)

geekette said:


> I don't necessarily agree with this.
> 
> I can't speak for others, but the reason I have always invested aggressively is because I didn't feel it wise to expect SS to survive.  If SS goes bust, I have it covered, without a pension.  I realize that few began investing in their 20s but I think it is becoming more common since today's 20somethings have internet and discount brokers, which I didn't have.  I have never cracked 6 digit income, either, and no spouse.



I started saving into a 401K once I got my first decent job at age 26. Paid off my student loans and I saved like crazy and I had a pension and then the Great Depression (our state took a harder hit than other states) hit and my pension went to the pension board where if I'm lucky I will get 10% of what I was suppose to get since our company's pension was so severely underfunded. 

Husband lost his job in the Great Depression along with just about every neighbor in our 76 home sub. It took him 5 years to get a job with benefits. Our neighbors on both side of our home had to declare bankruptcy, lost their homes and moved out of state for jobs. I had to use my emergency fund and tap into husbands 401K to keep the house

I did everthing right and I will need to rely on SS to survive


----------



## geekette (Sep 12, 2017)

Sugarcubesea said:


> I started saving into a 401K once I got my first decent job at age 26. Paid off my student loans and I saved like crazy and I had a pension and then the Great Depression (our state took a harder hit than other states) hit and my pension went to the pension board where if I'm lucky I will get 10% of what I was suppose to get since our company's pension was so severely underfunded.
> 
> Husband lost his job in the Great Depression along with just about every neighbor in our 76 home sub. It took him 5 years to get a job with benefits. Our neighbors on both side of our home had to declare bankruptcy, lost their homes and moved out of state for jobs. I had to use my emergency fund and tap into husbands 401K to keep the house
> 
> I did everthing right and I will need to rely on SS to survive


Indeed, the first "pension vaporized" story I knew was the mother of my best friend, back in the late 70s.  The company she had worked at for more than 20 years was bought and her pension was taken away.  She was still working at JC Penney's in her 80s last I knew.

One can do everything right and still be screwed.  Maybe one day it is me, too.  We are all one accident or act of nature away from calamity.   I try to stay humble and keep my needs simple in order to continue believing that I can handle anything that comes at me. 

SS is for some of us a safety net and for others a critical source of retirement income.   Either way, I don't want to see means testing nor benefit cuts.


----------



## WalnutBaron (Sep 12, 2017)

This discussion reminds us all of why Social Security is still considered "the third rail of American politics". It's unsustainable and has to be changed--and radically so--sometime before the middle of the next decade, or it will run out of cash. But the remedies are going to be tough--and it will require real leadership to tell the American people that changes are going to have to be made in order to make it sustainable.

These are among the tough choices:

Raise the retirement age. As I mentioned in earlier posts, when the program was created in 1935 and the retirement age was 65, average life expectancy was 61. Today, life expectancy is 79 and one can begin to draw Social Security benefits as early as 62. Those numbers don't work. I would immediately raise the age to 70, and index retirement age to life expectancy.
Raise the taxable salary cap, or remove it altogether. This will ensure that those at the highest income levels are contributing fully, which is not the case today.
Remove non-contributors from the rolls. If you haven't worked and contributed to the Social Security fund, you're not eligible to receive benefits. Period. Many will howl that this discriminates against disabled children, or spouses who worked at home raising the family and therefore were not drawing a paid wage which triggered payments into the system. Maybe so. There are other kinds of social support for disabled kids--and Social Security at its core was set up as a retirement benefit and should remain so. As for the homemaker spouse, as long as the spouse remains married, he/she draws from the working spouse's benefits. If divorced, the spouse who bore the brunt of childcare expenses should be the one receiving the surviving spouse's benefit.
Remove the wealthiest Americans from the rolls. They don't need it, and shouldn't be able to collect it. Yes, they likely paid a huge portion into it--and while I am not a proponent of penalizing the wealthy, this is one concession to a so-called progressive tax structure that I can live with.
Encourage greater individual savings through expansion of Health Savings Accounts by setting up accounts which cannot be touched until a person is 65 or older, or unless that person is faced with a potentially life-threatening disease or injury. Unlike 401k programs which are ultimately taxable, HSA's are not taxable. Perfect. Expand the program, but make the new HSA's untouchable until retirement--when a person's demand for healthcare services usually peaks anyway.
I'm glad I'm not a politician. Getting this right will not be easy, and there will inevitably be screams of protest no matter how the system is reformed. But it's like having a sore tooth--it's not going to get better without treatment, and the treatment is not going to be pleasant.


----------



## Sugarcubesea (Sep 12, 2017)

geekette said:


> Indeed, the first "pension vaporized" story I knew was the mother of my best friend, back in the late 70s.  The company she had worked at for more than 20 years was bought and her pension was taken away.  She was still working at JC Penney's in her 80s last I knew.
> 
> One can do everything right and still be screwed.  Maybe one day it is me, too.  We are all one accident or act of nature away from calamity.   I try to stay humble and keep my needs simple in order to continue believing that I can handle anything that comes at me.
> 
> SS is for some of us a safety net and for others a critical source of retirement income.   Either way, I don't want to see means testing nor benefit cuts.




That has been my motto, I just try and stay humble and grateful.  I feel very blessed that I now have a good job with a great 5% 401K company match and I feel thankful that I'm still working and I'm saving like crazy. I hope I can stay at this company for 10 years and then I can retire. However, I always keep my resume updated and I always stay in touch with my former colleagues to hear about job opportunities.


----------



## WinniWoman (Sep 12, 2017)

geekette said:


> I don't necessarily agree with this.
> 
> I can't speak for others, but the reason I have always invested aggressively is because I didn't feel it wise to expect SS to survive.  If SS goes bust, I have it covered, without a pension.  I realize that few began investing in their 20s but I think it is becoming more common since today's 20somethings have internet and discount brokers, which I didn't have.  I have never cracked 6 digit income, either, and no spouse.




My husband and I started investing in our early 20's and we still can't retire without SS. True-we made some mistakes with it and there were also a lot of market downturns. Income has a lot to do with it.

We were "victims" of layoffs and company takeovers. We had to roll with the punches. We weren't perfect but we did the best we could. Certainly were not irresponsible with our money. But stuff happened.


----------



## VacationForever (Sep 12, 2017)

My husband and I are comfortable and we still rely on SS to provide for about  50% of our retirement income.  Can we survive without SS?  Yes, but we will have to scale way down on our expenses. 

If SS benefits has a means test, it is going to be hugely problematic.  People are promised that they will get SS benefits when they retire.  What wealth level is considered wealthy enough to not be paid SS benefits?  The higher income folks who contribute to SS already has a wealth penalty built into the benefits.  The more that they contribute the less they get back in those last dollars of contribution.   

Starting SS benefits only at 70?  Bad idea.  At that age, not many people are in good health.  Getting employment is diffciult if an older person loses one's job.  One cannot live on air alone and wait for SS to kick in at 70.  

Removing the ceiling is a way to get more money into the system, but it also means the SS benefits will need to be increased for those who put more into the system than the current ceiling, unless the formula changes in a way to further reduce benefits for those last dollars that are paid into the system.  Lifting the contribution ceiling is certainly the quickest way to get more money into the system.  Most likely the formula for how much benefits are paid will need to be reworked.


----------



## geekette (Sep 12, 2017)

WalnutBaron said:


> This discussion reminds us all of why Social Security is still considered "the third rail of American politics". It's unsustainable and has to be changed--and radically so--sometime before the middle of the next decade, or it will run out of cash. But the remedies are going to be tough--and it will require real leadership to tell the American people that changes are going to have to be made in order to make it sustainable.
> 
> These are among the tough choices:
> 
> ...



Wow, harsh.  That would totally screw a lot people very quickly.  People that have paid in for decades.  Women would be horribly penalized, until such time as men carry the babies and raise them, wages become equivalent and men live and work longer so widows aren't again screwed.  Expanding HSA helps only people that have high deductible med plans and decent incomes, again screwing women with kids.  Forcing additional savings from a person's working paycheck while forbidding it be used for its intended purpose is a stranger version of a very cruel SS.   Pushing retirement age out immediately is another cruelty.  My FRA is already 2 years past my fathers, so bumping another 3 years is not at all ok.  Longevity statistics leave out that there are actual people with lives.  Some drop dead in the office or in a workplace accident or by disease or car crash or natural disaster.  Some beat incredible odds and hit 110.  There is no true expected age of demise, we all get to be surprised.  Yanking the rug out from under women would create a huge new poverty class of elderly women living the streets into their 90s.  Back to exactly what SS was intended to prevent.  Who wants this for their mother?  When do we start adding work credits and salary for carrying, birthing and raising children?


----------



## Jimster (Sep 12, 2017)

I would be interested to know if our Presidet is collecting social security.  He is 70 years old so he is technically eligible.  He said he would not take a salary but that is not what he did.  He took the $400 K and then donated it to some charitable cause thereby costing the government more than any other President.  It is costing us $400 K plus the cost of the deduction so ultimately he is getting nearly $500 K per year which is more than any other President in history.

I am sure there are many millionaires and billionaires getting SS.  That is why a means test makes sense.  Geekette was concerned about women's benefits (and rightly so).  The means test would not discriminate by sex rather it would discriminate by income which makes sense.  I don't think the amount of income needed to be subject to the means test needs to be low. Even denial to those earning $250 K or Moore would be a huge savings.  Rather it should only discriminate against those most able to subsist on their own.

I am sure there would be arguments from people who would say they are being denied the pension they contributed to, but that is already the case.  The changes in the 1980's substantially reduce my benefits under SS because I already have a government penson.  Yet someone who has a pension from a private corporation does ot suffer this reduction in benefits.

The means test has been suggested by many congressmen and commentators.  I do think there maybe a Constiutional issue to be overcome, but it would save SS billions annually.


----------



## VacationForever (Sep 13, 2017)

Jimster said:


> I would be interested to know if our Presidet is collecting social security.  He is 70 years old so he is technically eligible.  He said he would not take a salary but that is not what he did.  He took the $400 K and then donated it to some charitable cause thereby costing the government more than any other President.  It is costing us $400 K plus the cost of the deduction so ultimately he is getting nearly $500 K per year which is more than any other President in history.



I do not want to get political and I also am not for or against the current President.  If he takes 400K and turns around to give to charity, his deduction is only on that 400K.  If he gives more, out of his other earnings, the deduction is against those earnings.  400K in Presidential salary does not turn into 500K in deduction.  Why would it cost more than other Presidents?


----------



## Jimster (Sep 13, 2017)

I was using him only as an example of a billionaire that does not need the money.  But to answer the question.  It costs us $400 K in salary and it costs us the reduction of income on his taxes which costs us almost another #100 K.  So collectively it costs the taxpayer about $500 K. If he also gets SS then that adds to the tab.  I also think Mark Zuckerberg shouldn't get SS or Bill Gates or any of the Waltons or any number of others that may be technically eligible.  But at this point the Pres is the only old enough to actually collect SS from among the group i mentioned.


----------



## lizap (Sep 13, 2017)

geekette said:


> I don't necessarily agree with this.
> 
> I can't speak for others, but the reason I have always invested aggressively is because I didn't feel it wise to expect SS to survive.  If SS goes bust, I have it covered, without a pension.  I realize that few began investing in their 20s but I think it is becoming more common since today's 20somethings have internet and discount brokers, which I didn't have.  I have never cracked 6 digit income, either, and no spouse.



The statistics which show how much $ people have saved for retirement is alarming.  If you have a pot of $, the rule of thumb is that you can safely withdraw 4% per year during retirement (which some are now saying is too high).  Most people are not going to have anywhere near 1 million when they retire; even if they did, this would only provide 40k in annual income.  Assuming both spouses worked with a combined income around 100k, their retirement income would be around 76k a year (including ss) thus they would be taking a roughly 24% decrease in annual income upon retirement.  Unfortunately retirement is NOT going to be golden for many.


----------



## WalnutBaron (Sep 13, 2017)

geekette said:


> Wow, harsh.  That would totally screw a lot people very quickly.  People that have paid in for decades.  Women would be horribly penalized, until such time as men carry the babies and raise them, wages become equivalent and men live and work longer so widows aren't again screwed.  Expanding HSA helps only people that have high deductible med plans and decent incomes, again screwing women with kids.  Forcing additional savings from a person's working paycheck while forbidding it be used for its intended purpose is a stranger version of a very cruel SS.   Pushing retirement age out immediately is another cruelty.  My FRA is already 2 years past my fathers, so bumping another 3 years is not at all ok.  Longevity statistics leave out that there are actual people with lives.  Some drop dead in the office or in a workplace accident or by disease or car crash or natural disaster.  Some beat incredible odds and hit 110.  There is no true expected age of demise, we all get to be surprised.  Yanking the rug out from under women would create a huge new poverty class of elderly women living the streets into their 90s.  Back to exactly what SS was intended to prevent.  Who wants this for their mother?  When do we start adding work credits and salary for carrying, birthing and raising children?



Certainly not meant to be harsh. But on an actuarial basis, the SS system will fail by the end of the next decade without major reform. If delaying retirement age and reducing benefits is not the answer, what do you suggest? Raising the SS tax, which would place a huge burden on those in their 20's, 30's, and 40's just at the time that us Baby Boomers are drawing on the system? Talk about harsh--that would be it.

I'm about six years from hitting my maximum SS benefit level. Know what? I plan not to take it. Through savings and investments, I'll be fine without it. Ultimately, it's going to take all of us being willing to get at least partially "screwed" (to use your vernacular) in order to fix a system that--like every government program--started out with good intentions and has grown into a bloated and unwieldy and poorly-managed bureaucracy that is now unsustainable.


----------



## isisdave (Sep 13, 2017)

Congress can eventually pick a combination of measures that won't screw anyone, if they don't wait too long.  One of my biggest criticisms of government for the last 30 years is that they won't take mild measures soon enough to avoid having to make much bigger ones eventually. As businesses point out, they can cope with almost anything ... except surprises. They need a few years to get things lined up.

Let's not confuse "age when you stop working" with "age when you start SS," which are both often referred to as "retirement age." Anyone who loses a job after 60 is going to have a heck of a time getting one.  I had to start SS at 62 when that happened ... but 5 months later was lucky to get a great job which suppressed benefits until I stopped at 66. This pretty much saved our retirement, as we were having to deplete the IRAs very early. Most people in that situation don't have such good luck.

One other thought here: just because our grandparents died around or before the time they stopped working doesn't mean that we should have to do that. That's part of "progress." Our health is much better, and I for one would like to enjoy a dozen years before settling into the rocker.

Remember, the average monthly benefit is only like $1300.  Even with a working spouse, doubling this would make it hard to live very well other than in a mobile home in Kansas, unless your house is paid off. When the first spouse passes, living anywhere on $1300 is going to be darned hard. 

Those of us on TUG are mostly fortunate enough to have substantial savings, but  way more than half of the US don't. Whether the reasons that an individual doesn't have a lot saved are "good" or "bad", the reason for SS was to avoid having poor people in the streets. 

I think a fair start would be to do something like this:  tax salaries to $200k, then exempt 200-400k, then start again, perhaps at a different rate. Kind of like the Medicare tax now.  Freeze max benefit at what it is now, adjusting for inflation. Maybe continue to ease FRA up a little at a time, but not past 70.  And it won't happen, but coupled with this should be some kind of incentive for businesses to hire people past 60, so that we can afford to wait that much longer.


----------



## WinniWoman (Sep 13, 2017)

isisdave said:


> Remember, the average monthly benefit is only like $1300. Even with a working spouse, doubling this would make it hard to live very well other than in a mobile home in Kansas, unless your house is paid off. When the first spouse passes, living anywhere on $1300 is going to be darned hard.



I keep saying this. Everything I read is based on two SS checks in retirement. I believe you really have to base it on one because there is a good chance one in a couple will be gone at some point. 

It's just like when I started out when I was young. My grandmother used to say- try to live on your husband's salary and put yours away for extras and the future. 

Was good advice then and good advice for when you retire. But this is why I have such a hard time trying to figure out what we are going to do in a few years from now. Might very well be a trailer in Kansas.


----------



## WinniWoman (Sep 13, 2017)

Jimster said:


> I would be interested to know if our Presidet is collecting social security.  He is 70 years old so he is technically eligible.  He said he would not take a salary but that is not what he did.  He took the $400 K and then donated it to some charitable cause thereby costing the government more than any other President.  It is costing us $400 K plus the cost of the deduction so ultimately he is getting nearly $500 K per year which is more than any other President in history.
> 
> I am sure there are many millionaires and billionaires getting SS.  That is why a means test makes sense.  Geekette was concerned about women's benefits (and rightly so).  The means test would not discriminate by sex rather it would discriminate by income which makes sense.  I don't think the amount of income needed to be subject to the means test needs to be low. Even denial to those earning $250 K or Moore would be a huge savings.  Rather it should only discriminate against those most able to subsist on their own.
> 
> ...




First off, better a charity should have the Presidents' money than the government, which only wastes money with its huge bureaucracy. Hopefully it was a good charity that will truly help people. 

Second, I am tired of hearing about women who stay home with their children and deserving everything working women who HAD to go to work get. Gee, I would have loved to stay home and then be entitled to benefits. Instead, I suffered through putting my son into various child care situations- some good, some bad.

In the real world, the women with children- most are out working to survive and also to better their families. Sure, some might stay home, but once the kids start school, many return to the workforce pronto unless their husbands make a lot of money. 

At my job, what I see with the young women- many are having babies- staying single- to collect NYS's generous Medicaid/ACA benefits for themselves and their children, though many of them do live with their boyfriends and benefit from their income as well. Nice deal. Wouldn't it be even better if they could collect SS when they retire and not having to pay into it? Not for the taxpayers it wouldn't.

Let's face it. We all pay into the tax system-and a lot of our money goes to welfare and Medicaid, yet we do not personally benefit from it. Once you means test SS, it also becomes just another welfare benefit.

I don't know what the answer is....


----------



## geekette (Sep 13, 2017)

mpumilia said:


> First off, better a charity should have the Presidents' money than the government, which only wastes money with its huge bureaucracy. Hopefully it was a good charity that will truly help people.
> 
> Second, I am tired of hearing about women who stay home with their children and deserving everything working women who HAD to go to work get. Gee, I would have loved to stay home and then be entitled to benefits. Instead, I suffered through putting my son into various child care situations- some good, some bad.
> 
> ...



My point would be that you suffered a penalty while pregnant, missing work, then had delivery costs, then recovery time.  This is minimum for birth of baby.  In most cases, women are financially punished for this time off, they don't get promotions, they don't get raises, they don't get paid for time off.  Each baby puts a woman backwards financially.   All this time off for one baby sends career off track.  This isn't true for everyone, but happens a lot, too much, and impacts your earnings from which SS is derived.  I was mommy tracked, altho I never wanted kids.  I was told that I would want them someday so the promotion goes to the single guy, tho I was most qualified.  One creep in a heap of jobs, but not the only one.

I doubt people stay single In Order To collect but that to me implies a household income test on those benefits vs forcing marriage.    I'm not sure what to do with young single mothers but starving the kids isn't the answer and not all deadbeat dads can be made to pay child support.  SS is not floating babies so it's a completely different matter.   Taking time from career to have a baby puts her behind on career and wages and the lower the economic rung, the less likely she is paid for time off when she or baby is sick.  

I guess I remain appalled that having and raising children is still not considered Work, still falls to women, women still punished financially for it.  Some people make better mothers than any other profession they could choose but our society does not support that.  SS is based on dollars earned, period, propagating the species doesn't enter into it.   Weird, since we all need a lot more young taxpayers the older we get.


----------



## WalnutBaron (Sep 13, 2017)

geekette said:


> My point would be that you suffered a penalty while pregnant, missing work, then had delivery costs, then recovery time.  This is minimum for birth of baby.  In most cases, women are financially punished for this time off, they don't get promotions, they don't get raises, they don't get paid for time off.  Each baby puts a woman backwards financially.   All this time off for one baby sends career off track.  This isn't true for everyone, but happens a lot, too much, and impacts your earnings from which SS is derived.  I was mommy tracked, altho I never wanted kids.  I was told that I would want them someday so the promotion goes to the single guy, tho I was most qualified.  One creep in a heap of jobs, but not the only one.
> 
> I doubt people stay single In Order To collect but that to me implies a household income test on those benefits vs forcing marriage.    I'm not sure what to do with young single mothers but starving the kids isn't the answer and not all deadbeat dads can be made to pay child support.  SS is not floating babies so it's a completely different matter.   Taking time from career to have a baby puts her behind on career and wages and the lower the economic rung, the less likely she is paid for time off when she or baby is sick.
> 
> I guess I remain appalled that having and raising children is still not considered Work, still falls to women, women still punished financially for it.  Some people make better mothers than any other profession they could choose but our society does not support that.  SS is based on dollars earned, period, propagating the species doesn't enter into it.   Weird, since we all need a lot more young taxpayers the older we get.



Geekette, I almost always find your posts both thought-provoking and insightful, especially when it comes to financial management and investing. And I congratulate you for your success in saving and investing for your own account over the years. But, for some reason, you seem to have gone off the rails in parts of this discussion. No one, for example, has suggested that "starving the kids is the answer". That demeans an honest debate as we all try to ferret out answers to this perplexing public policy question. It's a common tactic for people to mis-characterize an argument of an opponent and take it to an unreasonable extreme in order to buttress their own argument, but it actually serves to do the opposite. (Let me also say that I appreciate the mods' allowing this debate to continue without labeling it "too political"...it's an important question that needs to be had in the public square.)

In my original suggestions on this topic, I said that removing ex- or current spouses who had not paid into the system and who had not raised any children from a marriage should not be eligible for the other spouse's Social Security benefits. If someone marries four times, divorces four times, how is it reasonable that all five people potentially draw benefits when only one contributed to the system?

Regarding children, we all know there are literally dozens of social programs in America that are designed to help poor or underprivileged or special needs children. And we also know that if SS benefits to those kinds of kids were discontinued, neither the constituents, public interest groups, or the political climate in general would allow kids to fall through the cracks, meaning some kind of replacement program would be created to take its place. 

My point is that Social Security--which, though being poorly managed by Congress is actually one of the better-managed and most prized public programs in the country--was created to offer retirement benefits and should be returned to its original charter. The more it becomes bloated with new and additional obligations, the more complex it becomes, the more opportunity there is for fraud, and the more it strays from its original charter, the closer it is to collapsing under its own weight.

I appreciate the ideas offered by isisdave in Post #70. He's right: the sooner Congress gets on this and fundamentally reforms Social Security to make it actuarially sound for the next 50 years instead of the next 8, the softer the impacts will be to all generations either receiving benefits or paying into the system. Right now, Congress is doing what it does best: ignoring the problem until it becomes a crisis, at which time any fixes will be severe, ultimately unfair to many, and prohibitively expensive and even wasteful.


----------



## lizap (Sep 13, 2017)

WalnutBaron said:


> Certainly not meant to be harsh. But on an actuarial basis, the SS system will fail by the end of the next decade without major reform. If delaying retirement age and reducing benefits is not the answer, what do you suggest? Raising the SS tax, which would place a huge burden on those in their 20's, 30's, and 40's just at the time that us Baby Boomers are drawing on the system? Talk about harsh--that would be it.
> 
> I'm about six years from hitting my maximum SS benefit level. Know what? I plan not to take it. Through savings and investments, I'll be fine without it. Ultimately, it's going to take all of us being willing to get at least partially "screwed" (to use your vernacular) in order to fix a system that--like every government program--started out with good intentions and has grown into a bloated and unwieldy and poorly-managed bureaucracy that is now unsustainable.



I completely agree with this.  We live in a state where most don't want to pay any taxes, BUT they want a free college education for their kids (in LA, college is basically free as long as you are a mediocre high school student), good roads, good schools, etc...


----------



## geekette (Sep 13, 2017)

isisdave said:


> Congress can eventually pick a combination of measures that won't screw anyone, if they don't wait too long.  One of my biggest criticisms of government for the last 30 years is that they won't take mild measures soon enough to avoid having to make much bigger ones eventually. As businesses point out, they can cope with almost anything ... except surprises. They need a few years to get things lined up.


yes, this, gentle changes, let's get on it!  

I also believe that by the time you are 25-30 you should know what your FRA is, it scares me that some think FRA rising should occur to people in their 50s and after.  That's too late, and as mentioned by someone(s) here, ageism does exist in the work place.  Perhaps there are stats to show how many boomers were involuntarily displaced in Great Recession and yet to find "comparable" work.  A large multinational employer HQ'd here has announced it is sending folks to retirement and otherwise laying people off.  Those involuntarily retired may not be able to actually retire yet and need to dust off the resume and hit the streets.  What if they got laid off over and over, employers streeting the elders, until age 70???  Unthinkably stressful to someone past their prime.

No matter what we do, it will remain true that some people pay in over a career and drop dead before collecting.  Instead of denying high earners from collecting, it's better they forgo it by choice and make noise over it so it can be an example.  I have a hard time saying "yeah, you paid in, but you made too much money so you don't get to see a dime of your contributions..."   which becomes punishment for success.  Far better that philanthropy spread or voluntarily forgoing it.   If I drop dead before age 70, when I expect to take SS, you can count me as forgoing it.  Involuntarily displaced, as it were.  

Penalizing people for accumulating outside savings is another punishment I'd like to avoid.  It's not like we have a choice whether or not to contribute to SS.  We are hearing all these scary-high healthcare-in-retirement numbers, so discouraging outside savings in order to come in under "means testing" will lead to more bad outcomes for our elders.   In my opinion, SS should concern itself with SS, not the overall individual's life, since all it cares about in our working years is our income.  

I find myself scared for the folks in Houston and FL that lost it all.  Everything, often including the job that washed away.   In many cases, folks will be compelled to make mortgage payments on homes that no longer exist.  These are people that in many cases are going to be in deep need of SS at earliest draw time.  They have been ruined.  Moving FRA to 70 immediately harms them greatly.  Deciding that their assets are sufficient to be "above need" harms them.  Consider someone whose home is gone and still has a mortgage yet fat bank account.  I really think we should bypass deciding what "need" is, as it will also vary across regions.  I also do not want to harm the special needs children that parents may have made large accounts to care for them with.  Deciding that this large account is for the retiring couple is not a decision anyone but the couple should be making.  Govt should  not be in the business of deciding what "enough" is.  If a person paid into SS, they should collect.


----------



## Jimster (Sep 13, 2017)

geekette said:


> . Govt should not be in the business of deciding what "enough" is. If a person paid into SS, they should collect.



It already is in that business.  I have paid in a very large amount of funds into social security because I have had two careers- one as a teacher and one as a private attorney.  Thanks to the Windfall Exclusion Act passed in the 1980's i can only collect a small portion of what I should receive because this act severely diminishes my social security because I already have a public pension.  Congress seems to be all right with that.  There are many like situated individuals including many who served in the military who already have a public pension and are likewise punished.

While I am not happy with that, it does make the SS system more viable.  I see no problem in restricting or diminishing those with a high INCOME.  I capitalize the word INCOME as opposed to using the word ASSETS or WEALTH. At age 66 or whatever, if you are still making $250 K in INCOME, you shouldn't expect to collect social security.  I find it repugnant to think that the Mark Zuckerman's, Bill Gate's, Donald Trump's or the like in this world should be drawing SS benefits.  I find it even more repugnant that they think that they should draw SS benefits yet some do believe this.

Today with income inequality at an all time high, those living in luxury should not be benefiting from a system designed to help people subsist.


----------



## PigsDad (Sep 13, 2017)

Jimster said:


> I find it repugnant to think that the Mark Zuckerman's, Bill Gate's, Donald Trump's or the like in this world should be drawing SS benefits.  I find it even more repugnant that they think that they should draw SS benefits yet some do believe this.


I think it depends on what people think the Social Security program is.  If they think SS is an income redistribution program, then your views above probably apply.  If they think SS is a retirement pension program with a security net feature, then expecting _some level_ of return for the dollars contributed seems quite reasonable and certainly not "repugnant".

Kurt


----------



## VacationForever (Sep 13, 2017)

Jimster said:


> I was using him only as an example of a billionaire that does not need the money.  But to answer the question.  It costs us $400 K in salary and it costs us the reduction of income on his taxes which costs us almost another #100 K.  So collectively it costs the taxpayer about $500 K. If he also gets SS then that adds to the tab.  I also think Mark Zuckerberg shouldn't get SS or Bill Gates or any of the Waltons or any number of others that may be technically eligible.  But at this point the Pres is the only old enough to actually collect SS from among the group i mentioned.


Why gripe about the rich who can afford to give their money to charities?  Charities, if run correctly/ethically, help the less fortunate.  

How do we draw the line between who should get SS or not?  Someone mentioned $250K in income as the line.  Income can change year to year, depending on whether in that year, funds were sold resulting in capital gains, or interest rates/dividends change, or something matures.  It will be a nightmare for SS to compute with start/stop.  The whole model will have to change to accomodate fluctuations.  We want simplification of taxes etc and we certainly don't want it to be more complicated than it already is. Medicare "penalty" with charging higher premium on the recipient uses income 2 years before is already an issue, with people needing to send application to Medicare to show why that was a one-off event or circumstances have changed.


----------



## geekette (Sep 13, 2017)

lizap said:


> The statistics which show how much $ people have saved for retirement is alarming.  If you have a pot of $, the rule of thumb is that you can safely withdraw 4% per year during retirement (which some are now saying is too high).  Most people are not going to have anywhere near 1 million when they retire; even if they did, this would only provide 40k in annual income.  Assuming both spouses worked with a combined income around 100k, their retirement income would be around 76k a year (including ss) thus they would be taking a roughly 24% decrease in annual income upon retirement.  Unfortunately retirement is NOT going to be golden for many.



Your last statement is completely true.  

The 3-4% "rule" is a bit whack, as many rules of thumb are, but gotta put a stake in the ground somewhere, I guess, just to give people Some Target.   I would simply caution that no one refer to this as "safe withdrawal rate" because it isn't.  Reasonable rate, maybe.  

Since I have chosen to ignore most rules of thumb and completely embraced dividend investment, I can make more than 40k on a pot less than a mil.  Time in the market is my friend, granting juicy compounding that gets larger with every passing year.  I look at my div payments more than I look at port value.  

It's a different mindset, focusing on div income vs portfolio value, but I can at least project div income while it is simply Wild Guess as to how much that million dollar portfolio is at first significant up or down market.  Persons choosing to liquidate using the 3-4% are going to be selling in bad markets out of necessity.  My strategy does not involve liquidation, I hold the shares that generate the dividends vs selling them off over time.  That would be for me less and less in divs each year.  

Extra bonus that div raises have for many many years been much higher than job raises, many dbl digits, some above 20%.  Within 10 years I should be able to replace job income with div income without selling off my portfolio.  Granted, my IRA will force withdrawals via RMD (IRA is largest nest egg) but I can move positions to taxable port and keep on eating the divs.  No forced sales.  I can liquidate some or all of any position at any time if I choose and will endeavor to put that off until my 80s.  

Anyone can invest in dividend stocks.  You don't need to be Warren Buffet nor an MBA and don't even need much money (I began with $25/mo).   

If interested in what this div thing is about, check out Lowell Miller's book.  It has been updated from the original in the 90s but numbers and so forth are still old, read it for the concepts and not the stale charts.   

http://www.mhinvest.com/files/pdf/SBI_Single_Best_Investment_Miller.pdf

as a companion site, 
http://www.tessellation.com/dividends/companies.html 
 will show you div history of many companies (not all but Robert will add a company if you ask).

Further help sifting the universe here
http://www.dripinvesting.org/tools/tools.asp

the dividend champions spreadsheet helps illuminate further the long div raising streaks of some companies.   David Fish updates this monthly, he is one of the kings of div investing.  

I get that many people do not want to be direct stock holders so offer these links for those with interest.  I think it is only Kurt and I here that are div devotees but perhaps a strategy that fits goals of others so I offer a place to start looking into it.


----------



## VacationForever (Sep 13, 2017)

geekette said:


> My point would be that you suffered a penalty while pregnant, missing work, then had delivery costs, then recovery time.  This is minimum for birth of baby.  In most cases, women are financially punished for this time off, they don't get promotions, they don't get raises, they don't get paid for time off.  Each baby puts a woman backwards financially.   All this time off for one baby sends career off track.  This isn't true for everyone, but happens a lot, too much, and impacts your earnings from which SS is derived.  I was mommy tracked, altho I never wanted kids.  I was told that I would want them someday so the promotion goes to the single guy, tho I was most qualified.  One creep in a heap of jobs, but not the only one.
> 
> I doubt people stay single In Order To collect but that to me implies a household income test on those benefits vs forcing marriage.    I'm not sure what to do with young single mothers but starving the kids isn't the answer and not all deadbeat dads can be made to pay child support.  SS is not floating babies so it's a completely different matter.   Taking time from career to have a baby puts her behind on career and wages and the lower the economic rung, the less likely she is paid for time off when she or baby is sick.
> 
> I guess I remain appalled that having and raising children is still not considered Work, still falls to women, women still punished financially for it.  Some people make better mothers than any other profession they could choose but our society does not support that.  SS is based on dollars earned, period, propagating the species doesn't enter into it.   Weird, since we all need a lot more young taxpayers the older we get.



Women have a choice whether to have children and how many.  If they cannot afford to have children, then don't.  In my previous work, we came across far too many single mothers who were on welfare and continued to pop out babies, going from boyfriend to boyfriend.  I don't have a solution but do we go with tough love and make sure welfare is only available when they work at least part-time?  Raising a child should not be considered paid work.  One is only a victim when one allows it or believes in it.

I worked starting from the time I finished my degree all the way until I retired - in the meantime, I had a child, which I took 8 weeks of maternity leave, I completed my MBA in the evenings and weekends for almost 3 years while still working full time and after I had my child. I drew a paycheck and never missing a day between the time I started working in my early 20s until my retirement last year.  Did I miss time with my offspring while I worked and went to school?  Yes, but I believe in working hard and to continue to better myself to ensure we are all financially secure.


----------



## geekette (Sep 13, 2017)

WalnutBaron said:


> Geekette, I almost always find your posts both thought-provoking and insightful, especially when it comes to financial management and investing. And I congratulate you for your success in saving and investing for your own account over the years. But, for some reason, you seem to have gone off the rails in parts of this discussion. No one, for example, has suggested that "starving the kids is the answer". That demeans an honest debate as we all try to ferret out answers to this perplexing public policy question. It's a common tactic for people to mis-characterize an argument of an opponent and take it to an unreasonable extreme in order to buttress their own argument, but it actually serves to do the opposite. (Let me also say that I appreciate the mods' allowing this debate to continue without labeling it "too political"...it's an important question that needs to be had in the public square.)
> 
> In my original suggestions on this topic, I said that removing ex- or current spouses who had not paid into the system and who had not raised any children from a marriage should not be eligible for the other spouse's Social Security benefits. If someone marries four times, divorces four times, how is it reasonable that all five people potentially draw benefits when only one contributed to the system?
> 
> ...


Baron, the kid thing was not SS-related, it had to do with another post citing non-working mommies refusing to marry in order to collect welfare or whatever that state calls it.  Off the rails?  I cannot disagree with you there!   The point was the very programs you reference were elsewhere referenced with disdain because taxpayers foot it.  

I am still concerned about the women married off, discouraged from schooling and careers, encouraged to latch onto a man that will provide for them.  It still happens, it always will, and wage gap contributes to it.   I don't think that having children should be the test.  Married people are a social unit, they share income, homes, taxes, etc.  To not provide for the woman that supported the man's career is punitive, whether or not there are children.  Women live longer with worse SS records, lower wages, etc.  We can't fix that, women bear children and do not birth them in the office and immediately continue on writing the email or whatever.  If we choose to dump the spouse part, we will be back to poverty-ridden widows.  And a huge slowdown in marriage and birth rates as women must choose away from the social unit that puts their potential earnings in jeopardy and forgo having kids in order to afford Life.   By not marrying, they may escape MommyTracking that inhibits career growth.   The less future workers, the worse SS gets, but a female can at least avoid career sidetracking by avoiding having children and the marriage tether.  

To collect on spouse record, the marriage must have been at least 10 years and if that marriage ended in divorce, not remarried.  Before becoming moms, most women do work so it is not true that they never paid in.  But their earnings for same work as men are less.  The uterus tax is not going away.  

My own mother would have been one of those in poverty if not for spousal SS and pension (greatly reduced after employee death).   She did what society told her to do - work until you are married and then stop working and raise children.    A choice, for sure, but it was The Path for women then and the workplace has not changed significantly enough to help women stay afloat regardless of choices made.  One sick kid and you can be out of a job.  Women cannot 'have it all' until society allows it, and until then, they suffer financially compared to men.  The problem is magnified in old age, after the men die off, if women can only collect on their own spotty records.   

I'm frankly not concerned about me, I am to the point of the low paying teen and college years coming off the record, replaced by later better paying years.  But my sister will be in deep doo doo if this "own record" stuff comes to pass.  Her own fault for volunteering as the kids went to school instead of paid work.  Her husband made good money, she didn't need money, she choose to give back to the community.  The thanks for that would be dismal SS due to all those unpaid years of actual work, value unrecognized.


----------



## geekette (Sep 13, 2017)

...


----------



## Jimster (Sep 13, 2017)

VacationForever said:


> Why gripe about the rich who can afford to give their money to charities? Charities, if run correctly/ethically, help the less fortunate.



I think you are missing my point.  I am not griping about charities.  My point was the Pres said he would NOT take a salary to save money.   Instead, he took the money as a tax dodge.  No other President who was wealthy ever accepted the money.  This is why the current Pres is effectively getting almost 500K each year from public funds.  He takes the money only so he can write it off.  He is not SAVING the government money; he is COSTING the government money for his own profit.

I fully support the principle of those people who can afford to give money to charity to do so.  That is why I would hate to see this deduction eliminated from our tax code.


----------



## lizap (Sep 13, 2017)

geekette said:


> Your last statement is completely true.
> 
> The 3-4% "rule" is a bit whack, as many rules of thumb are, but gotta put a stake in the ground somewhere, I guess, just to give people Some Target.   I would simply caution that no one refer to this as "safe withdrawal rate" because it isn't.  Reasonable rate, maybe.
> 
> ...



Dividend investing is a good strategy, but I certainly wouldn't count on it for all my retirement needs.  Any financial person/analyst will tell you its always best to diversify your assets (this especially holds true in retirement).


----------



## VacationForever (Sep 13, 2017)

Jimster said:


> I think you are missing my point.  I am not griping about charities.  My point was the Pres said he would NOT take a salary to save money.   Instead, he took the money as a tax dodge.  No other President who was wealthy ever accepted the money.  This is why the current Pres is effectively getting almost 500K each year from public funds.  He takes the money only so he can write it off.  He is not SAVING the government money; he is COSTING the government money for his own profit.



You are wrong and wrong again.

There is no tax dodge.  The 400K went straight to charity - 400K income, 400K donation to charities.  If charities do not exist, then our personal income tax bills will be higher to fund the less fortunate people in the society.  How does the current president give away presidential salary for his own profit?  It makes no sense. 

We have had lots of wealthy presidents who accepted their salaries.  There were only 2 other presidents who gave the presidential salary to charities - JF Kennedy (entire) and Herbert Hoover (partial to charities and others to his staff).

You obviously have an issue with Trump and I am stopping here because this discussion is going nowhere with your skewed view.


----------



## geekette (Sep 13, 2017)

VacationForever said:


> Raising a child should not be considered paid work.



But it is!  Witness the rise in child care facilities, where you can pay someone else to raise your kid.  Nannies.  Boarding schools. 

Only the parent does it unpaid, no SS earned income, so they pay someone else to raise the kid to go get approved SS work, that substitute parent then has SS wages.  When the job is outsourced, it counts for something, but when done directly, counts for nothing.  

I find it odd that tending to ones own offspring is penalized yet rewarded with old age benefits for a stranger to do it instead.


----------



## geekette (Sep 13, 2017)

lizap said:


> Dividend investing is a good strategy, but I certainly wouldn't count on it for all my retirement needs.  Any financial person/analyst will tell you its always best to diversify your assets (this especially holds true in retirement).


I have a home, cash and stocks.  The equities are quite diversified by mkt cap and sector as well.  What more could I need?   Bonds?  Gold?  why?  SS when it shows up grants the fixed income portion, mixing in with quarterly payments from utility companies, conglomerates, railroads, food companies, toilet paper companies....  pretty diversified.    

Perhaps many will tell you other things, but that's back to the ole rule of thumb stuff, the 60/40 and so forth.  Much of "conventional wisdom" does not fit me, and my biz degree + career gains me as much insight as "any financial person/analyst" since I have also been that, yet I'm not trying to sell you anything.  they are just people following the rule book they were handed, I carve my own way having studied finance and especially investing from early on.   I am choosing away from financial institutions and instead owning businesses and real estate directly.  No middlemen, no extra fees or obfuscation.  I'm the one making money off of my money.   A beautiful thing.

I was well into it before I found others already living off their divs.  It can be done, it is being done, it's what I set out to do and am within a decade of it being reality.


----------



## VacationForever (Sep 13, 2017)

geekette said:


> But it is!  Witness the rise in child care facilities, where you can pay someone else to raise your kid.  Nannies.  Boarding schools.
> 
> Only the parent does it unpaid, no SS earned income, so they pay someone else to raise the kid to go get approved SS work, that substitute parent then has SS wages.  When the job is outsourced, it counts for something, but when done directly, counts for nothing.
> 
> I find it odd that tending to ones own offspring is penalized yet rewarded with old age benefits for a stranger to do it instead.



It is a choice that the parent has to make.  My kid is mine - I made the choice to have my kid. No one else made me.  It is my responsibility to bring up my kid.  I should not be paid for my choice in having a kid and staying at home to raise the kid.  Many of us go out to work so that we have money to take care of our children (child care and food) and ourselves.


----------



## Jimster (Sep 13, 2017)

Message deleted by author


----------



## Brett (Sep 13, 2017)

VacationForever said:


> You are wrong and wrong again.
> 
> There is no tax dodge.  The 400K went straight to charity - 400K income, 400K donation to charities.  If charities do not exist, then our personal income tax bills will be higher to fund the less fortunate people in the society.  How does the current president give away presidential salary for his own profit?  It makes no sense.
> 
> ...



it's not quite like that.   You still have to follow IRS rules on charitable contributions.  (you cannot assign or give salary straight to a charitable organization.  It has to be declared as income on the income tax return and then deducted as a charitable contribution subject to limitations.  Some things like the Nobel Prize winnings can be given directly to a charity though.


----------



## VacationForever (Sep 13, 2017)

Brett said:


> it's not quite like that.   You still have to follow IRS rules on charitable contributions.  (you cannot assign or give salary straight to a charitable organization.  It has to be declared as income on the income tax return and then deducted as a charitable contribution subject to limitations.  Some things like the Nobel Prize winnings can be given directly to a charity though.



Yes, but my point is that on the IRS returns, in this case it will show $400K in income and $400K in charity line for deductions.  There is no profit/gain on any of this.


----------



## Jimster (Sep 13, 2017)

VacationForever said:


> Yes, but my point is that on the IRS returns, in this case it will show $400K in income and $400K in charity line for deductions.  There is no profit/gain on any of this.



The IRS defines "any acession to wealth" as a taxable event. Thus the $400 K is a taxable event and is listed as income.   The deduction under current tax rules is allowed if verified but it goes against gain in regular income.  in the case of the $400 K this profits the Pres in an amount of over $80 K by reducing his tax bill by that amount.  It's as good as $80 K in your pocket.  To clarify, this is legal because the IRS has ruled that "tax avoidance" is permitted but tax "evasion" is not.  Nevertheless, I don't think he should profit from this.

As to my prior post about Presidents who did not accept salaries, you are abolutely right.  I knew that but did not word it correctly.  JFK did not accept a salary at all- thus not a taxable event and no concomitant gain to him.


----------



## ace2000 (Sep 13, 2017)

Jimster said:


> It already is in that business.  I have paid in a very large amount of funds into social security because I have had two careers- one as a teacher and one as a private attorney.  *Thanks to the Windfall Exclusion Act passed in the 1980's i can only collect a small portion of what I should receive because this act severely diminishes my social security because I already have a public pension.  *Congress seems to be all right with that.  There are many like situated individuals including many who served in the military who already have a public pension and are likewise punished.
> 
> While I am not happy with that, it does make the SS system more viable.  I see no problem in restricting or diminishing those with a high INCOME.  I capitalize the word INCOME as opposed to using the word ASSETS or WEALTH. At age 66 or whatever, if you are still making $250 K in INCOME, you shouldn't expect to collect social security.  I find it repugnant to think that the Mark Zuckerman's, Bill Gate's, Donald Trump's or the like in this world should be drawing SS benefits.  I find it even more repugnant that they think that they should draw SS benefits yet some do believe this.
> 
> Today with income inequality at an all time high, those living in luxury should not be benefiting from a system designed to help people subsist.



You may be leaving some information out.  I think the reason you can't collect is because you didn't pay into Social Security to begin with, right?  The Windfall Act applies to those who recieve a pension and didn't pay into the system.  That scenario applies to my wife, who is a teacher and she does not have Social Security taken out, therefore those earnings didn't get taxed.  For me, I pay into Social Security and will also be eligible for a pension.

So, yes, your pay was taxed as an attorney, but your pay as a teacher was probably not taxed.  Here's a reference that describes it more fully...

https://www.fool.com/investing/gene...indfall-elimination-provision-cut-your-s.aspx


----------



## Jimster (Sep 13, 2017)

ace2000 said:


> You may be leaving some information out.  I think the reason you can't collect is because you didn't pay into Social Security to begin with, right?  The Windfall Act applies to those who recieve a pension and didn't pay into the system.  That scenario applies to my wife, who is a teacher and she does not have Social Security taken out, therefore those earnings didn't get taxed.  For me, I pay into Social Security and will also be eligible for a pension.
> 
> So, yes, your pay was taxed as an attorney, but your pay as a teacher was probably not taxed.  Here's a reference that describes it more fully...
> 
> https://www.fool.com/investing/gene...indfall-elimination-provision-cut-your-s.aspx



No, that is not it.  There are 13 states that do not require SS to be paid by certain professions covered by pensions.   I live in one of them.  I have been working since I was 14 years old and paying SS on those non-teaching jobs.  I have accumulated well over 150 quarters of payments into SS and i have contributed susbstantially to SS.   However, because I now collect a public pension, the amount of SS benefits I receive is offset by my pension with the net result that i get a pittance of what I would otherwise receive.  I am unhappy but reluctantly accept that.

 What i find more objectionable is that this also applies to the military and police and fire workers.  For example, a person who has spent 20 years in the military and eligible for a pension will get little or no SS even though his military service constitutes only 20 years of his working life.  He/she can work 30 or 40 more years and contribute a substantial amount but he/she will not get anything near his full SS benefit.  Essentially this act was passed to avoid "double dipping".   Personally, I think someone who has served our country for 20 years should be allowed to "double dip".  Apparently, Congress does not!

Just to be clear, I posted this in response to my point that paying into SS doesn't necessarily mean you will get a benefit.  Therefore, I see no justification for allowing those with substantial incomes to collect SS even though they paid in.
Doing so would save the SS system billions of dollars over time.


----------



## lizap (Sep 13, 2017)

geekette said:


> I have a home, cash and stocks.  The equities are quite diversified by mkt cap and sector as well.  What more could I need?   Bonds?  Gold?  why?  SS when it shows up grants the fixed income portion, mixing in with quarterly payments from utility companies, conglomerates, railroads, food companies, toilet paper companies....  pretty diversified.
> 
> Perhaps many will tell you other things, but that's back to the ole rule of thumb stuff, the 60/40 and so forth.  Much of "conventional wisdom" does not fit me, and my biz degree + career gains me as much insight as "any financial person/analyst" since I have also been that, yet I'm not trying to sell you anything.  they are just people following the rule book they were handed, I carve my own way having studied finance and especially investing from early on.   I am choosing away from financial institutions and instead owning businesses and real estate directly.  No middlemen, no extra fees or obfuscation.  I'm the one making money off of my money.   A beautiful thing.
> 
> I was well into it before I found others already living off their divs.  It can be done, it is being done, it's what I set out to do and am within a decade of it being reality.



Where do I begin?  You are investing in 'equities', be it for dividends or capital gains.  There is a relationship between risk and return, so if you find a high-dividend paying stock, there is a reason for it, and that stock is likely to be riskier. Diversification works and there is research to back this up; it's not just something promoted by CFPs. You are assuming the future is going to look like the past.  That's a huge assumption to base your retirement on.  I have a strong feeling the next 10 years, return-wise, may not resemble the past 10. If we head into an extended economic downturn, some companies will be forced to cut their dividends. Also, there may come a time where you may need the prinicpal that you've invested in your dividend paying stocks.  Dividend stocks are great if you don't need the principal as you may be forced to take it out after the market has tanked, if you have unexpected cash flow requirements, as many seniors do.  I have learned to expect the unexpected and plan for the worst case scenario.  I have not always been like this; in fact, in my earlier years, was quite an aggressive investor, but there is a season for all things, and for us, our retired life is about security. I do think it's reasonable for dividend-paying stocks to be part of a well balanced portfolio.


----------



## geekette (Sep 13, 2017)

lizap said:


> Where do I begin?  You are investing in 'equities', be it for dividends or capital gains.  There is a relationship between risk and return, so if you find a high-dividend paying stock, there is a reason for it, and that stock is likely to be riskier. Diversification works and there is research to back this up; it's not just something promoted by CFPs. You are assuming the future is going to look like the past.  That's a huge assumption to base your retirement on.  I have a strong feeling the next 10 years, return-wise, may not resemble the past 10. If we head into an extended economic downturn, some companies will be forced to cut their dividends. Also, there may come a time where you may need the prinicpal that you've invested in your dividend paying stocks.  Dividend stocks are great if you don't need the principal as you may be forced to take it out after the market has tanked, if you have unexpected cash flow requirements, as many seniors do.  I have learned to expect the unexpected and plan for the worst case scenario.  I have not always been like this; in fact, in my earlier years, was quite an aggressive investor, but there is a season for all things, and for us, our retired life is about security. I do think it's reasonable for dividend-paying stocks to be part of a well balanced portfolio.


Sure, equities are the riskiest class, there is indeed a risk spectrum, plenty of academic stuff on all that, nothing new.  I steered away from safe, needing much more growth than anything but equities could bring.   Yet I own many companies that are hardly risky.  When is the last time a utility went out of business?   It's unlikely that companies that have survived over a hundred years will suddenly vaporize in the next correction.  I get it, for many it looks like I play with fire.  For all my time as a div investor, I have been warned and I ignore those warnings as my div income grows higher every year.  Sitting on the stable end of the risky class doesn't bother me, I've been there a long time and have yet to lose any money in the market.   I made rules for myself and they hold.  One rule I would suggest for everyone is to not invest borrowed money.  People jumped out of windows at Great Depression when margins were called.  

People in ETFs are more at risk than I am, they have no control over what is in that portfolio nor the buys and redemptions of others that force the fund managers' hands.  They also make moves to make the quarter look good.  That isn't necessarily good for the investors of the fund but it does help marketing.  Stay tuned for the fall tax-loss harvesting that fund mgrs do.  

My risk is company out of business, nothing to do with stock price, yet that is what most risk discussions center on.  Companies don't go broke overnight, it's not that hard to see that things aren't going well over many quarters.  Most risk that is bandied about has little to do with business ops yet it is the earnings that matter, not stock price.  Which blue chips went out of business in the Great Recession?  Stock prices went down, but that didn't wipe out any solid companies.  There were some dividend cuts or freezes, which a person living off of all their divs may or may not notice.  My plan does not involve having to live off of All my dividends, one of those sneaky safety nets I have built for myself.  Having to depend on every nickel of div income is riskier than even I will go, best to work and invest for another year.  I can control what I own, but I cannot control what the companies do.  I monitor earnings and enjoy annual reports.  If I miss a big red flag, well, that can happen, I do not expect perfection from myself.  I don't need to be right with every company, I only need to be mostly right, if that.  Pareto Principle.  

I do not assume the past 10 years are like the next 10 and I do agree they will not at all be the same!  what a run up we've had!  My  strategy was hatched over 25 years ago, researched a few years before that, this is where I landed as best fit for me, a young person struggling, looking for how best to avoid becoming old and poor because young and poor was zero fun and I figured it would be worse than that when old.   I base my retirement on factual data, much of it money coming into my accounts all this time.   I make no assumptions about the future, I simply choose companies that I have high conviction will outlive me.   I don't play the buy low/sell high game, I buy and stay.  I don't care about "returns", I'm in it for income, which shows up with high, low or no returns.    Recessions bring stock prices down which gains more div shares @ reinvest.  I'm good to go in any market conditions.  Sure, who doesn't love big green Gain numbers?   I dig the triple digit greens, they sure are pretty.  But for me they are simply "fun numbers", here today, gone tomorrow, nothing but volatile vapor.  

"Forced to sell" doesn't happen, people make choices.  When and if I elect to sell, having decades of odd lots puts me in good shape to cash in shs bought 40 years previous at much lower prices and pair them with newer shs to net out on tax obligation or show a loss if I want.   What's to worry?   I have a lot of companies, there is pretty much zero likelihood of "forced sell" of every share of all of them, immediately, and if I want to sell, I have a lot of choices of companies and then the lots within them, representing decades of price movement.  

House + cash round it out; one big ole illiquid place to live cheap that I could sell, and cash, the most liquid asset there is, not much risk to it, except lack of growth and inflation erosion.   Then fixed income SS.  Savings is for unexpected expenses, those don't just happen to seniors!   Life happens, I'll roll with it.  At the end of the day, it's only my butt I need to float and I can own the outcome of my decisions like I have with everything else.

We all find our security in different ways, and it is very important to sleep well at night, not stressing over portfolios!  I get that my strategy gives others the willies but I am very comfortable with it, I've lived with it peacefully from my mid 20s.  Eventually some of my companies will be sending me annually more than I invested in them and that makes me super secure.  Bonds won't ever do that, unlikely to happen with any fund.  

Used to be, people didn't have to think about investing, they got pensions and SS and if they had squirrelled something away in the passbook savings account and paid off the mortgage, all the better.  These days, almost everyone has to be an investor, even if they have a pension, as there is no promise of money tomorrow that is guaranteed to materialize.  

Good luck to us all!


----------



## lizap (Sep 13, 2017)

Our investment strategies tend to evolve over the years. I don't disagree with much you've said. The one exception is that 'people are not forced to sell'. Let me give you an example. My mom passed away several years ago after an unexpected illness that lasted for about 3 years.  She stayed in her home, as she wanted, but needed around the clock care. She was very healthy and active prior to this; she could not have anticipated this. My mom was fairly well off from a financial perspective.  She had a pension and substantial savings. We were 'forced' to sell most of her securities because she wanted to stay in her home rather than going into a nursing home. We used most of her savings to honor her wishes. In a sense, was fortunate that this happened during a rising market. Mom would not have been able to afford this care had the timing of her illness been after the latest market crash.




geekette said:


> Sure, equities are the riskiest class, there is indeed a risk spectrum, plenty of academic stuff on all that, nothing new.  I steered away from safe, needing much more growth than anything but equities could bring.   Yet I own many companies that are hardly risky.  When is the last time a utility went out of business?   It's unlikely that companies that have survived over a hundred years will suddenly vaporize in the next correction.  I get it, for many it looks like I play with fire.  For all my time as a div investor, I have been warned and I ignore those warnings as my div income grows higher every year.  Sitting on the stable end of the risky class doesn't bother me, I've been there a long time and have yet to lose any money in the market.   I made rules for myself and they hold.  One rule I would suggest for everyone is to not invest borrowed money.  People jumped out of windows at Great Depression when margins were called.
> 
> People in ETFs are more at risk than I am, they have no control over what is in that portfolio nor the buys and redemptions of others that force the fund managers' hands.  They also make moves to make the quarter look good.  That isn't necessarily good for the investors of the fund but it does help marketing.  Stay tuned for the fall tax-loss harvesting that fund mgrs do.
> 
> ...


----------



## VacationForever (Sep 13, 2017)

lizap said:


> Our investment strategies tend to evolve over the years. I don't disagree with much you've said. The one exception is that 'people are not forced to sell'. Let me give you an example. My mom passed away several years ago after an unexpected illness that lasted for about 3 years.  She stayed in her home, as she wanted, but needed around the clock care. She was very healthy and active prior to this; she could not have anticipated this. My mom was fairly well off from a financial perspective.  She had a pension and substantial savings. We were 'forced' to sell most of her securities because she wanted to stay in her home rather than going into a nursing home. We used most of her savings to honor her wishes. In a sense, was fortunate that this happened during a rising market. Mom would not have been able to afford this care had the timing of her illness been after the latest market crash.



Part of one's retirement strategy has to include long term care insurance or funds set aside if self-funding.  I bought mine 8 years ago, that pays $8,000 per month with a 3 percent compounded inflation rider, pays for 5 years if max is used and if less is used, the insurance company will keep paying until the total amount is used.  So if half is used each year, then it will stretch to 10 years.  Because we were working in the elder industry, we picked the LTCI carrier with the best record and rating.  My premium has not gone up in the last 8 years and even if it doubles, we will keep paying.  I pay less than $100 per month.  My husband bought a different plan last year, one that we paid a one-time lump sum and it is both a life insurance and a LTCI policy, with an inflation rider.  If LTCI is not utilized, then upon his passing, a payment (slightly above the premium) is paid to the beneficiary.  If it is partially used, then the balance of the insurance value will be paid to the beneficiary. 

We do not plan to deplete savings to pay for our care, but if it is needed to cover some difference, we can live with it.


----------



## dagger1 (Sep 13, 2017)

Jimster said:


> No, that is not it.  There are 13 states that do not require SS to be paid by certain professions covered by pensions.   I live in one of them.  I have been working since I was 14 years old and paying SS on those non-teaching jobs.  I have accumulated well over 150 quarters of payments into SS and i have contributed susbstantially to SS.   However, because I now collect a public pension, the amount of SS benefits I receive is offset by my pension with the net result that i get a pittance of what I would otherwise receive.  I am unhappy but reluctantly accept that.
> 
> What i find more objectionable is that this also applies to the military and police and fire workers.  For example, a person who has spent 20 years in the military and eligible for a pension will get little or no SS even though his military service constitutes only 20 years of his working life.  He/she can work 30 or 40 more years and contribute a substantial amount but he/she will not get anything near his full SS benefit.  Essentially this act was passed to avoid "double dipping".   Personally, I think someone who has served our country for 20 years should be allowed to "double dip".  Apparently, Congress does not!
> 
> ...


You are in essence saying that folks who had two (or more) careers, one in which SS payments were made, one where payments were made into a public pension, should receive two fully vested retirement funds and therefore two full payouts.  But that the person who had two (or more) careers both of which paid into SS, should only get one fully vested retirement fund (SS), much less than the first person.  The person who had two separate jobs/careers and paid into SS for both of them only gets one SS check, not two checks (one SS, one pension) like the government worker who gets payouts from both retirement plans.
Everyone who paid into SS should get their promised benefit.


----------



## Jimster (Sep 14, 2017)

Dagger1 said: "You are in essence saying that folks who had two (or more) careers, one in which SS payments were made, one where payments were made into a public pension, should receive two fully vested retirement funds and therefore two full payouts. But that the person who had two (or more) careers both of which paid into SS, should only get one fully vested retirement fund (SS), much less than the first person. The person who had two separate jobs/careers and paid into SS for both of them only gets one SS check, not two checks (one SS, one pension) like the government worker who gets payouts from both retirement plans.
Everyone who paid into SS should get their promised benefit."

What I am saying is if you decided to get a pension and became vested, you should get that pension.  If you paid into SS, you should get the appropriate amount of money consistent with the number of quarters paid in.  They should not get less because they worked for a pension too.  Yes, that would mean two checks but it also means that both checks came from their contributions.  As it stands now, a person who has a vested public pension, is penalized for his service and foresight.  Yes, that probably saves the government money but at the expense of the retiree.  Incidently, prior to the Windfall Exclusion Act, it was perfectly acceptable to collect a full pension and your full SS benefit.  While I am hurt, the military and public workers are probably hurt more.

Furthermore, it is not a case of getting something you didn't pay for or didn't deserve.  The retiree played by the rules, did what was required including paying into the systems.  He/she just doesn't get full benefits.


----------



## isisdave (Sep 14, 2017)

Jimster -- I don't think you have the math right on the charitable deduction thing, either.

If he gets $400k and donates it all, his tax result should not change. His AGI will go up $400k but his itemized deductions will too, leaving the taxable amount the same.  It's possible that raising the AGI would decrease deductibility of some things and increase AMT liability, so the deduction might not cover all of the salary.  It's also possible (not for Donald but for others) that the 50% charitable deduction limitation could reduce the effect of the contribution.

He could accept the salary and make the contribution from an IRA as part of his RMD, which would ensure that the whole went untaxed, I believe.

Also, on the WEP: this is explained well on the IRS site. The full explanation is too long for this thread. Basically, low earners get a higher percentage of their salary as a SS benefit ... remember, the purpose of SS is to prevent poverty... and WEP reduces the inflated benefit because you weren't really a low earner. But it only affects the first "band" of benefits, so you can only lose about $750 a month at most. If you have 20 years of "significant" earnings from an SS job (about $20k annually in recent years), you won't lose anything at all. Have you actually started getting SS benefits yet?

My teacher sister-in-law complained about this for years until I showed her how it worked.


----------



## WinniWoman (Sep 14, 2017)

And the one that really gets me is shown in this example:

I worked all my life, had one child, and I will get SS benefits based on my earnings. Fair enough.

Another woman did not work. She chose to stay home to raise her one child because her husband made plenty of money for them to live on. When THAT woman turns 66, she can collect half of her husband's SS, which- because he was a high earner- is substantial. Yes- me- who worked her whole life- will get less than the woman who stayed home all her life. And-providing her husband is still alive and also taking the max SS based on his high earnings, they will be racking in the money.

Why should that woman be entitled to anything? If her husband was deceased, I certainly agree she should get his Social Security. But not when he is alive and already collecting his!


----------



## WinniWoman (Sep 14, 2017)

And don't get me started on the zillions of people on Disability SS Income that are no more disabled than I am.


----------



## geekette (Sep 14, 2017)

lizap said:


> Our investment strategies tend to evolve over the years. I don't disagree with much you've said. The one exception is that 'people are not forced to sell'. Let me give you an example. My mom passed away several years ago after an unexpected illness that lasted for about 3 years.  She stayed in her home, as she wanted, but needed around the clock care. She was very healthy and active prior to this; she could not have anticipated this. My mom was fairly well off from a financial perspective.  She had a pension and substantial savings. We were 'forced' to sell most of her securities because she wanted to stay in her home rather than going into a nursing home. We used most of her savings to honor her wishes. In a sense, was fortunate that this happened during a rising market. Mom would not have been able to afford this care had the timing of her illness been after the latest market crash.


health care is a different matter, covered different ways, but I do get paid divs most business days of the year so the cash keeps coming, even after LTC, even after depleting my HSAs.  Right up until I sell the shares as that dries up the income.

This is frankly still not a forced to sell situation, that was a choice in order to do what she wanted.  That's not force, that's "sell my stocks and keep me home!"  No one is forced to sell stocks, it is always a choice.  I agree that timing of that choice can matter.  Life can be inconvenient, no doubt about it.  hard to call illness timing lucky, I get it, but it was, financially.  

Given that I have saved in order to float my elderly self, selling stocks to live somewhere special would be part of the plan, if desired.  What else would the money be for?  Needs in old age is exactly why I've done this, money brings options.   No one knows how they will age, how long they can care for themselves.  All the better to have assets aplenty to accomplish happiness through creature comforts.  Smart cookie that your mom did have the assets, could be where she wanted to be.  I think that's all any of us can hope for, to live out our days as we desire.


----------



## lizap (Sep 14, 2017)

geekette said:


> health care is a different matter, covered different ways, but I do get paid divs most business days of the year so the cash keeps coming, even after LTC, even after depleting my HSAs.  Right up until I sell the shares as that dries up the income.
> 
> This is frankly still not a forced to sell situation, that was a choice in order to do what she wanted.  That's not force, that's "sell my stocks and keep me home!"  No one is forced to sell stocks, it is always a choice.  I agree that timing of that choice can matter.  Life can be inconvenient, no doubt about it.  hard to call illness timing lucky, I get it, but it was, financially.
> 
> Given that I have saved in order to float my elderly self, selling stocks to live somewhere special would be part of the plan, if desired.  What else would the money be for?  Needs in old age is exactly why I've done this, money brings options.   No one knows how they will age, how long they can care for themselves.  All the better to have assets aplenty to accomplish happiness through creature comforts.  Smart cookie that your mom did have the assets, could be where she wanted to be.  I think that's all any of us can hope for, to live out our days as we desire.



We are going to have to 'agree to disagree' on the 'forced to sell' issue.. There are many situations that may force a person to sell his/her securities, especially in our later years.  This was just one example.  Age has taught me to expect the best, plan for the worst, and expect to be surprised.  I wish you the best and hope all your retirement plans come to fruition.


----------



## Jimster (Sep 14, 2017)

isisdave said:


> Jimster -- I don't think you have the math right on the charitable deduction thing, either.
> 
> If he gets $400k and donates it all, his tax result should not change. His AGI will go up $400k but his itemized deductions will too, leaving the taxable amount the same.  It's possible that raising the AGI would decrease deductibility of some things and increase AMT liability, so the deduction might not cover all of the salary.  It's also possible (not for Donald but for others) that the 50% charitable deduction limitation could reduce the effect of the contribution.
> 
> ...


Yes i have been collecting ss benefits for years and losing about $700 per month. I have 18 significant years but will not pursue the remainder unless i get a big case or two.  As for the number of quarters, 150+ used to get FULL benefits BENEFITS the WEP.  At that time there was no such thing as a significant year.  My total contribution was substantial because once you reach the threshold of a signicant year nothing else matters for that year except for the contribution limits.
Also what constitutes a signicant year keeps increasing.  At 1 point it was barely 1k.  I believe it is more like 25k.  I must have at least 10 more years very close to the theshold.

[Political comment removed.]


----------



## dagger1 (Sep 14, 2017)

Jimster said:


> Dagger1 said: "You are in essence saying that folks who had two (or more) careers, one in which SS payments were made, one where payments were made into a public pension, should receive two fully vested retirement funds and therefore two full payouts. But that the person who had two (or more) careers both of which paid into SS, should only get one fully vested retirement fund (SS), much less than the first person. The person who had two separate jobs/careers and paid into SS for both of them only gets one SS check, not two checks (one SS, one pension) like the government worker who gets payouts from both retirement plans.
> Everyone who paid into SS should get their promised benefit."
> 
> What I am saying is if you decided to get a pension and became vested, you should get that pension.  If you paid into SS, you should get the appropriate amount of money consistent with the number of quarters paid in.  They should not get less because they worked for a pension too.  Yes, that would mean two checks but it also means that both checks came from their contributions.  As it stands now, a person who has a vested public pension, is penalized for his service and foresight.  Yes, that probably saves the government money but at the expense of the retiree.  Incidently, prior to the Windfall Exclusion Act, it was perfectly acceptable to collect a full pension and your full SS benefit.  While I am hurt, the military and public workers are probably hurt more.
> ...


Folks who are in the private sector and work for a company which offers a pension and requires SS payments get both upon retirement.  But folks who as government workers earn a pension (their first career) do not pay SS while earning this pension.  Government  pension plans are authorized replacements for SS.  If government workers earned their government pension and paid SS at the same time, and then took a second career paying only SS, they should get both full pension and full SS benefits.  But because they do not pay SS while working for governments/municipalities, their pension payments take the place of SS payments.  Government pension payments are basically substitute SS payments.


----------



## geekette (Sep 14, 2017)

lizap said:


> We are going to have to 'agree to disagree' on the 'forced to sell' issue.. There are many situations that may force a person to sell his/her securities, especially in our later years.  This was just one example.  Age has taught me to expect the best, plan for the worst, and expect to be surprised.  I wish you the best and hope all your retirement plans come to fruition.


I wish you the best as well, all of us, actually, as all of us are at risk of unknown Stuff.   That's why my plan also has evolved over time.

Yeah, agree to disagree!  I fathom zero possibility of gun to the head sale of stock just as no one forced me to click Buy.  it's semantics, that's all.  For me, everything I do is a choice because there is always another option, such as doing nothing.  I've lived lean in order to not have to live lean in retirement.  A Choice, vs new cars all the time or flight to Europe every summer.  Each of us has our own priorities and preferences, that's what makes the world interesting.

I'm within 8 years of retirement, it is fine-tuning time for me, shrinking expenses as far as they will go, hammering away at mtg.  Income vs outgo is key for me, not portfolio value.  I will be able to project my income with reasonable certainty while those doing the 3-4% market value distribution are left to guesswork on forward years as market gyrates.  That is the purpose of asset class diversification, cover your butt in down market.  That's why I don't need it, my butt has coverage.

I have appreciated the back and forth as it is always good to have someone poke a hole so I have to think it through from a different angle.  Valuable exercise.   I admit to living an experiment, but others have succeeded at it and signs over 2 + decades show that I will, too.  Maybe not, but I'll be fine no matter what.  I always have been, with or without money.


----------

