The coming Social Security fight could be 1983 all over again

[ScoopKona]

I also think future politicians will kick the funding can down the road and not cut current benefits (too much).

That's the problem, they kept kicking the can. They haven't put restrictions on benefits. And they haven't done anything about contributions to the OASDI trust fund. If Social Security was a person, it would be in hospice.

And, sadly, "doing nothing" is precisely how the automatic benefit cuts kick in. It's not like this is some secret, squirreled away in a giant warehouse along with the Ark of the Covenant and the crashed UFO. Every year, the trustees report on what can be expected. And every year, they end with a plea for congress to do something to minimize the looming cuts.

• The Old-Age and Survivors Insurance (OASI) Trust Fund will be able to pay 100 percent of total scheduled benefits until 2033, unchanged from last year’s report. At that time, the fund’s reserves will become depleted and continuing program income will be sufficient to pay 77 percent of total scheduled benefits.

The projected long-term finances of the combined OASDI fund worsened this year primarily due to three factors. First, the Social Security Fairness Act, as enacted on January 5, 2025, repealed the Windfall Elimination and Government Pension Offset provisions of the Social Security Act. The repeal of these provisions increased projected Social Security benefit levels for some workers, relative to projected benefit levels in last year’s report. The impact of this legislation on the OASI Trust Fund was the primary contributor to the change in the combined OASDI fund depletion date this year. Second, the Trustees extended the assumed period of recovery from historically low levels of fertility by 10 years. The long-term fertility rate is reached in 2050, compared to 2040 as assumed in last year’s report. Third, the Trustees lowered the assumed long-term share of Gross Domestic Product (GDP) that accrues to workers in the form of labor compensation.

Executive summary: benefit cuts are coming. We don't have enough workers making enough money to fill the coffers for 70 million retirees. And we're well past time for a solution that doesn't involve benefit cuts. And for those who say, "They can't. It's political suicide," they don't have to do anything at all. Just let the clock run out. And it's increasingly clear that's precisely what they intend to do.

Here it is. See for yourself:

Trustees Report Summary

A SUMMARY OF THE 2024 ANNUAL REPORTS

www.ssa.gov

 

[TolmiePeak]

I also think future politicians will kick the funding can down the road and not cut current benefits (too much).

They won't vote to cut benefits. The cuts will kick in automatically by law.

 

[Elan]

NO! The younger I claim the lower LOCK IN my payout. Not yet at FRA. My plan is to claim at the max FRA + 3 years = 130%

I will get paid at the highest level. Then if necessary SSA can reduce my benefit down from 130% when and if automatic cuts are imposed. I would still get paid out at a higher rate.

That's an interesting way to look at it. I took mine at 62. Crossover age vs taking it at FRA (67) is around 79-80. And that's not counting any return on the money collected over the 5 years. Any reasonable ROI for those 5 years pushes the crossover into the early 80's.

Sent from my Pixel 9a using Tapatalk

 

[Brett]

They won't vote to cut benefits. The cuts will kick in automatically by law.

Future politicians could vote to change Social Security funding requirements before the automatic decreases in benefits.

 

[Tia]

That's the problem, they kept kicking the can. They haven't put restrictions on benefits. And they haven't done anything .........................

....Executive summary: benefit cuts are coming. We don't have enough workers making enough money to fill the coffers for 70 million retirees. And we're well past time for a solution that doesn't involve benefit cuts. And for those who say, "They can't. It's political suicide," they don't have to do anything at all. Just let the clock run out. And it's increasingly clear that's precisely what they intend to do.

Here it is. See for yourself:

Trustees Report Summary

A SUMMARY OF THE 2024 ANNUAL REPORTS

www.ssa.gov

70 million retirees and all those that collect off of each of those. Some retirees move to foreign lands marry and sometimes reproduce children with younger women and they all know about benefits of our SS .

 

[ScoopKona]

Future politicians could vote to change Social Security funding requirements before the automatic decreases in benefits.

And I could flap my arms really fast and learn to fly. And again, for the people sitting way in the back, we only have about five years left to solve a mega-trillion-dollar problem. Think anything positive is happening over the next few years? Didn't think so.

The money we need to fix the OASDI trust fund makes our national debt look like peanuts. I've said it before -- this is like a 300 pound chain smoker getting a stage-four lung cancer diagnosis. "I'll quit smoking and lose weight! That'll fix it right up!"


Income cap? Means testing? That would have helped 30 years ago. Nothing was done. (And we've known this day was coming for even longer than that.) I'll bet on my "they haven't done a single positive thing during my entire life" vs. your "maybe they'll finally do something" every time. That's why I made my own arrangements. A very different retirement scheme will be waiting for me once 70 million retirees have sucked the system dry.

 

[Brett]

And I could flap my arms really fast and learn to fly. And again, for the people sitting way in the back, we only have about five years left to solve a mega-trillion-dollar problem. Think anything positive is happening over the next few years? Didn't think so.

The money we need to fix the OASDI trust fund makes our national debt look like peanuts. I've said it before -- this is like a 300 pound chain smoker getting a stage-four lung cancer diagnosis. "I'll quit smoking and lose weight! That'll fix it right up!"


Income cap? Means testing? That would have helped 30 years ago. Nothing was done. (And we've known this day was coming for even longer than that.) I'll bet on my "they haven't done a single positive thing during my entire life" vs. your "maybe they'll finally do something" every time. That's why I made my own arrangements. A very different retirement scheme will be waiting for me once 70 million retirees have sucked the system dry.

I agree that future generations should have a better "retirement scheme" than relying on social security. Admittedly I'm a retiree that is currently "sucking the system" however I (and my wife) have other retirement income that is substantially more than social security.

I'm also hoping I live long enough to see if social security benefits in 2034 are more than "beer money"

 

[ScoopKona]

I'm also hoping I live long enough to see if social security benefits in 2034 are more than "beer money"

I've been tilting this windmill since before there was an Internet. The only thing that's constant is that reality has turned out to be worse than my most pessimistic predictions.

The trustees have been moving the goalposts for my entire life. It started out as essentially "no need to worry about this until around 2050, and the cuts will be less than 10%." Thanks to increased lifespans, inflation, and wage stagnation, we're now at "Eight years, tops. And cuts of around 25%."

I tell my friends to prepare for five years and cuts of around one-third. There won't be any advantage to retiring at an older age. Because Lucy is going to yank that football before we even reach that age. Most of my friends don't have a plan-B, and they're going to be destitute in their old age. They're going to be eligible to draw right around depletion day.

And when that happens, under-the-table work and gig work is going to explode. "Why in hell should I pay into a system which isn't going to be there for me?" And the cuts will deepen very quickly. My wife and I retired young, because what's the point paying into a system that isn't going to pay us back? And every COL increase and benefit increase just brings depletion day closer and makes the coming cuts a little deeper.

 

[JeffC]

NO! The younger I claim the lower LOCK IN my payout. Not yet at FRA. My plan is to claim at the max FRA + 3 years = 130%

I will get paid at the highest level. Then if necessary SSA can reduce my benefit down from 130% when and if automatic cuts are imposed. I would still get paid out at a higher rate.

I've been tilting this windmill since before there was an Internet. The only thing that's constant is that reality has turned out to be worse than my most pessimistic predictions.

The trustees have been moving the goalposts for my entire life. It started out as essentially "no need to worry about this until around 2050, and the cuts will be less than 10%." Thanks to increased lifespans, inflation, and wage stagnation, we're now at "Eight years, tops. And cuts of around 25%."

I tell my friends to prepare for five years and cuts of around one-third. There won't be any advantage to retiring at an older age. Because Lucy is going to yank that football before we even reach that age. Most of my friends don't have a plan-B, and they're going to be destitute in their old age. They're going to be eligible to draw right around depletion day.

And when that happens, under-the-table work and gig work is going to explode. "Why in hell should I pay into a system which isn't going to be there for me?" And the cuts will deepen very quickly. My wife and I retired young, because what's the point paying into a system that isn't going to pay us back? And every COL increase and benefit increase just brings depletion day closer and makes the coming cuts a little deeper.

 

[Brett]

I've been tilting this windmill since before there was an Internet. The only thing that's constant is that reality has turned out to be worse than my most pessimistic predictions.

The trustees have been moving the goalposts for my entire life. It started out as essentially "no need to worry about this until around 2050, and the cuts will be less than 10%." Thanks to increased lifespans, inflation, and wage stagnation, we're now at "Eight years, tops. And cuts of around 25%."

I tell my friends to prepare for five years and cuts of around one-third. There won't be any advantage to retiring at an older age. Because Lucy is going to yank that football before we even reach that age. Most of my friends don't have a plan-B, and they're going to be destitute in their old age. They're going to be eligible to draw right around depletion day.

And when that happens, under-the-table work and gig work is going to explode. "Why in hell should I pay into a system which isn't going to be there for me?" And the cuts will deepen very quickly. My wife and I retired young, because what's the point paying into a system that isn't going to pay us back? And every COL increase and benefit increase just brings depletion day closer and makes the coming cuts a little deeper.

OK but I'm hoping future generations won't all be "destitute in old age"

My children probably have your attitude towards social security and are hoping their real estate and other investments will be a larger part of their retirement package

 

[ScoopKona]

OK but I'm hoping future generations won't all be "destitute in old age"

My children probably have your attitude towards social security and are hoping their real estate and other investments will be a larger part of their retirement package

Hoping isn't going to accomplish anything.

At least acknowledging reality would be a dandy start. (Much like the nuttiness happening over there in the "gasoline good, solar bad" thread. There are a couple people who would do well to join us here in the physical universe.)

There is zero reason for any optimism when it comes to Social Security. Because that ship hit the iceberg in the early 80s and we've done nothing except open more bulkheads. The band is still playing and the drinks are still flowing. But the bow is already under the waterline.

The program won't die. But whatever benefits are now, they'll go down by a third or so. (I think the trustees are optimistic with their 77% prediction. But we only disagree by the statistical margin of error.) That number will decrease even more as workers leave traditional employment. They'll work gigs so they don't get dinged for FICA. The real losers here are those who are too old to put a plan B in place. They'll have to find a way to live on somewhere between $2-3.5K per month. People in my age group will probably end up working at least part time until they die or are too infirm to work.

I'd rather face grim facts than rosy possibilities.

 

[TolmiePeak]

Future politicians could vote to change Social Security funding requirements before the automatic decreases in benefits.

Expecting congress to act? Dream on.

 

[ScoopKona]

Expecting congress to act? Dream on.

And that train left the station -- empty -- at the turn of the 21st century.

Me: "OK, I need to lose 30 pounds and train for the triathlon!"

Sports trainer: "When's the triathlon?"

Me: "Next week!"


Anyone who claims to have an easy fix either doesn't understand the problem or is selling a bill of goods in order to get elected.

 

[billymach4]

The cuts are across the board, and the "130%" is taken away. So you'll get 60-75% by waiting. It's all spelled out on their website, precisely what's going to happen on depletion day. I don't have a dog in this fight. Because by the time I'm allowed to draw, it probably won't even amount to beer money. So I made my own plans.

@ScoopKona
I disagree with your statement that the 130% is taken away. Your suggestion is there is no benefit of waiting to age 70 to claim the highest payment.

Show me the language in the rules and law that 130% is taken away.

 

[ScoopKona]

@ScoopKona
I disagree with your statement that the 130% is taken away. Your suggestion is there is no benefit of waiting to age 70 to claim the highest payment.

Show me the language in the rules and law that 130% is taken away.

It's all on the SSA website. PRECISELY what happens when the trust fund depletes. (They prefer depletes to "goes bankrupt.")

Go look for yourself. I posted the link.

 

[billymach4]

It's all on the SSA website. PRECISELY what happens when the trust fund depletes. (They prefer depletes to "goes bankrupt.")

Go look for yourself. I posted the link.

Yes I see your link. However I have not yet read that the max benefit of 130% is taken away. I stand by my original statement that I will benefit from taking the max benefit of 130% minus the automatic cut vs taking earlier benefit minus automatic cut.

 

[ScoopKona]

Yes I see your link. However I have not yet read that the max benefit of 130% is taken away. I stand by my original statement that I will benefit from taking the max benefit of 130% minus the automatic cut vs taking earlier benefit minus automatic cut.

I retired at 50 because I have no faith in the system at all.

The benefit schedule isn't decided by Congress. It's decided by the trustees. And when they make their cuts, they're going to make those cuts in such a way that fewest number of people starve to death. So play "The Price is Right" with your retirement all you want. Just don't be surprised when the sad trombones play around 2030-ish.

 

[billymach4]

I retired at 50 because I have no faith in the system at all.

The benefit schedule isn't decided by Congress. It's decided by the trustees. And when they make their cuts, they're going to make those cuts in such a way that fewest number of people starve to death. So play "The Price is Right" with your retirement all you want. Just don't be surprised when the sad trombones play around 2030-ish.

No worries. As you mentioned I get it.
Just wanted to make sure I was not missing the fine print.

You're take is of course on the extreme pessimistic end of the spectrum and not at all offended.

Tomorrow morning North Korea may launch an ICBM and target South Korea, Hawaii and Japan.
That will then trigger Russia, China and the USA to retaliate. USA and the remaining allies all against each other. Then China will take Taiwan in the fog of Battle.


Next month the killer asteroid will put all of us out of our misery.

Am I worried? No.

 

[ScoopKona]

Next month the killer asteroid will put all of us out of our misery.

Am I worried? No.

Unlike those "winning powerball is more likely" events, this is almost certainly going to happen. It would take an Apollo-program national effort to keep this from happening.

And tick-tock -- every day we don't do something is another day wasted. This is happening in roughly 60 months. For a lot of people, that's a car payment.

 

[PigsDad]

Yes I see your link. However I have not yet read that the max benefit of 130% is taken away. I stand by my original statement that I will benefit from taking the max benefit of 130% minus the automatic cut vs taking earlier benefit minus automatic cut.

It depends on your age in respect to when the automatic cuts would kick in. For example, I am 59, so I could start taking the smaller payment in three years at age 62, and if the automatic cuts started in 2033, I would have had five years of benefits that were not reduced by the automatic cuts. However, if I wait until I'm 70 (in 2036), even though my "base" benefit will be higher, my very first payment will be reduced by the automatic cuts -- I will never receive a non-automatic cut payment, vs. receiving 5 years of regular payments (at the lower "base").

A lot of variables to consider.

Kurt

 

[billymach4]

It depends on your age in respect to when the automatic cuts would kick in. For example, I am 59, so I could start taking the smaller payment in three years at age 62, and if the automatic cuts started in 2033, I would have had five years of benefits that were not reduced by the automatic cuts. However, if I wait until I'm 70 (in 2036), even though my "base" benefit will be higher, my very first payment will be reduced by the automatic cuts -- I will never receive a non-automatic cut payment, vs. receiving 5 years of regular payments (at the lower "base").

A lot of variables to consider.

Kurt

SSA has also calculated overpayment and clawed back funds. Another variable.. ?

 

[joestein]

There is no way we will have benefit cuts. Did you see the recent outrage over not renewing COVID era benefits for ACA? The gov't closed for 2 months due to that. That only affected a small portion of the US.

Can you imagine the outrage over cutting SS? They will pass a law kicking the can down the road and allowing SS to be funded out of the general fund when there are shortfalls. Maybe they will revamp SS for future retirees. There is no way they will allow the current law to cut SS.

But I GUARANTEE there won't be a cut in benefits.

ScoopKona - no need to point out the law, you have done it more than enough already.

 

[Brett]

There is no way we will have benefit cuts. Did you see the recent outrage over not renewing COVID era benefits for ACA? The gov't closed for 2 months due to that. That only affected a small portion of the US.

Can you imagine the outrage over cutting SS? They will pass a law kicking the can down the road and allowing SS to be funded out of the general fund when there are shortfalls. Maybe they will revamp SS for future retirees. There is no way they will allow the current law to cut SS.

But I GUARANTEE there won't be a cut in benefits.

ScoopKona - no need to point out the law, you have done it more than enough already.

So we have your personal GUARANTEE that social security benefits won't be reduced.
But Gen X and millennials will probably want to see real legislative progress on funding for "Old-Age, Survivors, and Disability Insurance"
(before 2034)

 

[ScoopKona]

So we have your personal GUARANTEE that social security benefits won't be reduced.

From a couple messages ago: Anyone who claims to have an easy fix either doesn't understand the problem or is selling a bill of goods in order to get elected.

I can point to the SSA website and say, "here it is." I recommend that anyone who might be adversely effected should spend an hour looking at the website. And maybe look at the summary of the annual trustee reports from a few years back, and again from last decade. See how this problem has been unfolding, and then use that knowledge to extrapolate how it will likely unfold when depletion day hits.

 

[joestein]

So we have your personal GUARANTEE that social security benefits won't be reduced.
But Gen X and millennials will probably want to see real legislative progress on funding for "Old-Age, Survivors, and Disability Insurance"
(before 2034)

Yes... my personal Guarantee that the politicians will not allow SS to be cut. Take that for what it is.