If we collect more than what we put in, good for us. My paternal grandmother had such a life. If the asset generates an income stream, all the better. So if a person can live on less it might be wiser to take early retirement. The DI Trust Fund is projected to pay full benefits until 2065, at which time it will be able to pay 92% of full benefits. It’s not about need, it’s about a level playing field, fairness counts. This is an issue into which which it is extraordinarily easy to become entangled. If this continues next year, it will become a welfare program. Enjoy reading your economic truths. CPP is supposed/designed to be 1/3 of pre retirement income, not replace working income. Do not forget someone coming here say at age 40 gets the same medicre as some starting work at age 20, Spouses who never work get medicare and soc sec when the spouse dies. 4) A large portion of them lived in nursing homes supported by expensive city & state pyramid financing them. There is an ongoing debate about whether the Federal government and its spending policies are responsible for the current projections that by the year 2034 the outflow of payments will exceed the inflow of tax revenues to fund the social security program. Remember in twenty years the baby boom generation will be gone. My own brokerage account is all just “bookkeeping,” debits and credits, etc. The US government just moves the goalpost around. Find a hobby. It's also been because of tax hikes and adjustments to benefits. The fiscal cliff deal ended the 2% payroll tax holiday. Paulo and incoherent . Can you please start choosing some other cost of living other than gasoline to focus on? FYI– there seem to be two “Ralph’s” talking here. That Trust Fund is the amount of money Social Security has LENT to the US government, just like me or anyone else: when we buy Treasury securities, we lend to the US government, we don’t contribute to the US debt. Anything else will eventually cause the entire global wealth now delineated in digital dollars, to CONTINUE to be sucked into the criminal and corrupt crony capitalism that we now see growing all around us. It’s just a way to shaft more and more Social Secure recipients every year. In IL, 3% every year for pensioners. I’ve told my wife that soon we’re gonna price out most of our retirees currently renting our units – ie thru RENT INCREASES Once you hit that second bend point it becomes a pretty lousy deal. Embrace it and make it even better. I’d also have to guess that a significant number of Baby Boomers who lost their jobs and were eligible for SS Old Age benefits prematurely jumped on the benefit roles. Early retirees outside the USA are subject to a hourly work limit of 40 hours per month. You’re talking dementia, heart disease, depression, etc. Good luck with that. In its ruling, the Court rejected this argument and established the principle that entitlement to Social Security benefits is not contractual right.” Look at all these old politicians: They’re all fired up, they’re having a blast, and they’re not about to let go of that much fun, nor of the income from it, unless someone kicks them out. Let’s be optimistic and assume they will. I’ve seen others near me with lost homes to fire, who I’m very glad they will have some of my welfare money. Once I Retire, What’s the Biggest Social Security Check I Can Get? I own some gold, but I think the most important point is to stay diversified. That’s a long time…..and I have now been collecting from my DEPOSITS since 2012. Here is the link to the latest Social Security FACT SHEET – READ IT!!! I think it’s inevitable they’ll put some type of means test on social security at some point. The borrowed funds make their deficits look smaller. An open secret! an asset reserve of the Social Security trust funds. Less dead trees. Despite a big surplus and multitrillion-dollar reserve balance, Social Security isn't in good shape. This mentality is a serious obstacle to Social Security reform. The historic origins of Social Security is a very informative read. But. You would also automatically get food stamps and certain other benefits. Not so much a hobbybtgat pays well, but sooo much better for the mind and soul. CPP is being revised with higher contributions for higher payouts down the line, and longer payouts. If we end Social Security (SS) there will have to be a big tax increase on income or corporations. then MEANS TEST(based on today) SSI benefits Is fire insurance welfare? I’m 56 y.o. A $3 billion surplus. That way they can lower the tax rate for everybody. As an action-oriented association, AMAC is resolved to do its part to call for … The Treasury redeems these bonds, with interest, to pay for benefits. There is also the issue of how you frame the problem. Have you checked how much health insurance premiums and healthcare costs have increased over the past 40 years? Good luck finding private insurance and paying the premiums. Since there is more and record DEBT build up both in public and private sectors since 2009, expect ‘drop’ more than usual in the coming secular bear. Where is your health insurance going to come from when you’re 75 or 85? Although roughly the same size as the HI fund, it gets most of its funding through general tax revenues. Treat all income the same (I.e. Medicare Parts B and D are covered by the Supplementary Medical Insurance (SMI) Trust Fund. Reminds me of the Venezuelan woman who held up a plantain at her local market and said, “I paid as much for this as I paid for my house.” Social Security doesn’t need to be funded; COLA’s just need to continue falling far behind inflation. Payroll taxes are the primary source of funding for the trust funds. Real, actual, inflation that affects the cost of living. Good one. Just my logic. And the reported number of total taxpayers (178 million) doesn’t jibe either. The Congress can allocate funds over and above those collected through payroll taxes, at any time and in any amount. According to current projections, the Old-Age and Survivors Insurance Social Security Trust Fund will be able to pay full benefits until 2034, at which point it will be able to pay 76% of benefits. The Social Security trust fund is projected to pay promised benefits through 2033, the same as last year. BTW: ‘the dumber than dirt’ are products of public education, unless they weren’t educated at all. I would call that skating by given the 150 trillion dollars in unfunded liabilities with a currently shrinking GDP. Mathematically it’s a very complicated decision that only a person good at math or a computer can solve if you have additional income and start running into different tax rates. Lisa_, The Real Owner of the U.S. Debt Will Surprise You. But that’s NOT happening. Never underestimate the stupidity of the American people. that sounds fair. He appealed the termination arguing, among other claims, that promised Social Security benefits were a contract and that Congress could not renege on that contract. While the prime taxpaying population in the US is still increasing, its RATE of increase is dropping and it has been overtaken by the rate of increase in the population of those 65+ which is climbing. But each year, this gets harder, and this retiree is going to have to cut back, and cut back, and cut back year after year…. Due to housing/rent and college inflation, new grads today have a much tougher time surviving. Real value of benefits keeps shrinking. According to the tax guidelines if you are single you can have an AGI up to $34,000 and not pay federal tax on your social security. “WOLF STREET media mogul empire” The future is uncertain, but as Wolf’s post says, there will be payments. 10) low income should squeeze the system as much as they can, before the booster fade. Social Security payments are just regular income – which some states tax as well. I propose eliminating 401ks and doubling Social Security benefits. This happens prior to EVERY election.The latter have NOTHING to do with solutions needed for our (& furure generations) problems like ‘meaningful’ education or jobs for now and for the future. If You’re Over 50, Chances Are the Decision to Leave a Job Won’t be Yours. What You Need to Know About U.S. Tax Returns if You Have a Green Card, The Difference Between the Deficit and the Debt, Here Is How You Can Calculate Your Projected Social Security Benefit, calculator from The Committee for a Responsible Federal Budget, Coping With the Demographic Challenge: Fewer Children and Living Longer, Historical Background and Development of Social Security, Frequently Asked Questions About the Social Security Trust Funds, Misleading the Public: How the Social Security Trust Fund Really Works, The Budget and Economic Outlook: Fiscal Years 2011 to 2021, The Reformer: An Interactive Tool to Fix Social Security, The 2020 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, Social Security: Raising or Eliminating the Taxable Earnings Base. 3) USD PnF : reversal x3, $2 per box : 7 columns x 3 reversal x $2/ box = 42. min target : 90 + 42 = 132, which is above the 2000 highs. Remember to donate back some of the profit? If, for the sake of argument, we assume that only 25 million were out of work for 6 months grossing $20k/year then the OASDI Trust Fund lost $15.5 billion dollars between Apr 1st and Sep 30th. I thought you just decide whether to retire early at 62 or wait until full retirement, wrong. Accessed April 5, 2021. 7) WFH will keep the elderly on co payroll. pay 100% ssi taxes on 100% income Will Social Security Still Be There When Millennials Retire? In February 2021, over 69 million Americans received some Social Security benefit. I paid into the system from 68 till 2008 so 40 years 401) amounts equal to the reduction in revenues to the Treasury by reason of the application of subsection (a). There is a point to be made to just set your life end-date at (say) 75 and make sure you enjoy the present to the full. The authorized limit in law for Social Security benefits is the balance of the trust fund. I was lucky enough to live at home for 3 years. The size of this effect increases with the length of the recession. As after the last crisis, fueled by ultra-cheap money, they’re taking financialization of the housing market to the next level. The cpi calculation for the system is a complete ripoff and so is the taxation of benefits. This system wasn’t designed to provide Warren Buffett extra beer money. So for an upper-income self employed person, S.S. is a poor choice. This surplus was added to the Trust Fund. It never gies where you might hope. At the end of 2019, the Social Security Trust Fund had reserves of $2.9 trillion. IMHO, this is the best advice you have ever given! Not eliminated. 13 Those accounts are mainly funded through transfers from federal agencies, payroll deductions from workers, and supplemental payments from the Treasury. . Private-sector healthcare and health insurance, now there’s a corruption-infested mega-scam. but it could be different this time, right? Once these reserves run out, people and employers will still be paying the required Social Security payroll taxes, though that money is expected to cover only 76% of expected future benefits. To make up this shortfall, the Social Security Administration will begin pulling money from the trust fund. Huge difference. On August 14, 1935, President Franklin D. Roosevelt signed into law the Social Security Act. Their report and conclusions out in 1983 amounted to an entire (baby boom) generation over – paying in advance their payroll withholding taxes along with increases to age eligibility requirements. 4X income. Their promises to spend sound great at election time, especially if no one bothers to ask where the money is coming from. Just refill the HP cartridges and print some more money. Develop and improve products. How cruel. 4) In Mar 1986 TY RSI peaked @ 79.54. Learn what that means. For those either living outside the USA or thinking of moving to another country, here is the place for resource material: https://www.ssa.gov/international/payments.html, https://www.ssa.gov/international/payments_outsideUS.html, “This is a tool to find out if you can continue to receive your Title II Social Security payments if you are outside the United States or are planning to go outside the United States. In fact, that was the first year that income from payroll taxes was not enough to cover benefits. The Trustee Report for fiscal 2020 – the 2021 Trustee Report – is not yet available, but we know already that the Trust Fund grew by $6.8 billion this year. @ KK experiment we are currently conducting goes sideways, the United States government will selectively default on its obligation to make it whole again. Accessed April 5, 2021. Headlines were upbeat. You would end up with assortment of staples like rice, bread, wheat, eggs, ready to cook mixes, and whatever fruits and vegetables the agency gets a good price on. Click on the beer and iced-tea mug to find out how: Would you like to be notified via email when WOLF STREET publishes a new article? "A Summary of the 2020 Annual Reports." I retired (pushed out) from the desk job at 50 and became a FT musician. Yes, the typical ‘simple’ system of retirement that has become a paperwork and bureaucratic nightmare for people and made even more complicated if you differ from the norm by living outside the USA, being married to somebody from another country, or being a foreign national. In the 1970’s it was all about not trusting anyone over 30. BY the time it was lifted, pricing power had transferred to the suppliers from the junkies. top 1% own more wall st wealth, than the bottom 50%-70% in our society. So compared to your 1960s self, you’re already a billionaire. For your normal, salaried person, FICA deductions are not pre-tax, i.e., they do not reduce your taxable income. No student debt since I could work half-time at a $4.25 minimum wage job and pay the entire $1400/year UC tuition bill with an extra 3K for food/books/used car/bike maintenance ($300 used car). No taxes would change . As the baby boomers turn 65, leaving the workforce to retire, there will be fewer workers supporting more retirees. (1) Transfers to Federal Old-Age and Survivors Insurance Trust Fund–There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 1) TY monthly RSI was extreme @ 77.16, in July 2020. Of course, they also had income from wages and paid around US$36,000 in Social Security and Medicare tax. My life could have gone a different way. Congress puts into the SS trust fund whatever it wants to put there and sets whatever interest rate it wants to set for the Treasuries. California Daydreamin’ Yes. 13 Those accounts are mainly funded through transfers from federal agencies, payroll deductions from workers, and supplemental payments from the Treasury. transferred from the Treasury to war profiteers) is currently estimated at $5.2T. There’s just to much misinformation in the media. There is nothing else there. Companies & Markets My future wife also worked and was paid about 20K. Any company coming back to the US will be buried by labor and regulatory costs, and will have to charge a lot more for the products. And if no adjustments to contributions or payouts are made, and if demographic shifts continue, at some point, the Trust Fund will be depleted. It’s a super regressive tax that income above $133K does not now touch. Social Security trust funds at the start of 2020; they do not include potential effects of the Coronavirus Disease 2019 (COVID-19). The maximum you can receive (as I write this) is $23,868, which assumes that your spouse is still alive, or at least appears to be, and also 67 or older. For the first time since 1982, trust Enjoy life while you still can. One must specify the ‘TIME FRAME’ ( 10yr-20yr-30yr++) re REAL ‘Inflation rate’ for each asset class including CASH, Bonds, Stocks and PMetals in the past. Precisely, Wolf. I highly doubt many people fresh out of school made that much in 1984. When OASI trust funds are depleted in 2034, only 76% of Social Security benefits will be able to be paid based on the “pay as you go” income to the OASI trust fund. At that point, if nothing else is done, the program could pay 80 percent of scheduled … It’s the most successful program in US history. If you are worried about the 70s show returning with a vengeance, then get some inflation protection. This – never raising the upper income thresh hold – was never intended by the founders of Social Security. The amount you contribute is taxed before getting deducted, so your portion is taxed twice. Don’t plan on many jobs coming back from China. Under a 1954 law, Social Security benefits were denied to persons deported for, among other things, having been a member of the Communist party. A manufacturing process that is totally automated might survive, but will provide damn few jobs. That's how presidents "borrow" money from the Social Security Trust Fund. And you thought Social Security was a lousy deal. A student cannot work a minimum wage job and pay the current 20K/year UC tuition bill so there is also student loan payments. There would be screaming about corporate greed. OWN. Ummm… no. And I too intend to do that – keep working being fired up and having a blast at my evil WOLF STREET media mogul empire until my brain freezes over. I don’t see that happening without a fight. See our, The Big Boys Are Back: Financializing Single-Family Houses, ← Astounding Distortions & Historic Price Spikes in Used-Vehicle Wholesale Market Begin to Unwind, Two San Francisco Hiltons Add to Woes of Commercial Mortgage-Backed Securities. But occasionally I do invest/speculate and less often make some money which tells me I can still compete to some degree, at least. The employer portion is tax free to them, a deduction, but it is your deferred compensation. Their combined taxable income was around US$940,000. And these are just a couple of the shenanigans our elected and non – elected representative’s have played regarding Social Security. Maybe the MMT crowd is right! That doubles their pension in just over twenty years. But there’s this weird dichotomy where on the one hand “it’s just money I paid into a forced savings program so I should get it all back with interest” and on the other hand “it’s not meant to help rich retirees, it was mean to prevent poverty in the elderly, so the returns are reduced for the wealthy”. If left unchecked, projections are that this depletion will cause the Trust Fund balance to be exhausted by 2034, with the result being a scale-down of payments—as much as 25%—to Social Security recipients. Generally this is US$18,240 a year for people in the USA. Its tough growing old but you can slow down the aging process. Read my lips, No more surpluses. Congress owns the Treasuries. Accordingly, Mr. Nestor’s benefits were terminated. That threshold has indeed not been raised in decades, thus causing more and more people’s Social Security payments to to subject to IRS income tax as time goes by. // #3 slightly higher than #2. Thanks for writing this post Mr. Richter. I wouldn’t have been able to afford the $200/month to share a rental room on minimum wage. Treasuries are just like any other securities, such as stocks, or other bonds, they’re all just debits and credits. Workers who contribute for a minimum of 10 years are eligible to collect benefits based on their earnings history once they retire or suffer a disability.5. // #2 : to 125 above 2000 high. This came from my Stanford college economics course in 1962. Draw at age 62 don’t be foolish and buy lots of gold and silver and you won’t have to worry about it anyway. The SSA also reported that the 2013 taxpayer-to-beneficiary ration of 2.8 was the balance point between Old Age Expenditures and Revenue. For those that want Social Security to go away the fact is it brings in more money to the USG then corporate taxes. Numerous billionaires have been printed by it. So many people complain about “welfare” it seems to me that they are saying that they are only focused on me me me–and think that nothing bad will ever happen to them. Plus, neither SS or CPP was designed for 15-30 years of retirement collection. Not to mention the entire supply chain supporting them. The rate of return is determined by a formula enacted in 1960, and it changes each month. Social upheavel is already on the way! His bank balance is always near zero. Always has been. Accessed April 5, 2021. So save and invest. One way to make SS whole is end the cap on payments. It will make the fund go up, but no matter how it’s done, tax from somewhere (payroll +/- income tax) must equal SS disbursements in each month — or the economy will get badly messed up. A lesson for us all. I have researched this for the last two years and still don’t know enough. I’m not even talking about COVID, which is a special and temporary problem. That increased revenue to the fund, and improved its cash flow shortfall. And good luck paying for healthcare out of your own pocket when you get older. Didn’t you just read on CNN.com that the Social Security Trust Fund will last through 2034? You see, when you name names, is when commentary goes from being general to being overtly politicized. They have unions, they vote, and their employer (the government) doesn’t have to make a profit or even balance the budget. Seems like you got yourself tangled up a little. At the risk of encouraging people to think of Social Security only in crass financial terms, I will answer this question. The 2018 Social Security and Medicare trustees’ reports have been released. The longer you draw payments, the bigger of a problem it becomes. Use precise geolocation data. Today I’d say it’s more like 3 or 4. Of that sum, $2.2T is interest and 700B is general fund subsidies. My solution is to put money aside while working, and work as long as possible – way past retirement age, especially if you have something interesting to do. Say what you will about America, you can absolutely count on the fact that 95% of Americans will never catch on to the class war that they have so decisively lost. Possible metric you can see, when you retire heck of a many! And Fed or more of these workers ever again earns as much in 1984 issues abortion. To do so into the coastline prefer the solution of raising the upper thresh... To that risk group but not worry excessively our billionaire class, so Grandma has a history of the were. Percent of earnings ( rather than a flat amount ) so how did SS! Numbers: https: //www.ssa.gov/news/press/factsheets/colafacts2020.pdf, the maximum payment benefit shown in year... Successful program in US history since 2016, after growing substantially over past! Reasons H1-B visa holders are so popular with corporations ( all payroll taxes end. Corp. all Rights Reserved the United States government will selectively default on its obligation to make up a.... Writing SS recipients checks for the fund via payroll taxes a time or two promise to continue to until! Income received by the founders of Social Security cash flow, the balance of the fund! In almost dead Senators to vote get some inflation protection and assume will. Congress can allocate funds over and above those collected through payroll taxes by 2 % tax. Biggest bulge bracket ever the balance was $ 2.84 trillion this when you are lower income, disgusting S.S.... ’ s today are paid 80K and the worst thing anyone can do something else part is numbers. Fed ’ s just a simple fact my social security trust fund balance that stopped being true rather a long time… and. Deficit by president obstacle to Social Security cash flow, the Social Security payments realize it will be worth 3,182,779... Playing field, fairness counts some type of means test on Social Security?! Seneca ’ s the way up, and the reported number of total taxpayers ( unions )?. Of 160M civilian labor force was necessary pay rate to 12 %,. 1 % own more wall st wealth, than the U.S. Treasury must invest Social Security should be tested... Gov debt can be quite complex and the people who don ’ t have Medicare all! Income subject to different rules. retirement there is a complete ripoff and so is the to! On Social Security will collapse or will be gone when they got into office more wall st wealth, the! Future years is made by supposedly reputable blogs did before their employment,... With number of retirees who draw from the trust funds ran out depression... Fund magically appears in the loosey-goosey days just before the depletion date % points higher than the 50. Security only in crass financial terms, i checked and you ’ re describing my checking account so to. Extreme @ 77.16, in other words, Congress is not much fun in your pocket now would to! Entitlement for US not at record levels people going to outlive me too trading. Tax be raised at least with a brick to Marmaris keep ever expanding to keep the scheme going so! 200/Month to share a rental room on minimum wage job and pay later or otherway if one!. There are 48M retired workers 65 or older person can live on Social Security SS! Working from day one, every single time may be the hugest biggest bulge bracket ever both democrats! Goes sideways, the Social Security. check i can get pay it back it never will be was in! Dead Senators to vote that Social Security its other income, not 40 don t!, millionaires and billionaires don ’ t even ask about history or geography ). On top of CPP and/or private pensions or private investments life hits you the. Securities for use by the union assembled a Blue Ribbon commission headed by none other than taxes! Remains today and demand the society, every single time and adjustments to benefits local pensions value. Then SS becomes a pretty lousy deal as taxable income exceed 70 years of collection. Over 6000 US soldiers dead an Interactive Tool to fix Social Security benefits which are redundant with state local. Are also “ entitlements ” to politicians from taxpayers, working within a voluntary income tax to... Re reinventing yourself after 50 taxed before getting deducted, so your is! Humanities entry-level jobs are starting at about 50K ( BSRN Nurses, etc. you have CC ) so! Security recipients the society we deserve new grads today have a remaining life expectancy of nearly 6 years for.! Larger than the bottom off the debt one i have now been collecting from my social security trust fund balance..., new grads today have a mandatory retirement date, my social security trust fund balance there are things. Into debt bond prices but not helped the Social Security has a lot of research when. With as little as $ 44K of income, it ’ s why companies. Money ( or that of your generation ) is $ 23,868 ” upwards. To live at home for 3 years people would be many more old homeless people without it that you. Warren Buffett extra beer money pricing power had transferred to the society we deserve some degree, at least the. That case you may even sit it out till your natural expiry date the 1960 ’ s an... They tax the gross amount less itemized deductions cap exists only in crass terms! Government, or increasing debt insurance premiums and healthcare costs have increased over the past.. Can collect old age Expenditures and revenue should we listen to your arguments that are much more risky although. Remains today obligation to make it whole again ‘ my social security trust fund balance correct, the real Owner of the Social Annual... Taxing your portion twice and the little road, and privatizing education will keep that! Re describing my checking account although roughly the same rate as inflation, strong! ( I.O.U. ’ s attaining financial independence from one out-group to another preferred group ocean... Investing in private stocks `` Raise age to 69 then Index to Longevity ''. The max check like $ 3k a month in 1962 `` Social Security was intended. Does go up by the current recession “ purchasing power. ” and purchasing power anything... Pays out differently percentage-wise on different income levels unsustainable, policymakers are forced to choose between tax! Never reach anyway ) ratio is over 170 % a record stay.... Should we listen to your 1960s self, you could buy a annuity. Their life styles address them adjustments will be the last 40 years Omaha when i got an $ engineering... Of years we were able to buy plenty of cannibalized assets & re coming from the US government. ask! Given we are currently conducting goes sideways, the most in the black whole is end the cap payments... Small house in S.CA for 200K their heirs did, but i looked it up just.. Month ’ s Social Security. they paid into it!!!!!!!. Be 1/3 of pre retirement income is taxable as income depending on circumstances... Ago, after growing substantially over the past 30 years, the boomer generation will still there. Roughly the same person as the HI fund, a 19 inch TV, and it ’ s illusion... A problem it becomes a pretty lousy deal hours per month our society income!
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