Serious question about social security solvency.

[MontanaMama]

Maybe some of you are in my shoes or some version of my shoes and have some thoughts on this…

I 60 and my husband is 63. We are recently retired. We had planned to take money from our investments for living expenses until we are 67 and can draw our full social security benefits. At that time we planned to ratchet back what we take from our investments.

Reputable economists have said that with the felon’s economic “plan” and project 2025, SS could be insolvent in 6 years.

Should we take our SS early in the hopes of getting something out of what we’ve put in over our lifetimes or should we gamble that it might still be there?

If fascism begins to take hold, I don’t believe we can count on a free and fair election in 4 years…but maybe? This too seems like a gamble.

Anybody else thinking about these things?

[Scrivener7]

1. I'm definitely thinking about it, and waiting to see the answers to this. I had planned to wait too, but

now I'm wondering if those already taking it will be grandfathered in.

[MontanaMama]

3. Okay. Good.

I am glad this won’t be a useless question.

[nitpicked]

4. This may not be the case

"Fairness", etc.

[Scrivener7]

6. Right. "Fairness" will be one of the Newspeak words.

[Fiendish Thingy]

13. If SS becomes insolvent, benefits for present retirees will be reduced.

There won’t be enough money to “grandfather” anybody.

They will reduce benefits for current retirees, and shift contributions of current workers to a privatized investment system.

[nitpicked]

2. My understanding

Is that without any changes, SS will be, in several years' time, be paying out more than then-current workers will be contributing.

Thus the estimates at that point, SS payments will be cut back by one-quarter to one-third of current levels.

[MontanaMama]

5. So taking it early...

Might be advisable since benefits would be cut anyway? Getting some of what we contributed is better than nothing?

[Elessar Zappa]

7. I would maybe consider waiting.

I think if they cut SS, they’d cut it for younger people, not people about to retire. But I could be wrong, so consider carefully. Sorry I don’t have a better answer.

[MontanaMama]

14. I appreciate your comment.

I have a call into my financial advisor and hope to hear back soon. When I do, I’ll share that info.

[CousinIT]

8. YES. I was set to retire in 2-3 years. Now, I have no idea what I should do

Should I just go ahead as planned and hope some half-sane person (congress dominated by MAGAts and billionaires who control our government and don't give a damn since it doesn't affect them) can get the petty tyrant to do something to stave this off?

I have no freaking idea what to do.

[MontanaMama]

15. Glad I am not the only one

asking these questions. I was afraid to even post this thread…thinking I’d be told I was being crazy.

[Yavin4]

9. All government services and payments are up in the air.

No one knows how any of this will play out bc the clown show that is the Trump admin is in charge. I really don't know what to tell anyone to do other than slow your spending.

[VMA131Marine]

10. Insolvency doesn't mean what you seem to think it does

when it comes to Social Security. Insolvency means that the Social Security trust fund is exhausted and benefits then have to be paid out from the money coming in from payroll taxes. If that happens, it’s estimated that SS would be able to 65%-70% of benefits owed. So there is a question about how that would be done.

I believe, as the program stands now, everyone’s benefits would get reduced by an equal percentage to balance revenue versus payments. But a means testing regime could be implemented so that people with retirement income from other sources would get a bigger reduction than those with no supplemental income.

The other thing to think about is when to start taking SS benefits. There’s a substantial penalty for taking SS benefits at 62 vs 67 or 70 but if you think your benefits are going to be reduced by 30%-40% in 6 years then it might make sense to start taking benefits now, if you are eligible, to get the most money back out of the program. That’s a bit of a gamble because you can’t know how the party in power might act to stabilise Social Security’s finances. If Dems have control then I would be fairly confident that they would work to restore benefits as much as possible to the values promised. But there are Republicans who are pretty adamant about doing away with SS altogether. They are probably in the minority (think Freedom Caucus) and eliminating SS would be wildly unpopular but who knows what they might be capable of.

[MontanaMama]

16. Yes.

I am aware of the penalty for taking it early and had planned to wait until I was 67. If the program won’t exist as it does today due to the trump clown show, it may be worth shouldering the penalty to get some of what I have paid in. It all seems like a gamble right now.

[Klarkashton]

11. First they will raise the cap on yearly contribution limits

And next they will raise the full retirement age. I think the 25 percent cuts shit is a scare tactic actually.
I've been hearing people saying 'i know it won't be there for me when I retire" since the 1970s. Those people lived through retirement with SS and are now mostly deceased.

[StarryNite]

23. But we've never lived under authoritarian rule before.

This is going to be a whole different ballgame.

[Silent Type]

12. We've known for 20 years that the SS fund would be in a deficit some time in the 2030s requiring an automatic cut

of around 20% if something is not done. You can read the SS Trustees Report from every year.

Obama tried to address this, but was bashed by everyone including Democrats who called his effort the "Catfood Commission," even though it would have increased benefits to those at the lower levels.

My guess is that we'll continue to kick the can down the road until it's an emergency. Gawd help us if GOPers are in charge.

We'll continue to tout "remove the Cap" and everything will be OK, but that won't pass Congress even if Democrats are in control. So, that won't happen, although some minor adjustments could easily extend things a few decades.

To your question-- Each year one waits to draw SS adds about 8% to your annual benefit up to age 70.

I'd wait as long as possible to apply for SS. But I get people who take it at 62, either out of need or thinking it's better to get SS as soon as possible. There are apps that help calculate that, but it still comes down to need and beliefs about the future and your life expectancy.

[valleyrogue]

17. SS can't go 'insolvent." That is a right-wing LIE that's been peddled for 40 years.

Last edited Thu Nov 7, 2024, 12:42 PM - Edit history (1)

No federal program can because of something called sovereign currency. Furthermore, any alleged "shortfall" can be readily fixed by using the general fund. If there was really "insolvency," Congress and the White House sure don't act like they are in a panic about it. These quack economists pulled this same shit about Medicare going "broke" by 2016. It is still here.

People need to stop believing right-wing lies.

ETA: "Sovereign currency" is the fact the federal government can print money. States of course can't do it. THAT is why SS can't go "broke." We haven't been on the gold standard for nearly a century.

[MontanaMama]

18. I disagree that this is a RW lie.

Reputable economists backing the Harris economic plan warned that SS would become insolvent if tRump was reelected. I think we can all agree that the find would face problems at some point, but those changes could be escalated with this election and the onset of project 2025.

[valleyrogue]

19. It IS a right-wing lie. Good grief.

The Cato Institute back in the early 1980s peddled the SS is going broke LIE as a way to undermine the program and create a generational divide. They took one possible scenario from three, the most pessimistic, about SS funding when the boomers retired and ran with it.

It was all Koch-inspired LIES. Koch and likeminded ilk in corporate America hate SS because of the fact they have to pay half of the FICA tax. Meanwhile the Institute knew it was lies.

The Concord Coalition, a neolib outfit, also peddled the "insolvency" LIE.

We are not having this discussion anymore. You can look it up where the source of the "SS is going broke" LIE originated.

There is no mad rush to "fix" SS because of what I said.

[Silent Type]

22. I guess the SS Trustee annual reports under Obama, trump, Biden are wrong.

[mitch96]

20. My fear that the powers that be will "privatize" SS. Then the corporate raiders will sell it off piece by piece. nt

[MontanaMama]

21. This is a well founded fear.

Rethugs have been threatening to do this for years. It’s not, as stated above, a RW lie. All of these fears should be talked through with facts as we have them.