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Budget deal would nix popular Social Security claiming strategies
Investment News ^ | Oct 28, 2015 | Mark Schoeff Jr.

Posted on 10/28/2015 3:35:55 PM PDT by taildragger

A budget agreement reached by congressional leaders and the White House would kill popular Social Security claiming strategies shortly after the measure becomes law, cutting off payments in midstream for beneficiaries, according to experts.

(Excerpt) Read more at investmentnews.com ...


TOPICS: Breaking News; Business/Economy; Government; News/Current Events
KEYWORDS: boehnerbudgetdeal; budget; socialsecurity
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To: babble-on
"Yes all good Republicans should be against entitlement reforms!"

Oh no, debate all individual facets of SSI Reform ( and all entitlement reform ) on the well of the "Floor" of the House. Do not pass this crap in the dark of night, scum bags one and all.

21 posted on 10/28/2015 3:57:19 PM PDT by taildragger (Not my Monkey, not my Circus...)
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To: George from New England; napscoordinator

This raised the SSDI share of the payroll tax by .57%, reducing the amount going to ‘regular’ Social Security.


22 posted on 10/28/2015 3:58:00 PM PDT by mrsmith (Dumb sluts: Lifeblood of the Media, Backbone of the Democrat/RINO Party!)
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To: taildragger
“This change is going to promote people to take their benefits earlier,” when they are less generous, Mr. Meyer said. “The middle class are the ones who are going to get hurt.”

Anything to screw the citizens ... while handing out wads of cash for illegals and so-called refugees.

23 posted on 10/28/2015 3:59:19 PM PDT by smokingfrog ( sleep with one eye open (<o> ---)
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To: taildragger

Well, we all know SS is broke, Medicare is broke and the government is broke despite what the government and media have been claiming. So are we surprised really?


24 posted on 10/28/2015 4:00:29 PM PDT by MulberryDraw
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To: dp0622
isn’t an entitlement something you never paid into?

No, an entitlement is a benefit provided by law. It has no connection to whether you "paid into it".

And once again, I hate bursting this bubble, but here goes:

Social Security has no contractual obligation to you. Congress can change the law to reduce, increase, or even cut off your benefits completely, and the only recourse you have is to vote against them.

This is settled law: back in the 50's, Congress eliminated benefits for a small class of people. A guy that was already collecting benefits found himself cut off. He sued, it went to the Supreme Court, he lost. You can look up the case: Flemming v. Nestor.

i figured the lump sum amount my mother would have if she invested the money she put into SS.

The ratio of the value of SS benefits vs. the value of SS contributions varies based on several factors:

  1. The starting age of contributions. The tax rate has increased quite a bit from the first year.
  2. The age the recipient passes away (obviously).
  3. If there is a non-working spouse (that increases benefits 50%).
  4. The average monthly indexed earnings, over the contributor's career. If it's below the median income (about $50,000 in 2014), they tend to do pretty well. But, if it's above the median income, they tend to get a crappy deal.

I've gone through the calculations myself, using real numbers (not hypothetical): presuming that I would have bought long-term US Treasury Bonds each year, at the prevailing dividend rate. Then, I would hold them to maturity, and reinvest the dividends each year.

This approximates the return in the Social Security Trust Fund, which is invested in a special type of Treasury Bond, paying the market dividend rate.

My average indexed monthly earnings is above the median, and I calculated that I'd have about $1 million now, and $1.5 million by the time I start taking Social Security benefits.

25 posted on 10/28/2015 4:02:29 PM PDT by justlurking
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To: sparklite2

I will never understand how people accept that these wealthy people paid into it over an entire career at the point of the gun, and likely paid much much more into it than average. Now their benefits are cut. Class warfare is so easy. People who are forced to pay in should get the benefits promised no matter what their income.


26 posted on 10/28/2015 4:03:48 PM PDT by ilgipper
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To: microgood

My wife is not eligible to receive a spousal benefit from my SS because she receives a government pension and if I die she would get a pittance of survivor benefits because of a law passed to cut out double dippers.


27 posted on 10/28/2015 4:04:30 PM PDT by AU72
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To: justlurking

thanks for clearing up entitlement. boy, that’s horrifying news for me. and many others who dont know,

i’m gonna go taste the cat’s food just in case.

i hate this government

and SS doesn’t go into default in 2033 or whatever. That would mean that there’s roughly 16 or more trillion in a fund somewhere NOW, held for only SS payments.

at least that one i know :)


28 posted on 10/28/2015 4:09:04 PM PDT by dp0622
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To: taildragger

“... in order to prevent individuals from obtaining larger benefits than Congress intended,”

Retirees aren’t gaming the system if they’re abiding by the rules Congress created. If Congress did not want this scenario to develop, they shouldn’t have put those rules into place.


29 posted on 10/28/2015 4:10:58 PM PDT by moovova
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To: dp0622
and SS doesn’t go into default in 2033 or whatever.

Social Security won't default. That's scare tactics.

What WILL happen, if nothing is done: benefits will be reduced by about 23%, across the board.

That's the estimate of the level of benefits that can be funded by the payroll taxes collected at that time, once the Trust Fund is exhausted. The SSA can't borrow money, so they have to reduce benefits.

That would mean that there’s roughly 16 or more trillion in a fund somewhere NOW, held for only SS payments.

The trust fund only contains the excess taxes collected above what was needed to pay benefits for the past few decades. Almost all of it was paid to your parents and grandparents. And, most of your benefits will come from taxes levied on your kids and grandkids. That's they way it has always worked, and thanks to demographic changes -- that's why it isn't working.

Benefits started to exceed payroll taxes a couple of years ago (about 4 years earlier than planned, thanks to the recession). So, the Trust Fund is now being drawn down, and redemptions are coming out of the general fund.

30 posted on 10/28/2015 4:15:22 PM PDT by justlurking
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To: taildragger

They should first go after all the double-dippers in government—local, state and federal who are bankrupting treasuries across America. Don’t say it ain’t so, we’ve all read the blood pressure-raising stories. What makes them any better than the poor schlub on minimal retirement or honestly-granted disability benefits?


31 posted on 10/28/2015 4:15:43 PM PDT by W. (I piss fire and acid upon the militant muslims as they pray to their baby-raping god!)
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To: ilgipper

Am I mistaken, or was SS withheld up to a maximum total earnings limit per year? I’m pretty sure that’s the case, and would tend to favor, not discriminate against the wealthy.


32 posted on 10/28/2015 4:16:25 PM PDT by sparklite2 (All will become clear when it is too late to matter.)
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To: taildragger

Republicans are pulling out all the stops so they can go back to Minority ,the only problem is the stupid voters keep giving them more seats every election


33 posted on 10/28/2015 4:17:11 PM PDT by butlerweave
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To: ilgipper
I will never understand how people accept that these wealthy people paid into it over an entire career at the point of the gun, and likely paid much much more into it than average.

Actually, the benefit formula has ALWAYS been skewed to benefit low income, and screw the high income taxpayers.

Look up how the Primary Insurance Amount (PIA) is calculated, and you'll see how.

34 posted on 10/28/2015 4:17:31 PM PDT by justlurking
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To: Paladin2
Absolutely.The concept of giving hard earned money to people who by law shouldn't even be here,is appalling.
35 posted on 10/28/2015 4:19:31 PM PDT by Farmer Dean (stop worrying about what they want to do to you,start thinking about what you want to do to them)
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To: justlurking

its funny what trust fund means to the gov and what it means to the average person.


36 posted on 10/28/2015 4:21:15 PM PDT by dp0622
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To: Bubba_Leroy

Correction....you haven’t been paying into it.....it’s been taken from you.


37 posted on 10/28/2015 4:21:28 PM PDT by ealgeone
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To: sparklite2
Am I mistaken, or was SS withheld up to a maximum total earnings limit per year? I’m pretty sure that’s the case, and would tend to favor, not discriminate against the wealthy.

No, the problem is on the benefit calculation.

The payroll tax is flat, up to the limit each year.

But, the benefit calculation is NOT flat. Depending on where you are on the income scale, every additional dollar of additional income (actually, average indexed monthly income over your working lifetime) results in 90 cents, 32 cents, or 15 cents being added to your monthly benefit.

So, the higher your average income, the percentage replaced by your Social Security benefit is lower. SS has always been effectively "means-tested".

Search for "Primary Insurance Amount" or PIA to see the details. The Social Security administration has a webpage about it, but there are many others that explain it as well.

38 posted on 10/28/2015 4:21:49 PM PDT by justlurking
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To: dp0622
its funny what trust fund means to the gov and what it means to the average person.

The trust fund is real -- it's just invested in the equivalent of long-term US treasury bonds. Until Obama screwed the pooch, US Treasury bonds were considered the safest investment in the world.

But, think about what would have happened if the SSA had invested it elsewhere. Congress would have never let them do it on their own: there would have been all kinds of earmarks and prohibitions. It would have been crony capitalism at its worst.

39 posted on 10/28/2015 4:24:36 PM PDT by justlurking
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To: taildragger

Yet the welfare class remains untouched.


40 posted on 10/28/2015 4:32:04 PM PDT by Red in Blue PA (war is peace, freedom is slavery, ignorance is strength, obama loves America)
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