Social Security Thoughts

**disneysteve** · 12-18-2017, 12:54 PM

I've never included SS in my retirement planning because I don't know what SS will look like when I retire. I expect that it will still exist but possibly in an altered form. There may be means testing so that those of us who have been responsible and saved money will be penalized and see lower benefits. Or maybe benefits will be cut across the board to stabilize the system. Or something else entirely.

If we get SS, that's great. If not, we'll manage okay without it.

**corn18** · 12-18-2017, 02:45 PM

Originally posted by disneysteve View Post

I've never included SS in my retirement planning because I don't know what SS will look like when I retire. I expect that it will still exist but possibly in an altered form. There may be means testing so that those of us who have been responsible and saved money will be penalized and see lower benefits. Or maybe benefits will be cut across the board to stabilize the system. Or something else entirely.

If we get SS, that's great. If not, we'll manage okay without it.

I use the flexible retirement planner and run scenarios with and without. I plan to delay to 70 as I don't need it and I prefer the longevity insurance for my wife.

I do think they should look at raising FRA. The average life span is going up and FRA should reflect that.

As for means testing, I would be ok with that if they let me pick who gets it. Send me a list of 10 candidates and I will interview them and decide who were the deadbeats and wasted their money and who worked their butts off but might not have been given the same opportunity as others. Then direct deposit my check into their checking account and keep the government from shaving 20% off the top to cover their non value added stuff. Short of that, it's my money, I earned it, keep your mitts off.

**disneysteve** · 12-18-2017, 03:14 PM

Originally posted by corn18 View Post

I do think they should look at raising FRA. The average life span is going up and FRA should reflect that.

I'm not entirely sure I agree. Just because people are living longer doesn't necessarily mean they can continue to work full time in their careers longer. Physical ailments, dementia, and various other issues can necessitate cutting back or leaving the workforce entirely in your 60s or even sooner. It's great to live to 90 but many of those people spend their last 2 decades or more in no condition to work a full time demanding job.

**Thrif-t** · 12-18-2017, 03:43 PM

I think social security will always be around in some form just to keep a civilized society. Can you imagine all the unrest if we had no safety nets for people? I can't imagine that it would ever go away for the neediest of the needy.

This is what is projected to happen the year after I turn full retirement age:

"Based on the Social Security Administration's 2015 report, the trust is on track to be depleted in 2034, at which point the system will be able to pay 79% of benefits from ongoing tax revenue. That projection is expected to shrink to 73% by 2089.

So we still should get "something".

**cooliemae** · 12-18-2017, 08:13 PM

My DW and I are trying to put as much into our 401k as possible because we don't believe SS will be around as it looks today. That being said as a federal employee the idea of SS diminishing in value is scary because a third of our retirement is based on SS.

When the old Civil Service Retirement System (defined benefit plan) was replaced with the new Federal Employee Retirement System, Congress decided they would no longer offer the defined benefit plan and moved to a hybrid system. One Third of our retirement is a defined benefit, the next third is a 401k match up to 5%, and the last third was SS.

**Like2Plan** · 12-19-2017, 05:16 AM

SS is already means tested. If you have income above a certain level, your SS is taxed (up to 85%). https://www.fool.com/retirement/gene...y-taxable.aspx

I believe SS will be there in some form for the current generation. I noticed that some of the loopholes have recently been closed and there have been some changes made to make the system more viable long term.

The most popular age to sign up for SS at age 62 even though there is a huge permanent reduction in payments. In this article from 2015, it was reported that this trend has been slowing down. US News The Most Popular Ages to Sign Up for Social Security Jun 1 2015

**phantom** · 12-19-2017, 06:25 AM

When I was younger, I didn't expect to get any social security. I'm 35 now, and after many years of hearing about how it was going to disappear and not seeing that happen, I am more inclined to believe that I'll get something out of it. Perhaps my feelings are a bit backwards and I should assume that since they've let it go so long without sweeping change it's more doomed than ever.

In any case, I like to consider what my retirement will look like both with no social security and with reduced social security. But, I figure that whether or not I get social and exactly how much I'll get won't really matter until I'm really close to retiring. I'm stashing away as much as I can comfortably afford right now, and social security is just one of many variables that will determine when I can ease off a bit.

**Fishindude77** · 12-19-2017, 06:35 AM

I never planned on it, but now at 58 it looks like a cinch I'm going to get some of it.

I don't see SS getting eliminated, but I could definitely see the minimum ages changed and or the structure of the whole program changed significantly in the next decade or so. It would be political suicide for any politician to try to eliminate SS.

**bjl584** · 12-20-2017, 07:43 AM

I don't count SS in any of my financial planning.

Even if it doesn't exist or is altered when I am ready to collect, I don't mind paying in. Both my parents were able to retire due to being able to draw on SS.

My dad lost his job due to the plant that he worked at closing.
My mom was forced out of her job.

Without SS I don't know where they would be right now.

**Thrif-t** · 12-20-2017, 10:18 AM

Originally posted by bjl584 View Post

I don't count SS in any of my financial planning.

Even if it doesn't exist or is altered when I am ready to collect, I don't mind paying in. Both my parents were able to retire due to being able to draw on SS.

My dad lost his job due to the plant that he worked at closing.
My mom was forced out of her job.

Without SS I don't know where they would be right now.

How nice! More people need to have this unselfish attitude, the word would be a way better place.

**snafu** · 12-20-2017, 01:50 PM

The research suggests that about 22% of those in the working world seem to be actively contributing to a retirement plan. Information suggests SS unfunded liability seems steadfastly available through those born in 1972.

A quick review of history makes it clear that SS was created due to desperate depression conditions of 1935. The access age set was based on average male age expectancy 58. 1970's - 1990's were the decades of defined benefits when the employer took the responsibility and risks associated with providing retirement benefits, deducting contribution and often using those sums for their own purposes creating a major, unfunded liability, tax deduction.

According to TIAA, risk was relinquished to employees but by 2001, employees preferred to sign on to an employer organized plan as a staff benefit, particularly if the employer offered a small match. I wondered what the figures would be if employees used a figure of 17% monthly contribution to a preferred/chosen allocation to a low fee fund like those offered by Vanguard. While the burden of risk would be the employees, there would be not issue of vesting, change of employment complication etc. All you need care for is . allocation appropriate to age and market rules.

**tripods68** · 12-20-2017, 05:34 PM

I think social security will still be there when I turn age 62 (I am 49 now); therefore I still include numbers in my financial planning (as part of my due diligence). Unless the law is changed under Trump that social security will no longer be there when I retire (there seems to be no particular appetite to change the status quo, or the political "will" to change at this time) social security will still be there. Of course, this can change real quick

**disneysteve** · 12-20-2017, 06:55 PM

Originally posted by snafu View Post

The access age set was based on average male age expectancy 58.

I often point this out in SS discussions. The "retirement age" was set at 65 at a time when average life expectancy was only 58. SS was never intended to support retirees for 2-3 decades. It was meant to serve as a safety net for those who beat the odds and lived that long. The problems arose when the life expectancy rose and rose and rose. Today, a man who reaches 65 can expect to live to 84 on average. If he starts collecting SS at 62, that's 22 years of checks, not at all what was expected or intended when SS was created.

**LivingAlmostLarge** · 12-20-2017, 10:33 PM

I'm 38 and I think I'll get something but not planning on it. I wonder what I'll really get though?

Social Security Thoughts