Here's the timeline for Social Security benefit cuts

[corbe]

Here's the timeline for Social Security benefit cuts

The first in series of events is expected to occur as soon as next year

Fox Business

For more than eight decades, the Social Security program has played a critical role in providing a financial foundation for our nation's retired workers. According to the Centers for Budget and Policy Priorities, it singlehandedly pulls more than 15 million retirees out of poverty every year.

But it's also a program that's facing serious financial hurdles in the years that lie ahead. For each of the past 35 years, the Social Security Board of Trustees report has cautioned that there wouldn't be enough revenue collected over the long run (defined as the 75 years subsequent to the release of a report) to cover all projected outlays, including cost-of-living adjustments. While this doesn't mean bankruptcy or insolvency, it does imply that Social Security benefit cuts may become necessary to maintain program solvency.

How big would these benefit cuts be? Though the answer tends to change every time the U.S. economic outlook is altered or broad-sweeping fiscal measures are introduced, the 2020 report calls for a possible 24% across-the-board reduction to retired worker and survivor payouts. That's not negligible.

The big question is, when might this happen? Let's take a closer look at the timeline of events that could lead to a significant Social Security benefits cut.

2021: The first year of net cash outflows

<..snip..>

https://www.foxbusiness.com/money/social-security-benefit-cuts-timeline-covid-unemployment-retire

[catfish1957]

And deficit spending balooning to $29T has nothing to do with it.  (/s) 

[XenaLee]

And deficit spending balooning to $29T has nothing to do with it.  (/s) 

You better hope the rats don't get power again in November.   They will immediately rescind the corporate tax cuts, reinstate stranguling regulations on business, tax the literal HELL out of everyone that breathes (mask or no mask) and will make shock-sure the US economy never recovers enough to fulfill those social security "promises to pay" for folks that actually did pay into the system... while giving away free $$$ to all those that never paid a dime.

[libertybele]

Not to worry ... COVID and the upcoming Swine flu will be killing off a  percentage of those receiving SS benefits.  So far 129,000 deaths have been reported in the U.S. -- FL, TX, CA, cases and deaths continue to rise.  IF these Chinese viruses don't have the desired outcome, there will be another.

[XenaLee]

Not to worry ... COVID and the upcoming Swine flu will be killing off a  percentage of those receiving SS benefits.  So far 129,000 deaths have been reported in the U.S. -- FL, TX, CA, cases and deaths continue to rise.  IF these Chinese viruses don't have the desired outcome, there will be another.

It's called culling the herd.   Only problem is... it's culling the wrong damn herd.   

[Jazzhead]

Not to worry ... COVID and the upcoming Swine flu will be killing off a  percentage of those receiving SS benefits.  So far 129,000 deaths have been reported in the U.S. -- FL, TX, CA, cases and deaths continue to rise.  IF these Chinese viruses don't have the desired outcome, there will be another.

I've thought about this as well.  Premature deaths represent actuarial gains to a pension plan.

[catfish1957]

Another pretty significant point to bring up.  This is just another example of why and how everyone needs a significant ancillary nest egg for  retirement planning.  One thing not brought up in this article that I predict will be the indexing of payment based on income.  Example: if your annual retirement investment income is over say arbitrarily between $200 - $300 K, the government may decide to reduce, and based on their scales, possibly eliminate a SS payment for you all together.  This is already happening on a smaller scale, so  don't be suprised when the dims take over and make higher earners pay. 

Which will be a crime, and a precedent for  the first wave of wealth confiscation.

[IsailedawayfromFR]

Another pretty significant point to bring up.  This is just another example of why and how everyone needs a significant ancillary nest egg for  retirement planning.  One thing not brought up in this article that I predict will be the indexing of payment based on income.  Example: if your annual retirement investment income is over say arbitrarily between $200 - $300 K, the government may decide to reduce, and based on their scales, possibly eliminate a SS payment for you all together.  This is already happening on a smaller scale, so  don't be suprised when the dims take over and make higher earners pay. 

Which will be a crime, and a precedent for  the first wave of wealth confiscation.

That is why I never advised anyone to wait as long as possible to begin taking benefits - One never knows when one will be targeted as being 'too rich to need them'.

[Gefn]

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[IsailedawayfromFR]

The more serious issue is missing here: The confiscation of the largest source of untapped money of $17 trillion in IRAs and 401ks.

Folks, the government will come after that with a vengeance as you see it believes it is their money because no taxes have been paid on it as yet.

Watch confiscation take place for higher accounts and SS 'credits' be given in order for one to continue to receive SS.

It will happen, so convert as much of your pre-tax money to post-tax.  It has been my game plan since I retired 5 years ago.

[mystery-ak]

24% across-the-board reduction to retired worker and survivor payouts.

Does anyone really believe this will happen...no one on Cap Hill will ever vote for this and survive politically...

[AL]

Just my take on things.  There has been problems with this whole concept of government running a pension plan for workers since the SSA was created.  Government can not run anything, their track record speaks for itself.  There are so many skilled financial management companies, which have been around for years, that should have been used for worker pensions.  All they had to do was make the payments made by a worker to a pension fund of his own choosing a number subtracted from taxable income up to a limit.  Taxes need only be collected for military, that sets the limit, everything else government does that requires tax revenue should be privatized or better yet eliminated, especially if there is unions involved.

[IsailedawayfromFR]

Just my take on things.  There has been problems with this whole concept of government running a pension plan for workers since the SSA was created.  Government can not run anything, their track record speaks for itself.  There are so many skilled financial management companies, which have been around for years, that should have been used for worker pensions.  All they had to do was make the payments made by a worker to a pension fund of his own choosing a number subtracted from taxable income up to a limit.  Taxes need only be collected for military, that sets the limit, everything else government does that requires tax revenue should be privatized or better yet eliminated, especially if there is unions involved.

SS was never meant to be a pension plan.  There are no assets in it, as payments into it are immediately made part of the US Treasury and are not reinvested.

It is simply the greatest Ponzi scheme in history and will eventually collapse as it should.

BTW, welcome to TBR.

[catfish1957]

Does anyone really believe this will happen...no one on Cap Hill will ever vote for this and survive politically...

After the smoke and mirrors tactics mentioned above, the only options will be (1) cut benefits, or (2) run the debt up to but not exceeding infinity.  But you are right.....   Low lifes in congress will do anyting to insure their job.

[IsailedawayfromFR]

After the smoke and mirrors tactics mentioned above, the only options will be (1) cut benefits, or (2) run the debt up to but not exceeding infinity.  But you are right.....   Low lifes in congress will do anyting to insure their job.

Curious on why do you not believe that another option will be to seize other retirement assets like IRAs or 401ks to maintain benefits for the rest? @catfish1957

[catfish1957]

Curious on why do you not believe that another option will be to seize other retirement assets like IRAs or 401ks to maintain benefits for the rest? @catfish1957

I do beleive that, and  I have stated that many times here.  In addition  I have cited several  times the secret democratic caucus that first discussed this option back in either 2009 or 2010.  The text of that  basically was confiscating all 401K and IRAs and adding them into a combined social security system for all, and distirbute it equitably based on need.

So let me clarify...   I beleive the options i discussed earlier in thread are by the nature for the next 3-10 years.  I don't think the dims will take the scorched earth approach until about 10 years from  now once they have fully locked up enough of the demographic base to accept and perpetuate the idea.

[IsailedawayfromFR]

I do beleive that, and  I have stated that many times here.  In addition  I have cited several  times the secret democratic caucus that first discussed this option back in either 2009 or 2010.  The text of that  basically was confiscating all 401K and IRAs and adding them into a combined social security system for all, and distirbute it equitably based on need.

So let me clarify...   I beleive the options i discussed earlier in thread are by the nature for the next 3-10 years.  I don't think the dims will take the scorched earth approach until about 10 years from  now once they have fully locked up enough of the demographic base to accept and perpetuate the idea.

Got it.

Note to self:  Get out of IRAs by 2030

[catfish1957]

Got it.

Note to self:  Get out of IRAs by 2030

 

Just an estimate.  The 2030 date kind of corresponds with next census, reflecting a likely blue shift in several states. 

If it looks imminent, I might just cash them in, and take the one time massive tax hit.  At least I will have the principle (and principals) for that matter of not letting them getting their meat hooks on all of it. 

[IsailedawayfromFR]

Just an estimate.  The 2030 date kind of corresponds with next census, reflecting a likely blue shift in several states. 

If it looks imminent, I might just cash them in, and take the one time massive tax hit.  At least I will have the principle (and principals) for that matter of not letting them getting their meat hooks on all of it.

Yep, am like you thinking it is too big and tempting a stockpile of cash available for the government to tap into.

It is also a reason why I chose to never open a Roth IRA.  I don't trust the promise they will not tax withdrawals from it, anymore than Bush's "Read My Lips".

The government believes 100% of all personal assets is available to them to seize; however, there is a priority for political reasons on which assets to take first.

I think they begin with the money sitting in pre-tax accounts as no taxes were ever paid on them.  By govenment thinking, they 'won' a piece of this one already.

Since that pie is rather big, it will be a long time before they confiscate post-tax wealth, and will nibble on it with higher tax rates initially.

Since there are few truly wealthy, this is one easy target as there are few votes there to worry about pissing off.  So all they do is to draw the line of who is considered 'wealthy' down as far as the feel necessary without undue sacrifice of votes.

So who is 'wealthy' on this chart?

[LegalAmerican]

Here's the timeline for Social Security benefit cuts

The first in series of events is expected to occur as soon as next year

Fox Business

For more than eight decades, the Social Security program has played a critical role in providing a financial foundation for our nation's retired workers. According to the Centers for Budget and Policy Priorities, it singlehandedly pulls more than 15 million retirees out of poverty every year.

But it's also a program that's facing serious financial hurdles in the years that lie ahead. For each of the past 35 years, the Social Security Board of Trustees report has cautioned that there wouldn't be enough revenue collected over the long run (defined as the 75 years subsequent to the release of a report) to cover all projected outlays, including cost-of-living adjustments. While this doesn't mean bankruptcy or insolvency, it does imply that Social Security benefit cuts may become necessary to maintain program solvency.

How big would these benefit cuts be? Though the answer tends to change every time the U.S. economic outlook is altered or broad-sweeping fiscal measures are introduced, the 2020 report calls for a possible 24% across-the-board reduction to retired worker and survivor payouts. That's not negligible.

The big question is, when might this happen? Let's take a closer look at the timeline of events that could lead to a significant Social Security benefits cut.

2021: The first year of net cash outflows

<..snip..>

https://www.foxbusiness.com/money/social-security-benefit-cuts-timeline-covid-unemployment-retire

I don't believe this story. SOCIAL SECURITY is income to government.  Clinton made it part of general fund and they spent our S.S. on crap.  This has been "talk" every election year.  If any cuts, it would be for future recipients.  NOT ESTABLISHED , GRANDFATHERED IN,  S.S. RECIPIENTS. But, who knows anymore with all the democrats and marxist in our country now.

[LegalAmerican]

Fox News is now a left site.  Purchased by pervert Disney. Notice the words, likely, could, maybe, if.........stopping payments to ILLEGALS...would help a lot.  Each year, from immigration site info, now removed, It costs American tax payers, $746.3 BILLION dollars each year to deal with ILLEGALS.  EACH YEAR.  Thank goodness for the wall. 

[LegalAmerican]

Getting rid of democrats in congress, would  save us a lot of money.   VOTE RED.  REMOVE EVERY DEMOCRAT. 

[LegalAmerican]

Does anyone really believe this will happen...no one on Cap Hill will ever vote for this and survive politically...

 

[LegalAmerican]

Just my take on things.  There has been problems with this whole concept of government running a pension plan for workers since the SSA was created.  Government can not run anything, their track record speaks for itself.  There are so many skilled financial management companies, which have been around for years, that should have been used for worker pensions.  All they had to do was make the payments made by a worker to a pension fund of his own choosing a number subtracted from taxable income up to a limit.  Taxes need only be collected for military, that sets the limit, everything else government does that requires tax revenue should be privatized or better yet eliminated, especially if there is unions involved.

About 15 years ago?  Time flies, 20?  when we had a republican woman, Buchanan,? someone with a B name, running for office wanted to privatized S.S. Take it out of government hands.  The democrats screamed...republican's want to take away your S.S.  Some people believed the democrats. They had no clue, what privatized meant.  She lost. Since then, we KNOW whatever the demon-rats say, that is negative about republicans, means that is what THEY will do or have DONE!

[IsailedawayfromFR]

I don't believe this story. SOCIAL SECURITY is income to government.  Clinton made it part of general fund and they spent our S.S. on crap.  This has been "talk" every election year.  If any cuts, it would be for future recipients.  NOT ESTABLISHED , GRANDFATHERED IN,  S.S. RECIPIENTS. But, who knows anymore with all the democrats and marxist in our country now.

Well, it was LBJ in 1968 who folded in the SS budget to the general fund.

Reagan and Congress in 1984 began the first taxing of benefits capped at 50% based upon income then Clinton and Congress raised it to a 85% rate in 1993.

The rise in both the $ cap and tax rate % subject to the Social Security tax has been made by virtually every Congress since its inception, so govenment has been complicit throughout in changing the deal.

As far as its nature to ultimately fail, FDR brilliantly set it up to fail as it had political rather than economic incentive

In the course of this discussion I raised the question of the ultimate abandonment the pay roll taxes in connection with old age security and unemployment relief in the event of another period of depression. I suggested that it had been a mistake to levy these taxes in the 1930’s when the social security program was originally adopted. FDR said, “I guess you’re right on the economics. They are politics all the way through. We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics.”

FDR also mentioned the psychological effect of contributions in destroying the “relief attitude.”

https://www.ssa.gov/history/Gulick.html

Like W, Clinton had some noble words to improve it, but these were never enacted upon and were essentially fairy tales of untold surpluses of the general budget to save SS.

Our fiscal discipline gives us an unsurpassed opportunity to address a remarkable new challenge -- the aging of America. With the number of elderly Americans set to double by 2030, the baby boom will become a senior boom. So first, and above all, we must save Social Security for the 21st century. (Applause.)

Early in this century, being old meant being poor. When President Roosevelt created Social Security, thousands wrote to thank him for eliminating what one woman called the "stark terror of penniless, helpless old age." Even today, without Social Security, half our nation's elderly would be forced into poverty.

Today, Social Security is strong. But by 2013, payroll taxes will no longer be sufficient to cover monthly payments. By 2032, the trust fund will be exhausted and Social Security will be unable to pay the full benefits older Americans have been promised.

The best way to keep Social Security a rock-solid guarantee is not to make drastic cuts in benefits, not to raise payroll tax rates, not to drain resources from Social Security in the name of saving it. Instead, I propose that we make an historic decision to invest the surplus to save Social Security. (Applause.)

Specifically, I propose that we commit 60 percent of the budget surplus for the next 15 years to Social Security, investing a small portion in the private sector, just as any private or state government pension would do. This will earn a higher return and keep Social Security sound for 55 years.

But we must aim higher. We should put Social Security on a sound footing for the next 75 years. We should reduce poverty among elderly women, who are nearly twice as likely to be poor as our other seniors. (Applause.) And we should eliminate the limits on what seniors on Social Security can earn. (Applause.)

Now, these changes will require difficult but fully achievable choices over and above the dedication of the surplus. They must be made on a bipartisan basis. They should be made this year. So let me say to you tonight, I reach out my hand to all of you in both Houses, in both parties, and ask that we join together in saying to the American people: We will save Social Security now. (Applause.)

Now, last year we wisely reserved all of the surplus until we knew what it would take to save Social Security. Again, I say, we shouldn't spend any of it -- not any of it -- until after Social Security is truly saved. First things first. (Applause.)

Second, once we have saved Social Security, we must fulfill our obligation to save and improve Medicare. Already, we have extended the life of the Medicare trust fund by 10 years -- but we should extend it for at least another decade. Tonight, I propose that we use one out of every $6 in the surplus for the next 15 years to guarantee the soundness of Medicare until the year 2020. (Applause.)

But, again, we should aim higher. We must be willing to work in a bipartisan way and look at new ideas, including the upcoming report of the bipartisan Medicare Commission. If we work together, we can secure Medicare for the next two decades and cover the greatest growing need of seniors -- affordable prescription drugs. (Applause.)

Third, we must help all Americans, from their first day on the job -- to save, to invest, to create wealth. From its beginning, Americans have supplemented Social Security with private pensions and savings. Yet, today, millions of people retire with little to live on other than Social Security. Americans living longer than ever simply must save more than ever.

Therefore, in addition to saving Social Security and Medicare, I propose a new pension initiative for retirement security in the 21st century. I propose that we use a little over 11 percent of the surplus to establish universal savings accounts -- USA accounts -- to give all Americans the means to save. With these new accounts Americans can invest as they choose and receive funds to match a portion of their savings, with extra help for those least able to save. USA accounts will help all Americans to share in our nation's wealth and to enjoy a more secure retirement. I ask you to support them. (Applause.)

  https://www.ssa.gov/history/clntstmts2.html#1999state