Opinion: Why raising Social Security’s ‘full retirement age’ is a bad idea

[IsailedawayfromFR]

Proposals to increase Social Security’s retirement age are beginning to resurface. The notion is that if people are living longer, they can work longer.

But the retirement age has little to do with how long people work, and a lot to do with how much money they get. Increasing the retirement age is a benefit cut.

Social Security’s Full Retirement Age (FRA) under current law is in the process of moving from 65 to 67. To keep lifetime benefits for the average worker roughly constant, benefits claimed earlier than the FRA are actuarially reduced and benefits claimed later are actuarially increased. That is, an FRA of 66 means that people will get 100% of their benefits at 66, 75% if they retire at 62, and 132% if they claim at 70. The comparable numbers for age 67 are 100% at 67, 70% at 62, and 124% at 70.

So as the FRA rises from 66 to 67, the worker retiring at 62 sees his monthly benefit cut from 75% to 70%of the full benefit. The worker who increases his retirement age from 66 to 67 sees no cut in the monthly benefit but receives benefits for one less year, reducing his lifetime benefit. So raising the FRA is a cut in benefits either way.

http://www.marketwatch.com/story/why-raising-social-securitys-full-retirement-age-is-a-bad-idea-2017-05-17?siteid=yhoof2&yptr=yahoo

From what I see here, it seems the higher paid workers are the ones who will have less return for their years of contributing to SS, and taxes are not even included within here, which means they will net out even less.

[catfish1957]

From what I see here, it seems the higher paid workers are the ones who will have less return for their years of contributing to SS, and taxes are not even included within here, which means they will net out even less.

I understand quietly there is also talk of those born after a certain date having benefit reduced. on a sliding scale X%, based on AGI. 

Also, hang on to your hats, if we get an Bernie or Elzabeth Warren, there will be an effort to seize 401K/IRA/Pensions as a supplement to SS.  (i.e one stop shop socialized SS)

[IsailedawayfromFR]

Also, hang on to your hats, if we get an Bernie or Elzabeth Warren, there will be an effort to seize 401K/IRA/Pensions as a supplement to SS.  (i.e one stop shop socialized SS)

I believe Ryan is more than suspect at doing this to accommodate his views of "fiscal responsibility".

[Cripplecreek]

Wanna make SS solvent?

Raise the retirement age to 100.

That is the name of the game isn't it? Getting out of paying people what they paid in?

[catfish1957]

Wanna make SS solvent?

Raise the retirement age to 100.

That is the name of the game isn't it? Getting out of paying people what they paid in?

Amen.  Anything the government gets their hands on gets f'ed up.

[Cripplecreek]

Amen.  Anything the government gets their hands on gets f'ed up.

I think what I would do is allow new people entering the workforce to opt out while offering lump sum payouts at the top end with more paid to those who choose to work longer. Base the lump sum payouts on estimated life expectancy. Eliminate the taxes on SS payments while encouraging retirees to run small businesses without being penalized on their SS.

[catfish1957]

I think what I would do is allow new people entering the workforce to opt out while offering lump sum payouts at the top end with more paid to those who choose to work longer. Base the lump sum payouts on estimated life expectancy. Eliminate the taxes on SS payments while encouraging retirees to run small businesses without being penalized on their SS.

Like the idea, if it could be postponed or phased in without depleting the funds for existing seniors.  That's 90% of the problem.  Our incompetent government has painted itself into a corner with no really easy way to fix it.

[Frank Cannon]

SS isn't a retirement package. It is a welfare program.

[catfish1957]

SS isn't a retirement package. It is a welfare program.

So what was that 5% they were skimming off my gross those 40 years?

[jmyrlefuller]

So what was that 5% they were skimming off my gross those 40 years?

Taxes.

[Smokin Joe]

Wanna make SS solvent?

Raise the retirement age to 100.

That is the name of the game isn't it? Getting out of paying people what they paid in?

Obamacare was supposed to kill us all off long before then.

[catfish1957]

Taxes.

Yeah...  earmarked for SS.  My point of his calling SS welfare is only half right. (i.e those who contributed little or non, but are getting the benefit for 30 years).  The rest of us, better get something back for our trouble.

[Smokin Joe]

SS isn't a retirement package. It is a welfare program.

Actually, it was looted to pay for welfare (buy votes), among other things. IOUs indeed!

[Night Hides Not]

So what was that 5% they were skimming off my gross those 40 years?

Not 5%...12.4%, split between what you paid, and your employer "paid". In reality, it all came out of your pocket, along with the 2.9% Medicare tax.

[InHeavenThereIsNoBeer]

I understand quietly there is also talk of those born after a certain date having benefit reduced. on a sliding scale X%, based on AGI. 

Also, hang on to your hats, if we get an Bernie or Elzabeth Warren, there will be an effort to seize 401K/IRA/Pensions as a supplement to SS.  (i.e one stop shop socialized SS)

I don't think they'll go for the direct seize of existing accounts.  Instead, they'll use means testing to eliminate SSI payments to those of us "lucky enough" to have saved for retirement.  This will be combined with tightening down on new accounts (probably new contributions), say by requiring pre-tax contributions to go into funds "backed" by T-bills (sound familiar?).  And of course eliminating the cap on SSI "contributions".

[Joe Wooten]

Wanna make SS solvent?

Raise the retirement age to 100.

That is the name of the game isn't it? Getting out of paying people what they paid in?

First, take away the SS benefit for those who never paid in, like priests, nuns, bums, druggies, and winos. Then cut off illegal aliens.

[catfish1957]

First, take away the SS benefit for those who never paid in, like priests, nuns, bums, druggies, and winos. Then cut off illegal aliens.

[Fishrrman]

There are a lot of short memories around here, and in Congress as well.

Think back to 2005. G.W. Bush had just won against Kerry, and there was all that talk about how he'd use "the political capital" he had accumulated.

Well, he decided to use it, alright. Started talking about "reforming" Social Security, talk about raising the retirement age, etc.

And guess what? The Pubbies went on to lose big in the 2006 midterms, and then along came obama in 2008.

Fortunately, Mr. Trump knows better.
But Congressional Republicans remain [largely] stupid.

Let them try to cut benefits or mess with the retirement age.

You'll see not only the Senate but the House "go blue" in 2020!

[Weird Tolkienish Figure]

Boomers want their gubment cheese. Doesn't matter whether they're Democrats or Republicans.

Whether you paid into it is no matter, we all pay taxes for stuff we may never get to use.