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My number is a smidge below that. $4,697. Some of this depends on your birth year. My FRA is 66 8 months.
I have only 25 years of work counting towards Soc Security (prolonged immigration proceedings, so my first 13 years of work-training in the US did not count), and my FRA is 67, so my first Soc Security check at 70 (ie, in a little less than 6 years) is calculated to be $3,609 plus the next 6 COLAs. But I'd be super happy if I actually get 3/4 of that. Considering a possibility of increased means testing to cover Soc Security for low earners after the reserve fund runs out around 2033, my Soc Security check could end up being closer to $0 (I am prepared for that possibility too). Who knows what it will be
I cannot see means testing. There would be no way to easily and accurately implement it.
As Mogul always points out it is already means tested by the mere fact that if your income is low enough you do not pay taxes on it and if your income is higher you do pay taxes on it. Not only that, but, the formulary is heavily weighted so the lower social security amounts are earned by the majority whereas it takes a gazillion to get that last $50 to $200 in monthly benefits.
I could see them messing with the formula and obviously raising the wage ceiling that it is calculated on.
One of the latest proposals was to raise the ceiling to $250k of earned income and make SS non-taxable at a Federal level.
No one is going to see a reduction of their SS. It would be political suicide. Discussing it creates fear and good theater for politicians.
Well, the reserve fund has started running out, and you can't get water from a stone. Money will have to come from somewhere. Can the entire additional burden of funding our generation's vastly expanded use of soc security come entirely from taxation of younger, working generation? One justification for that would be that the two younger generations (ie, Millenials and GenZ) are of equal size as Boomers, so the increased FICA taxation would also sustain their own Soc Security, but I don't know whether they are capable of seeing it that way while their minds (and expenses) are on things very different from retirement (which for them is still intuitively located somewhere in the infinite future :-).
Also, businesses and the purchasing power of a paycheck are already being flogged by inflation; not the best moment to increase FICA taxes too.
There are various ways Soc Security income can be de facto reduced without actually reducing the amount of current check (eg, by abolishing COLA increases for Soc Security recipients whose Soc Security income is above 100% federal poverty level, by raising FRA to 70, by newly imposing FICA taxes on all retirement income, by who knows what else - politicians are creative when it comes to taxation).
Well, the reserve fund has started running out, and you can't get water from a stone. Money will have to come from somewhere. Can the entire additional burden of funding our generation's vastly expanded use of soc security come entirely from taxation of younger, working generation? One justification for that would be that the two younger generations (ie, Millenials and GenZ) are of equal size as Boomers, so the increased FICA taxation would also sustain their own Soc Security, but I don't know whether they are capable of seeing it that way while their minds (and expenses) are on things very different from retirement (which for them is still intuitively located somewhere in the infinite future :-).
But, it was okay in 1983 when they raised our FRA by 2 years and increased our SS / Medicare taxes?
The Social Security tax rate has changed several times over the years:
1950: The original rate was 1% of pay, with employers matching the employee.
1950 and earlier: The tax only applied to earnings up to $3,000.
1970: The tax rate increased to 1.5%.
1972: The system introduced automatic adjustments, or "indexing", to Social Security benefits based on cost of living increases. 1983: The first Amendments to the Social Security Act were passed, which began taxing some Social Security benefits for federal income taxes in 1984.
1984: The payroll tax rate increased by 0.6%, and then again by 0.72% in 1988 and 1989.
1990: The tax rate became 6.2%, and the tax cap increased to $51,300.
2022: The tax cap increased to $147,000
Let's not forget they changed our FRA by up to 2 years in 1983 (instead of 65 try 67) - this is a dramatic decrease in benefits.
But, it was okay in 1983 when they raised our FRA by 2 years and increased our SS / Medicare taxes?
The Social Security tax rate has changed several times over the years:
1950: The original rate was 1% of pay, with employers matching the employee.
1950 and earlier: The tax only applied to earnings up to $3,000.
1970: The tax rate increased to 1.5%.
1972: The system introduced automatic adjustments, or "indexing", to Social Security benefits based on cost of living increases. 1983: The first Amendments to the Social Security Act were passed, which began taxing some Social Security benefits for federal income taxes in 1984.
1984: The payroll tax rate increased by 0.6%, and then again by 0.72% in 1988 and 1989.
1990: The tax rate became 6.2%, and the tax cap increased to $51,300.
2022: The tax cap increased to $147,000
Let's not forget they changed our FRA by up to 2 years in 1983 (instead of 65 try 67) - this is a dramatic decrease in benefits.
I am aware of all of that. But all of that is still insufficient to preserve the current levels of soc security payout. SSA will be short of about 25% of full funds after 2033 unless they add some source of funds. I wouldn't be critically harmed if my Soc Security income were to be reduced by 25%, but the mass of people whose soc security income is close to the guaranteed minimum would drop below this minimum if their checks are cut by 25% - and how will SSA compensate for that? The government will be forced to do SOMETHING, and it seems unlikely the younger generations will have to carry the entire weight of this something.
I am aware of all of that. But all of that is still insufficient to preserve the current levels of soc security payout. SSA will be short of about 25% of full funds after 2033 unless they add some source of funds. I wouldn't be critically harmed if my Soc Security income were to be reduced by 25%, but the mass of people whose soc security income is close to the guaranteed minimum would drop below this minimum if their checks are cut by 25% - and how will SSA compensate for that? The government will be forced to do SOMETHING, and it seems unlikely the younger generations will have to carry the entire weight of this something.
It only seems unlikely to you. It has always been the working population paying into SS. They will fix it and I honestly do not care how they do it (whether they cut it or not). There is no historical grounds for your proposal. They are more likely to do what there is precedence for doing. But, we have both made our arguments a couple/few times already on various threads so I will leave it at that.
It only seems unlikely to you. It has always been the working population paying into SS. They will fix it and I honestly do not care how they do it (whether they cut it or not). There is no historical grounds for your proposal. They are more likely to do what there is precedence for doing. But, we have both made our arguments a couple/few times already on various threads so I will leave it at that.
Oh, believe me it is definitely not MY proposal . I am just considering what they could be capable of doing. I am not about to propose any of it; it surely wouldn't be in my personal interest!
Oh, believe me it is definitely not MY proposal . I am just considering what they could be capable of doing. I am not about to propose any of it; it surely wouldn't be in my personal interest!
I think you worry too much (especially based on what I know about your personal finances). The whole point of doing what you did was that you would not need to worry. Do not let politics rob you of that. I just would not worry about it. You seem to able to do everything you want to do regardless and SS will assist you in case your brain outlives your body (or vice versa - or both). Some things, such as peace of mind, do not rely on money alone.
Here is the AI analysis of my words:
It seems like the selected text is offering reassurance about financial concerns and the impact of politics on personal peace of mind. Here’s a summary of the key points:
Unnecessary Worry: The text suggests that worrying too much, especially about finances, may be unnecessary.
Impact of Actions: It implies that previous actions were taken to avoid such worries.
Politics and Peace of Mind: Advises not to let politics affect one’s peace of mind.
Support Systems: Mentions that Social Security (SS) will provide support if needed.
The message emphasizes the importance of focusing on what can be controlled and enjoying the ability to do what one wants, rather than being overly concerned with financial or political matters. Peace of mind is portrayed as not solely dependent on money
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. I am just considering what they could be capable of doing. I am not about to propose any of it; it surely wouldn't be in my personal interest!
The whole point of doing what you did was that you would not need to worry. Do not let politics rob you of that. I just would not worry about it. You seem to able to do everything you want to do regardless and SS will assist you in case your brain outlives your body (or vice versa - or both). Some things, such as peace of mind, do not rely on money alone.
