Life Expectancy - Saving and Planning

[fdcg27]

At the end of the day, you don't know when that day will be.
Therefore, spend at a level that doesn't exceed your current income in retirement and you'll never need to worry about running out of money. If you've been reasonable throughout your working life, that will leave you with enough to do whatever you please.
Also, leaving some money on the table for your heirs seems like a good thing to me, but I'm fairly generous with family.

 

[fantastic]

Social security is funded directly from payroll taxes, so current workers pay SS recipients just like those recipients paid for previous recipients. The first recipients withdrew without paying much in. So as long as there are people paying in it cannot go 100% bust.

When there is excess payments they go into the trust fund, and when there is a shortfall of payments they come out of the trust fund. The trust fund has been taking money out since 2021 and the current estimate is it will be depleted in 2032, however that number gets revised yearly. When it runs out current estimates indicate there will be enough payroll taxes to pay about 80% of the promised benefit, using current deduction rates.

Yes, but there are less payroll taxes coming into the trust fund than what will be paid out at that tipping point (Income vs Expense). They've been saying around that time period (2030's) for several years now so it's not floating around very far. Yes, it does get revised if the "outlook" differs but it looks like it'll happen in a few short years.

I am unsure I would make this assumption. Since the younger generation was already completely screwed by the social security reforms made in 1979. If they actually know what there voting for I cannot imagine them voting to pay more taxes so retirees will get benefits there not entitled to themselves. However people do dumb things so who knows?

I would wager there will be a change in the laws. It'll be changed, how? they've floated several ideas & not everyone will be happy I'm sure. Raising the retirement age etc will certainly get folks upset. I don't like it but the higher earners will push for stuff like that INSTEAD of the higher earners paying their fair share. I say raise the income cap! & perhaps some other things to make it work out for the long haul. Aren't we the ones that get our knees replaced for the big corp? I think it's fair to raise the cap. What do you think about it?

 

[Dave Hess]

The fact is, there is no Social Security Trust Fund and there never was one. My social security, and everyone else's, is paid out of current federal government income and borrowing. The trust fund lie is the same as if I say I owe myself $1 million. In fact, I have signed a promissory note to myself for $1 million. How much is that note actually worth? When I take it to the bank to borrow money using it as collateral, how much will the bank loan me?

Yes.

100% of your taxes you paid into the POT got squandered and now they owe you your money.

 

[SC Maintenance]

Yes, but there are less payroll taxes coming into the trust fund than what will be paid out at that tipping point (Income vs Expense). They've been saying around that time period (2030's) for several years now so it's not floating around very far. Yes, it does get revised if the "outlook" differs but it looks like it'll happen in a few short years.

I am actually not sure what your saying, but essentially the trust fund is just a buffer - money added when there are excess payroll taxes and withdrawn from when there are too little. Currently we have been withdrawing from the fund for 5 years and current predictions say it goes to zero in late 2032. However when it goes to zero there are still payroll taxes each month that go to the SS admin, and they would continue to distribute those. However those would only cover around 80% of what has been promised each month - best current estimate.

I would wager there will be a change in the laws. It'll be changed, how? they've floated several ideas & not everyone will be happy I'm sure. Raising the retirement age etc will certainly get folks upset. I don't like it but the higher earners will push for stuff like that INSTEAD of the higher earners paying their fair share. I say raise the income cap! & perhaps some other things to make it work out for the long haul. Aren't we the ones that get our knees replaced for the big corp? I think it's fair to raise the cap. What do you think about it?

Everyone my age and younger has gone through life figuring we would get nothing. It is going to be extremely hard to raise taxes on younger people to pay for those already retired for a benefit we know we will never get. So I assume they will not. They might do some means testing and cut high earners because tax the rich sells well.

On top of that, at the current deficits we will have approx. $55T in debt so they will need already to raise taxes to pay for that. Were getting ever closer to not even being able to pay the interest on that debt.

My guess - the most politically expedient thing will be to do nothing. That way they can continually blame the other guy. Which simply means that they will pay out whatever they can each month and thats it.

 

[fantastic]

I am actually not sure what your saying, but essentially the trust fund is just a buffer - money added when there are excess payroll taxes and withdrawn from when there are too little. Currently we have been withdrawing from the fund for 5 years and current predictions say it goes to zero in late 2032. However when it goes to zero there are still payroll taxes each month that go to the SS admin, and they would continue to distribute those. However those would only cover around 80% of what has been promised each month - best current estimate.

Everyone my age and younger has gone through life figuring we would get nothing. It is going to be extremely hard to raise taxes on younger people to pay for those already retired for a benefit we know we will never get. So I assume they will not. They might do some means testing and cut high earners because tax the rich sells well.

On top of that, at the current deficits we will have approx. $55T in debt so they will need already to raise taxes to pay for that. Were getting ever closer to not even being able to pay the interest on that debt.

My guess - the most politically expedient thing will be to do nothing. That way they can continually blame the other guy. Which simply means that they will pay out whatever they can each month and thats it.

Apparently this group has been following this topic for several decades. The survey claims raising the cap for $400k + has the most approval. Leaving the existing lower cap in place.
https://www.nirsonline.org/wp-content/uploads/2025/01/NASI_SocialSecurityat90.pdf

 

[alarmguy]

Social security is funded directly from payroll taxes, so current workers pay SS recipients just like those recipients paid for previous recipients. The first recipients withdrew without paying much in. So as long as there are people paying in it cannot go 100% bust.

When there is excess payments they go into the trust fund, and when there is a shortfall of payments they come out of the trust fund. The trust fund has been taking money out since 2021 and the current estimate is it will be depleted in 2032, however that number gets revised yearly. When it runs out current estimates indicate there will be enough payroll taxes to pay about 80% of the promised benefit, using current deduction rates.



I am unsure I would make this assumption. Since the younger generation was already completely screwed by the social security reforms made in 1979. If they actually know what there voting for I cannot imagine them voting to pay more taxes so retirees will get benefits there not entitled to themselves. However people do dumb things so who knows?

The board of trustees administers the programs per the laws on the books. Payroll taxes are fixed and congress has never changed them except for payroll tax holidays which basically depletes the funds faster. The last time the program was changed by congress was 1983 I believe, and the board of trustees cannot make any changes on there own. I wouldn't call that managed?

Absolutely it’s managed. The system would’ve been broke in a 1983. Congress changed it.
And that will happen again by the year 2030 or 2031 or 2032
The system is going nowhere, benefits will not be cut. Congress will make sure of it.
Just like they did a 1983, Congress made adjustments for whatever the reason and they will do it again when it’s time.

Current numbers are the payroll tax would have to increase about 4%
That would be 2% to employers and 2% to workers
And 4% to self-employed people
That is if and only if they don’t make adjustments to other criteria.

I suspect a mix.

 

[SC Maintenance]

Apparently this group has been following this topic for several decades. The survey claims raising the cap for $400k + has the most approval. Leaving the existing lower cap in place.
https://www.nirsonline.org/wp-content/uploads/2025/01/NASI_SocialSecurityat90.pdf

As I mentioned above, tax the rich (same as means testing) is always popular. It always fails, because the rich find loopholes around it. It never garners as much money as people think. Europe has been trying it lately and there revenues declined. I am sure we will try, I just don't think it will be enough money to actually matter because it never does.

As well raising retirement age won't work this time, unless you literally raise the age of people that are currently 60. It worked in 1979 because they were raising it for people decades later. Its too late for that now.

As for the rest of the survey - its all on how you ask the question. So if you ask "would you pay more to fund social security" everyone always says yes. But then when you actually try to take their money they always say no. Go survey people you know - "would you like to get in shape with me" they will all say yes. Then "would you join me for a 3 mile walk at 5AM tomorrow morning they will all say no. Its human nature.

 

[SC Maintenance]

Absolutely it’s managed. The system would’ve been broke in a 1983. Congress changed it.
And that will happen again by the year 2030 or 2031 or 2032
The system is going nowhere, benefits will not be cut. Congress will make sure of it.
Just like they did a 1983, Congress made adjustments for whatever the reason and they will do it again when it’s time.

It worked in 1979 because they had 3.2 workers per retiree paying in.

Here is the profile in 1980. I have circled the baby boomer generation. They had this huge generation to pay in for 50 years. Easy Peazy.

By 2030 there will be about 2 workers for every retiree - some estimate less. You have less people to fund the ponzi.

Bernie Madoff's Ponzi also worked until there were not enough people at the bottom of the pyramid. There just are not enough people to tax.