Social Security COLA 8.7% for 2023

[5030]

The 8.7% increase don't even cover the cost of inflation and what it's doing to your spending power.

 

[Snobdds]

The one good thing with SS...you're benefit is based on what you put in. Everyone has different payouts depending on how long and how much was contributed.

If your a 1099 contractor and never paid in...sorry sucker.

 

[sea2summit]

Social Security isn't "free money". We're taxed on it all our working lives.
That said, SS should be strictly applied for people who paid in... not for any other recipients

Sorry Roy, maybe I wasn't clear. Wasn't referencing SS with that statement, it was the relief checks and other inflation fighting measures that do exactly the opposite.

ETA, from long ago I gave up counting on my SS contributions ever coming back to me with the miss management of the system.

 

[sea2summit]

Nothing is free from the gummit, nothing. Far as SS goes, you paid into it with no choice and it's your money you are getting back, not theirs. It's a forced 'savings' account, nothing more, even though politicians robbed the fund for money which, is typical of politicians.

Too true, and with the "administrative costs" of managing SS the government is literally making itself a self licking ice cream cone with that money.

 

[plowhog]

Choosing when to collect SS is a complex decision that each person must make based on their circumstances. There are a few additional considerations I have not yet seen here:

1. The comparisons of whether to "draw early" or "wait until 70" are not accurate, in my opinion. Because they presume the money drawn early is spent with no return or residual value. But what if you use the early-drawn money to buy tangible goods, like a tractor, land, or a rental property? Or, more simply, invest the early-drawn money. Calculate a typical return on that, and it moves the decision more toward drawing early.

2. If you wait to draw, but die before starting to draw, your family loses all the value that would have been added to the size of the estate they will divide up.

3. For me, the crossover point was age 84. At age 84. I would have drawn exactly the same amount regardless of which path I chose.

A very skilled investment advisor once counseled this on drawing SS: "It's counter-intuitive. If you don't need the money for monthly expenses, you should start drawing it early. But if you do need the money for monthly expenses, you should wait as long as possible, up to age 70."

 

[Username Taken]

Choosing when to collect SS is a complex decision that each person must make based on their circumstances. There are a few additional considerations I have not yet seen here:

1. The comparisons of whether to "draw early" or "wait until 70" are not accurate, in my opinion. Because they presume the money drawn early is spent with no return or residual value. But what if you use the early-drawn money to buy tangible goods, like a tractor, land, or a rental property? Or, more simply, invest the early-drawn money. Calculate a typical return on that, and it moves the decision more toward drawing early.

2. If you wait to draw, but die before starting to draw, your family loses all the value that would have been added to the size of the estate they will divide up.

3. For me, the crossover point was age 84. At age 84. I would have drawn exactly the same amount regardless of which path I chose.

A very skilled investment advisor once counseled this on drawing SS: "It's counter-intuitive. If you don't need the money for monthly expenses, you should start drawing it early. But if you do need the money for monthly expenses, you should wait as long as possible, up to age 70."

Good stuff.

You pay into SS with after-tax money and when you start receiving it, many people have to pay taxes on it. Something don't seem right.

Also, what if (I hate those) you took all your SS money from 62-On, invested it and took it in a lump sum when you're 70?

I took mine. If I can get money from the goobermint, I get it. Immediately if not sooner.

I also never over-contributed to the IRS and used them as a bank. But that's just me

 

[FERLING]

That is all factored into the math with the break even point...

Roll That Dice! By the way check out the obits - how many were 80 plus and how many were under 80. Social Security loves for people to work until they fall over. It eases the burden on those they send a check to every month.

 

[5030]

Without sayin what I get monthly, let me say it's a good chunk of change.

 

[FERLING]

Nothing is free from the gummit, nothing. Far as SS goes, you paid into it with no choice and it's your money you are getting back, not theirs. It's a forced 'savings' account, nothing more, even though politicians robbed the fund for money which, is typical of politicians.

Correction - The money you paid in is not yours. It did not go into a savings account for you. The money paid into SS today is paid out to people that are receiving SS / Disability today. Your contributions to SS comes with a promise that when you retire the people currently paying in at that time will contribute so you can receive a check.
It's a basic welfare system for the old and disabled. People that earn an income pay into SS so old and disable get a check to buy food, etc.
If they made SS optional no one but the rich would pay into it. Old and disable people would have to have a 'go fun me' page on facebook just to keep from starving.

 

[Gale Hawkins]

While my break even is 78 by starting at 70 my COLA $$$ is much greater than had I signed up at 62 or 66. If I die in the next 6 years you guys can fight over what I left on the table.

 

[newbury]

If they made SS optional no one but the rich would pay into it.

And what planet do you live on where the rich would pay into SS?

 

[FERLING]

While my break even is 78 by starting at 70 my COLA $$$ is much greater than had I signed up at 62 or 66. If I die in the next 6 years you guys can fight over what I left on the table.

Don't worry Kenny it's already spent. It's kind of like leaving $$$$ for your beneficiaries. Most of the time they already have a plan when you croaked. Just make sure they have a copy of your Will and they'l take care of it.
With SS every dollar paid in today is spent on someone receiving a SS check today.

 

[FERLING]

And what planet do you live on where the rich would pay into SS?

Does everyone pay Social Security tax?


Nearly every American worker – as well as their employer – is required to pay Social Security and Medicare taxes, including the self-employed. If you don't pay into the system when you work, then you can't collect the income benefits later in life.Sep 9, 2022

 

[Gale Hawkins]

Don't worry Kenny it's already spent. It's kind of like leaving $$$$ for your beneficiaries. Most of the time they already have a plan when you croaked. Just make sure they have a copy of your Will and they'l take care of it.
With SS every dollar paid in today is spent on someone receiving a SS check today.

That is why I feel good about paying income taxes on my social security collections.

 

[newbury]

– is required to pay Social Security

I took the statement

If they made SS optional no one but the rich would pay into it.

to indicate it would not be required, the rich would put their money elsewhere.
And up till 1984 Federal employees did not pay into it. Most of my co-workers and I declined to participate.

 

[5030]

Correction - The money you paid in is not yours. It did not go into a savings account for you. The money paid into SS today is paid out to people that are receiving SS / Disability today. Your contributions to SS comes with a promise that when you retire the people currently paying in at that time will contribute so you can receive a check.
It's a basic welfare system for the old and disabled. People that earn an income pay into SS so old and disable get a check to buy food, etc.
If they made SS optional no one but the rich would pay into it. Old and disable people would have to have a 'go fun me' page on facebook just to keep from starving.

I disagree to a point. You paid into it with no choice so that makes it a forced 'savings account' for those that pay into it.

Bottom line however is, SS is a Ponzi Scheme relying on less and less people paying into it but more and more people withdrawing from it. If the politicians had kept their grubby mitts out of it, it would stay solvent long into the future but as it stands now, it's not.

Ponzi schemes never work but then the government in general is a Ponzi scheme.

 

[plowhog]

Nearly every American worker – as well as their employer – is required to pay Social Security and Medicare taxes,

I don't agree with this. I'd agree with "most" but not "nearly every ..."

The underground economy is huge. Much of it is paid in cash, and when so, it doesn't contribute anything to SS. If you need construction workers in my area, you typically have to hire folks this way or you may not find anyone to employ. Not always true, but it's a large share of the economy.

Something almost never written about is reverse SS fraud. Suppose you are in the country illegally and want a legitimate job paid through normal payroll. You apply and give a fake SSN. If you are hired, your employer, thereafter for months or years, dutifully sends the govt your SS contributions that were deducted from your check. The beauty for the govt is since the number if fake-- they keep collecting but will never have to pay a benefit.

Finally, many legitimate jobs don't contribute. My relative worked as LEO in State of CA for 30 years, never contributing to SS. Some LEO agencies have their own retirement. Before peace officer status, she worked 10+ years in private industry and contributed to SS. But is prohibited from receiving any SS benefits due to the LEO pension.

 

[KennyG]

In all the discussions about SS, you have to remember that it's not a savings or pension program, it's an insurance program. You may think it's a poor and mismanaged program, but it's still insurance. If you are poor, disabled, or a dependent of someone who paid into the system, you will get benefits. If you are healthy, work until normal retirement age, etc, you likely won't "get back" what you paid into the system because you also had insurance in case things didn't go well.

 

[bigtiller]

No SS tax is collected when earned income is over $147K this year. Next year the paid-up point will be $160K.

Remove the cap and SS will be solvent for a long time.

 

[Gale Hawkins]

No SS tax is collected when earned income is over $147K this year. Next year the paid-up point will be $160K.

Remove the cap and SS will be solvent for a long time.

Are you thinking of increasing SS payout on retirement to these who in 2023 be paying like $1800 more in SS taxes?