Social Security COLA 8.7% for 2023

[scootr]

I think there's room for regrets for most people when they retire.

In the USA the is no one size fits all when it comes to SS decisions. When SS ran my benefits at 62 it was so low that I knew I was going to work till 70 if possible. From 62 to 70 I was able to bump my bottom line up by another $18,000 annually. The 2023 cost of living will bump that that bonus another $1,500 annually so by retiring at 70 my annual social security is about $20,000 more than it would have been at 62. As in all things your mileage May vary.

I'm about the same. My age 62 estimate would not have covered the most meager existence. I'm 14 mos from 70 now and the number has nearly doubled with my income being higher these last yrs and inflation. Plus I was able to double down on the homestead payments leaving no mortgage when I do retire.

 

[newbury]

Research: The Future Financial Status of the Social Security Program

Social Security Administration Research, Statistics, and Policy Analysis

www.ssa.gov

From the link (cuz I know most of you don't follow links)

If trust fund assets are exhausted without reform, benefits will necessarily be lowered with no effect on budget deficits.

That reads like a politicians promise.
/edit
By forcing virtually the entire federal work force to pay into SS it seems the politicians made a step towards propping up the system. But with the declining birthrate it might not work.

 

[Snobdds]

You get 8% more per year, for each year you delay past your full retirement date.

You receive 8% less per year, for each year you collect prior to full retirement date.

Age 70 is the cap out date.

If your full retirement age is 66, the most you can add to your benefit is 4 years.
If your full retirement age is 67, the most you can add to your benefit is 3 years.

Conversely...

If you claim at age 62 and your full retirement is age 66, you took off 4 years from your benefit.
If you claim at age 62 and your full retirement age is 67, you took off 5 years from your benefit.

Every time they increase the full retirement age without increasing the minimum age to claim, they are preserving SS by 8% annually. We will preserve SS by increasing the full retirement age and keeping the minimum age to claim at 62.

We actuaries know what we are doing.

Neat trick huh.

 

[Gale Hawkins]

One positive of paying all the income tax on social security payments is it supposed to be funneled back into the social security fund and not general treasurer as I understand.

 

[FERLING]

From the link (cuz I know most of you don't follow links)

That reads like a politicians promise.
/edit
By forcing virtually the entire federal work force to pay into SS it seems the politicians made a step towards propping up the system. But with the declining birthrate it might not work.

Politicians know when a promise made in the past comes due they will no longer be in office.
At work, years ago the company came up with a contributory retirement plan. HR manager told all the young employees if they would get in at the maximum contribution they would all be millionaires at retirement. They sold the company about 15 years after that. The retirement and the HR manager didn't go with the new owner. Needless to say no one received enough to retire. They forgot to mention most of it was tied to the stock market and taking a cash out was tied to interest rate. High interest rate equaled lower cash out and lower interest rate equaled higher cash out. You know the interest rate was through the roof then.

 

[FERLING]

One positive of paying all the income tax on social security payments is it supposed to be funneled back into the social security fund and not general treasurer as I understand.

Social Security taxes that workers and employers pay are credited to the Social Security trust funds. The trust funds are defined by law as a way to set aside money that is earmarked for Social Security. A Board of Trustees oversees the trust funds. It is made up of the Secretary of the Treasury, who is the managing trustee, the Secretaries of Labor and of Health and Human Services, the Commissioner of Social Security, and two public trustees from different political parties who are appointed by the President and confirmed by the Senate.

In 2016, the Social Security program received $958 billion in income and spent $922 billion for benefits and administrative costs, increasing the trust fund reserved by 35.2 billion. Total administrative costs amount to less than 1 percent of the funds collected each year.

What happens to the funds that are not used immediately to pay benefits? By law, the funds are invested in special-issue Treasury securities that earn interest. In effect, the funds are loaned to the Treasury, which borrows the money just as it borrows money when it sells Treasury securities to the public. In return for the funds they loan to the government, the trust funds receive Treasury securities bearing a market rate of interest. The average interest rate on the portfolio held by the Social Security trust fund was 3.2 percent in 2016.

Because the federal government is spending the cash it borrows from Social Security, “some people see the current increase in the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future,” according to the Social Security Administration website. But, the agency states on its website, “Far from being ‘worthless IOUs,’ the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. savings bonds or other financial instruments of the Federal government.”

Where Do Social Security Taxes Go? - National Academy of Social Insurance

Social Security taxes that workers and employers pay are credited to the Social Security trust funds. The trust funds are defined by law as a way to set aside money that is earmarked for Social Security. A Board of Trustees oversees the trust funds. It is made up of the Secretary of the...

www.nasi.org

 

[FERLING]

Well that's a silly way to run things. By all means, change that law.

'Life is easier when you plow around the stumps'

You have to put up with all the roots holding it in the ground. Once you remove them the stump will just topple over. The stump is betting you don't value removing it enough to go through all that effort so you just go around it and it continues to occupy that spot.

 

[ljjhouser]

Doesn't mean much - wait until you see the Medicare Pt premium. It (most years) is increased more than the COLA. In 2009 it was $96.40 and pretty stable. Today, I think it is $170, and seems to increase each year. We will see soon in 2023. Of course, the Pt B is higher for higher incomes.

 

[mike69440]

If you retire before 70 you are leaving monthly payment $ on the table. My friend started collecting at 62 yrs. He swears he got enough $ in that time to put him ahead of the waiting game. IDK
I'm still working, self employed at home, so I'll wait 1 more yr to collect without earnings penalties.
And no your wages are not going up like that unless you work a min wage job, in which case your wages doubled.
And we wonder why the cost of everything is going up?

YOU CAN STIIL WORK AND COLLECT.
I you choose to do so you still pay into SS and pay taxes but you get nothing added to SS by working and collecting.

 

[scootr]

YOU CAN STIIL WORK AND COLLECT.
I you choose to do so you still pay into SS and pay taxes but you get nothing added to SS by working and collecting.

Right they are always willing to let you work and pay more.
I saw today on the news the average 401k value is down 25% from Jan 1.
American personal savings has lost over 2.1 billion dollars in value this year.
If you had a 100k socked away jan 1st 2022 you have 75k today... ouch