They are more likely to remove the wage cap on FICA, and they keep the wage cap for benefit formula.
That will fill a huge portion of the gap.
All tax changes should be slowly phased in.
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Yep. Iâve voiced this opinion before. While it makes the program less equitable for high income folks, I think itâs more likely to fly politically.
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Is Bruce still around?
He always had good insight into SS issues.
Thatâs really interesting that a relatively modest increase in the tax rate would instantly bring SS back to full funding.
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Itâs not relatively modest for the high earners and their employers
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Iâm a little surprised at how little of an impact raising retirement age has
What are you guys thinking when you say âfor those 10 years or fewer to retirementâ? Age 52 since you can start SS at 62⌠or age 57 since full retirement age is 67?
I agree that people âcloseâ to retirement probably wonât be impacted but canât decide what I think âcloseâ means.
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I think it makes sense to use full retirement age as the target.
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No bright line here of course. Iâm thinking mid 50âs.
Thatâs what Iâm thinking also. Being in my mid 50âs it makes me extra nervous. Will I be one of the lucky ones who just misses being impacted⌠or one of the unlucky ones who just misses the cut and gets hammered?
If you just miss the cut, you arenât going to get hammered. Youâre going to get mildly impacted.
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But going with default choices for retirement ages is often not a good idea.
People may go with 59 1/2, as that is the earliest theyâre allowed to tap tax-advantaged savings in the U.S. without having a tax penalty.
Some go with 62 because thatâs the youngest they can start collecting Social Security old-age benefits for workers.
Some pick 65 , because thatâs when youâre eligible for Medicare coverage.
Everybody born in 1960 or after has a full retirement age of 67 , so maybe theyâll pick that.
Some pick 70 because Social Security benefits do not accrue past that age.
Some pick even older, because theyâre forced by tax laws to take distributions from their tax-advantaged savings (these are called required minimum distributions.) This used to be 70 1/2 , but now itâs been pushed up to 73 .
And that was just for 2024, itâs going up to 75 by 2033:
To be sure, 65 is the age for Medicare, but thatâs the only thing tied to 65 now.
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Cool stuff, thanks for putting it all together and sharing!
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Wait a sec, whatâs wrong with eating a marshmallow?
âŚbut if you waitâŚ
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Itâs a carb and carbs make you fat
But if you hold off on eating the marshmallow, you will be rewarded with a second one at a later time. At this time you can sell them both and invest in Jet-Puffedâs parent company instead
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Yes, thanks meep!
Gotta give the rule of 55 a shout out as well
I know a few people who rolled accounts in, in preparation to clock out the year they turned 55
So the 22yos entering the workforce with $$$ in student loans still have to contribute 12.4% of their would-be income to FICA, but may never collect anything? Sounds like a really bad deal for them. Success will rely on 22yos not voting.
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