More on Japanese debt…
Big question is: how to profit from it.
Short the yen?
SS is a great program, don’t get me wrong. It seems to me that it should be augmented. If that average were to double to $4k/mo I would feel better. The program has exceptionally low admin costs, and is easy to fund at the federal level.
The FPL comparison is intriguing. Can you explain how the government determines the figure they publish? As far as I can tell, it says nothing about the money needed tp survive. It’s just a way to restrict fed funding wrt to healthcare. An arbitrary number with no bearing on actual cost of living. But if you have a more articulate definition, I am interested. Because $1300/mo would leave most urbanites homeless.
is the ~2K per month average benefit per person or per household? if per person then married retirees (of close enough age) are looking at $3K - $4K if both are eligible, right?
I’d assume so.
It’s an average of $2k per retired worker.
I believe there is a spousal benefit, currently averaging a bit more than $900 when the spouse doesn’t qualify for more by virtue of their own prior earnings…but I could be mistaken.
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This discussion got me curious about a couple of things: what’s the difference between the average and median benefit, and what is the difference between the benefit for retired workers vs other benefits.
First, the median isn’t too much lower than the average for retirees. Both vary by state due to salary differences:
Breakdown by benefit type:
Interesting story. “The poverty thresholds were originally developed in 1963 and 1964 by Mollie Orshansky, an economist working
for the Social Security Administration (SSA).”
The USDA had been publishing “food budgets” for different families. They had four levels of spending. She took the “economy” level of spending. Then, she found a 1955 survey that said the average spending on food for families of 3 or more persons was about 1/3 of their cash incomes.
So, her first number was 3 times the economy food budget. 1964 is relevant because that coincides with Johnson’s Great Society speech. If they were going to wipe out “poverty”, they needed some way to measure it, and Orshansky had a number.
Nowadays, each year’s FPL is just the prior year’s increased by the CPI. I think there were some technical changes in the earlier years (the first numbers differed between farm and non-farm I believe), but this is the general idea.
The important point is that there has never been a “market” basket for anything except the initial food budgets. Nobody in the gov’t has a list of things you should be able to afford with an FPL income.
Thanks. Fascinating, for sure. Calling it a strange metric is overly generous. I’d be reluctant to use it to interpret it as any kind of minimum living wage. But the name is certainly suggestive in that regard.
If a lower income spouse starts benefits at their normal retirement age, this person will get at least 50% of the higher income spouse’s PIA.
(I think SS technically says the lower income spouse gets their own benefit if any, then gets an incremental benefit to get up the 50%.)
that’s what I understood. spouse gets higher of (their own earned benefit, 50% of spouse’s earned benefit). when one dies, the survivor gets 100% of the higher earned benefit I believe (own or spouse’s)
Correct.
This is one reason the higher earning spouse should delay taking benefits. First, the higher benefit is paid to the second of the two deaths. And, if the higher income person dies first, the lower earning spouse “steps into his shoes” and gets the benefit which may be increased due to the deferred start.
The West Wing dug into this on The Indians in the Lobby episode (which separately included a call to the butterball hotline).
Bruce Schobel is an expert of course, but i think the early retirement reduction (if any) on the earlier to retire spouae continues even if the later to retire spouse’s benefit is large enough to give the spouse a higher payment.
That is true while they are both alive. However, if the higher earning spouse “earned delayed retirement credits” by starting the benefit after their full retirement age, then dies …
(e) What is the effect of my delayed retirement credits on the benefit amount of others entitled on my earnings record? —(1) Surviving spouse or surviving divorced spouse. If you earn delayed retirement credits during your lifetime, we will compute benefits for your surviving spouse or surviving divorced spouse based on your regular primary insurance amount plus the amount of those delayed retirement credits.
The Census Bureau has a “Supplemental Poverty Measure” which is different from the official poverty number in a number of way. AFAIK, the SPM isn’t used in any laws.
But, it does not use a defined market basket of goods, either.
The SPM poverty threshold is the 33rd percentile of out-of-pocket FCSU expenditures of consumer units with two children multiplied by 1.2
FCSU is food, clothing, shelter, and utilities. The “percentile” comes from the Consumer Expenditure Survey.
(And, no, Orshansky did not use any information from Poland in developing her number.)
I agree. I would like to see the market basket of stuff that the FPL is meant to buy.
DOGE reports $170B in savings. I’m certain that’s an overstatement, but lets go with it. The extension of the estate tax exemption alone, will cost $200B.
I’m not a numbers guy, but that seems really bad.
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