Us Social Security

[Wrong Turn]

If you would like more details on the cola check out

http://www.ssa.gov/cola/colafacts2009.htm

Thanks, BEENTHEREDONETHAT.

For 08 and 09 the employee contribution will be 7.65%.

I see this going up in the near future.

SS employee taxes (and employer) taxes will have to go up.

PeaceBlondie or anyone:

Do we know how high these SS taxes are going to go?

[PeaceBlondie]

For 08 and 09 the employee contribution will be 7.65%.

I see this going up in the near future.

SS employee taxes (and employer) taxes will have to go up.

PeaceBlondie or anyone:

Do we know how high these SS taxes are going to go?

In over 20 or more years that I can recall, these have been the rates (and double for self-employed, but with credits). I recall politicians saying the increases are inevitable, but nobody even proposing an increase. Medicare is predicted to run out of cash before old age (OASDI) program does, so look for that to increase first.

[Wrong Turn]

For 08 and 09 the employee contribution will be 7.65%.

I see this going up in the near future.

SS employee taxes (and employer) taxes will have to go up.

PeaceBlondie or anyone:

Do we know how high these SS taxes are going to go?

In over 20 or more years that I can recall, these have been the rates (and double for self-employed, but with credits). I recall politicians saying the increases are inevitable, but nobody even proposing an increase. Medicare is predicted to run out of cash before old age (OASDI) program does, so look for that to increase first.

Yes.

Medicare could bring the US to its knees.

Actually, I thin it will. SS is a disaster; medicare is worse.

[Jingthing]

There is no big problem with Social Security future funding. The funding solution is super simple. Raise the upper income limit where the tax stops. This will almost surely happen. Currently, people earning over 97,500 do not pay any SS taxes above that figure. Socialism for the rich, ha ha ha. Raise it to 200K, problem solved.

Medicare, yes, that's a bigger problem.

Edited November 2, 2008 by Jingthing

[Lost in LOS]

There is no big problem with Social Security future funding. The funding solution is super simple. Raise the upper income limit where the tax stops. This will almost surely happen. Currently, people earning over 97,500 do not pay any SS taxes above that figure. Socialism for the rich, ha ha ha. Raise it to 200K, problem solved.

Medicare, yes, that's a bigger problem.

Raise taxes. always a solution for people that wont have their taxes raised, the "robin hood syndrome"

a few interesting quotes:

"A poor man never hired me"

Larry Elder [black LA talk show host] quoting his father

"I contend that for a nation to try to tax itself into prosperity is

like a man standing in a bucket and trying to lift himself up by the

handle."

- Winston Churchill

"A government which robs Peter to pay Paul can always depend on the

support of Paul."

- George Bernard Shaw

"A liberal is someone who feels a great debt to his fellow man,

which debt he proposes to pay off with your money."

- G Gordon Liddy

"Foreign aid might be defined as a transfer of money from poor

people in rich countries to rich people in poor countries."

- Douglas Casey, Classmate of Bill Clinton at Georgetown University

"Giving money and power to government is like giving whiskey and car

keys to teenage boys."

- P.J. O'Rourke, Civil Libertarian

"Government is the great fiction, through which everybody endeavors

to live at the expense of everybody else."

- Frederic Bastiat, French Economist (1801-1850)

"Government's view of the economy could be summed up in a few short

phrases: If it moves, tax it. If it keeps moving, regulate it. And if it

stops

moving, subsidize it."

- Ronald Reagan (1986)

"If you think health care is expensive now, wait until you see what

it costs when it's free!"

- P.J. O'Rourke, Civil Libertarian

"In general, the art of government consists of taking as much money

as possible from one party of the citizens to give to the other."

- Voltaire (1764)

"A government big enough to give you everything you want, is strong

enough to take everything you have."

- Thomas Jefferson

[glyph]

"The funding solution is super simple. Raise the upper income limit where the tax stops."

Another solution is to raise the age at which 100% of the retirement benefits are received. That age has been raised from 65 to 67, depending upon the year you were born. Raising that, by one year for every 5 years, will solve the problem.

[Wrong Turn]

There is no big problem with Social Security future funding.

Funding IS the major problem.

The funding solution is super simple. Raise the upper income limit where the tax stops. This will almost surely happen.

It's not enough.

Medicare, yes, that's a bigger problem.

It's a train crash and the direction cannot be changed.

[PeaceBlondie]

There is no big problem with Social Security future funding. The funding solution is super simple. Raise the upper income limit where the tax stops. This will almost surely happen. Currently, people earning over 97,500 do not pay any SS taxes above that figure. Socialism for the rich, ha ha ha. Raise it to 200K, problem solved.

Medicare, yes, that's a bigger problem.

Jing, there is no such easy solution. SS benefit computations are already socialist. The cleaning lady gets 90% of her lifetime monthly earnings, updated for inflation. Middle class, more like 60 or 65%. Rich guys, only about 35% of what they paid FICA or SECA taxes on. It is progressive, meaning the rich folks pay much more and receive proportionately less. So if you double or quintuple the wage ceiling, you must guarantee those folks a SS pension of two to ten thousand dollars. In fact, that would be grossly unfair, actuarially. But actually, SS has not been actuarially sound since we were in diapers.

[Jingthing]

PB, I agree, the program already favors the people that need it the most. If it pleases you, call it socialist security. But the truth is people want to keep it. By your logic, progressive taxation is wrong, yet that is our system and favored by both major parties. I have done a good bit of reading on this and have concluded that at least in the 30 year time frame, some tweaking will solve the funding. That tweaking will almost definitely will include raising the upper income cutoff and I believe this will happen with either party. The big question is whether other tweaks will be politically possible such as lowering the benefits age and lowering the benefits. I would be worried and angry if I was 20 or 30 now and do think it is very unfair to force them to pay and not guarantee their payout when the time comes. There is an element of generational warfare with this issue, but politically, taking this away from baby boomers will be politically impossible.

Edited November 3, 2008 by Jingthing

[PeaceBlondie]

Jingthing, people understand and generally accept that income tax is progressive, soaking the rich for higher percentages of their annual income, and receiving proportionately fewer benefits for it. I bet that not ten percent of Americans who pay into SS realize how progressive the wage tax is, considering that the plan is supposed to imitate private pension plans. In private plans, for contributing more money, you receive proportionately more of a pension. Any moves to increase the maximum FICA tax base will spark a debate on how unfair it is to upper middle class and executive salaries. This may be a hidden reason why the whole thing is such a political hot potato.

[Jingthing]

PB, even McCain has said that nothing is off the table for tweaking the ss system. Look at the demographics. The population bulge is with the baby boomers and they have been promised this benefit all their lives. It ain't going away, some patch will fix it for the baby boomers. Younger people, that is a problem. Medicare, like I said, that does appear to be a real disaster in the making.

Another thing you fail to mention is that the right wing ideas to restructure ss so that people would have put a portion in the stock market, well, just look at the stock market. That idea is dead for at least decades now.

Edited November 3, 2008 by Jingthing

[Wrong Turn]

PB, even McCain has said that nothing is off the table for tweaking the ss system. Look at the demographics. The population bulge is with the baby boomers and they have been promised this benefit all their lives. It ain't going away, some patch will fix it for the baby boomers. Younger people, that is a problem. Medicare, like I said, that does appear to be a real disaster in the making.

I am 38.

Will I pay the higher Medicare and SS taxes and costs to get less? I think I will first get SS benefits at the age of 67, if I'm alive then.

Edited November 4, 2008 by Wrong Turn

[Jingthing]

PB, even McCain has said that nothing is off the table for tweaking the ss system. Look at the demographics. The population bulge is with the baby boomers and they have been promised this benefit all their lives. It ain't going away, some patch will fix it for the baby boomers. Younger people, that is a problem. Medicare, like I said, that does appear to be a real disaster in the making.

I am 38.

Will I pay the higher Medicare and SS taxes and costs to get less? I think I will first get SS benefits at the age of 67, if I'm alive then.

I think the start date may like you say varies based on your current age. I am in my early 50's and if the rules stay as they are now., will be able to get minimal benefits at age 62, increased benefits if I wait, and medicare starts at 65, though not useful for expats. With SS there is the potential start age and the maxed out benefits age which is course a higher age. A huge percentage of people never live to collect penny one of benefits, and a higher than average portion of those that don't make it are minorities and poor people and people without adequate health care access. With all these entitlement programs, there are huge social implications.

Edited November 4, 2008 by Jingthing

[Jingthing]

PB, even McCain has said that nothing is off the table for tweaking the ss system. Look at the demographics. The population bulge is with the baby boomers and they have been promised this benefit all their lives. It ain't going away, some patch will fix it for the baby boomers. Younger people, that is a problem. Medicare, like I said, that does appear to be a real disaster in the making.

I am 38.

Will I pay the higher Medicare and SS taxes and costs to get less? I think I will first get SS benefits at the age of 67, if I'm alive then.

I think the start date may like you say vary based on your current age. I am in my early 50's and if the rules stay as they are now., will be able to get minimal benefits at age 62, increased benefits if I wait, and medicare starts at 65, though not useful for expats. With SS there is the potential start age and the maxed out benefits age which is course a higher age. A huge percentage of people never live to collect penny one of benefits, and a higher than average portion of those that don't make it are minorities and poor people and people without adequate health care access. With all these entitlement programs, there are huge social implications. In other words it isn't always fair at all, and there are winners and losers, some unfairness built into the system and some based on good or bad luck (like staying alive). There is also a political side. If enough people think it is too unfair to them, they are free to take political action and try to change things, but good luck with beating the demographic of baby boomers who will fight to keep their benefits tooth and nail (now that IRAs and 401Ks have shrunk, now even more than ever).

Edited November 4, 2008 by Jingthing

[JimGant]

Other Americans retired on military, federal civil service, or veterans benefits can expect similar COLA's, but I doubt it will be as high as the SS COLA

Can't speak for civil service or VA benefits, but military retirement pay has the same COLA as SS -- thus also a 5.8% raise come 1 Jan.

Edited November 4, 2008 by JimGant

[JimGant]

what is the current rate that you can make a year before they take taxes from SS ?

If you mean 'offsets,' not taxes, you can have earned income of up to $13560 (in 2008) before your SS payments are offset $1 for every $2 in SS benefits paid. This is if you are collecting SS *before* full retirement age (which is age 66 for those born in '43 and after). No offset if working after full retirement age. And earned income does *NOT* include pensions, annuities, and investment income.

If you really mean actual taxes on SS: Federal taxes on SS begin if your modified adjusted gross income (MAGI) is at least $25000 single, $32000 married. MAGI is essentially all taxable income plus half SS benefits plus tax exempt income. Amount of SS subject to Fed tax is phased in at these markers, with 85% of SS benefits being the max. (See IRS Form 915)

[paulfr]

what is the current rate that you can make a year before they take taxes from SS ?

It depends on what your total income and deduction situation is.

You pay Fed [and State] taxes on your total.

You may also pay SS tax if you are before the Full Retirement age

if you are still earning money from a job.

[jcon]

just curious, what is the max payment now for social security... i seem to recall my old man saying he would get 1500USD/month... and laughed about it saying, 'christ, is this what they expect people to live on who have no investments, savings, etc..."

around 1500 USD still? Or was I mistaken.

I've given up on my country and I haven't' worked enough to make my ss quota (and never plan to), so I have no horse in that race.

[Hawaiian]

SS payments are meant to supplement other retirement income. For those that planned prudently for their golden years

this works fine. For those whose SS benefits are their only source of retirement income, there are other social programs

such as food stamps, rent subsidies, Medicaid, etc. As previous posters have stated the system is not perfect, but does provide a safety net for many folks.

From an economic standpoint, SS payments do benefit the general economy when these monies are spent. Those retirees who have private pensions usually have their plans invested in areas that rely on consumer spending. Multiplier effect and so on.

Income taxes would probably be higher to fund more social programs or expand existing ones if there was no SS. While

not perfect no one has come up with a more politically acceptable scheme.

The future of Medicare does not look good. The healthcare system in the U.S. is a national disgrace. Medicare fraud

and a faulty reimbursement system are just two areas that need to be fixed. Like anything else, the longer it takes

to fix the worst it becomes.

Incidentally, Tricare pays for the annual $135 Medicare deductible. Found that out when I got reimbursed from

my doctor.

[Fore Man]

what is the current rate that you can make a year before they take taxes from SS ?

If you mean 'offsets,' not taxes, you can have earned income of up to $13560 (in 2008) before your SS payments are offset $1 for every $2 in SS benefits paid. This is if you are collecting SS *before* full retirement age (which is age 66 for those born in '43 and after). No offset if working after full retirement age. And earned income does *NOT* include pensions, annuities, and investment income.

If you really mean actual taxes on SS: Federal taxes on SS begin if your modified adjusted gross income (MAGI) is at least $25000 single, $32000 married. MAGI is essentially all taxable income plus half SS benefits plus tax exempt income. Amount of SS subject to Fed tax is phased in at these markers, with 85% of SS benefits being the max. (See IRS Form 915)

Since we're on this...as an ex-pat living in Thailand, I work (on a strictly telecommuting basis) for a U.S. corporation. Since this provides me with earned income, I claim the annual Foreign Earned Income Exclusion (FEIE)($87,600 for 2008) and this substantially reduces my tax liability for the remaining amount that was left below the line (I earn more than $87,600). I also receive income from several defined pension programs, as well as a US military retirement and a VA disability. I have not considered beginning Social Security benefits yet (I am 63) because of my U.S. employment income and its serious impact on my potential net SS proceeds.

My question is this: is the SS offset penalty applied before or after the effect of the Foreign Earned Income Exclusion? If the FEIE is considered in the SS offset calculation for tax purposes, I would probably be better off starting my SS benefits now rather than waiting until I retire for good from my US employment. True or false? Thanks.

Edited February 21, 2009 by Fore Man

[PeaceBlondie]

just curious, what is the max payment now for social security... i seem to recall my old man saying he would get 1500USD/month... and laughed about it saying, 'christ, is this what they expect people to live on who have no investments, savings, etc..."

around 1500 USD still? Or was I mistaken.

I've given up on my country and I haven't' worked enough to make my ss quota (and never plan to), so I have no horse in that race.

mai bpen rai, jcon. It may be over $1,500 now, but only for those folks who earned the maximum salaries for all their working lives, and should have a million dollars saved privately. There is no minimum; you might be eligible for $19/month some day.

[Lost in LOS]

what is the current rate that you can make a year before they take taxes from SS ?

If you mean 'offsets,' not taxes, you can have earned income of up to $13560 (in 2008) before your SS payments are offset $1 for every $2 in SS benefits paid. This is if you are collecting SS *before* full retirement age (which is age 66 for those born in '43 and after). No offset if working after full retirement age. And earned income does *NOT* include pensions, annuities, and investment income.

If you really mean actual taxes on SS: Federal taxes on SS begin if your modified adjusted gross income (MAGI) is at least $25000 single, $32000 married. MAGI is essentially all taxable income plus half SS benefits plus tax exempt income. Amount of SS subject to Fed tax is phased in at these markers, with 85% of SS benefits being the max. (See IRS Form 915)

yep, this is what i was asking for, thanks Jim and to all that responded. i will have to reread this a few times to make sure i understand it.

maybe someone can give me an example. i will give easy figures to make it simple, not the real ones but just in example

interest income 50k per year

1500 SS payment

no write offs

what part of that SS do you end up with?

thanks

Edited February 21, 2009 by Lost in LOS

[jcon]

just curious, what is the max payment now for social security... i seem to recall my old man saying he would get 1500USD/month... and laughed about it saying, 'christ, is this what they expect people to live on who have no investments, savings, etc..."

around 1500 USD still? Or was I mistaken.

I've given up on my country and I haven't' worked enough to make my ss quota (and never plan to), so I have no horse in that race.

mai bpen rai, jcon. It may be over $1,500 now, but only for those folks who earned the maximum salaries for all their working lives, and should have a million dollars saved privately. There is no minimum; you might be eligible for $19/month some day.

Well the old man is a Retired Radiologist, so yes max pay in the max pay field in a era of max pay for physicians (~1960-~2000)... for 35 years, and yes he's got other cash in the piggy bank (which has seen 2 bubbles burst since his retirement in 1997)...

my comment was more of of a commentary that if a man of his high income is entitled to a measly 1500 ss benefit, (out-going expenses I'd guess to be around 15k USD/month, just him and my mom, not living 'excessively' - NO MORTGAGE, NO DEBT), then those who didn't earn max salaries are going to get fcked.... be we already knew that already, at least my generation does. And if the few years I worked in the US gives me a ss of 19USD/mo, I will promply use it to buy toilet paper, but only to be used when i have diarrhea. In that way I can at least get the government' to wipe my ass in times of severe diarrhea.... because that's all they are good for as far as I'm concerned.

[paulfr]

My question is this: is the SS offset penalty applied before or after the effect of the Foreign Earned Income Exclusion? If the FEIE is considered in the SS offset calculation for tax purposes, I would probably be better off starting my SS benefits now rather than waiting until I retire for good from my US employment. True or false? Thanks.

Your question assumes that the offset is the same if you live in Thailand or the US.

It is not.

In the US it is earning s after approx $14160 that reductions begin.

In LOS it is working more than 40 hours per MONTH.

AND if you work for 41 hours, all your beneifts are suspended.

That is how I understand it.

[hhgz]

"interest income 50k per year

1500 SS payment

no write offs

what part of that SS do you end up with?"

Why do you state the interest income as an annual payment, but the FCIA as a monthly payment? The highest FCIA payment is in excess of 2000/month, depending upon several things, all of which are described on the SSA website. Assuming that you're retiring at the age for full benefits, I'd guess you'd keep about 65% of your income - whether its interest or FICA.

[PeaceBlondie]

Just guessing, that the poster was asking if he drew the $1,500 per month SSA pension ($18K per year)....and had $50K in interest income, what would his MAGI be (roughly 59,000), what part of his SSA would be included in taxable income? I can figure it out for US$66 an hour...

jcon, it is your wealthy father who gets fcked on the benefit formula, just as he did on the income tax formula. The formula gives the washer woman 90% of her lifetime earnings, and your father gets a tiny fraction of his. He can use it to pay the butler, or pay for some good booze. His wife gets half his amount, also.

[Fore Man]

My question is this: is the SS offset penalty applied before or after the effect of the Foreign Earned Income Exclusion? If the FEIE is considered in the SS offset calculation for tax purposes, I would probably be better off starting my SS benefits now rather than waiting until I retire for good from my US employment. True or false? Thanks.

Your question assumes that the offset is the same if you live in Thailand or the US.

It is not.

In the US it is earning s after approx $14160 that reductions begin.

In LOS it is working more than 40 hours per MONTH.

AND if you work for 41 hours, all your beneifts are suspended.

That is how I understand it.

Thanks. I've sent the question to my US-based tax accountant to see how he responds. Even though I live here, I do not generate income in Thailand and do no business within these borders...it is all generated in the USA and paid by my US company directly into my USA bank account. So living in LOS should not make a difference. I am mainly curious to learn what effect if any the Foreign Earned Income Exclusion would have if I began taking SS benefits before I retire from my employment.

[TerryLH]

To go back a few posts;

"5.8%.

That is a large increase.

Inflation is that high in the US?"

The period of time used to compute the COLA was during the high oil prices.

Luckily, now that oil prices have come down, the COLA awarded for SS continues.

[lanny]

Thanks. I've sent the question to my US-based tax accountant to see how he responds. Even though I live here, I do not generate income in Thailand and do no business within these borders...it is all generated in the USA and paid by my US company directly into my USA bank account. So living in LOS should not make a difference. I am mainly curious to learn what effect if any the Foreign Earned Income Exclusion would have if I began taking SS benefits before I retire from my employment.

Whether or not you draw social security benefits has no effect on the Foreign Earned Income Exclusion. Ss benefits are not earned income and are not eligible for the exclusion. You have to be earning something outside the US, for work outside the US, to be able to exclude anything.

[Fore Man]

Whether or not you draw social security benefits has no effect on the Foreign Earned Income Exclusion. Ss benefits are not earned income and are not eligible for the exclusion. You have to be earning something outside the US, for work outside the US, to be able to exclude anything.

Ah yes, this is the root of the issue. I completely understand the definition of earned vs pension income. The FEIE allows me to exclude the majority of my U.S. earned income...the amount of which has a great deal to do with how much I am penalized when accepting SS benefits. Is that earned income amount affecting the SS calculation determined before or after the FEIE is applied?