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Prepare For A 23% Cut In Your Social Security Benefits

  1. #61
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    When SS was first implemented, in about 1935, the average life expectancy was in the low 60's...and there were about 14 people paying into the system for every One drawing benefits. Today, the average life expectancy has increased to around 75....a gain of 15 years....and there are less than 3 people paying in to the system for every One drawing benefits. It doesn't take a math genius to see the basic problem SS faces. Withholding has increased, over the years, but nowhere near enough to account for the increasing number of retirees. One of the easiest solutions would be to remove the "Cap" on earnings, so those making over $125K a year would pay a percentage of their total earnings...but even that will not suffice as people continue to live longer.

    The government "benefit" programs are all headed for serious problems....Congress had to do some manipulation last year to keep SSDI solvent past 2018. Medicare is going to be in trouble somewhere around 2022...and given the number of people who rely on Medicare, our government is going to have to do some major work to avoid that program going under. How Medicare is handled will be a pretty good indicator of just what the future holds for SS.
    Things get better with age....I'm approaching Magnificent.

  2. #62
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    Quote Originally Posted by Don M. View Post
    When SS was first implemented, in about 1935, the average life expectancy was in the low 60's...and there were about 14 people paying into the system for every One drawing benefits. Today, the average life expectancy has increased to around 75....a gain of 15 years....and there are less than 3 people paying in to the system for every One drawing benefits. It doesn't take a math genius to see the basic problem SS faces. Withholding has increased, over the years, but nowhere near enough to account for the increasing number of retirees. One of the easiest solutions would be to remove the "Cap" on earnings, so those making over $125K a year would pay a percentage of their total earnings...but even that will not suffice as people continue to live longer.

    The government "benefit" programs are all headed for serious problems....Congress had to do some manipulation last year to keep SSDI solvent past 2018. Medicare is going to be in trouble somewhere around 2022...and given the number of people who rely on Medicare, our government is going to have to do some major work to avoid that program going under. How Medicare is handled will be a pretty good indicator of just what the future holds for SS.
    I think what you aren't directly mentioning is things like factories moving offshore, out-sourcing of jobs to offshore workers, and mass immigration of under educated and unskilled workers that are willing to undercut livable wages contribute to the problem. The SS system depends on a well paid workforce that contribute to the pot of funds available. Government policies and how well they are enforced/executed has a huge impact on SS... not only on who gets what of the pie, but how the pie is built and maintained.

  3. #63
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    that really is not the case for life expectancy . that is from birth and not a very accurate measure .

    as michael kitces points out :

    “life expectancy” can be a somewhat misleading term. Many people hear the term and think of it as a measure of how long they can “expect to live”. In reality, though, life expectancy is a measure of the average time a person within some particular population is expected to live. While the average is meaningful in many respects, it may not always provide the best measure for setting expectations about the actual age someone is likely to reach. Because mortality rates aren’t constant across a lifespan and the distribution of ages at death are heavily skewed (i.e., more people die old than young), commonly cited life expectancy measures—particularly life expectancy at birth, which is most often cited in the media—may result in misleading expectations.
    For instance, a child born in 2014 has a life expectancy (average age at death) of 79. However, the median age of death for the same child is 83, and the modal (most common) age at death is 89! Given the shape of the distribution of ages at death (negatively skewed), it’s simply a mathematical fact that the mean is going to be lower than the median or the mode

  4. #64
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    One can argue to merits of Life Expectancy, vs Median Age, etc., but the fact remains that SS, in its present form, is not going to be the reliable source of income that it has been in the past. There are some 80 million Seniors who derive much, if not all, of their monthly income from SS, and the present system is Not set up to handle Half that number in the long term. There are many reasons for the shortfall in the Trust Fund...illegal immigration, outsourcing of manufacturing jobs, etc., all leading to a stagnant Middle Class, and the inability of many workers to contribute substantially to the trust fund. Less money is coming in, and people ARE living longer, so basic math says that this program is headed for a brick wall. Anyone younger than, say 50 years old, better be ramping up their individual savings and retirement plans, or they will be in for a rude awakening in another 15 years.
    Things get better with age....I'm approaching Magnificent.

  5. #65
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    Median age, average age I think it comes down to if you haven't planned and Soc. Sec. is your only source of retirement income life in retirement is not going to be fun. This article explains the differance between "mean" & "median". Doesn't look to good to me, I can't imagine what a future cut of 23% will do to people with so little put away for their retirement.

    Here's how much the average family has saved for retirement at every age
    Kathleen Elkins Fri, Apr 7 8:28 AM PDT .

    When it comes to retirement savings, how do you stack up?
    According to a report from the Economic Policy Institute (EPI), the mean retirement savings of all working-age families, which the EPI defines as those between 32 and 61 years old, is $95,776.
    But that number doesn't tell the whole story. Since so many families have zero savings and since super-savers can pull up the average, the median savings, or those at the 50th percentile, may be a better gauge. The median for all working-age families in the U.S. is just $5,000.
    As the charts show, retirement preparedness varies by age. Not surprisingly, younger families have less stashed away. Here's a breakdown of the mean and median retirement savings of U.S. families at every age:

    Mean retirement savings of families between 32 and 37: $31,644
    Median retirement savings of families between 32 and 37: $480
    Mean retirement savings of families between 38 and 43: $67,270
    Median retirement savings of families between 38 and 43: $4,200
    Mean retirement savings of families between 44 and 49: $81,347
    Median retirement savings of families between 44 and 49: $6,200
    Mean retirement savings of families between 50 and 55: $124,831
    Median retirement savings of families between 50 and 55: $8,000
    Mean retirement savings of families between 56 and 61: $163,577
    Median retirement savings of families between 56 and 61: $17,000
    How big should your nest egg be?
    The answer is highly personal, and specific dollar amounts can be arbitrary, but according to retirement-plan provider Fidelity Investments, a good rule of thumb is to have 10 times your final salary in savings if you want to retire by age 67.
    Fidelity also suggests a timeline to use in order to get to that magic number:
    By 30: Have the equivalent of your salary saved
    By 40: Have three times your salary saved
    By 50: Have six times your salary saved
    By 60: Have eight times your salary saved
    By 67: Have 10 times your salary saved

    https://www.yahoo.com/finance/news/h...152813382.html

  6. #66
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    I am somewhat amazed at the number of Seniors who have little to show for a lifetime of work....and some even still making mortgage payments. I guess they figured they would never get old. The best thing the Government ever did for the working people is the 401k/IRA plans...I just wish those had been available when I first started working. We had two daughters, and they were costly little rascals, so when they became adults, we started saving the thousands of dollars/year we were spending on them. Many of our friends of that age took their extra "child" money, and moved to bigger houses, bought fancy cars, and took lavish vacations. We maintained our lifestyle, maxed out the 401K, and put the "child" money to work, in conservative Mutual funds. Now, if we suddenly decide to take some money and hit the casino, we're not flirting with the grocery money.

    There are any number of reasons why SS is headed for troubles. Today, the Motley Fool released an article that probably explains SS better than most reports I've seen.

    ttps://www.fool.com/retirement/2017/04/08/social-security-is-failing-because-the-program-is.aspx?yptr=yahoo
    Things get better with age....I'm approaching Magnificent.

  7. #67
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    I agree with Don about the amount of savings people have, I think that money management, saving and investing, should be drummed into children's heads from the moment they pick up a coin and put it in their mouth for the first time, LOL!

    The one and only reason that I have a few bucks now is because I signed up for payroll savings the day I started my first real job at age 20. My savings were always skimmed off the top, I never really had to make a decision other than to increase the amount withheld each time I got a raise. The 401K/IRA plans came later but the pattern was set during those early years. Next came the reinvestment of dividends and capital gains on conservative mutual funds. I was not a genius about saving or investing and I'm still not, the knowledge came to me just as slowly as the money accumulated. It seemed that by the time I had saved a thousand dollars I had accumulated the knowledge on how to invest it, when that became ten thousand dollars the knowledge was there and so on.

  8. #68
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    Quote Originally Posted by Knight View Post
    Median age, average age I think it comes down to if you haven't planned and Soc. Sec. is your only source of retirement income life in retirement is not going to be fun. This article explains the differance between "mean" & "median". Doesn't look to good to me, I can't imagine what a future cut of 23% will do to people with so little put away for their retirement.

    Here's how much the average family has saved for retirement at every age
    Kathleen Elkins Fri, Apr 7 8:28 AM PDT .

    When it comes to retirement savings, how do you stack up?
    According to a report from the Economic Policy Institute (EPI), the mean retirement savings of all working-age families, which the EPI defines as those between 32 and 61 years old, is $95,776.
    But that number doesn't tell the whole story. Since so many families have zero savings and since super-savers can pull up the average, the median savings, or those at the 50th percentile, may be a better gauge. The median for all working-age families in the U.S. is just $5,000.
    As the charts show, retirement preparedness varies by age. Not surprisingly, younger families have less stashed away. Here's a breakdown of the mean and median retirement savings of U.S. families at every age:

    Mean retirement savings of families between 32 and 37: $31,644
    Median retirement savings of families between 32 and 37: $480
    Mean retirement savings of families between 38 and 43: $67,270
    Median retirement savings of families between 38 and 43: $4,200
    Mean retirement savings of families between 44 and 49: $81,347
    Median retirement savings of families between 44 and 49: $6,200
    Mean retirement savings of families between 50 and 55: $124,831
    Median retirement savings of families between 50 and 55: $8,000
    Mean retirement savings of families between 56 and 61: $163,577
    Median retirement savings of families between 56 and 61: $17,000
    How big should your nest egg be?
    The answer is highly personal, and specific dollar amounts can be arbitrary, but according to retirement-plan provider Fidelity Investments, a good rule of thumb is to have 10 times your final salary in savings if you want to retire by age 67.
    Fidelity also suggests a timeline to use in order to get to that magic number:
    By 30: Have the equivalent of your salary saved
    By 40: Have three times your salary saved
    By 50: Have six times your salary saved
    By 60: Have eight times your salary saved
    By 67: Have 10 times your salary saved

    https://www.yahoo.com/finance/news/h...152813382.html
    for the most part these how much should you have at the various ages are way off base . we all have different times in our lives that saving money is harder than others , different times the markets and our investments co-operate and different times we are able to take advantage of opportunity . i have rarely seen any of us on the same schedule .

    it took me 50 years of life before i saw my first million but only 13 years to triple it . as the amount got larger the opportunity and deals i could take part in grew bigger and more exclusive .

    others have different schedules as to how their wealth grew

  9. #69
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    Quote Originally Posted by mathjak107 View Post
    for the most part these how much should you have at the various ages are way off base . we all have different times in our lives that saving money is harder than others , different times the markets and our investments co-operate and different times we are able to take advantage of opportunity . i have rarely seen any of us on the same schedule .

    it took me 50 years of life before i saw my first million but only 13 years to triple it . as the amount got larger the opportunity and deals i could take part in grew bigger and more exclusive .

    others have different schedules as to how their wealth grew
    I must have read that article wrong. I didn't read anything about what a person should have I read it as an explanation of the difference between "mean" and "median" .

    There was this qualifier in the article.

    "How big should your nest egg be?
    The answer is highly personal, and specific dollar amounts can be arbitrary," I'm pretty sure that is a quick way of saying

    Quote
    " we all have different times in our lives that saving money is harder than others , different times the markets and our investments co-operate and different times we are able to take advantage of opportunity"

    I don't know where the article author got her facts and figures, but if the median retirement savings of families is between 56 and 61: $17,000 is true. Then There are going to be a whole lot of people hurting if that 23% cut does happen.

    I was fortunate to have the help of my wife to be comfortable now. I'm happy for you to have accumulated the amount that you have.

  10. #70
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    Quote Originally Posted by mathjak107 View Post
    i always watch live at darry'ls house
    I actually got hip to Live At Darryl's House after watching his video several time. Then of course YouTube offers up several suggestions for you. That reminds me, there's more of those sessions I have to check out. He is one cool guy.

  11. #71
    Well, trump has to get his $54,000,000,000 from somewhere... I've always maxed out my 401 and started an ROTH IRA on my own. I always just assumed SS wouldn't be there anyway... Here in Pennsylvania there are other programs to help the less fortunate anyway.

  12. #72
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    Quote Originally Posted by mathjak107 View Post
    for the most part these how much should you have at the various ages are way off base . we all have different times in our lives that saving money is harder than others , different times the markets and our investments co-operate and different times we are able to take advantage of opportunity . i have rarely seen any of us on the same schedule .

    it took me 50 years of life before i saw my first million but only 13 years to triple it . as the amount got larger the opportunity and deals i could take part in grew bigger and more exclusive .

    others have different schedules as to how their wealth grew
    Congratulations on your impressive financial success!

  13. #73
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    Thanks

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