Social Security Financing Gutted by 2023???

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StarSong

StarSong

Awkward is my Superpower
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Probably because of this.

Trump Signs Payroll Tax Deferral Executive Order
Thursday, August 13, 2020
Over the weekend, President Trump signed an executive order purporting to defer the payment of the employee’s share of the Social Security portion of FICA (payroll) tax from September 1, 2020, until December 31, 2020. The order is limited to only the employee’s share of the Social Security portion of the payroll tax, which is currently set at 6.2%. The order does not affect the Medicare portion of the payroll tax (1.45%), nor does the order affect the employer portion of the payroll tax, so these will still have to be withheld (where applicable) and deposited on a timely basis. The order also limits deferrals to employees with biweekly, pretax income of less than $4,000, or a similar amount where a different pay period applies. This roughly equates to an annual salary of $104,000. Importantly, the order is not a suspension of the payroll tax (a “payroll tax holiday”), but merely a deferral. The president directed the Treasury to seek ways to implement a full suspension at a later date, including by legislative action.

The order does not dictate how employers are supposed to comply with its terms, although it is anticipated that the Treasury will provide additional guidance relating to compliance. Until additional guidance is issued, an employer is left with three options:

Full article at this web site

https://www.natlawreview.com/article/trump-signs-payroll-tax-deferral-executive-order

Of more concern should be the deficit that will impact the time frame for reduction.

An opinion article that IMO is closer to becomming a reality. Note the word could as in a possibility.


Social Security benefit cuts could be coming — here's who it will affect first

https://www.yahoo.com/news/social-security-benefit-cuts-could-161749521.html
 
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Nathan said:
A large percentage of seniors are Trump supporters, and are in the (usual) denial frame of mind.
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without getting political.
denying what?

you did read this didn't you.
The order does not affect the Medicare portion of the payroll tax (1.45%), nor does the order affect the employer portion of the payroll tax, so these will still have to be withheld (where applicable) and deposited on a timely basis.
 
I don't think any politician would ditch SS.... sure hope not... I've paid into it 40 years hoping to collect it soon.... don't trust NBC one bit especially during a political year with a president they hate.
 
We all knew that at some point, SS would be cut back (not cut out altogether). Most articles I read from sources I would trust to make the most accurate guesses at the time I retired, indicated that SS would have to be cut by 25% across the board by 2034 because SS would be "broke". However, what that really means is that SS would no longer have reserves, but instead that SS would only have what it was taking in through payroll taxes to distribute to retirees. I would expect the current COVID-19 situation to have a negative impact on even this prediction.

Our way to prepare for that was to purchase an annuity that will start when I turn 70 in another 3 years and pay us almost as much as I get from SS (much more than the average SS payment) for life. That is our safety net. At that time, people were telling me how stupid that move was because it doesn't account for inflation. These days, people are advocating such a move. There were other reasons we chose that route too, but those are not relevant to this discussion.

I can't advise anybody else what they should be doing to prepare for retirement because we each have our own unique situations. I am just saying that this is what we chose to do, and SS being in trouble has not been news for quite some time and nobody should be surprised, so we really have all been forewarned to plan alternative incomes for quite some time now.

I do agree with those who feel it isn't fair that, when our time comes to collect, we are hearing that we won't be able to (at least to the level we are supposed to be getting). Like many here, I have been paying into SS since I was 15 1/2 (except the time I was in Vietnam), and for the past 20+ years, have been paying in the maximum. If I could have invested that money instead, I would be much farther ahead, but the basic idea was that those working are supporting those retired, rather than putting it away for their own use.

One big problem is that when SS was originated, the life expectancy of a retiree was only a couple of years. It has been routine for some time now that people are living longer in retirement than they spent working and paying in. Also, people are having fewer kids, making for a smaller work force, not to mention the government "borrowing" from SS when it needed extra funds for other ventures.

I find it interesting that medical science has found ways to extend our lives, but nothing has been done to figure out what to do with us socially or economically.

Tony
 
StarSong said:
@Knight, I referred specifically to the effect on Social Security, not Medicare.
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I was showing the difference between S S & Medicare payroll deductions.
Parts of Medicare
Social Security enrolls you in Original Medicare (Part A and Part B). Medicare Part A (hospital insurance) helps pay for inpatient care in a hospital or limited time at a skilled nursing facility (following a hospital stay). Part A also pays for some home health care and hospice care.
Medicare Benefits | SSA - Social Security

Medicare would still be funded but SS would take the hit if congress actually addressed the problem. I could be wrong but IMO Trump is forcing congress to look at seriously. I don't think any one can deny funding for SS is taking a hit due to the loss of taxable wages from Covid-19
 
Knight said:
I don't think any one can deny funding for SS is taking a hit due to the loss of taxable wages from Covid-19
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It sure doesn't help to suspend the collection of those taxes and to suggest a permanent elimination of them.

I don't understand reducing taxes for people who are working, while squawking about helping those who've lost their jobs.
 
I refuse to discuss Politics, the Election, Riots, Racism, BLM, etc. anymore and will block anyone that insists on "discussing" either one. It isn't worth the aggravation. Just a statement, not a discussion :cool: I do browse once in a while, but never stay long as my head starts exploding! :LOL:
 
KimIn Wis said:
I refuse to discuss Politics, the Election, Riots, Racism, BLM, etc. anymore and will block anyone that insists on "discussing" either one. It isn't worth the aggravation. Just a statement, not a discussion :cool: I do browse once in a while, but never stay long as my head starts exploding! :LOL:
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It's a free internet. Ya gotta do what ya gotta do.
p.s. This regards Social Security, a topic near and dear to the heart of most Americans on this forum.
 
This article from MarketWatch is the most succinct I've read so far. As far as what's actually going to happen ...who knows. I'm mid 50s and have been told all my life that SS was doubtful for my generation.

Excerpt:

The programs rely heavily on payroll taxes. The CBO expects reported receipts from payroll taxes to increase this year despite record levels of unemployment in recent months, but that will change in subsequent years, it said. Lower interest rates and price levels will also reduce the cost of Social Security and other related health care programs, according to the Committee for a Responsible Federal Budget, which did an analysis on CBO’s updated outlook.​
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Still, Social Security is in trouble. The two trust funds that support the program, which pays out retirement benefits as well as disability and survivorship benefits, are already at risk of running out of money within the next two decades. With the impact of the pandemic under review, the CBO estimates the insolvency date for Social Security Disability Insurance to be 2026, and the Social Security retirement program, known as Old-Age and Survivors Insurance, by 2031. Medicare Hospital Insurance faces insolvency by 2024 if nothing is done to rectify these projections.​
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“In other words, today’s youngest retirees will face a sharp 25% drop in their benefits when they turn 73,” the CRFB said in an analysis about the CBO’s report. The cut is attributed to less tax revenue, an aging population that will inevitably claim Social Security benefits and trust fund assets that grow at a lower interest rate.​
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IMO the notion of a payroll tax deferral and possible forgiveness is a mistake.

When you dig a hole it takes twice as much work to get out of it as it did to get into it.

As far as cutting social security benefits it already happens to me every year when I file my income tax and a portion of my social security benefits are taxed. The social security administration giveth and the IRS taketh away. :(
 
unfortunately Social Security is a political topic very often. Its a tin can they keep kicking down the road to avoid dealing with it or fixing it, if it can be fixed. 40 years paying into it, Im hoping to collect soon...
 

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