Prepare For A 23% Cut In Your Social Security Benefits

IMO we will not see an actual cut to our benefits, I think it will be more subtle.

I think that the rate of inflation will go up faster than the Social Security COLA allowance and we will see our purchasing power reduced, not the actual benefit.
 
the cola adjustments have nothing to do with anyone's personal cost of living . in fact the cpi is just a price tracker on a basket of goods and services . you may use little of what went up or down or a lot .

the cpi is a measure of no ones personal cost of living . this is why inflation proof bonds are not a very good idea . your costs will never match up with a price change index .

how many times you buy something x the price change x some quality factor is what makes up your own personal cost of living . better products tend to have higher mark ups and increases so what you buy quality wise is a factor . it may be more , have a higher price increase but not get replaced as much ..

renters can see greater inflation than homeowners with fixed or paid off mortgages too so there really is no way any cpi index apply's to you .
 
what you say above may be true; however, Aunt Bea is still right about the fact the the Medicare premium ate up any increase we got, and that the fact we got no increase affects our purchasing power. Prices on almost everything went up last year, and our SS hasn't gone up for 2 years not.
 
the reality is whether we like it or not any inflation adjusting to match our individual cost of living has to come from our own savings and investments . it is really no different than my working years when i got a raise and the increases in our health insurance exceeded the raise . at least now they are capped at the amount of the raise if you are collecting .

the united states consists of 1500 mini economy's and we all see things differently . this is the 2nd year in a row for as long as i can remember ,we had no rent increases for 1/2 of nyc's housing which effects millions of people ..

my wife went on medicare and our health insurance dropped a lot . driving our jeep was cheaper than ever thanks to low energy costs . but what we saw i bet is not what you saw ...
 
IMO reading and understanding what mathjak107 said is important. Where you live, how you planned for retirement, makes a difference in each persons perception about the projected cut 17 years from now.

It may come down as an individual do you think the projected cut is really going to be needed? I do, but I doubt I'll be alive to be affected by it.
 
just think of the difference in inflation between someone owning a house in cheapsville usa vs renting in the bay area or long island or westchester.

another factor is discretionary income .

study after study shows that senior spending is smile shaped as we age . we tend to spend more early on in retirement , then spending falls off a cliff until our 80's when it ramps up again for healthcare .

what we no longer do or buy as we age tends to have those dollars cover the increases in the things we do buy and do . that makes inflation effects a lot less .

but if everything is a need and non discretionary then the likelihood of cutting back on certain things is nil when everything is a need and not just a want .
 
I checked the SS actuary tables and I'm scheduled to kick the bucket the last week of November, 2030. So I don't have to worry about 2033 :)
 
as michael kitces said :

“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.
 
mathjak107 said:
just think of the difference in inflation between someone owning a house in cheapsville usa vs renting in the bay area or long island or westchester.

another factor is discretionary income .

study after study shows that senior spending is smile shaped as we age . we tend to spend more early on in retirement , then spending falls off a cliff until our 80's when it ramps up again for healthcare .

what we no longer do or buy as we age tends to have those dollars cover the increases in the things we do buy and do . that makes inflation effects a lot less .

but if everything is a need and non discretionary then the likelihood of cutting back on certain things is nil when everything is a need and not just a want .
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That's all well and good Mathiak107 but I have online friends who are suffering financially, who are stretched to the max with their incomes. Any increase in food and medications is painful to them. I know people who are not even close to their 80's yet who are taking several medications. Their Medicare plan is not an excellent one like mine is. They are paying a lot out of pocket. And I don't know what formula they are using to count food because food has gone up more than .030%.

And you are right about the life expectancy tables. I'm sure my mother wouldn't have made it to 80 based upon what some sites use to "tell you" how long you can expect to live. She was overweight, had smoked until she was probably in her 40's or 50's. She didn't get much exercise unless you count housework. She ate fatty foods since she did the southern cooking thing. My mother lived to be 97 years old.
 
it really does not matter what personal situations are when you are talking about the cost of living adjustments based on 1500 mini economies . someone having an under funded retirement is their own issue . not that we can't feel bad for them but when you fail financially to be able to adequately provide for your retirement there are other issues involved other than social security trying to match your personal situation . .

unfortunately retirement is a privilege for those who can afford not to have to find a way to work . no one is guaranteed the right not to have to work at any age . that falls on us personally with ss as just a safety net or supplement to our own means .

yeah , not everyone can have the means to retire , or even can work , but disability and ss are not made to support everyone who can't in the manner they like . the burden is really on all of us is to at least achieve enough of a way to support ourselves if we can't work . that is just how the system here is , good or bad . the fact someone can't has nothing to do with how cola's are calculated .
 
mathjak107 said:
it really does not matter what personal situations are when you are talking about the cost of living adjustments based on 1500 mini economies . someone having an under funded retirement is their own issue . not that we can't feel bad for them but when you fail financially to be able to adequately provide for your retirement there are other issues involved other than social security trying to match your personal situation . .

unfortunately retirement is a privilege for those who can afford not to have to find a way to work . no one is guaranteed the right not to have to work at any age . that falls on us personally with ss as just a safety net or supplement to our own means .

yeah , not everyone can have the means to retire , or even can work , but disability and ss are not made to support everyone who can't in the manner they like . the burden is really on all of us is to at least achieve enough of a way to support ourselves if we can't work . that is just how the system here is , good or bad . the fact someone can't has nothing to do with how cola's are calculated .
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You are right mathjak107. Unfortunately too large a percent of the population has either ignored the importance of planning for their senior years or just never had enough funds to do so. I know people who made good money...heck had great salaries and spent like it was water coming out of a tap. It's as if they thought it would last forever. Then they fell on hard times when their income streams either stopped or were reduced. America as a whole is in a pitiful state as far as retirement readiness is concerned.:(
 
OneEyedDiva said:
You are right mathjak107. Unfortunately too large a percent of the population has either ignored the importance of planning for their senior years or just never had enough funds to do so. I know people who made good money...heck had great salaries and spent like it was water coming out of a tap. It's as if they thought it would last forever. Then they fell on hard times when their income streams either stopped or were reduced. America as a whole is in a pitiful state as far as retirement readiness is concerned.:(
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I fear it may get worse when the kids find out that mom and dad spent the inheritance.
 
Aunt Bea said:
I fear it may get worse when the kids find out that mom and dad spent the inheritance.
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I had gone to two pre-retirement seminars the state offered for it's workers. That was over 20 years ago. A different financial planner spoke at each event. Both of them advised that we not think of leaving inheritances for our children. I would love to leave something for my son and plan to unless I get a catastrophic illness, have to go into a nursing home or there are drastic changes in our group Medicare plan. But he knows not to count on it. My son says he wouldn't put me in a home but circumstances could change that. I've talked with him and my oldest grandson about getting serious regarding retirement planning and my grandson is only 27. As the song says "Mama may have and poppa may have but God bless the child that has his own".
 
Oneeye, From what i've read and understood i don't think that they can touch the pensions of the people whom are currently on ss payments. I believe it only pertains to those who are not as yet receiving their benefits.
 
think what you want but it is as true as true can be .

we all go through one of the big three at some point , illness-divorce -job loss . but we all come out very different . a lot of how you end up is based on a history of poor choices and bad decions coupled with motivation ,creativity and a desire to pull a head .

i saw it first hand with the guys i am still friendly with from when i lived in a nyc housing project .

when my career as a pro drummer was being hurt by D.J's back in the 1970's i saw the hand writing on the wall . i needed a new career path . well i thought long and hard and found one . i begged my project buddy's to go to the trade school with me .

there was no way raising my own family was ever going to be in the projects . well they declined and today they all are raising their own family's in the projects , complaining about their low paying jobs and blaming everything and everyone around them . that is a story that repeats over and over sadly .

it is no different than losing weight . very few of the obese population actually have a medical reason . for most it boils down to eat less-move more . but there are more reasons and excuses than carter had pills .

yeah ,some may be valid reasons , we all get that , but that is not the majority . i mean we even have cardio machines at our gym that can use arms only if you have leg and back issues .

those that really want to find a way will generally end up finding a way .

financially it is rarely the "event " that does someone in . it is a history of poor choices , poor prep work and bad decisions generally that leads up to the financial disaster when the event hits .

most of us want to do better but we lack the drive , motivation , control of our lives and creativity to really make it happen . in that case there are lots of excuses and none of them ever reflect those reasons i listed , you can be sure of that.
 
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mathjak107 said:
think what you want but it is as true as true can be .

we all go through one of the big three at some point , illness-divorce -job loss . but we all come out very different . a lot of how you end up is based on a history of poor choices and bad decions coupled with motivation ,creativity and a desire to pull a head .

i saw it first hand with the guys i am still friendly with from when i lived in a nyc housing project .

when my career as a pro drummer was being hurt by D.J's back in the 1970's i saw the hand writing on the wall . i needed a new career path . well i thought long and hard and found one . i begged my project buddy's to go to the trade school with me .

there was no way raising my own family was ever going to be in the projects . well they declined and today they all are raising their own family's in the projects , complaining about their low paying jobs and blaming everything and everyone around them . that is a story that repeats over and over sadly .

it is no different than losing weight . very few of the obese population actually have a medical reason . for most it boils down to eat less-move more . but there are more reasons and excuses than carter had pills .

yeah ,some may be valid reasons , we all get that , but that is not the majority . i mean we even have cardio machines at our gym that can use arms only if you have leg and back issues .

those that really want to find a way will generally end up finding a way .

financially it is rarely the "event " that does someone in . it is a history of poor choices , poor prep work and bad decisions generally that leads up to the financial disaster when the event hits .

most of us want to do better but we lack the drive , motivation , control of our lives and creativity to really make it happen . in that case there are lots of excuses and none of them ever reflect those reasons i listed , you can be sure of that.
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I understand where you are coming from with this Mathjak. I believe that often what you are saying is true but the generalization is what may have come off as elitist. I know people who have made bad choices and even with continued good advice from loved ones, they continued to make those same bad choices. Now they are suffering the consequences. I don't know why people do that. But I've also read stories about people who did everything "right"...had great jobs, saved money, invested well, took good care of themselves and BOOM..something unexpected and catastrophic happened that they just could not recover from. One such story was about a couple who started out well off. The husband racked up several medical bills (don't know what kind of insurance he had) and they got drained. They became homeless and were living in a "tent city" here in N.J. that the city government came in a knocked down. The residents had even built a wooden structure they used as a church. Because of their ages and the husband's health, it was nearly impossible for them to find other work.
 
actually yes . i hated the business after so many years and i put down the sticks 35 years ago . never taught my kids , never brought it up . but for decades i banged on everything in sight . well when i retired my wife said why don't you get a set of pads and play . at first i didn't want to but then i said what the heck .

well it was love at first sight . i have not put those sticks down in over a year . not only that , but through facebook the band from 35 years ago hooked up . we hit the studio last month and we are all chomping at the bit for the next session
 
they will have a cut off like they did for file and suspend if they make changes . it will likely not effect anyone close to collecting .

i don't see reductions in the cards anyway . it would be political suicide with 80 million voting baby boomers
 
"those that really want to succeed will find a way , the rest will just find an excuse."

Easier said than done. A tad mean spirited too. We all come from different places, backgrounds, and times. We all have different challenges and concerns. Also, life isn't fair. If somebody told you it is they've lied to you. We might talk a good talk about equality but any reasonable person knows deep down it's bull.

"Walk a mile in another person's shoes" is more my way of thinking.


 
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