Social Security

[Macanudo 12928]

3 hours ago, Texas Jeff said:

If you want to play with Social Security reform ideas, you can do so here:

https://www.crfb.org/socialsecurityreformer/

To balance social security, you have to get the trust fund projections above zero by choosing policy reforms.

I will never understand why we cap wages that are taxed.  

[Texas Jeff 1932]

2 minutes ago, Macanudo said:

I will never understand why we cap wages that are taxed.  

Well, it's part of the original idea behind Social Security.  Your benefit is determined by how much you make over your lifetime.  And, since there was a maximum benefit, there was also a maximum tax.  Beyond that maximum tax, you weren't increasing your benefit at all.

So, no additional tax because there is no chance of additional benefits.  That was the reasoning.  I don't think that reasoning makes sense today.

[Gatorubet 30117]

1 hour ago, BeardIP said:

Not to be macabre, but to your point, has there been any analysis and recalculation for what COVID-19 deaths did to bolster SS? I have to assume of the million(s?) that died, a goodly number were SS eligible by age.

I'd be curious to see the data being ran and a visualization of if covid-19 didn't happen X and since covid-19 deaths happened, Y. 

I would think a couple forces are at work.  One, a lot of olds died of Covid, which should help the fund.   Two, a lot of people economically hurt by Covid’s increased unemployment -and negative impact on self-employed and small businesses - likely resulted in people in their early 60s having to start their benefits earlier than optimal to have food and mortgage payments paid (they see about an 8% reduction for each year taking it early).   And, of course, unemployment means less $ to fund.  

That need to tap retirement funds early may have resulted in a groundswell of benefits requested in a shorter period of time than normal - like a run on a bank.  The thing is, in the long term, taking benefits at a younger age should reduce the strain on the fund over time, as the people who did so will be getting a net reduction in the total amount amount of Social Security benefits received over their remaining lives.

How that all works out in the big picture I have no idea.

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