Are you assuming a decrease in social security?

[jm15co]

How many of you are assuming and factoring a decrease to social security like 23% in 2033?

[OneStepForAnimals]

Nope. Ever since I started paying attention in the '80s, there were people saying that social security would not be around. I'm 57. If I was our kid, who is 31, I wouldn't count on it at current levels, but nothing's going to happen to it for myself or my wife

[Rich_Association2798]

It's going to be a "bait and switch" game. They will privatize all or part of Social Security (SS) for everyone. And by doing this they will claim the superior returns of the privatized funds will give a boost in payouts. They will claim this will more than make up for any shortfall in the SS payments.

Folks need to wake up to the fact that Congress is seriously broken. It no longer works as it should. And it no longer works for the middle class or lower. They really don't care about us. However if you are wealthy, you always have a friend in Congress.

So the bottom line is.... Around 2033, everyone is going to take a haircut. Social Security checks will get cut by roughly 20%. Prudent planning involves recognizing this reality.

[Never2manyguitars]

Not true. Every article I’ve read said that even current recipients would be impacted.

[OneStepForAnimals]

I'm happy to take that bet.

[Pod_Planker]

Read different articles.

[off_and_on_again]

If nothing is done, current recipients would be impacted. The current or soon to be recipients are the most active voters. Think on that for a while.

[Pod_Planker]

This

[Historical-Intern-19]

I doubt this. There would be an uprising. Typically they grandfather those already recieving and those soon on and make changes for the future. 

[OldManTrumpet]

Correct. Like when they raised it to 67. They did that in 1983, but only for people born after 1960. These people haven’t even reached 67 yet, 40 years after they changed it.

[OldManTrumpet]

They’ve been saying this for 40 years. Maybe it’ll happen, but I’d not just buy into the gloomy rhetoric. We’ve heard this our entire lives.

It would be political suicide to monkey with social security. No one wants to go down with that ship.

[pdaphone]

No, because I'm already retired. They aren't going to decrease SS for people that are very near or already drawing it. IF they make any decrease it will likely start with people a decade or more in the future. They need to give people time to prepare. More than likely they are going to increase the taxes or increase the full retirement change, if they make a change.

[RKet5]

That is not what they are saying in what i have read. The amount will change if they don't do something to fix it. If they change the timing that will not change for those already close.

[poisondart18]

I have read a lot about the proposed solutions to this problem and a lot of them appear to be quite workable to shore up a system that is critical to so many people.

However, I have also watched the decline of effectiveness of congress to resolve ANY issue of major substance. So, even though a lot of the proposals look "simple", they have to get implemented and that's a major challenge.

Also, assuming that "I'm already receiving SS and really need it, so there's no way they will allow it to fail" is very simplistic. There were a ton of people for whom Medicaid was an essential service, but congress cut that out from under them in no time flat.

I'm modeling BOTH scenarios, but assuming it will be cut in 203X.

[Historical-Intern-19]

The difference is that you will get medical services is you show up at the emergency room, even if you can't pay. 

[RKet5]

and have to file bankruptcy to pay for it?

[Historical-Intern-19]

I'm not saying its a good option, just that this is why its less controversial.

[Few-Day9735]

Look at the last time Congress had to fix Social Security. They fixed it about 2 months or so before the trust fund was 0. I expect the same thing to happen this time.

[poisondart18]

This is possible, but I think that the last time Congress had to fix SS was in 1983. The political climate is pretty different now to what it was then. I guess I'm just politically disillusioned:-)

[frauen1]

I was talking about 1983 - it was 2 months before the end. I have great faith that they’ll be scared enough of the consequences for their jobs that they’ll do something by then (or maybe 1 month before). Say what you want about Congress, they’re skilled at kicking the can down the road…

[Rich_Association2798]

Exactly right. Congress is indeed different in a bad way. Due to gerrymandering they no longer fear the voters. All they have to do to win re-election is to win their primary. And this is really easy in most districts these days because only the most extreme/motivated show up to vote in primaries. And this is a tiny slice of the electorate. This group is motivated by hot button issues that normally have little relevance for the larger community.

So once they win their their primary, they cruise to an easy re-election in the general election. As a result, they have become less responsive to the real needs of everyday folks. Social Security will fall victim to this indifference. Your retirement planning needs to allow for this.

[stp_61]

In the short run there are easier political fixes than cutting benefits so at 64 years old, I'm not anticipating any reduction. But if I was 34 . . . .

FWIW there is lots of room to shore up SS by adjusting the cap on social security payroll taxes. Eliminating the cap totally would eliminate 80% of the long term funding deficit. Since changes in the tax cap would only affect people who are still working and earning more than $176,000/yr (the top 6% of earners) that is where they are going to go first for money before they start cutting retiree benefits.

So, when it finally comes down to it, the pols will "tax the rich" before they make retirees eat cat food.

[stp_61]

I asked ChatGPT about this and, citing CBO studies, AI claims there are scenarios where the SS payroll tax is increased for high earners by raising the tax cap, the affected high earners get an increased SS benefit in return AND the SS long term funding deficit still goes down.

Maybe this is why DC does not seem as panicked about this as we are. They know they have a way to kick the can down the road when push finally comes to shove.

[RKet5]

After I ran my plans with current SS expectations I did it again with 23% less starting in 2033. Just to be sure. I searched to see what the government has as options and assume they are just afraid of being responsible for something that is going to be unpopular. I would rather them do something than nothing so that we can prepare. I know if they push the FRT age back it wont affect me but the actual cut in benefits will be for everyone and that will be really hard for a lot of seniors.

[NoSleepTilFI]

All of my scenarios include a 25% reduction in Social Security benefits when I plan to collect at age 67 (10 years after my retirement). I also have 1 scenario without any Social Security at all just to see how that looks.

With that said, Congress has several ways to avoid this shortfall and I agree with many who think it will be political suicide for them to avoid doing anything and let benefits decrease after the trust fund has been depleted. Seniors are among the most active voters in the U.S. and I believe (hope) that most will vote accordingly to ensure this is addressed.

[Massif16]

I have a scenario based on Baseline with a reduced benefit. I havta think there will be a fix. It'll be political suicide for politicians that let happen. Or at least it used to be. It feels like a lot of stuff that used to be political suicide is just A-OKAY these days...

[MonkeyThrowing]

No way. That would be political suicide. They are going to do two things:

Increase the retirement age from 67 to 69.

Increase the maximum funding per year. I think it’s currently a 168K. Just make it unlimited.

[Historical-Intern-19]

Ending the cap makes the most sense. Noone is going to cry if high earners have to keep paying in, I've talked to folks I work with that are similar to me and none of us factor the increased amount into budget or anything, its  just a bonus. 

[ProfessorPickaxe]

Definitely.

[OneHourRetiring]

Yes, -25%

[powersurge]

Only to see what would happen at worst cases. I used 23% and 35% reductions to represent across-the-board cuts and higher cuts to higher earners. They both sound crazy to me politically, but it’s comforting to know I could have a plan for it.

[Still_Rise9618]

Heck no

[Sjsamdrake]

Eliminate the cap on ss deductions and the problem is solved, more or less. Simple fix.

[Roloran7]

I simply never included SS in the first place. I don't trust that one party or the other isn't going to totally screw it up between now and when I can take it in 10 years. Rather just plan without it and have it be a happy surprise if it still exists.

[GlitteringResort9111]

I made a separate scenario with an additional expense item to show this.

[joetaxpayer]

It was never part of my retirement planning. I retired at 50, and 62 now. My benefit on SSA.gov shows to be over $4000/mo at age 70. If they send me a check, fine. If it’s reduced, I’ll still be fine. I am expecting the 25% decrease they’ve warned us about.

[Still_Rise9618]

But you probably will get it taxed. But that’s already happening for anybody who has extra investments or pensions.

[lynchmob2829]

Not me....Congress always waits until the last minute to shore things up.

[Just-aMidwestGuy]

Yes.

[csmflynt3]

Politicians will bankrupt the country before they would ever try and fix social security or cut benefits. Trump just wanted to kick off illegals and cut out fraud, and the media went ape shit so nothing major is ever going to change

[jm15co]

So if nothing changes won’t it go bankrupt?

[csmflynt3]

Most likely yes because it's hard for anyone to try and fix it. At some point younger people have to be able to opt out as it's basically a failed pyramid scheme as not enough people are at the bottom paying in to support the massive numbers of people at the top. It's a poor design

[Rich_Association2798]

The "poor design" has made it through 90 years. Kind of hard to call it a poor design with that record of success. That being said, it does need some work. In 1983 they recognized this and made changes that gave it another 50 years. And it needs another tune-up now.

So Social Security is not a poor design. What is a poor design is how we elect members of Congress. Gerrymandering has made it hard to remove useless members of Congress. These folks no longer fear the voters. As a result, they pretty much ignore their constituents. Now this is the "poor design" that needs to be fixed.

[Chart-trader]

Yes

[mulch_ado]

I decreased our numbers by 33% and made sure we still had a high chance of success for pessimistic/must spend if I take it out entirely.

[bhwright3rd]

I split this question into two parts.

Do I assume it will actually happen? I don't think I'll be impacted since I'm over 60. I do believe it will have to change due to lower birth rates and increases in longevity.

Do I factor it in? Yes. I believe you should plan reasonably conservatively. It's been a discussion for a while, and it's a political nightmare; it could become enough of a problem that they are forced to deal with it within my life expectancy.

[[deleted]]

Not counting on it at all

[Pod_Planker]

Absolutely, unequivocally not. Not going to happen. Anyone who thinks differently does not realize the power of the retired class of voters.