📋 The Future of Social Security (AARP Article - updated)

@BalbonisMoleskine   I wouldn't want to do it unless they stop taking SS taxes out of my pay after I start benefits and remove the income tax from my SS benefit.  SS is already means tested with the income tax and if someone is still working they are paying part of their own monthly benefit every payday.  Between the income tax on my SS and the payroll deduction, I'm giving back 37% of my SS every year already.  As far as the $500K level, my house is worth more than that in California and the property tax plus insurance is almost 3 of my full SS payments.  You'd have a hard time buying a house here for less than $500K unless it's 100 years old, small, and run down.  My first house was built in 1969 and it would cost over $780K today.

It's the median, which means that a lot of Americans don't live paycheck to paycheck. Those who do wind up in a pickle that makes them a cautionary tale that others can learn from. 

@GailL1 Thanks, Gail, but I have to disagree with you on your #2.  Removing the cap brings about $300 Billion a year in new SS taxes.  Since all wages are taxed for Medicare, it's easy to reverse the math to figure out close to the additional SS tax.  The $300 Billion sounds good but at least $200 Billion of that will have to buy bonds from the Treasury, which puts all that money into the hands of the Congress, if they don't remove the cap from payments, too.  They may use it to reduce external debt or they may just spend it on something new and let the budget deficit remain the same level.  Anyway, in 10 years that grows to $2.6 Trillion more in National Debt plus another $300 Billion in bond interest over the 10 years.

If they remove the cap on benefits to keep the annuity affect intact, rather than a wealth transfer, then the formula will probably still be changed to be very lopsided such that it takes 20 years for those above the current cap to recover just the taxes they paid, or by allowing the benefit formula to stay the same it will maintain the Trust status quo and we're still looking at an exhausted Trust, just not as soon.

The other suggestion of not counting work income toward increasing benefits after starting SS doesn't amount to much in my experience.  I continued to work for substantial income after starting SS and the max the income increased my SS was $11 a month.  Last year, it gave me a $1 increase and this year will probably be none.  The reason is all income after age 60 is not indexed to a higher value and eventually isn't replacing the lowest indexed values.  To put it in comparison, I've gotten less than $300 extra in total SS so far for over $44,000 paid in SS taxes by me and my employer since my starting SS.  The Trust is really making out on this deal already.

Hope to see you around here a long time.