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How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

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How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Old 03-01-10, 04:12 PM
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How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

A relative recently applied for early social security retirement benefits. This person has only been in the US for 20 years. Out of the 20 years, working full time about 10 years and spotty employment the last 5 years. So, SS says that this person will receive $750 per month. (~ $5/hour full time job)

Because of lifespans in the family, I fully expect this person could live to at least 85 years if not longer.

So we have 750 per month x 12 months = 9000

9k x 23 years = $207K

Plus this person will get full healthcare (who knows how much Medicare will pay out in the coming years) and this person is applying for housing assistance.

Someone please tell me how there can be a recovery out of this situation? My wages have been stagnant for the past 10 years (as are alot of other peoples). Unemployment is still rising. Who can pay more?

Who is going to pay these benefits for millions of people now claiming early retirement or those about to soon retire? And benefits that in many cases will be much higher than even what my relative is cashing in on?

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Old 03-01-10, 04:52 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Death panels?
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Old 03-01-10, 05:03 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

By early retirement, do you mean at age 62?

If this person earned at least the minimum amount required in 40 or more quarters (ie 10 years) then they qualified for Social Security based on their own work. I see no problem with this, everyone is held to the same standard.
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Old 03-01-10, 05:12 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Originally Posted by foggy View Post
By early retirement, do you mean at age 62?

If this person earned at least the minimum amount required in 40 or more quarters (ie 10 years) then they qualified for Social Security based on their own work. I see no problem with this, everyone is held to the same standard.
Yes, it's age 62, so it is early retirement.

I guess this person is meeting the standards, but it seems crazy to me. No way this person contributed even remotely in taxes compared to what will be disbursed.

Another reason I am firmly in the camp that believes hyperinflation must come. Wonder how all those boomers will feel about their "third rail" then?

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Old 03-01-10, 05:21 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Hyperinflation, or much of any inflation as defined by the government, can't come because those SS benefits will rise with the stated inflation rate.

Hypertaxing and economic stagnation can come though.
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Old 03-01-10, 05:34 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Originally Posted by shifrbv View Post
I guess this person is meeting the standards, but it seems crazy to me. No way this person contributed even remotely in taxes compared to what will be disbursed.
At least this person made a contribution. If your relative had immigrated to the US at the age of 63 (unlike most other countries, it's allowed to happen here), he or she would most likely qualify for Supplemental Security Income (SSI as opposed to SSDI) of about $550 a month without ever having paid a cent in taxes.
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Old 03-01-10, 05:36 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

That person won't get full health care unless he pays around $100.00 per month for Part B of Medicare.
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Old 03-01-10, 06:07 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Originally Posted by X View Post
Hyperinflation, or much of any inflation as defined by the government, can't come because those SS benefits will rise with the stated inflation rate.
But that's exactly why I believe the inflation will come. When government cuts a check for the majority of the population, it's a guaranteed buyer in the marketplace. Much like college tuition, the prices for the things that are the most average people worry about and what the elderly will most likely consume (food, healthcare) will continue to rise dramatically. Food is still going up per the CPI and I believe firmly it's because we have a guaranteed buyer (all-time high in food stamps and increase of SS benefits). Otherwise, these prices would not be rising so rapidly.

Hypertaxing and economic stagnation can come though.
I guess to a point, but we've already lost 30% of our purchasing power in the last 10 years. Increase taxes and further loss of purchasing power and when does it become pointless to work?
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Old 03-01-10, 06:12 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Somewhere, Dr. Ponzi is smiling.
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Old 03-01-10, 06:22 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

I'm certainly convinced that a single anecdote is proof that the system is about to collapse.
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Old 03-01-10, 06:30 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Originally Posted by WallyOPD View Post
I'm certainly convinced that a single anecdote is proof that the system is about to collapse.
I believe that if we collect enough anecdotes, we can eventually call it "data"!
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Old 03-01-10, 06:40 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Originally Posted by shifrbv View Post
But that's exactly why I believe the inflation will come. When government cuts a check for the majority of the population, it's a guaranteed buyer in the marketplace. Much like college tuition, the prices for the things that are the most average people worry about and what the elderly will most likely consume (food, healthcare) will continue to rise dramatically. Food is still going up per the CPI and I believe firmly it's because we have a guaranteed buyer (all-time high in food stamps and increase of SS benefits). Otherwise, these prices would not be rising so rapidly.
Lets see... rise in unemployment in the private sector (thus more people depending on government unemployment checks), and a stimulus that increases/saves jobs mainly in the public sector...
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Old 03-01-10, 06:59 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Originally Posted by Thor Simpson View Post
Death panels?
The street. Go die in it.

(the person the OP mentioned, not you )
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Old 03-02-10, 01:11 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

My dad's going to be 84 in May. He retired in June 1982, at age 56. He started collecting social security in 1991, at age 65. He has already gotten more out of the system than he ever paid into it. That is the way the systems works unless we keep people from collecting their benefits until later in life.

I don't have a problem with my dad getting more than he paid in. But the rest of you bastards and your lousy parents can go straight to hell.
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Old 03-02-10, 02:45 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

This is nothing new. If he had retired at 65 or later, SS would be paying him more.

For example, Joe Biden - the vice president - started claiming his SS benefits at 67 and his benefits are $3,300 per month.

People on SS still do pay premiums for Medicare and RX.

The person in the OP paid his SS taxes, so I don't see the problem.
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Old 03-02-10, 03:23 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Just think of the folks who have paid in 30 years and die before they attain entitlement age.

Now if you believe you're going to be pissed off about your benefit - just think of me. I don't receive my full Social Security benefit because I also receive Civil Service Retirement Benefit. There is a government pension offset. It's unfair as hell - but that's the way it goes.

That's why I'll never forgive Carter & Reagan.
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Old 03-02-10, 04:35 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

I'm amazed at the nonchalant stance of most people here. SS works when it follows the formula. If people have jobs and can pay in, then it's OK. When that breaks down, there's a big problem.

According to the Washington Time's, we now have more people than ever on the government dole:

http://washingtontimes.com/news/2010...all-time-high/

Americans Reliance On Government At All-Time High

The so-called "Great Recession" has left Americans depending on the government dole like never before.

Without record levels of welfare, unemployment and other government benefits as well as tax cuts last year, the income of U.S. households would have plunged by an astonishing $723 billion — more than four times the record $167 billion drop reported last month by the Commerce Department.

Moreover, for the first time since the Great Depression, Americans took more aid from the government than they paid in taxes.

The figures show the devastating results of the massive job losses last year and indicate that the economic recovery that began last summer is tenuous and has a long way to go before many Americans resume life as normal, analysts said.

Economic growth typically depends on consumer spending, which is fed by wages, rents, interest and other forms of income. But the tentative revival of consumer spending in the second half of last year appears to have been fed largely by an extraordinary flood of government spending, as growth in other kinds of income has disappeared.


"Governmental support was critical in keeping the economy, particularly consumer spending, from completely collapsing during the crisis," said Harm Bandholz, an economist at Unicredit Markets. He said he is concerned that so much of the economic rebound is a result of government spending rather than a revival of private income and jobs. That situation is unsustainable, he said, because the government has had to borrow massively to prop up the economy and cannot continue that binge for long.

Because of bleak job prospects during the recession, some people were forced to go more permanently on the government dole.

In particular, many workers who were nearing retirement age and got laid off started drawing Social Security benefits. The number of retirees taking Social Security at age 62 grew by a record 19 percent in the past year, helping to push up Social Security outlays by $100 billion. Analysts expect those spending levels to stay high and continue to increase as more baby boomers retire.


How can anyone believe this will end well? We don't have the revenue coming in to sustain this. How will anyone win an election if they are going to "hypertax" as X thinks they will to pay for it? I just don't see how this lasts. And what about confidence in the currency? When everyone is getting a government check as the years roll by, how can anyone be confident in holding dollars? Compound this with the bailout of the money-losing states that's coming real soon (probably this summer) it's going to get ugly real fast.

Last edited by shifrbv; 03-02-10 at 04:46 PM.
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Old 03-02-10, 04:50 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Maybe because SS doesn't work? The people paying in now are paying for the people who are receiving benefits now. So somehow we hope there is always a bigger working class that is able to support the process when we are eligible, and I think most people have understandably not been counting on it.
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Old 03-02-10, 05:25 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Ida May Fuller was the first recipient of a monthly check. She paid in a whopping $24.75. She collected $22,888.92 in benefits. Everyone knows the system is broken.
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Old 03-02-10, 05:29 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Originally Posted by fujishig View Post
Maybe because SS doesn't work? The people paying in now are paying for the people who are receiving benefits now. So somehow we hope there is always a bigger working class that is able to support the process when we are eligible, and I think most people have understandably not been counting on it.
There is a surplus in the Social Security Trust Fund.

Again - petition your government to stop 'stealing' from the trust fund, and things probably will be a little different.

I've heard over and over for decades that the system is broken. It's still operating, and it will continue to operate.

There are some things that need to be done. The quicker we do them, the less pain there will be. The very first thing that needs to be done is to remove the earnings cap.
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Old 03-02-10, 05:54 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Originally Posted by classicman2 View Post
There is a surplus in the Social Security Trust Fund.
The trust fund isn't really a trust fund; it is all in T-Bills. The money is long gone. To actually dig into the trust fund, we'd have to find buyers for those T-Bills, in addition to the T-Bills that we need to sell to fund our budget deficit. Buyers (other than the folks at 33 Liberty) are getting harder and harder to find.
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Old 03-02-10, 06:24 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Originally Posted by shifrbv View Post
I'm amazed at the nonchalant stance of most people here.
Look, I think we're on a one-way road to War with China. But you can't expect me to lose sleep over it or get all uptight. The war will be much better fought if I am rested and have watched enough war movies and eaten enough Doritos to properly prepare.
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Old 03-02-10, 06:32 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Originally Posted by shifrbv View Post
I'm amazed at the nonchalant stance of most people here.
That's because everybody is in one of two categories:

1. Baby boomers who will get much more than they ever put in

2. Younger people who have come to terms with the fact that we'll get nothing more than "good vibes" when it's our turn to retire.
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Old 03-02-10, 11:45 PM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

Originally Posted by Groucho View Post
That's because everybody is in one of two categories:

1. Baby boomers who will get much more than they ever put in

2. Younger people who have come to terms with the fact that we'll get nothing more than "good vibes" when it's our turn to retire.
I don't understand all the hate for Baby Boomers, they've paid more into all of these programs than any generation before them. The great majority of them have been paying Medicare taxes for their entire working lives (since 1965) and did most of their earning in years when even relatively high earners paid Social Security taxes on all of their income.

My grandfather retired at age 62 and is still collecting at age 93. He never had a job making more than $8 an hour and worked seasonally as a house painter. He paid the maximum taxes for Social Security several times during his working life.

My parents are both Baby Boomers (born in 1948 and 1949) and when they were both working had several good years (by US standards, not by Otter standards ) when they made over $120K between the two of them. Social Security taxes were paid on every dollar.
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Old 03-03-10, 01:05 AM
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Re: How Can Anyone Believe There Will Be A Recovery Out Of This: Early SS Benefits

It's not hatred for the baby boomers, it's that even with the surplus the system is unsustainable, mainly because the number of workers after the baby boomers is smaller.

http://www.cnbc.com/id/34941334

The beginning of the article, click on the link above to read the rest:
As the record federal budget deficit draws increasing scrutiny from Washington to Wall Street to Main Street, deficit hawks may take aim at entitlement programs including Social Security.

And, the nearly 80 million Baby Boomers phasing into retirement will set in motion a dynamic that—if not addressed by Congress—could result in the next generation getting fewer benefits.

However, despite fears that Boomers will trigger a collapse of Social Security, experts say the system can and will survive for decades and generations to come.

Congress made significant fixes to Social Security during the 1970s, the 1980s and the 1990s, and there appears to be a slowly gathering political will to make it solvent for the next 75 years.

By 2017, Social Security is expected to start paying out more than it collects in payroll taxes, according to the 2009 Annual Report from the Social Security and Medicare Board of Trustees. There is currently a large surplus, but it will be drained by the year 2037. At that point, Social Security will only be able to pay out 75 percent of its benefits.

A separate report, done by the nonpartisan Congressional Budget Office, concludes much the same thing, but gives the system another 10 years before it begins to fall apart.


The trustees’ annual report “does not depict a program in crisis,” said Kathy Ruffing, of the Center for Budget and Policy Priorities. “Policymakers should act sooner rather than later to put the program on a sound long-run footing, but today’s beneficiaries and workers approaching retirement need not fear that their Social Security benefits are at risk.”

“Alarmists who claim that Social Security won’t be around when today’s young workers retire misunderstand or misrepresent the trustees’ projections,” she added.

Beginning the Boom

Looking back, the outlook was rosy for most Americans in 1946, the year earmarked as the beginning of the so-called “baby boom.” With World War II finally over, a 15-year stretch of bad times that had begun with the great Depression was finally over. They responded by having more babies than ever before, more than 78 million of them by 1964.

For Social Security, the mini-population explosion was both beneficial and problematic. Social Security is funded mostly through payroll taxes, with present-day workers funding the payouts for retirees. Since there have been so many Boomers in the workforce for so many years, there were a lot more people putting money into the system than taking it out.

As Boomers begin to retire, the huge group of people putting money into the system will begin taking it out of the system, which then will be funded by a generation of workers—the so-called Gen X—whose numbers are some 15 million fewer. The surplus of money paid into the system by Boomers will allow it to run into the late 2030s, even though it will begin paying out more than it takes in by 2017.

“We won’t have a crisis,” says Michael Astrue, commissioner of the Social Security Administration. “2037 is a long way off and there is no reason to panic, but this is a serious issue we need to resolve. Younger people tend to overreact.”

business check

Count Gen-Xer Tom Firey among those younger workers who think they’re getting the short end of the stick. The managing editor of the conservative Cato Institute magazine, Regulation, first wrote about the subject nearly 10 years ago in a column headlined, “Boomers Fleece Generation X with Social Security.”

“Ever since we Gen-X/Yers began working, we've paid 12.4 percent of our earnings to Social Security,” he wrote. “In contrast, the Boomers will get a bargain. When they entered the workforce in the late 1960s, they paid only 6.5 percent of their earnings to Social Security. Only from 1990 on, when the Boomers had earned paychecks for a quarter-century, did they start paying 12.4 percent to Social Security, the same percentage we Gen-X/Yers have paid our whole lives.”

That’s why Firey dubbed it The Boomers’ Bargain: “They've paid less of their earnings into Social Security than we Gen-X/Yers, yet they'll receive more in benefits than we will and we'll pick up the tab.”
What surprises me about the article is the "rah-rah" stuff from the "experts" who say that the younger generation is overreacting, when they admit that the system is failing. They're basically saying that things will be fine as long as they change things soon. They don't detail what those changes are, and there seem to be few answers other than upping the retirement age and/or the amount people are paying in, which was the "solution" the last time too.
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