Have you looked at the sw job market lately around here? Pretty much all you need is a pulse. Especially if you are willing to do testing.
Eh but it’s is steep price to pay just to be able to add a few dollars into a Roth. If you want to be in a Roth that badly, just convert the tIRAs you already have and pay the taxes. That doesn’t grow the size of the pot of course, but how much more do you need?
NRE, haha, you might be right about the pulse requirement. I wouldn’t want to work outside the house anyway; dogs need me here. Besides, I’m almost a general contractor with all the home improvement projects we have scheduled for the spring.
And, you are absolutely right about not needing more, in Roth or elsewhere.
Please take good care of your teeth:
https://www.sciencemag.org/news/2019/01/gum-disease-causing-bacteria-could-spur-alzheimer-s
For NY State Income Tax payers who are age 59.5 or older.
Withdrawals up to $20,000 from a traditional IRA or 401(k) are not subject to NYS tax.*
When my husband and I recently consulted a CPA for recommendations to limit tax liability, as we decide when to begin SS benefits and the order in which to draw down on regular & retirement assets, this was an unexpected surprise.
*for specifics search for "New York Tax Treatment of Distributions and Rollovers Relating to Government IRC Section 457 Deferred Compensation Plans"
I’ll add that I want to thank those here who have recommended the internet sources MaxiFi and OpenSocialSecurity.
Yes @ManhattanBoro I am sure you have to monitor NY tax codes carefully. One stress-or we don’t have being in a lower taxing state.Visiting CA (and having relatives there) we also are glad to avoid the stress-ors there. Sad to paint a whole state with a paint brush like that, and living there one can navigate to some extent. However once one is retired, one can decide where they can best have QOL - if it means staying but downsizing to have more affordability, so be it.
Will see what our financial group says in our semi-annual ‘state of the markets’ update on Tuesday…
With our equities, 4th quarter wiped out the first 3 qtrs plus some. Hopefully some of the political stuff which is slowing down the economy will lift and people can move on with life. We have gov’t employee friends who now return to work on Monday.
Writer claims that falling birth rates and immigration make it harder for more people to retire, due to fewer young working people to help support the retired.
^^There is no doubt that the above is true. As an example, when SS was installed the ratio or workers to beneficiaries was 160:1 (and the average life expectancy was <62, in other words, the masses were not expected to live long enough to even make ONE claim).
By 1950, the worker/beneficiary ratio was 16:1, and dropping to 5:1 in 1960. It was down to 3.2:1 by 1980 and <3:1 a few years ago. (Adults having fewer children, more boomer retirees who are living longer…)
It’s no wonder that SS has a funding problem by ~2034.
I sincerely doubt that anyone is delaying retirement because they fear there aren’t enough young people to support them. They just keep raising the amount of income you use to pay social security tax on. When I retire, I will have paid FICA for at least 45 years, most of them at the maximum.
All they have to do is keep upping the amount you have to pay FICA. It’s not like they have been keeping it in the “lockbox” anyways. It’s all a shell game.
“All they have to do is keep upping the amount you have to pay FICA. It’s not like they have been keeping it in the “lockbox” anyways. It’s all a shell game. .”
sorry but that is faulty thinking. Upping the amount one pays to FICA , by itself, will NOT solve the problem.
The solution is not rocket science.
3 things need to happen, and if they do, SS is saved for those who will need it most.
"A 2014 study by the National Academy for Social Insurance analyzed the long-term benefit of several potential Social Security fixes, as well as the costs of some potential improvements. Here are three fixes that would align with Buffett’s Social Security views and how much of an impact they would have:
"How Warren Buffett Thinks We Should Fix Social Security
“For starters, Buffett has advocated removing – or at least increasing – the Social Security maximum taxable earnings. For 2018, the maximum amount of income subject to Social Security payroll tax is $128,400. This leaves BILLIONS of potential Social Security tax from high earners on the table. And while Buffett hasn’t directly mentioned raising the Social Security payroll tax rate – currently 6.2% on both employers and employees – he has spoken in favor of the U.S. paying a greater percentage of GDP toward Social Security”
1- Eliminating the taxable earnings cap over a 10-year period would fix 74% of the long-term financing gap all by itself.
2-Raising the Social Security payroll tax rate from 6.2% to 7.2% over a 20-year period would generate 52% of the shortfall.
3-Finally, gradually raising the full retirement age to 68 would take care of 16% of the funding gap.
https://www.fool.com/retirement/2018/05/21/how-warren-buffett-thinks-we-should-fix-social-sec.aspx
there is NO reason that those earning more than $118,500, which is the current cap, and ESPECIALLY those earning multi million $$ paychecks, should NOT pay a LOT more into the SS system, commensurate with their income, since they are entitled to receive SS benefits in the future, which they will not need as much a much lower earners.
I mean, puleeze…
@menloparkmom , I couldn’t agree more. Our tax rates are intended to be progressive, as I think is only right. Payroll taxes are hugely regressive, probably as a means of continuing the illusion that we are “saving” into a fund and then drawing it down after retirement.
I think we should also directly address the SSDI fraud that is rampant. I have knowledge of many who abuse this system. If the US wants to go toward a “universal basic income” model for all, it should do so openly and without requiring fraud on the part of the recipients. If the US doesn’t want to go that route, well, then it should get rid of the fraud. I’m not entirely sure how I feel about universal basic income, but I know how I feel about fraud.
Finally, why not quit the charade about taxing SS benefits? I pay taxes on 85% of my SS. Why? Just make it all taxable after a certain level of income and quit dancing so gingerly around the issue.
For what it’s worth, the change to payroll taxes would affect us considerably. Still, right is right.
The cap is $132,900 this year. Once again, the cap increased at a higher rate than inflation and a higher rate than benefit increases.
Second, there is a very big reason there is an earnings cap - it’s because benefits are capped. If you increase the payroll tax without increasing the benefit, you are just making SS even more a pure welfare program than it already is.
The payout is hugely progressive.
Why should you pay any taxes on your benefits? You already paid taxes once on the money that funds it… you would be happy if the gov’t started requiring distributions from Roth accounts and taxing them? It’s the same thing… it’s a back-door method of means testing.
Social Security is an out-of-control government program that has expanded wildly beyond its original purpose, to the point where something like 1 in 6 Americans is drawing benefits. There have been years where FICA tax collections have almost equaled taxes generated by the entire Federal income tax.
Let’s just remove the fiction that it is some sort of “insurance” or “retirement” program. It’s not.
@notrichenough I have no problem at all taxing high earners to make SS or anything else a pure welfare program.
@menloparkmom, when I said, “All they have to do is keep upping the amount you have to pay FICA”, I left out one word. I should have said, “All they have to do is keep upping the amount you have to pay FICA ON”. Which is exactly the same thing you said.
And as @notrichenough mentioned, that’s exactly what they’re doing. Every year, greater than the rate of inflation or benefit increase. If they want to massively raise the amount that is taxed, without increasing the benefits, then I’m fine with that…but yeah, remove the fiction that it’s insurance or retirement, it’s a welfare program.
Actually, there is and it is political and actuarial. Back when the last major changes to SS were made, there was plenty of discussion of raising the cap more and/or eliminating it. At that time, then-senator Kennedy (MA) was against that concept bcos, at any higher of a level, the return for such folks would be negative. In other words, actuarially, they would never get back what they paid in. Now of course, that may be the point, but what Senator Kennedy et. al. was concerned about was that SS would evolve (buy appearances?) into just another ‘welfare’ program and be subject to the annual funding ups and downs of programs like Medicaid and Food Stamps.
Uhh, that would be double taxation.
But note that much of the income earned by those earning millions of dollars is not in the form of labor income that is taxed for Social Security purposes (e.g. capital gains, dividends, interest, rents, royalties, etc.).
Until you mentioned it, I hadn’t checked, and you’re right, the employee portion of FICA counts in Adjusted Gross Income. The employer’s portion does not. But, they call it a contribution rather than a tax, so I guess that’s how they avoid the double taxation issue.
You can call me anything other than late for dinner, but I consider SS a welfare program of a type that welcomes even the wealthy , and I consider my contribution to it a tax.
Often, but not always.
^^Lots of “new wealth” gets paid in stock options and grants that are treated as ordinary income, so they are subject to all applicable taxes. The days of giant ISO grants seem to be gone.
I have always doubted the necessity of a reduced capital gains rate. So much wealth is created in the form of capital gains. I’m all for wealth creation, but I don’t think it has to be subsidized to the extent it is. In terms of welfare for the wealthy, this one is the real elephant in the room that never seems to be discussed. If I were king, it would be gone and I would take down the top rate on ordinary income in order to make it revenue neutral.
“If they want to massively raise the amount that is taxed, without increasing the benefits, then I’m fine with that…but yeah, remove the fiction that it’s insurance or retirement, it’s a welfare program.”
I could not agree more, because frankly I don’t CARE whether its called “welfare” or SS or something else.
It serves a valuable social purpose.
And I also believe in means testing- so that those with over $10,000,000 in assets at full retirement age would NOT receive SS [or welfare] payments.
No one with that kind of a nest egg needs additional help from taxpayers ,imho.