And……that pesky strike is looming again….
In the words of the funny parrot Eago in Aladdin, “I’m going to have a heart attack and die from ‘not surprise!’”
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Yet, the market is up reversing the earlier sharp down trend. I can’t make any sense.
Markets hate uncertainty. Now the fed’s next moves are almost guaranteed.
Or the market simply doesn’t make much sense short term?
It’s nice to see a COLA for Social Security. But 8.3% is kind of insulting, when groceries, gas, and rent have gone up more than 50%. My grocery bill doubled in the last year. That percentage is the fed’s measure of inflation when they take out the actual inflation from the calculation. I guess they’re planning that senior citizens don’t eat, drive, or live anywhere.
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Don’t get mad. SS is dwindling. Isn’t it better to pinch a penny here and there and make it last a bit longer?
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Inflation hurts most low income and those on fixed incomes. (In other words, seniors would be better off in a zero inflation environment with a zero increase in SS.)
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It definitely is dwindling. In my opinion, the only to make it solvent is to gradually eliminate it. If you take the same amount of money deducted from your paycheck for SSN, and put it into an IRA at 20 years old, it would be well over a million dollars at retirement, and that’s not including a 401k savings.
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Unless of course you extrapolate from this year’s investment returns. Past performance is no guarantee of future returns.
It would be a terrible idea to eliminate the safety net that social security provides for those who are incapable or unlucky in managing their money. What happens to foolish people who put all their money in a meme stock or crypto and lose it? Do you let them starve to death?
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It’s 8.7% COLA and not 8.3%.
At a 5% annual return (representative of a relatively low risk portfolio which would be necessary if this will be the only source of retirement income for most workers) you would need to contribute $2518/month to save $1,000,000 in 20 years.
Given SS withholding is 6.2%, for $2518 to be the same amount of money deducted from your paycheck, you would need to have a gross income of $487000/year and withholdings would have to be assessed on all of that compared to the current $147,000 income limit.
Since less than 20% of all employers offer a 401, very few retirees would have that supplement.
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SS wasn’t enough to live on last year and it won’t be enough to live on this coming year. It’s not the cost of eggs I worry about but the cost of the utilities to cook them with.
Many social programs for those on fixed incomes haven’t adjusted their income qualifications for the next year. LEAP still uses federal poverty limits and that’s a really low amount. My mother was getting about $2000 for SS. She didn’t qualify for medicaid, leap, food stamps, etc., but couldn’t have survived if her children didn’t provide at least half of her living expenses. Just before she died she hit the ‘donut hole’ for her prescriptions and couldn’t afford one that was $117/mo. She had a charity pay her $3000 deductible on her medicare when she had breast cancer but that wasn’t a government program.
Food banks here are still doing a great business every month. We’re really heading into a have/have not society, and I’m not talking about those living in tents around the city but those with housing and jobs that just can’t make ends meet anymore because utilities and groceries are twice what they were last year.
20 years? I’d say 40 years minimum for that calculation. And most SS recipients don’t receive anywhere near a $1,000,000 lifetime payout.
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Although you might have to require them to buy an inflation adjusted annuity with survivor benefits in order to avoid the possibility of them running out of money and either starving or needing government assistance. In those circumstances you might well need $1M or more, even after recent rate increases.
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I didn’t say 20 years or $1,000,000. @coolguy40 did. I am refuting his claims.
He said starting at 20 years old not for 20 years.
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Ahhh…thank you. I missed that.
So over a period of 40 years you would need to save $688/month. At a 6.2% withholding rate that equates to a gross salary of $135000/year.
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Inflation increasing will affect SS negatively in the long term. The program is already facing a crisis sometime down the road when payments coming in won’t be able to find payments going out. Increases in benefits because of increased inflation will just move that point sooner. Eventually something will need to be done. There are options.
Raise the rate withheld from paychecks. (Maybe 10%)
Eliminate the income cap for contributing so there is no income cutoff and all income is subject no matter how much is made.
Reduce the benefits. Perhaps 75% of current.levrls.
Put in an cap for those collecting whereby if you have a substantial income otherwise or large assets otherwise you are excluded from collecting. You have a pension, 401k, other investments, then you are on the hook for your own retirement funding.
So, what’s it going to be? Where’s the money coming from? Talk about inflation.
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