Some Inconvenient Facts About Social Security

[WorldWatcher]

Easy to say.
Why is it morally acceptable to you to screw that demographic out of their benefit rather than lower wage earners?

Here’s why the rich live longer than the poor

It’s not just about money.

au.finance.yahoo.com

https://www.ssa.gov/OACT/tr/2022/V_A_demo.html#221776

Research shows that high wage earners live 8-10 years longer than low wage earners.

Since low wage earners are more likely to die (on average for the demographic) prior to receiving out from SS all that they paid in and draw benefits for a shorter number of years, in contrast with high wage earners living 10 years longer (on average) and getting more out than the pay in because of the wage cap on income.

WW

(NOTE: Not saying I'm on board "morally", but there is a logic to show that high wage earners are more likely to have total benefits exceed total contributions.)

{NOTE 2: Table V.A.5 of the SS Trust Fund Report for 2022 shows intermediate life expectancy for someone born in 1960 is about 15 after age 65 (80 years old). For someone in a high wage earner bracket that means and addition 8-9 years of drawing benefits.)

WW

 

[WorldWatcher]

Damn…..you take long showers
I usually just wash my balls and get out

Keeping the water out of the laptop was a real bitch.

WW

 

[Grumblenuts]

Easy to say.
Why is it morally acceptable to you to screw that demographic out of their benefit rather than lower wage earners?

Easy, the earnings cap is not the benefit cap. But you're bound and determined to never pay attention, right?

Momentary spike due to COVID

I seriously doubt it. Unless or until we finally rid ourselves of employer / profit based "healthcare."

 

[rightwinger]

View attachment 763080

Let's address the idea that some propose of raising the Full Retirement Age (FRA) to 70 and it NOT being a cut in benefits because the monthly check isn't reduced. Those supporting that premise are factually incorrect either by mistake or on purpose (and I'm not making a claim either way on that point).

I was thinking about this in the shower this morning and over coffee so decided to show mathematically how that is incorrect.

So let's establish some baseline conditions to make the calculations easier:

• A couple share the exact same birth date.
• A couple starts drawing SS benefits on the same date based on FRA.
• One spouse has the higher income and dies on his birthday at age 77.
• The surviving spouse has either no income or a lower income and dies on her birthday at age 87.
• For purposes of these scenarios cola is ignored because it doesn't change the mathematical principals it just makes thing more complicated as you then have to (a) determine the COLA for each year and then do calculations for each individual year over a 20 year span. Again the principal is unchanged, it just make the math more cumbersome.
• No intent on insulting anyone by sex, feel free to change genders for male/female, male/male, female/female and who is the primary "bring home the bacon" person as you wish. Given the income and age assumptions it doesn't matter. I'm the higher earning in my couple, my boss is the higher earning in her marriage and he's a stay at home Dad. So consider it in the light of whatever floats your boat.

[DISCLAIMER: Ignore the fact that the numbers get pretty big. Remember these are cumulative number supporting 2 people for 10 years and 1 person for an additional 10 years. The numbers therefore are spread over 20 years.]

[DISCLAIMER 2: Of course exact numbers vary based on age, when one or both members of the couple begin drawing social security, when one spouse actually passes and when the other spouse passes.]

SCENARIOS A RESPECTIVELY:
In scenario a the husband brings home the bacon and the wife is a more traditional stay at home none-working spouse. Well traditional for the 50s, 60s, and early 70s. Because the wife didn't work in a SS qualifying job, but instead maintained the house, cleaned the house, cooked the meals, did the laundry, took care of the kids, she has no SS benefits based on work history.

Scenario A (FRA = 67) [Column B] establishes the baseline for "A". The husband is the only one drawing SS benefits and when he passed at 77, the wife is eligible to draw at his rate for the remainder of her life for old age support. Total benefit draw here is over a period of 20 years.

Scenario A (FRA = 70) [Column C] shows the impact of raising FRA to 70 years and establishing that as the new 100% threshold. The husband is the only one drawing SS benefits and when he passed at 77, the wife is eligible to draw at his rate for the remainder of her life for old age support. Total benefit draw here is over a period of 17 years.

SCENARIOS B RESPECTIVELY:
Here we have a more modern reality where both of the couple work. One being a higher wage earner than the other.

Scenario B (FRA = 67) [Column D] establishes the baseline for "B". In this case both the husband and wife work and qualify for benefits in their own right. The husband draws $3,000 per month until his death and the wife draws $2,000 a month until his death. Upon his death the wife is able to draw at his rate for the remainder of her life for old age support. Total benefit draw here is over a period of 20 years.

Scenario B (FRA = 70) [Column E] shows the impact of raising FRA to 70 years and establishing that as the new 100% threshold. In this case both the husband and wife work and qualify for benefits in their own right. The husband draws $3,000 per month until his death and the wife draws $2,000 a month until his death. Upon his death the wife is able to draw at his rate for the remainder of her life for old age support. Total benefit draw here is over a period of 17 years.
.
.
.
.
As can be clearly seen, raising the FRA from 67 to 70 results in a reduction of benefits (Scenario A = $108K and Scenario B = $180K).

The whole purpose of raising FRA from 67 to 70 is to reduce benefit payouts by the system, how is that achieved? (A) B more people die without drawing benefits, and (B) by reducing the number of years that individuals are likely to draw benefits from the system since FRA is now higher.

Anyone that can't recognize that as a "cut" in benefits is either (A) mistaken or (B) doesn't understand the math involved. In past discussions the individuals that don't "see" the cut tend to focus solely on the monthly check and ignore the impact over time.

Hope this helps some.

WW
[NOTE - this is a post made for another board the other day.]

Way too long to follow

In a nutshell, the life expectancy in the US over the last 45 years has risen 4 1/2 years. That means you can expect to be retired an additional 4 1/2 years

So, asking someone who is 25 to work to 70 instead of 67 is not a decrease in benefits.

U.S. Life Expectancy 1950-2024

Chart and table of U.S. life expectancy from 1950 to 2024. United Nations projections are also included through the year 2100.

www.macrotrends.net

 

[WorldWatcher]

Easy, the earnings cap is not the benefit cap. But you're bound and determined to never pay attention, right?

I seriously doubt it.

Actually I agree with RW on this one. COVID, in general, had higher death rates on older people do to compromised immunity or other factors (smoking, weight, etc.). As such they were in more danger of death from COVID than younger demographics. Since they impacted one side of the "life expectancy" average, then that would have had a larger impact on the reduction of the overall average.

WW

 

[Hutch Starskey]

Here’s why the rich live longer than the poor

It’s not just about money.

au.finance.yahoo.com

https://www.ssa.gov/OACT/tr/2022/V_A_demo.html#221776

Research shows that high wage earners live 8-10 years longer than low wage earners.

Since low wage earners are more likely to die (on average for the demographic) prior to receiving out from SS all that they paid in and draw benefits for a shorter number of years, in contrast with high wage earners living 10 years longer (on average) and getting more out than the pay in because of the wage cap on income.

WW

(NOTE: Not saying I'm on board "morally", but there is a logic to show that high wage earners are more likely to have total benefits exceed total contributions.)

{NOTE 2: Table V.A.5 of the SS Trust Fund Report for 2022 shows intermediate life expectancy for someone born in 1960 is about 15 after age 65 (80 years old). For someone in a high wage earner bracket that means and addition 8-9 years of drawing benefits.)

WW

That is not a viable argument. The average life expectancy includes everyone.
By your logic then, lower wage earners should receive benefits at 62 because it’s the higher wage earners that skew the average life expectancy higher.

Ridiculous.

 

[WorldWatcher]

Way too long to follow

In a nutshell, the life expectancy in the US over the last 45 years has risen 4 1/2 years. That means you can expect to be retired an additional 4 1/2 years

So, asking someone who is 25 to work to 70 instead of 67 is not a decrease in benefits.

U.S. Life Expectancy 1950-2024

Chart and table of U.S. life expectancy from 1950 to 2024. United Nations projections are also included through the year 2100.

www.macrotrends.net

Sorry it was to long for you to follow. Was it to long or was it countered your position?

Mandating a decrease in benefit years is a decrease in benefits. Commonly called a "cut".

The intend is to reduce benefit payouts. How does that happen? (A) people die before drawing benefits, or (b) they draw benefits for fewer years.

WW

 

[Hutch Starskey]

Easy, the earnings cap is not the benefit cap. But you're bound and determined to never pay attention, right?

I seriously doubt it.

So the benefit cap will rise proportionally then?
How does that change the dynamic?

 

[WorldWatcher]

That is not a viable argument. The average life expectancy includes everyone.
By your logic then, lower wage earners should receive benefits at 62 because it’s the higher wage earners that skew the average life expectancy higher.

Ridiculous.

Yes, your attempt at a strawman is ridiculous. As it does not pertain to what I said.

"Higher wage earners" skew life expectancy higher. Of course they do, that is basic math. But since they are only about 10% of the subject population, that impact on ALE (Average Life Expectancy) could be calculated by calculating ALE separately for low to medium wage earners, then comparing the two averages.

Basic math. Does it skew it "a lot" (qualitative term, not quantitative)? Don't know. Does it skew it "some" (qualitative term, not quantitative)? Of course it does.

WW

 

[rightwinger]

View attachment 763091

Sorry it was to long for you to follow. Was it to long or was it countered your position?

Mandating a decrease in benefit years is a decrease in benefits. Commonly called a "cut".

The intend is to reduce benefit payouts. How does that happen? (A) people die before drawing benefits, or (b) they draw benefits for fewer years.

WW

Lets look at it this way

The last time the SS retirement age was raised was 1983 (65 to 67)

The life expectancy has risen 4.5 years since then.
If you raise it to 70, you will still have an extra 1.5 years of retirement

 

[Hutch Starskey]

Yes, your attempt at a strawman is ridiculous. As it does not pertain to what I said.

"Higher wage earners" skew life expectancy higher. Of course they do, that is basic math. But since they are only about 10% of the subject population, that impact on ALE (Average Life Expectancy) could be calculated by calculating ALE separately for low to medium wage earners, then comparing the two averages.

Basic math. Does it skew it "a lot" (qualitative term, not quantitative)? Don't know. Does it skew it "some" (qualitative term, not quantitative)? Of course it does.

WW

No straw man. Just trying to grasp your logic.
So life expectancy is irrelevant to this discussion. Got it.
Now the moral question.
Why should higher wage earners pay vastly more for their benefit?

Is working hard and making a higher wage inherently immoral?

 

[Grumblenuts]

So, asking someone who is 25 to work to 70 instead of 67 is not a decrease in benefits.

U.S. Life Expectancy 1950-2024

Chart and table of U.S. life expectancy from 1950 to 2024. United Nations projections are also included through the year 2100.

www.macrotrends.net

That top graph shows worldwide life expectancy while the bottom and U.S. data provided shows how much we suck already compared the the rest of the industrialized world.

 

[Grumblenuts]

Actually I agree with RW on this one. COVID, in general, had higher death rates on older people do to compromised immunity or other factors (smoking, weight, etc.). As such they were in more danger of death from COVID than younger demographics. Since they impacted one side of the "life expectancy" average, then that would have had a larger impact on the reduction of the overall average.

WW

Agreed, but it's not just due to COVID. Thus, why I later tacked on

Unless or until we finally rid ourselves of employer / profit based "healthcare."

That's what's been killing us off more than anything.

 

[g5000]

Or unless you increase the Salary Cap and retirement age

Bingo. I've been saying for years we need to raise the retirement age. We are living longer, we should be working longer.

Common sense.

 

[rightwinger]

Agreed, but it's not just due to COVID. Thus, why I later tacked on

That's what's been killing us off more than anything.

Vastly improving healthcare is a major factor in people living longer

 

[Toddsterpatriot]

Eliminate the earnings cap. Problem solved.

If someone pays double the amount in, they get (about) double the amount out.

How does that solve the problem?

 

[Toddsterpatriot]

Being a liberal I agree wholly with the idea that there are many ultra rich folks who do not pay their fair share of taxes. See Bernie’s example of a guy who pays a lower income tax rate than his secretary. That’s income tax though .

That's a bullshit example.

 

[WorldWatcher]

Lets look at it this way

The last time the SS retirement age was raised was 1983 (65 to 67)

The life expectancy has risen 4.5 years since then.
If you raise it to 70, you will still have an extra 1.5 years of retirement

Let's look at is this way.

And a 3 year cut in benefit eligibility when FRA is moved from 67 to 70.

Decreasing benefit eligibility is a cut in the number of years you can draw the benefit.

WW

 

[rightwinger]

Let's look at is this way.

And a 3 year cut in benefit eligibility when FRA is moved from 67 to 70.

Decreasing benefit eligibility is a cut in the number of years you can draw the benefit.

WW

But you get a 4 1/2 year increase to your total retirement window

 

[WorldWatcher]

No straw man. Just trying to grasp your logic.
So life expectancy is irrelevant to this discussion. Got it.
Now the moral question.
Why should higher wage earners pay vastly more for their benefit?

Is working hard and making a higher wage inherently immoral?

Ask the same question you get the same answer.

WW