• "Spreading the ideas of freedom loving people on matters regarding metals, finance, politics, government and many other topics"

for you oldsters

Scorpio

для продажи слегка подержанный
Founding Member
Board Elder
GIM Hall Of Fame
Joined
Mar 25, 2010
Messages
33,327
Reaction score
54,162

many of you already on .gov welfare, but some coming up on it soon



This Chart Shows Why You Shouldn’t Wait to Claim Social Security​


Ross Urken
Thu, November 11, 2021, 3:30 PM


Social Security Administration building
Social Security Administration building
Your health status, anticipated longevity and retirement cash needs all factor into when it makes sense to claim Social Security. Of course, you’re eligible to start taking Social Security at 62. But the longer you wait, the higher your monthly benefit will be, and conventional wisdom says that you should hold out as long as you can to ensure more robust checks. Your patience, in other words, is rewarded in the long run. But pop open the hood to get a more granular look at the numbers, and the virtues of delaying diminish.
To investigate, we used SmartAsset’s Social Security calculator to examine how total earnings add up when claiming at ages 62, 67 and 70. For the purposes of this hypothetical, we’re considering a person born in 1960 – who will reach his or her first year of eligibility next year, and whose full retirement age is 67 – making $60,000 a year.
As you make the decision of when it’s best for you to claim Social Security, be sure to consult with a trusted financial advisor to determine what best suits your situation.

On a monthly basis in this scenario, you’d start receiving checks of more than $1,871 if you claimed Social Security at 62. If you waited until 67, that initial monthly amount would be $2,674 (+43%). And for every year you delay claiming Social Security benefits past your full retirement age up to age 70, you’d net an additional 8% in your Social Security benefit (our calculator accounts for Social Security cost-of-living adjustments in all three scenarios). That means, if you wait until 70 instead of claiming Social Security at 67, you’d boost your checks 24% to $3,315 (nearly double the benefit you’d get if you’d claimed at 62).
Over time, delaying really adds up. By age 93, you’d net $952,151 by claiming Social Security at 62, $1,080,426 by waiting until 67 and $1,147,820 by waiting until 70. But that’s assuming lifespan that’s way above average; in 2020, the CDC put the life expectancy of Americans at just 77.3.
If you compare the three scenarios at age 77, you’d have $388,748 if you started claiming Social Security at age 62, $351,354 if you started claiming at 67 and only $295,802 if you started claiming at 70 (nearly $100k less than if you claimed it at 62). Take a look:

So when does it become worth it to have waited? In delaying Social Security benefits five or eight years past 62, it takes some time for those even more handsome checks to catch up to the cash amassed from claiming Social Security as early as possible. If you claim Social Security benefits at 67, it isn’t until between 81 and 82 that your total Social Security payments would supersede what you’d have if you began claiming at 62. Meanwhile, if you claimed Social Security at 70 instead of 67, you’d have to live to almost 85 for your total Social Security earnings to make it worth the wait.

Of course, there are benefits to delaying retirement: Another year working means one more year building up your nest egg and one fewer year drawing it down. And waiting until full retirement age also means that any income you earn in retirement won’t reduce your Social Security benefits. And over time through your late 80s and into your 90s, the advantages of waiting to claim Social Security become more pronounced — by 2048 (age 88), there’s nearly a $100,000 difference between claiming at 62 and claiming at 70. And by 93, waiting until 70 would net you $67,394 more than claiming at 67 — and nearly $200,000 more than claiming at 62. That’s a huge chunk of change to use during your later years or pass on to your heirs. But if you’re waiting to claim in hopes of getting the most money from the government, you’re making a bet on your longevity that may not pay off.
Bottom Line
Though retirement gurus typically extol the virtues of waiting to take Social Security, there are definite bird-in-hand advantages to claiming your Social Security benefits as early as possible when you consider life expectancy. That’s to say nothing, of course, of the potential to invest money from those early Social Security checks and leave more money in your other retirement accounts to grow.
Tips on Social Security
  • A financial advisor can help you decide when it makes sense for you to claim Social Security. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • A Social Security calculator can also help you decide when you should retire and when might make sense for you to start claiming your Social Security benefits.
The post This Chart Shows Why You Shouldn’t Wait to Claim Social Security appeared first on SmartAsset Blog.

 

the_shootist

Mother Lode Found
Sr Midas Sup +++
Mother Lode
Joined
May 31, 2015
Messages
71,168
Reaction score
149,946
This is great stuff Scorpio and a topic near and dear to my heart. I just did this research last year before hitting my 66 1/2 mark and eligible to collect 100% of my benefits. For me it was no contest. Letting them keep my money (Yeah, I DO feel its my money but that's another discussion) even one day longer than necessary was not acceptable. I can't guarantee I'll live past today so, rather than gamble on being alive tomorrow I opted to start collecting ASAP. This article does a great job of explaining the options.:2 thumbs up:
 

Scorpio

для продажи слегка подержанный
Founding Member
Board Elder
GIM Hall Of Fame
Joined
Mar 25, 2010
Messages
33,327
Reaction score
54,162
yep, that is just it,

they punish you for not waiting, but really, how long do you really believe you can outlast the reaper?

like a game of blackjack, the table odds for them supersedes your moves,

and doing what they do, the purposefully make it 'appear' that it is better if you wait, knowing full well the odds are with them
 

edsl48

Midas Member
Midas Member
Midas Supporter
Joined
Apr 2, 2010
Messages
4,022
Reaction score
8,583
I took it the day I was first eligible for SS some ten years ago. The thing is, and not factored into the charts, I have to pay a tax on my SS draws that could vary depending on what my, or anyone elses, taxable income status for a particular year.
I paid in for many years and now have the priveledge to pay my benefits back into the system...I think I got the wrong end of the stick on this one now that FDR's ponzi scheme has evolved into just another tax and spend welfare program.
 

the_shootist

Mother Lode Found
Sr Midas Sup +++
Mother Lode
Joined
May 31, 2015
Messages
71,168
Reaction score
149,946
It's definitely not welfare. If so,,, I will settle for a refund of the $100's of 1000's confiscated from me. About 9 years to go. Better believe I am collecting if it's still there.
Welfare? Don't make me laugh. I could feel the pain of SS paycheck deductions 40 years ago. It ain't welfare, it's collecting my entitlement!
 

Irons

Outlaw Prospector
Midas Supporter
Mother Lode
GIM Hall Of Fame
Joined
Mar 30, 2010
Messages
32,300
Reaction score
66,022
My wife is convinced the starting age changes the later you were born so I'm not sure if I can start at 62 or if I have to wait until 65.

I plan of retiring ASAP. I'm already skilled at being poor and I'm too busy to waste any more time at work.



.
 

the_shootist

Mother Lode Found
Sr Midas Sup +++
Mother Lode
Joined
May 31, 2015
Messages
71,168
Reaction score
149,946
My wife is convinced the starting age changes the later you were born so I'm not sure if I can start at 62 or if I have to wait until 65.

I plan of retiring ASAP. I'm already skilled at being poor and I'm too busy to waste any more time at work.



.
She's right. Go to SSA.gov and start poking around. You, being a man of intelligence and a world renowned expert in the female form, will figure it our pretty quickly. I found hat site pretty helpful
 

Au-myn

Goldbug
Founding Member
Site Supporter
GIM Hall Of Fame
Joined
Jul 2, 2010
Messages
1,041
Reaction score
1,940
Location
California
they punish you for not waiting, but really, how long do you really believe you can outlast the reaper?
Yes, I received much less however, I planned on early Retirement and got out at 63+ still at the top of my game.

I did make some adjustments and became more of a short term trader with most Stock trades.
Adding additional avenues of Income via Options and high Yield Stock Dividends has worked well this year.
Built a nice coin collection and have a stack of Silver.

And I am my own BOSS...
 

Irons

Outlaw Prospector
Midas Supporter
Mother Lode
GIM Hall Of Fame
Joined
Mar 30, 2010
Messages
32,300
Reaction score
66,022
She's right. Go to SSA.gov and start poking around. You, being a man of intelligence and a world renowned expert in the female form, will figure it our pretty quickly. I found hat site pretty helpful
I will go there and make an account sometime. I'm too far away from it to start counting the days now.


.
 

the_shootist

Mother Lode Found
Sr Midas Sup +++
Mother Lode
Joined
May 31, 2015
Messages
71,168
Reaction score
149,946
I will go there and make an account sometime. I'm too far away from it to start counting the days now.


.
It's never too far away! I've been where you are. Do the research sooner rather then later, you'll be glad you did!
 

Casey Jones

Train left the station...
Gold Chaser
Joined
Apr 4, 2020
Messages
7,458
Reaction score
12,043
Location
Down the road from the Kaczynski ranch
I'm retired early - Railroad Retirement, not FICA. But I'm paid less, just the same. Part of it was my relatively-short railroad career - 23 years, not 30-plus.

The plan was, get a minimum-wage job somewhere - parts runner, Uber, something light. We have a mega RV dealer just a mile from me; they have two other lots in other areas. Lots of moving RVs around - that's not a job you entrust to a kid, but it's not a job that pays well. So I could easily do it, with my truck and heavy-equipment experience.

Wu Flu and the Mandates put the kabosh on that. I have no idea how long this insanity will last, or whether we'll again be a functioning, civil, industrial society based on law...but for now, I'm just lying low.
 

gringott

"Internet Moofluencer"
Midas Member
Site Supporter ++
Joined
Apr 2, 2010
Messages
18,926
Reaction score
31,226
Location
Stable
I took it at 62, but I had stopped working at 58.
Reasons.
1. SS killed me at Christmas just before I hit 62.
2. I created a SS account on line. They had a statement on there that it did not matter when you took it, their numbers show everybody ends up getting the same amount if they wait or not.
3. I am shocked it isn't kaput yet.
 

the_shootist

Mother Lode Found
Sr Midas Sup +++
Mother Lode
Joined
May 31, 2015
Messages
71,168
Reaction score
149,946

the_shootist

Mother Lode Found
Sr Midas Sup +++
Mother Lode
Joined
May 31, 2015
Messages
71,168
Reaction score
149,946
I took it at 62, but I had stopped working at 58.
Reasons.

2. I created a SS account on line. They had a statement on there that it did not matter when you took it, their numbers show everybody ends up getting the same amount if they wait or not.
Double huh?
 

tigerwillow1

Gold Member
Gold Chaser
Midas Supporter
Joined
Mar 31, 2010
Messages
1,805
Reaction score
3,507
It's not so simple because of tax issues, spousal issues, and WEP (windfall elimination provision). On the tax issues, if you have any money in taxable retirement accounts like IRA or 401K, you might come out better in the end delaying taking SS to get the money out of those taxable accounts first. If you have a spouse who also qualifies for his/her own SS benefit, you may come out ahead starting one of the spouses at age 62 and holding the other spouse off while he/she collects the other's spousal benefit. This is highly dependent on the individual earnings records and age spread. If you get another pension benefit that catches you in WEP, the overall impact of that has to be considered.

For 40 bucks you can sign up for an online service that lets you run different scenarios for a year. IMO the guy who runs this knows more about how social security works that 99% of the people who work for the SS department.
https://maximizemysocialsecurity.com/
 

smooth

Gold Member
Gold Chaser
Site Supporter ++
Joined
Mar 31, 2010
Messages
3,407
Reaction score
7,195
I will go there and make an account sometime. I'm too far away from it to start counting the days now.


.
I was born in 1970 and am eligible for reduced SS at age 62. And plan to take it. A bird in hand for sure. BUT..... I do plan on talking to a finance guy soon, having just changed employers. I have a fair amount of loot in a retirement account that needs to be moved elsewhere. I certainly have trust issues when it comes to this stuff so finding the right guy is a challenge. But it's never too soon to start thinking about it.
 

Uglytruth

Super Moderator
Mother Lode
Midas Supporter ++
Joined
Apr 6, 2011
Messages
17,850
Reaction score
41,405
Does no one else see the connection to the death jabs for baby boomers & SS?
 

917601

Midas Member
Midas Member
Survivor
Joined
Apr 2, 2010
Messages
11,811
Reaction score
11,141
Most are making an assumption SS will be solvent when they check out. Beware and prepare, Means Testing is actively being discussed with the SS hacks. My source says it will be instated, but they are looking at grandfathering in those older than 59 1/2 when they try to pull it off. Means tested means you have to much money, benefits will be reduced according to your traceable “ wealth”. If your “ wealth” is tied to your SSN in any way ( bank accounts, stocks, bonds, house, real estate, etc) you may/will be screwed. I suspect it will not be attempted until we go cashless, ( Fedcoin- digital currency instated). The digital currency Senate bill has been in closed door committee, see Senate Bill 3571. The Federal Reserve and Treasury is hot on instating the digital currency.
 

Uglytruth

Super Moderator
Mother Lode
Midas Supporter ++
Joined
Apr 6, 2011
Messages
17,850
Reaction score
41,405
Take away people jobs, zero interest rates and they will turn into hunters of those that created this mess.
 

edsl48

Midas Member
Midas Member
Midas Supporter
Joined
Apr 2, 2010
Messages
4,022
Reaction score
8,583
I was born in 1970 and am eligible for reduced SS at age 62. And plan to take it. A bird in hand for sure. BUT..... I do plan on talking to a finance guy soon, having just changed employers. I have a fair amount of loot in a retirement account that needs to be moved elsewhere. I certainly have trust issues when it comes to this stuff so finding the right guy is a challenge. But it's never too soon to start thinking about it.
Look here.


They have done considerable research regarding the use of index funds with various stock/bond allocations that are bactested over time. You wont find anything on the gold front there but there are some like me that do not think that the PMs should be your total investment and are rather more of an insurance policy against future calamaties or a total collapse of the currency. I am certain that these dire predictions will happeen but like many I am not sure when and to me a proper allocation to stock/bond portfolios tend to produce pretty good returns in the interem till TSHTF.
Best of all that site doesn't try to sell you anything and that in and of itself has a value today in my estimation. I think it is worth a look imho.

Another good watch from Frontline at PBS
 
Last edited:

Hystckndle

SWEATEQUITYIS$$$
Board Elder
Midas Member
Midas Supporter ++
GIM Hall Of Fame
Joined
Mar 28, 2010
Messages
7,976
Reaction score
11,979
Location
Central Florida
Understand the way it is calculated:
The little paper you used to get in the mail is available at their website now
Further, have a visit here:
*** link to this site taken out by Haystack ***
PM Haystack if interested in the math , alll good

You may have already worked enough hours ( most of us here started paying in at like age 11 )
and have enough hours clocked so that per their math formulas
( they FACTOR your earnings starting with your early working years and then using the 35 most $ gross years over your lifetime )
that your so called " tenure " is paid up and so high already ...
meaning that the amount you will be eligible for WILL NOT CHANGE ( m,aybe 20 bucks dif )
substantially if you do not work another
day or hour in their system until you decide to file.

IOW, working harder and longer for a bigger payout is a bit of a myth...check it out.
 
Last edited:

Irons

Outlaw Prospector
Midas Supporter
Mother Lode
GIM Hall Of Fame
Joined
Mar 30, 2010
Messages
32,300
Reaction score
66,022
I was born in 1970 and am eligible for reduced SS at age 62. And plan to take it. A bird in hand for sure. BUT..... I do plan on talking to a finance guy soon, having just changed employers. I have a fair amount of loot in a retirement account that needs to be moved elsewhere. I certainly have trust issues when it comes to this stuff so finding the right guy is a challenge. But it's never too soon to start thinking about it.
Good news, I was born in 67 so I'll be out in seven! Living on deer and other free woods food, Maybe cheekin on Saturday!


.
 

Hystckndle

SWEATEQUITYIS$$$
Board Elder
Midas Member
Midas Supporter ++
GIM Hall Of Fame
Joined
Mar 28, 2010
Messages
7,976
Reaction score
11,979
Location
Central Florida
We have beat this stuff up many times here.
I don't understand the whole run out of $ scare tactic they use.
We ALL here know it is funny money.
And we ALL here see that they are just pressing buttons now at will.
Greenspan himself said:
"While we CAN certainly guarantee the QUANTITY of all future payments,
we CANNOT guarantee the QUALITY of those future payments "
( quantity not a problem...we will just make it....quality---no idea the real consequences ( buying power ) of us making a shiteload of it )
Therefore the whole " running out of money " thing is more hype x 1000.
" whatever " .... PHOTO OP !!!...print another T Bond and stand in front of a file cabinet holding it
and POOF we have SS benefits for another xyz years.
 
Last edited:

Hystckndle

SWEATEQUITYIS$$$
Board Elder
Midas Member
Midas Supporter ++
GIM Hall Of Fame
Joined
Mar 28, 2010
Messages
7,976
Reaction score
11,979
Location
Central Florida
As GH has pointed out here...
Tontine Insurance.
Interesting stuff.
68, 75, 95....whatever....just a crap shoot...who the hay knows ???

I look at it this way.......yeah....they taxed me...where is it ?
Gone,
but they are gonna create some $ and send it to me after X age IF I fill out some paperwork
AND if I understand I will be penalized if I work earning more than XYZ $ before age 67.
What a scam all of it.....like folks like us in here are NOT gonna work / be productive in life and sit around eating Dominos all day.

I finally reduced it to this:
It is perhaps not for me.
It is for the wife / survivor unit.
It is an annuity ( virtual ) you cannot see....call it whatever you want.
Every year that I WAIT...it will pay the wife unit the base amount published PLUS the 8% or whatever more
every year past 62 until age 70 where it maxes out....and also a COLA that the old coots will vote in every so often.
8% greater payout return for the wife or us every year...
Not a lot of downside risk. ( inflation is one )
Using the tools above....Haystack is fully paid in and sweat equity maxed out with them...
the dishrag is wrung out...
So THAT being understood....hmmmmm what is the next move..
Hence the it is for the wife thought process.
Regards to all,
 
Last edited:

Scorpio

для продажи слегка подержанный
Founding Member
Board Elder
GIM Hall Of Fame
Joined
Mar 25, 2010
Messages
33,327
Reaction score
54,162
.problem with that link is it is 3rd party,

a 3rd party getting access to all your data,

which of course brings up the question, how does it work regarding getting the info, and just how private is it,
where if they have the full earnings history directly mainlined from .gov, name, address, SSN, and so on

asking before people get to jumping all over that website

this is straight from the SSI website:

How the Retirement Estimator Works​

The Retirement Estimator calculates a benefit amount for you based on your actual Social Security earnings record. Please keep in mind that these are just estimates.

Estimate Your Retirement Benefits

We can’t give you your actual benefit amount until you apply for benefits. The estimated and actual amounts may differ due to:

  • Future increases or decreases in your earnings.
  • Social Security annual cost-of-living adjustments.
  • Changes to U.S. laws and policies.
  • Your military service, railroad employment, or pensions earned through work for which you did not pay Social Security tax.

Who Can Use the Retirement Estimator​

You can use the Retirement Estimator if you have enough Social Security credits to qualify for benefits and you are not:

  • Currently receiving benefits on your own Social Security record.
  • Waiting for a decision about your application for benefits or Medicare.
  • Age 62 or older and receiving benefits on another Social Security record.
  • Eligible for a Pension Based on Work Not Covered By Social Security.
If you are currently receiving only Medicare benefits, you can still get an estimate. For more information, read our publication Retirement Information for Medicare Beneficiaries.

If you cannot use the Retirement Estimator or you want a survivors or disability benefit estimate, please use one of our other benefit calculators.

You cannot use the Retirement Estimator if you have blocked electronic access to your personal information.

How Long Can You Stay On Each Page?​

For security reasons, there are time limits for viewing each page. You will receive a warning if you don’t do anything for 25 minutes, but you will be able to extend your time on the page.

After the third warning on a page, you must move to another page. If you do not, your time will run out and your work on that page will be lost.

If you turned JavaScript off in your browser, you will not receive these warnings. After you spend 30 minutes on a page, you must move to another page or you will be logged out.

 

Hystckndle

SWEATEQUITYIS$$$
Board Elder
Midas Member
Midas Supporter ++
GIM Hall Of Fame
Joined
Mar 28, 2010
Messages
7,976
Reaction score
11,979
Location
Central Florida
If ya read it...
It is a dif sort of a tool.
And a tool that many of the financial manger types use.
The link does the math from a cut and paste.
Straight data.
You can do it off of a scan of a print out from your stuff from the SS Administration.
Piece o pie
No SSN required, no private info required
just your total earnings # s over the years.
Year and then total.
Same # s as millions of other folks....

NOTE:
What it shows you, if one is interested, and what the Social Security Website does NOT show you,
is where you sit with your totals paid in to date and what busting your ass
for a few more years may or may not do to your so called benefit.
IOW, because for a lot of folks...the peak earnings years is a bell curve,
working longer is of little benefit...in my case...20 bucks dif per month or something small like that.
Waiting longer...yer, beneficial perhaps , but working more years...no

Not an "' estimator ", it is the math that the SS Admin uses to produce the bar curve they show you
" What you Might Receive "
There are vids, dunno how many, been through a few,
that also explains, in great exciting detail, all of the math.
I did that all by hand and then on excel also.
Matches to a T what is printed in the short form on the SS website.


But since ya are concerned about the linky provided
and wanna protect others, 3rd party and all.
Which I would then suppose, is all linkys provided.
I get that,
Tell ya what, I will delete them.

No worries....ALLLL good.
On the move since 0300,
Back later.
 
Last edited:

Scorpio

для продажи слегка подержанный
Founding Member
Board Elder
GIM Hall Of Fame
Joined
Mar 25, 2010
Messages
33,327
Reaction score
54,162
nope, just wanted to make sure people were aware is all,

they can choose to use it or not,

that is on them, not you

if what you say is accurate, which of course it would be, then leave it up for those that want to use it IMO
 

Scorpio

для продажи слегка подержанный
Founding Member
Board Elder
GIM Hall Of Fame
Joined
Mar 25, 2010
Messages
33,327
Reaction score
54,162
I'll be out in seven!

what a wonderful way to put it,

be out in 7,

out of slavery,
out of the make food work powered enterprise,
out of 'I have to do time' today

etc.

be out in 7

like a really long prison sentence,
 

Unca Walt

Midas Member
Midas Member
Site Supporter ++
Joined
Mar 15, 2011
Messages
15,357
Reaction score
30,921
Location
South Floriduh
They lost me when I started to see “ When you reach 78, 85, 90….”
Why, kid? Hell, I won't even be a pirate (I'm eighty!) in nine more days. I'll be 81 and lose my piratude. My BP is 120/68 this moanin', I am disgustingly healthy, and look forward to the day when we have flying cars.

Looks like I chose right. I am the blue line -- so the hesitaters will catch up to me in three more years. Hah.

But I gotta say that the article misses one HUGE point. Absolutely overwhelming point missed: INFLATION <-- you wait for a "higher rate", and behold!! The numbers go up, but the purchasing power drops far more quickly. So you wind up with a whole shitload less of "value".

There It Is.

1636803902421.png
 

edsl48

Midas Member
Midas Member
Midas Supporter
Joined
Apr 2, 2010
Messages
4,022
Reaction score
8,583
Why, kid? Hell, I won't even be a pirate (I'm eighty!) in nine more days. I'll be 81 and lose my piratude. My BP is 120/68 this moanin', I am disgustingly healthy, and look forward to the day when we have flying cars.

Looks like I chose right. I am the blue line -- so the hesitaters will catch up to me in three more years. Hah.

But I gotta say that the article misses one HUGE point. Absolutely overwhelming point missed: INFLATION <-- you wait for a "higher rate", and behold!! The numbers go up, but the purchasing power drops far more quickly. So you wind up with a whole shitload less of "value".

There It Is.

View attachment 232176
Inflation...the cruelest tax of all said Reagan I think it was...anyway...

Status of Social Security and the Trust Fund, Fiscal 2021: Beware of Vicious Dog​

by Wolf Richter • Nov 11, 2021 • 117 Comments

Biggest COLA since 1982 already eaten up by inflation.

By Wolf Richter for WOLF STREET:​

The Social Security Trust Fund – the Old-Age and Survivors Insurance (OASI) Trust Fund – closed the fiscal year 2021 at the end of September with a balance of $2.76 trillion, down by 2.0% from a year earlier ($2.81 trillion), according to figures released by the Social Security Administration. After large increases in the prior decade, this was the second annual decline of the Trust Fund since 1990; the first occurred in 2018 (-0.8%).
The Disability Insurance Trust Fund is by law a separate entity from the OASI Trust Fund, and is not part of this discussion here.
The OASI Trust Fund invests exclusively in Treasury securities. At the end of the fiscal year, it held $2.73 trillion in interest-bearing long-term special issue Treasury securities and $22 billion in a short-term cash management security, called “certificates of indebtedness.” These securities are not traded, and so their value doesn’t change from hour to hour, and they don’t need to be marked to market because the Trust Fund purchases them at face value, and the US Treasury redeems them at face value.
US-Social-Security-Trust-Fund-balances-2021-11-11-fiscal-year.png

By investing on autopilot in Treasury securities that are not exposed to the market, the Trust Fund follows an ultra-low-risk strategy and operates with ultra-low administrative expenses, amounting to just 0.14% of the assets in the fund.
This strategy keeps Wall Street and its shenanigans away. For decades, Wall Street has been lobbying to “privatize” the Trust Fund in order to suck juicy fees out of those trillions of dollars.
According to the 2021 Trustee Report, 55 million people drew Social Security retirement benefits at the end of 2020: 49 million retired workers and dependents of retired workers, and 6 million survivors of deceased workers.
During 2020, the pandemic year, 175 million people paid into Social Security via payroll taxes – down by 3 million from 2019.

There are some real problems.

The Fed’s interest rate repression. The weighted average interest rate earned on the securities in the Trust Fund dropped to 2.40% in September. Before the Financial Crisis, the Fund was earning over 5%.
The effective interest rate earned from the Treasury securities in the Trust Fund has been declining for three decades: At first, the rate of inflation was coming down from the early 1980s, and yields were dropping across the board; and then, with the Financial Crisis, the Fed used QE to force down long-term interest rates.
The Trust Fund invests in long-term securities. There is a lag of many years before the replacement of higher-yielding securities by lower-yielding securities pushes down the average interest rate.
The Fed’s interest rate repression since March 2020 is just starting to be reflected in the Trust Fund’s average interest rate and will hound it for years to come, even if long-term interest rates rise.
US-Social-security-2020-11-11-interest-rate-.png

As a result: despite the 13% growth of the Trust Fund assets since 2010, annual interest income has dropped by 35%, from $108.5 billion in 2010 to $70.5 billion in 2021:
US-Social-security-2020-11-11-interest-income-.png

Total income fell below total outgo in fiscal 2021. Income from contributions ($831 billion), interest income from securities ($70.5 billion), and income from taxation of benefits ($34 billion) generated total income of $936 billion, down by $20 billion from the prior year.
Total outgo of the program (nearly all of it in form of benefits paid) rose to $991 billion.
The deficit generated by the lower income and the higher outgo reduced the Trust Fund balance by $55 billion.
When the green line (total income) was above the red line (total outgo), the Trust Fund accumulated assets. When the green line fell below the red line, the Fund shrank:
US-Social-security-2020-11-11-income-v-outgo.png

Employment fell off. Contributions to the fund depend on the labor market, and when people in high-paying jobs lose their employment, contributions sag. This happened during the Financial Crisis when banking, real estate, and many other sectors with high pay shed lots of jobs.
During the pandemic, those people switched to working from home and continued to make money and pay into Social Security. But people on the lower wage scale – such as workers at restaurants, retail stores, and service establishments – lost their jobs, and contributions dipped, but by a smaller amount than during the Financial Crisis:
US-Social-security-2020-11-11-contributions-v-benefits.png

What has filled in the gap between 2010 through 2020 were the two other sources of income:
  • Interest income peaked at $109 billion in 2010 and then steadily declined to $71 billion in fiscal 2021;
  • Income from taxation of benefits rose from $21 billion in 2010 to $38 billion in fiscal 2020. But in fiscal 2021, it fell to $34 billion, the lowest since 2016.
Demographics. The huge generation of millennials is entering their peak earning years. They’re replacing the huge generation of boomers (now between 55 and 75) transitioning out of their peak earnings years, and older boomers retiring. The two generations were similar in size. So that balances out. But the generations following the millennials are smaller. And then came the pandemic that jostled all assumptions.

Beware of Vicious Dog: Inflation.

Social Security payments to beneficiaries are adjusted annually for inflation via “Cost of Living Adjustments” (COLA). The percentage of the COLA is the average CPI-W inflation rate in the third quarter, and is applied the following January for the whole year. The Social Security COLA for 2022 is 5.9%, the biggest since 1982.
But CPI-W for October jumped by 6.9%, and the COLA for 2022 is already underwater. And the COLA for 2021 – a lousy 1.3% even as inflation started to rage – has been horribly underwater.
The Fed still has its foot fully on the gas, printing money and repressing interest rates, thereby creating more fuel for inflation. The Fed will eventually react, but it will be too late and too slow to bring inflation down quickly. And the 5.9% COLA for 2022 may not cover even the official rate of inflation as measured by CPI-W.
Each year that the COLA is behind actual costs of living increases, it affects all future years of benefits because inflation and COLAs are compounding, and that gap between them is compounding as well. Even small gaps year after year compound into big differences after 10 or 20 years.
In addition, depending on where retirees live and how they live, actual costs of living increase faster than CPI-W.
The gap between actual increases in costs of living and the COLAs for each year causes Social Security benefits to lose a significant part of their purchasing power over the years.

Depletion of the Trust Fund — if unaddressed.

The Trust Fund, after years of flat-lining, declined in fiscal 2021 by 2%. Relying on estimates for future demographics, employment, wages, retirements, mortality, births, immigration, and the like, actuaries attempt to estimate how income and outgo of the system will impact the Trust Fund.
The Pandemic has shredded the prior estimates in both directions and has created a lot of uncertainties about future estimates.
Employment, earnings, and interest rates “dropped substantially” in 2020, the 2021 Trustee Report pointed out. This lowered the income into the system.
But the report also assumed that the pandemic would “lead to elevated mortality rates over the period 2020 through 2023.” This would lower the outgo.
The 2021 Trustee Report only covers data for the year 2020. The report for the 2021 data will come out next fall.
In October 2021, despite the labor shortage, the number of working people was still down by 4.7 million from pre-pandemic levels, and by 6.5 million people if the pre-pandemic trends of working people had continued. This translates into lower-than-previously-projected income for the Social Security system.
The lower number of working people was in part caused by the surge in early retirements of people old enough to draw Social Security that then started drawing Social Security earlier than they would have otherwise. This increased the outgo.
The 2021 Trustee Report estimated, based on the new assumptions for the pandemic era, that the OASI Trust Fund reserves, now at $2.76 trillion, would become depleted in 2033.

Social Security won’t “go broke,” but adjustments will be made.

It simply means that workers will have to pay more, or benefits will get trimmed, or both. Social Security has been fixed before. So adjustments will be made before the depletion date.
Contributions could be increased by raising the income cap or by increasing the percentage of contributions, or both.
Benefits could be reduced, including by trimming benefit payments by perhaps something like 2% or 3%; or more insidiously by changing how the COLA is calculated.
COLA changes are insidious because they’re technical and people don’t understand them. But they have a large impact disproportionately on people who can least afford it, when they can least afford it – lower-income people, late in life.
The purpose of COLA reductions is to cause a faster loss of the purchasing power of the benefits, while inflation increases wages and thereby increases contributions on the income side.
Proposals have been floated over the years to replace CPI-W for COLA calculations with a chain-type price index, such as the PCE price index, which pegged inflation in September at 4.4%, compared to CPI-W in September of 5.9%.
If a change of the COLA calculation lowers the COLA adjustment by 1 or 1.5 percentage points on average per year, compounded over 20 years, it would have a very large impact on the purchasing power of those benefits. It would doom the lower-income elderly.
So the Social Security system won’t “collapse” or go “broke” in 2033, but benefits will be trimmed or contributions will be increased, or both, before then. The shortage this year was $55 billion, in a system that takes in and pays out nearly $1 trillion, in a $23-trillion economy.

Social Security will be there for you, but…

Social Security benefits will be there for you, but they’re guaranteed to lose purchasing power year after year, even if the COLA calculations are not changed, and much faster if they’re changed.
This is not an accident. Inflation measures are carefully engineered to not capture the true increases in the costs of living.
Retirees relying exclusively on those benefits might not feel the loss of purchasing power for the first year, but it compounds and eventually becomes painful. If it is tough to live exclusively on Social Security early on, it will be brutal after 20 years of retirement.
Social Security was never intended to provide adequate retirement on its own, and it’s not going to. Some people are trying to deal with this by moving to a cheaper location in the US, or to a cheaper country, such as Mexico or Thailand, which can be a great adventure.

A hedge against inflation in retirement is to keep working.

My patented solution is twofold: Build a nest egg while working, and work for as long as possible, either doing what you’ve been doing, or doing something new and interesting and fun. Full-time is great, but even a part-time gig is great, and for all kinds of reasons, not just money, and even if you have plenty of money and don’t need to work.
 

Fiat Metaler

Gold Member
Gold Chaser
Joined
Apr 2, 2010
Messages
2,212
Reaction score
1,538
I guarantee that chart was created back when everyone was still pretending inflation was less than 2%.

I plan to draw as soon as possible. Not only does a bird in the hand beat inflation, but you get the cash in hand before they change the rules again.
 

Scorpio

для продажи слегка подержанный
Founding Member
Board Elder
GIM Hall Of Fame
Joined
Mar 25, 2010
Messages
33,327
Reaction score
54,162
from the SS website you can put in your birth year, and it will pop up with your full retirement age, then the effect if you choose to go early


for every xtra month worked after 62, they change the 'math' as Stack says

with many of you being 1960 and over, they lump you all together and this comes up,
with more on the site, just scroll down



1.jpg
 

Scorpio

для продажи слегка подержанный
Founding Member
Board Elder
GIM Hall Of Fame
Joined
Mar 25, 2010
Messages
33,327
Reaction score
54,162
Not only does a bird in the hand beat inflation, but you get the cash in hand before they change the rules again.

interesting point,

as typically, once in the system and on the dole, the rules no longer change for that person, only those that come behind,

which can be a strategy