Social Security COLA Announced

[Dusty_Star]

3.2%

Social Security COLA to Give Retirees a Roughly 3.2% Raise in 2024 - WSJ (https://www.wsj.com/personal-finance/social-security-cola-increase-2024-5b0cd62)

[CoachKandSportsguy]

ugh, that's on the low side of inflation, but its entitlement money, so its probably best to keep it not exploding higher so that congress peeps don't come up with the wrong answer to continue funding it.

[Stu from NYC]

Ok better they do not run out of money before they stop kicking the can down the road.

[Caymus]

3.2%

Social Security COLA to Give Retirees a Roughly 3.2% Raise in 2024 - WSJ (https://www.wsj.com/personal-finance/social-security-cola-increase-2024-5b0cd62)

CPI was reported today at 4.1%.

[MrFlorida]

Well they sure do have enough money to give away to other countries don't they ?

[Dusty_Star]

CPI was reported today at 4.1%.

The COLA doesn't come close to its stated goal of not to erode the purchasing power of Social Security benefits by inflation.

[dewilson58]

Lucky there is any inflation adjustment.

:eclipsee_gold_cup:

[OrangeBlossomBaby]

So I'm gonna get a $30 raise, which will bump up my health care premium costs by around $45 per month since it puts me in the next level of eligibility for subsidies under the ACA. I'm not old enough for Medicare yet. The good news, is that if I wasn't eligible for subsidies at all, my premiums would be around $1900/month. I'm still paying under $225/month. So I guess there's that.

[Jayhawk]

... but its entitlement money, so its probably best to keep it not exploding higher so that congress peeps don't come up with the wrong answer to continue funding it.

If Social Security was a true Entitlement, everyone would get it at a certain point. But as most know, unless you paid into it and have enough quarterly credits or collect on the earnings of a spouse, you do not get it.

8 Types of Americans Who Aren’t Eligible to Get Social Security (https://www.investopedia.com/retirement/8-types-americans-who-wont-get-social-security/)

[billethkid]

3.2%......

A misnomer.....cost of living increase...:1rotfl:

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:censored:

[Chi-Town]

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[Stu from NYC]

Well they sure do have enough money to give away to other countries don't they ?

Different pocket.

[Chi-Town]

Being taught in my Economics classes that we should not count on Social Security benefits being around at retirement and plan your future accordingly I look at every payment as a bonus. I was in college and part of the height of the Baby Boomer explosion, and the thinking was that there would be no funds by the time we reached 65.

[GoRedSox!]

If Social Security was a true Entitlement, everyone would get it at a certain point. But as most know, unless you paid into it and have enough quarterly credits or collect on the earnings of a spouse, you do not get it.

8 Types of Americans Who Aren’t Eligible to Get Social Security (https://www.investopedia.com/retirement/8-types-americans-who-wont-get-social-security/) I think this is correct, it is improperly characterized as an entitlement. We all paid into Social Security our entire working lives, and our employers matched that contribution. For most of my career, 12.4% of my salary was paid into Social Security.

In my opinion, the most unfair aspect of Social Security for beneficiaries is that the income limits to determine what portion of your benefits are subject to federal income tax are not indexed to inflation. For the first 50 years of Social Security from 1935-84, Social Security benefits were not taxed at all. When Reagan "saved" Social Security in the mid-80's, benefits became taxable for the first time. However, in 1984, only 8% of recipients exceeded the limits and were taxed. Today, that percentage is approaching 60% and either 50% or 85% of their benefits are subject to federal income tax. The limits have not changed in 40 years. Here is what they are:

Single under $25,000 or Couple under $32,000 - benefits are not taxable
Single between $25-34,000 or Couple between $32-44,000 - 50% of your benefit is taxable
Over these amounts, 85% of your benefit is taxable.
When computing your income for these limits, the formula is modified adjusted gross income + 1/2 of your Social Security benefit.

These limits really should be updated, most everything else in the tax code is including standard deductions and tax brackets. I will not be holding my breath waiting for this, and I guess we should just hope they fix Social Security before the trust fund is unable to continuing paying full benefits somewhere around 10 years from now.

[NoMo50]

Hard to call Social Security an "entitlement," when those receiving it paid into the system their entire working life. We are simply recouping our "investmrnt," at a ridiculously low rate of return.

[dewilson58]

A definition might help some:

en·ti·tle·ment

noun
the fact of having a right to something.

the amount to which a person has a right.

the belief that one is inherently deserving of privileges or special treatment.


Seems to fit since there is no mention of how much.

:mornincoffee:

[retiredguy123]

Hard to call Social Security an "entitlement," when those receiving it paid into the system their entire working life. We are simply recouping our "investmrnt," at a ridiculously low rate of return.
Social Security is skewed in favor of low income earners. They will get a good rate of return, while high income earners will get no return on their "investment".

[tophcfa]

A definition might help some:

en·ti·tle·ment

noun
the fact of having a right to something.

the amount to which a person has a right.

the belief that one is inherently deserving of privileges or special treatment.


Seems to fit since there is no mention of how much.

:mornincoffee:

I certainly don’t feel entitled to expect to get back a small fraction of what I have paid into the system after considering the time value of money. I feel like it is money that is owed.

[JGibson]

So I'm gonna get a $30 raise, which will bump up my health care premium costs by around $45 per month since it puts me in the next level of eligibility for subsidies under the ACA. I'm not old enough for Medicare yet. The good news, is that if I wasn't eligible for subsidies at all, my premiums would be around $1900/month. I'm still paying under $225/month. So I guess there's that.

Doesn't ACA make adjustments based on COLA?

You may be fine and not go to the next level.

[GoRedSox!]

Doesn't ACA make adjustments based on COLA?

You may be fine and not go to the next level.I believe ACA subsidies are based on 400% of the federal poverty guidelines, which do change and generally increase every year. There is also an expansion on top of these limits through 2025 for some people that was part of the COVID relief bills.

[justjim]

Social Security is a program that was enacted by Congress in 1935 (amended and expanded several times) to provide for the basic needs of individuals and families; to keep families together and to give children the opportunity to grow up healthy and secure.

Paraphrasing the social security system’s purposes. It’s a “social program” and not a “retirement program” as such.

[Caymus]

The COLA doesn't come close to its stated goal of not to erode the purchasing power of Social Security benefits by inflation.

After taxes the average recipient will lose 1 to 2 % in purchasing power. Could be worse.

[charlieo1126@gmail.com]

They could have a 10% raise and my check would be $128 they could have a 40% raise and my check would still be $128 the good news is no matter how much Medicare goes up my check will still be $128

[Stu from NYC]

I certainly don’t feel entitled to expect to get back a small fraction of what I have paid into the system after considering the time value of money. I feel like it is money that is owed.

We paid into it so I feel we are supposed to get it back.

[manaboutown]

IMHO FICA is money confiscated from our wages yet we pay tax on it as if it was income we actually received and pocketed. Then four or five decades later when we receive promised payments many of us have to pay tax on those payments. In addition if we have sufficient income our social security payments are significantly reduced by the notorious IRMAA which radically increases our medicare premium at no additional benefit whatsoever.

[tophcfa]

IMHO FICA is money confiscated from our wages yet we pay tax on it as if it was income we actually received and pocketed. Then four or five decades later when we receive promised payments many of us have to pay tax on those payments. In addition if we have sufficient income our social security payments are significantly reduced by the notorious IRMAA which radically increases our medicare premium at no additional benefit whatsoever.

And to add further insult, there was no cap on our wages for the Medicare taken from our hard earned paychecks.

[manaboutown]

And to add further insult, there was no cap on our wages for the Medicare taken from our hard earned paychecks.

And...don't forget the outrageous 3.8% Net Investment Income (NIIT) medicare tax!

Questions and Answers on the Net Investment Income Tax | Internal Revenue Service (https://www.irs.gov/newsroom/questions-and-answers-on-the-net-investment-income-tax#:~:text=The%20Net%20Investment%20Income%20Tax% 20is%20imposed%20by%20section%201411,above%20the%2 0statutory%20threshold%20amounts).

[dewilson58]

And to add further insult, there was no cap on our wages for the Medicare taken from our hard earned paychecks.

more than insult, it's salt in the open wound

[dewilson58]

Has anyone done the math.........with time-value of money, how many years do you need to draw on SS (full SS) in order to get your & your employer's dollars back???

Too much fun for me to do.

I think it's about seven years without time-value.

Jus wondering.

[retiredguy123]

I believe ACA subsidies are based on 400% of the federal poverty guidelines, which do change and generally increase every year. There is also an expansion on top of these limits through 2025 for some people that was part of the COVID relief bills.
I think that rule only applies in states where it was approved because the states had to participate in the subsidies after a few years. Florida was one state that rejected the rule.

[coralway]

Well they sure do have enough money to give away to other countries don't they ?



Dunno - but obviously they have enough to give an almost 2 trillion tax cut to the top 0.6%.

[Stu from NYC]

Dunno - but obviously they have enough to give an almost 2 trillion tax cut to the top 0.6%.

Again what does this have to do with social security?

[Tvflguy]

Hoooooooray!

With this added monthly windfall, we’ll probably treat ourselves to a Mickey D lunch.

Oh wait. With the increased inflation coming, that’s out.

Perhaps we’ll stop at the local soup kitchen.

Oh wait. We’ll need to drive and that’s more for gas.

Crap, we’ll just make PB&J.

Oh wait. PB prices are skyrocketing.

Back to Square One. Not the local restaurant, back to crackers and water. crap.

[rsmurano]

I would have loved to have the option 55 years ago to either pay the government 12% now to pay me social security 50 years in the future, or allow me to fund my own social security, I would do it myself. I cashed in 2 big pensions so I could manage my own retirement funds and I did much better than if I would have stayed with the pensions.
The government has always used other pots of money to spend in other areas, or the talk on giving illegals social security. You don’t think that will drain the fund?
All of congress has been dropping the ball on social security so we will be running out of money in 10 years unless congress makes big changes which won’t be good for the workers.
Nobody wants to work these days and we need each working person to pay more into social security to fund our payroll, that’s how it works, there is no pot of money that is designated specifically for you, the current working class pay for our social security.

[Dusty_Star]

Has anyone done the math.........with time-value of money, how many years do you need to draw on SS (full SS) in order to get your & your employer's dollars back???

Too much fun for me to do.

I think it's about seven years without time-value.

Jus wondering.

I think the ~7 years figure is the time taken to recoup the money not taken at 62, but starting at full retirement age.

The question about contributions over a lifetime of earnings I have never considered - thinking the answer is probably too mind bogglingly depressing to think about.

[Windguy]

Well they sure do have enough money to give away to other countries don't they ?
If you filled up a bucket with the amount of water representing our annual budget and then poured it out, the water left clinging to the walls would probably represent more money than we give to other countries.

[Andyb]

3.2%

Social Security COLA to Give Retirees a Roughly 3.2% Raise in 2024 - WSJ (https://www.wsj.com/personal-finance/social-security-cola-increase-2024-5b0cd62)
Real inflation is around 10%, we are still going backwards. Government must stop wasting money on foreign affairs.

[retiredguy123]

If you filled up a bucket with the amount of water representing our annual budget and then poured it out, the water left clinging to the walls would probably represent more money than we give to other countries.
And, 40 percent of that water would need to be borrowed because we use more water than we have.

[MandoMan]

3.2%

Social Security COLA to Give Retirees a Roughly 3.2% Raise in 2024 - WSJ (https://www.wsj.com/personal-finance/social-security-cola-increase-2024-5b0cd62)

Plus 8.7% last year. Thank you to the Social Security Administration for helping us keep up with inflation without our needing to go on strike.

[Bill14564]

Has anyone done the math.........with time-value of money, how many years do you need to draw on SS (full SS) in order to get your & your employer's dollars back???

Too much fun for me to do.

I think it's about seven years without time-value.

Jus wondering.

You can get a statement from the SS website that shows what you and your employer contributed over time. For me, the numbers are about equal. I will recover what I contributed in five years and the combined total in ten years.

No, that doesn't account for gains or losses if the money was invested. It also doesn't account for any amount that would not have been invested for any number of reasons. However, since I hope to collect for 30 years or so, receiving 300% (or 600% depending on how you want to view it) of what I contributed seems like a decent deal.

[OrangeBlossomBaby]

Has anyone done the math.........with time-value of money, how many years do you need to draw on SS (full SS) in order to get your & your employer's dollars back???

Too much fun for me to do.

I think it's about seven years without time-value.

Jus wondering.

Don't forget the fact that there are increases most years. Might not be much but if you get the maximum monthly check of $4555, and it goes up 3% next year, you'll be getting $4692/month next year. And if it goes up another 3% in 2025, then you'll be getting $4832/month in 2025. And so on.

Meanwhile, you'll be getting this (plus whatever other increases) every year for 7 years - and on the 8th year, you will now be getting money that you never paid in. How is that possible? Because the generations behind you are footing the bill. Your payroll deductions are paying for the generations in front of you, they're not paying for you. If you live for 25 years past your first SS check, you'll have collected more than 250% of what you put in.

The problem with the system is that there are SO many baby boomers receiving checks now, and the generation who's paying for it - are fewer in number. So there's not enough coming in to support the people receiving. So they rely on the next generation behind them, and so on and so forth. Once the Boomers die out, they'll be back on solid ground. They just have to make it through this generation.

[HJBeck]

Why is it entitlement money? Didn’t we and the company we worked for pay into it our entire working career?

[Bill14564]

Why is it entitlement money? Didn’t we and the company we worked for pay into it our entire working career?

If you are healthy and had a good job then you paid into it maybe 1/6 of what you will take out. If you were unhealthy or maybe had a lower paying job then you might get more than out. And yes, if you are unfortunate and pass early then you won't get your money back but your widow or kids might.

[manaboutown]

Money has time value; interest and dividends can be earned; purchased assets such as stocks and real estate can appreciate. Plus due to inflation the dollar of 1960 or any other past year was worth more, even far more, in purchasing power than today's dollar. Social Security is lose-lose except for the disability and survivor insurance components. Most of us would be millionaires, even multimillionaires, if what was confiscated from us for FICA over our working years had been invested in a S&P 500 index fund.

[blueash]

While you poor impoverished Villages are busy whining about your getting back every nickel you paid in to Soc Sec over the years, please be sure to calculate the cost of the disability insurance you have gotten for free for your entire working life. And the cost of the insurance for several disorders and illnesses provided to your children for their lives, and the value of the ability for your spouse to collect on your earnings not only during your life but after your death.

While whining about the amount you paid for Medicare. When you paid in there were no immunotherapy drugs, there were no MRI scans or heart transplants or surviving cancer other than briefly. There was no drug benefit, there was no stem cell treatment, there was almost no joint replacement.

And you paid at a rate based on the cost of medicine at the time, not what it costs now

So quit whining and be very grateful that Medicare was passed by LBJ, was improved by subsequent administrations.

[JGibson]

I never knew if you take your SS at retirement age and then go back to work you can still collect your SS but you also have to keep paying into SS you will never see that money in any way.

[manaboutown]

I never knew if you take your SS at retirement age and then go back to work you can still collect your SS but you also have to keep paying into SS you will never see that money in any way.

Yep! Even Charlie Munger who is still toiling away at the ripe old age of 99 (he will reach 100 1/1/24) must pay into Social Security and Medicare from his salary. At his investment income level he also pays the 3.8% NIIT on top of his other income taxes so he funds health insurance for others under the ACA. Thank you Charlie from those getting their health insurance through ACA!

[yellowtownhouse]

ugh, that's on the low side of inflation, but its entitlement money, so its probably best to keep it not exploding higher so that congress peeps don't come up with the wrong answer to continue funding it.

I have a question regarding inflation. I recently read that when inflation is being calculated that neither ENERGY or FOOD are included. I am completely taken aback. Would someone please explain how these two things ( that every human being needs to survive) could possibly be left out of the equation?? Please no political remarks and ranks, just looking for knowledge.
Thanks......