Why doesn't the SSA increase the FICA limit now? Problem solved. Social Security recipients can't afford any cuts, but high income wage earners should be contributing more than low income elderly people.
In 1991 when I graduated from college, I was told that social security was going to run out by the time I was 60. I'm not stupid. I started planning then to retire without social security.
“We have no control over whether social security is cut” - I disagree. We can throw the bums out who’d even consider such a possibility. We spend trillions on our military. God knows what they’re throwing at the Space Force alone 🙄 Need a funding source? Bring back the tax rates on billionaires in the post WW2 boom years. There’s many ways to fund social security, and slashing benefits at the same time pensions have all but disappeared is immoral and unacceptable.
It is more likely future benefits will be reduced or delayed. There are millions of current recipients who simply cannot and will not accept cuts to earned benefits. It would be disastrous to the US economy and a losing proposition for any politician who supports cuts. In addition, there will be legal challenges as Social Security contributions are mandatory. Cutting benefits potentially constitutes a legal breach of contract. At the very least, it would be tied up in court for years until SCOTUS reviews it.
What about those of us who are already retired? Advising that we stay in a job for longer won't work for us. Or those who retired because of getting worn out physically?
James, for me you have brought another topic to heal that relieves some of my worry. You and Ari are on my daily watch list and I have never been more confident as I do now and I know that will only increase as I keep watching and Learning. I have purchased and use the software and for once I can say exactly what my withdrawal rate will be. Don't get me wrong I still have questions and doubts, but it seems you guys are keeping up and exceeding my questions in those areas. Thank you both for for what you are doing. I am looking forward to working with your company as we get closer to the finish line.
There will be 11th hour agreement which will keep ss from being cut. They won't cut it, but I don't think they would be above taxing the seniors who are currently benefiting from ss. The government should think about taxing working people whose income is above the threshhold where their paychecks are having ss deducted.
I'm planning to retire at 62 with a withdraw rate of about 5.5% until age 70 when I will claim SS. At that time my withdraw drops to less than 3%, based on my current projected benefit amount. If it does get cut, I can probably sustain up to 3.5%, but it's it. Most advisors would likely tell me not to retire, but that's not an option...I'm done at 62 no matter what. My fixed expenses will be very low, so I can adjust my discretionary spending at any time if necessary. It is utterly infuriating watching Congress try to every program working class people depend on in order to give even more corporate welfare and tax cuts to their wealthy campaign donors. Also, SS is an earned benefit, meaning we all pay into it so we are owed that benefit.
So, I hate to break this info to you James, but if Social Security is cut, it will NOT be an even percentage across the board. The cuts will be income-based. Politicians will not vote for a system that reduces benefits across the board. This will be the means testing expansion of Social Security. The first time means testing happened was in the 1980's when up to 50% of benefits became taxable (previously, Social Security was not taxed). The second time means testing happened was in the 1990's when up to 85% of benefits became taxable.
The biggest issue for the social security trust fund is getting through the boomers’ retirement years. Resolution of this issue doesn’t require cutting or delaying benefits for younger generations - but the GOP has always hated the program and has wanted an excuse to get rid of it since it came into existence in the 1930s. The solution lies in closing this temporary funding gap, either through temporary increases in SS taxes, using money from the general fund, and/or temporarily cutting benefits for more well-off retirees. Of course, higher wages for US workers would also help since it would increase SS tax receipts. Another potential solution is investing the trust fund money in the stock market - but that would temporarily juice the equity markets without any underlying economics behind the rise, which could lead to a spectacular crash down the road - so bad idea.
Cutting social security is a non-starter for the American public’s citizens. For us to even entertain that possibility is something that shouldn’t even be floated out to those that have worked hard and paid into the system for decades. This isn’t a criticism directed at you, James, by any means. I’m referring to the American government and their seeding of this type of solution as a possible “proposal for consideration” is ludicrous. They’re hoping by talking about it and people getting up in arms about it that any other type of solution will go down like pablum to the American public. The bet is if this topic about cutting Social Security payments is talked about often enough there will be an acceptance of this or some other type of cut directly to the beneficiary. Our Government needs to look internally and clean up their act to work more efficiently while delivering what’s fully owed to the US citizens of this country who have had money mandatorily taken out of their paychecks for decades to fund their retirement.
I think this is a realistic presentation of the facts coupled with good advice. This is not the fault of the current administration. The current state of affairs is the fault of the previous Presidential administrations and previous Congressiinal terms who could not agree, so nothing was done except to kick the can down the road. I am not pointing the finger just at one side of the aisle, politically speaking......I think there is enough blame and shame to go around. My deep concern is that they will take away money from people who cannot afford to lose even a nickel of their Social Security.....this is going to cause absolute chaos.
The government will push retirement age back and remove the max earnings before the cut social security. This will suck for younger filks. But it has been done before that is why FRA is now 67 vs 65
Love this, and agreed that knowing these things is empowering in planning. Small side note: have watched James for a long time now, this is the first time I've noticed this much moire (video artifacts) on his sweater. Wondering if he changed cameras or lighting?
Hi James, I appreciate all the learning opportunities and financial guidance you provided in 2024. Social Security is designed to support all Americans, but it was never intended to be the sole source of income. It's unfortunate that many individuals are now relying on it for their basic needs due to a lack of planning. Nonetheless, the Social Security program will always be available. I look forward to gaining more insights from you in 2025.
Another thing I’ve been hearing is the next administration is introducing legislature that allows your employer free access to your money in your 401k to spend and invest for themselves….in other words take the money away from you…….so try to use other investment vehicles besides your 401 k also….and as soon as you can do a direct rollover of your 401k into an IRA!
It is ten years away and has almost zero chance of happening. I'd be far more worried about the coming wars, out of control debt, hyper-inflation, and about a dozen other things before I worried about SS cuts.
When SS does get cut, it's going to be cut disproportionately from higher earners. The SS cannot be cut for lower earners because they depend so heavily on it. So if you are one of the former, watch out...
James-thanks for the video. Good things to think about. Just a technical point of order on today's video: your vertically-ribbed sweater, the strangely lower camera resolution and the vertical striping of the background woodwork are combining to give some very strange visual 'swirls' and rainbows on the video feed. Quite distracting.
The powers that be will kick the can all the way to the last second before acting. Lot of seniors will be s______ in their pants until they finally act on it. Hopefully the changes won't be too painful but better than losing $$ on not doing nothing.
I think the issue is also in using 1 million as an example, but the average 65 year old retirie has less than 250k in their 401 k. Big future problem on the horizon for the baby boomers.
Government expenditure among added social services have sky rocketed the budget beyond what is sustainable. This is simply poor leadership in government out of the last 16 years give or take. Also the work force has simply walked out as well, so not enough of the younger generation putting in the pot for the older generation to take back out. What is destroying the Debt and affecting SS: age of US citizens, healthcare costs and not enough taxes to cover all the social service policies passed by congress.
Every single one of us need to contact our elected representative by phone or email in in person and let them know that cutting SS, Medicaid and Veteran’s benefits to pay for the tax cuts to billionaires is UNACCEPTABLE. Do it now, do it today.
Your comment that we can't do anything about cuts is incorrect. We can and must contact members of Congress and insist that they do not cut social security. They need to find an alternative solution and not keep kicking the can down the road.
Why do you say we have no control over whether SS is cut??? Of course we do! Contact your elected representatives and DEMAND they eliminate the FICA cap on taxes so the rich pay their fair share into the SS fund. That will solve the funding problem. Join AARP or other organizations fighting for Social Security. We won’t just accept a 20% cut in our benefit!
This is why you want to be in the SS torpedo range. Cuts to SS get government help. OK -- I'm joking. But it is nonetheless true that benefits cuts have a tax effect that was not discussed.
It does not get cut. The fund decreases in 2034 as it's been scheduled to for over 10 yrs. Its no surprise. Congress is just too lame to do something about it.
This is so awful. I was going to retire in 2026. Now I’m staying in until the orange man is gone and hope it gets better. This stealing from elderly and poor to line the pockets of the rich is disgusting.
What a ridiculous example. Ridiculous high spending. People need to learn to live within their means. An example wi spending less than half of the example would be more realistic
Hopefully, politicians will be more logical and citizen-centric the next few years than they have in the recent past. Do you suppose that deporting millions that are costing Billions of our tax dollars per month could be helpful? How about cutting Billions or Trillions of obvious government waste? How about reducing free money to foreign countries that will never be paid back to us? There are so many things that can be done if our country's leaders just have the will to do it!
OK - lets be honest, the reason there is a problem, is because the Govt dipped their hands into the funds the working citizen deposited and never put it back, so we were out all that money plus the interest it would have earned. Instead of talking about us suffering for their mistake, how about just managing it correctly. We can find billions and billions to send everywhere else in the world but none to help out our own citizens? Our country was founded on “Govt for the people by the people” Today, we have “Govt for the politician by the politician” The party who cuts these benefits will commit suicide. EVERY citizen (independent, Democrat, undecided, Old school republican and yes even MAGA) will vote every single one of you out of office, whether you personally supported it or not!
James…starting the video by saying “according to recent reports Social Security benefits are projected to be cut by 20% in 10 years..etc”… is click bait. “Reports” can’t lower SS benefits… only our elected politicians can. The content was good…Disappointed in the setup….would have been more appropriate to say, “there is economic uncertainty in every aspect of our financial lives…. We should all plan on offsetting changes in funding pools to reduce your chances of having financial problems. This includes Social Security, stock market performance, interest rates, expense management, etc… let’s talk about how potential changes in social security could help or hurt your financial health (e.g. reduced social security tax rates could help, larger standard deductions, etc) By starting this video as click bait you’re eliciting a political reaction vs. helping your viewership… I listen to you for unbiased factual representation of financial issues.. don’t get sucked into RUclips click bait nonsense.
Why doesn't the SSA increase the FICA limit now? Problem solved. Social Security recipients can't afford any cuts, but high income wage earners should be contributing more than low income elderly people.
Shame on the government for allowing potential cuts to happen at all👎🏾👎🏾👎🏾
In 1991 when I graduated from college, I was told that social security was going to run out by the time I was 60. I'm not stupid. I started planning then to retire without social security.
“We have no control over whether social security is cut” - I disagree. We can throw the bums out who’d even consider such a possibility. We spend trillions on our military. God knows what they’re throwing at the Space Force alone 🙄 Need a funding source? Bring back the tax rates on billionaires in the post WW2 boom years. There’s many ways to fund social security, and slashing benefits at the same time pensions have all but disappeared is immoral and unacceptable.
It is more likely future benefits will be reduced or delayed. There are millions of current recipients who simply cannot and will not accept cuts to earned benefits. It would be disastrous to the US economy and a losing proposition for any politician who supports cuts. In addition, there will be legal challenges as Social Security contributions are mandatory. Cutting benefits potentially constitutes a legal breach of contract. At the very least, it would be tied up in court for years until SCOTUS reviews it.
What about those of us who are already retired? Advising that we stay in a job for longer won't work for us. Or those who retired because of getting worn out physically?
James, for me you have brought another topic to heal that relieves some of my worry. You and Ari are on my daily watch list and I have never been more confident as I do now and I know that will only increase as I keep watching and Learning. I have purchased and use the software and for once I can say exactly what my withdrawal rate will be. Don't get me wrong I still have questions and doubts, but it seems you guys are keeping up and exceeding my questions in those areas. Thank you both for for what you are doing. I am looking forward to working with your company as we get closer to the finish line.
There will be 11th hour agreement which will keep ss from being cut. They won't cut it, but I don't think they would be above taxing the seniors who are currently benefiting from ss. The government should think about taxing working people whose income is above the threshhold where their paychecks are having ss deducted.
They need to raise the earnings limit.
I'm planning to retire at 62 with a withdraw rate of about 5.5% until age 70 when I will claim SS. At that time my withdraw drops to less than 3%, based on my current projected benefit amount. If it does get cut, I can probably sustain up to 3.5%, but it's it. Most advisors would likely tell me not to retire, but that's not an option...I'm done at 62 no matter what. My fixed expenses will be very low, so I can adjust my discretionary spending at any time if necessary.
It is utterly infuriating watching Congress try to every program working class people depend on in order to give even more corporate welfare and tax cuts to their wealthy campaign donors. Also, SS is an earned benefit, meaning we all pay into it so we are owed that benefit.
So why did they add more people to SS
Thank you, James for walking through the math of this.
If they cut SS then they need to do away with RMDs on 401ks and IRAs. They should also reduce or eliminate taxes on the same.
So, I hate to break this info to you James, but if Social Security is cut, it will NOT be an even percentage across the board. The cuts will be income-based. Politicians will not vote for a system that reduces benefits across the board. This will be the means testing expansion of Social Security. The first time means testing happened was in the 1980's when up to 50% of benefits became taxable (previously, Social Security was not taxed). The second time means testing happened was in the 1990's when up to 85% of benefits became taxable.
But what about people who live on social security alone and can't work? The reality is we've elected crooks who don't care about the elderly.
The biggest issue for the social security trust fund is getting through the boomers’ retirement years. Resolution of this issue doesn’t require cutting or delaying benefits for younger generations - but the GOP has always hated the program and has wanted an excuse to get rid of it since it came into existence in the 1930s. The solution lies in closing this temporary funding gap, either through temporary increases in SS taxes, using money from the general fund, and/or temporarily cutting benefits for more well-off retirees. Of course, higher wages for US workers would also help since it would increase SS tax receipts. Another potential solution is investing the trust fund money in the stock market - but that would temporarily juice the equity markets without any underlying economics behind the rise, which could lead to a spectacular crash down the road - so bad idea.
Cutting social security is a non-starter for the American public’s citizens. For us to even entertain that possibility is something that shouldn’t even be floated out to those that have worked hard and paid into the system for decades. This isn’t a criticism directed at you, James, by any means. I’m referring to the American government and their seeding of this type of solution as a possible “proposal for consideration” is ludicrous. They’re hoping by talking about it and people getting up in arms about it that any other type of solution will go down like pablum to the American public. The bet is if this topic about cutting Social Security payments is talked about often enough there will be an acceptance of this or some other type of cut directly to the beneficiary. Our Government needs to look internally and clean up their act to work more efficiently while delivering what’s fully owed to the US citizens of this country who have had money mandatorily taken out of their paychecks for decades to fund their retirement.
James Conole for President!!! Finally, someone who is actually looking at this Social Security problem with logic and a sense of reality.
I think this is a realistic presentation of the facts coupled with good advice. This is not the fault of the current administration. The current state of affairs is the fault of the previous Presidential administrations and previous Congressiinal terms who could not agree, so nothing was done except to kick the can down the road. I am not pointing the finger just at one side of the aisle, politically speaking......I think there is enough blame and shame to go around. My deep concern is that they will take away money from people who cannot afford to lose even a nickel of their Social Security.....this is going to cause absolute chaos.
The government will push retirement age back and remove the max earnings before the cut social security.
This will suck for younger filks. But it has been done before that is why FRA is now 67 vs 65
Love this, and agreed that knowing these things is empowering in planning. Small side note: have watched James for a long time now, this is the first time I've noticed this much moire (video artifacts) on his sweater. Wondering if he changed cameras or lighting?
Hi James, I appreciate all the learning opportunities and financial guidance you provided in 2024. Social Security is designed to support all Americans, but it was never intended to be the sole source of income. It's unfortunate that many individuals are now relying on it for their basic needs due to a lack of planning. Nonetheless, the Social Security program will always be available. I look forward to gaining more insights from you in 2025.
Another thing I’ve been hearing is the next administration is introducing legislature that allows your employer free access to your money in your 401k to spend and invest for themselves….in other words take the money away from you…….so try to use other investment vehicles besides your 401 k also….and as soon as you can do a direct rollover of your 401k into an IRA!
If IRS cuts SS by say ~20% they should lower how much SS is taxed to ones that are affected by the cuts to ease the pain.
It is ten years away and has almost zero chance of happening. I'd be far more worried about the coming wars, out of control debt, hyper-inflation, and about a dozen other things before I worried about SS cuts.
When SS does get cut, it's going to be cut disproportionately from higher earners. The SS cannot be cut for lower earners because they depend so heavily on it. So if you are one of the former, watch out...
I expect if nothing is done by then, the SSA will borrow from the Treasury just like the Treasury has been borrowing from the SSA since the 1980s.
James-thanks for the video. Good things to think about. Just a technical point of order on today's video: your vertically-ribbed sweater, the strangely lower camera resolution and the vertical striping of the background woodwork are combining to give some very strange visual 'swirls' and rainbows on the video feed. Quite distracting.
Eliminating the fed tax on SS income will only accelerate the date of reductions.
An easy way might be to save the fees from a financial planner of 1, 1.5 % and self invest.
The powers that be will kick the can all the way to the last second before acting. Lot of seniors will be s______ in their pants until they finally act on it. Hopefully the changes won't be too painful but better than losing $$ on not doing nothing.
I think the issue is also in using 1 million as an example, but the average 65 year old retirie has less than 250k in their 401 k. Big future problem on the horizon for the baby boomers.
Government expenditure among added social services have sky rocketed the budget beyond what is sustainable. This is simply poor leadership in government out of the last 16 years give or take. Also the work force has simply walked out as well, so not enough of the younger generation putting in the pot for the older generation to take back out. What is destroying the Debt and affecting SS: age of US citizens, healthcare costs and not enough taxes to cover all the social service policies passed by congress.
What rent are of $1000-$2000 there’s not much to work with that’s reality
Every single one of us need to contact our elected representative by phone or email in in person and let them know that cutting SS, Medicaid and Veteran’s benefits to pay for the tax cuts to billionaires is UNACCEPTABLE. Do it now, do it today.
Your comment that we can't do anything about cuts is incorrect. We can and must contact members of Congress and insist that they do not cut social security. They need to find an alternative solution and not keep kicking the can down the road.
How about giving workers the option to invest theirs in the stock market instead of receiving a monthly SS check someday?
Why do you say we have no control over whether SS is cut??? Of course we do! Contact your elected representatives and DEMAND they eliminate the FICA cap on taxes so the rich pay their fair share into the SS fund. That will solve the funding problem. Join AARP or other organizations fighting for Social Security. We won’t just accept a 20% cut in our benefit!
This is why you want to be in the SS torpedo range. Cuts to SS get government help.
OK -- I'm joking. But it is nonetheless true that benefits cuts have a tax effect that was not discussed.
It does not get cut. The fund decreases in 2034 as it's been scheduled to for over 10 yrs. Its no surprise. Congress is just too lame to do something about it.
This is so awful. I was going to retire in 2026. Now I’m staying in until the orange man is gone and hope it gets better. This stealing from elderly and poor to line the pockets of the rich is disgusting.
What a ridiculous example. Ridiculous high spending. People need to learn to live within their means. An example wi spending less than half of the example would be more realistic
99.9% of people do not have $1 million to draw from
Hopefully, politicians will be more logical and citizen-centric the next few years than they have in the recent past. Do you suppose that deporting millions that are costing Billions of our tax dollars per month could be helpful? How about cutting Billions or Trillions of obvious government waste? How about reducing free money to foreign countries that will never be paid back to us? There are so many things that can be done if our country's leaders just have the will to do it!
What if? Pretty much guaranteed.
Absolutely ridiculous for anyone to believe this is going to, or even might happen. The news media, and others, uses this as Click Bait!!! 🙄
Give my money back with compounded interest.
OK - lets be honest, the reason there is a problem, is because the Govt dipped their hands into the funds the working citizen deposited and never put it back, so we were out all that money plus the interest it would have earned. Instead of talking about us suffering for their mistake, how about just managing it correctly. We can find billions and billions to send everywhere else in the world but none to help out our own citizens? Our country was founded on “Govt for the people by the people” Today, we have “Govt for the politician by the politician” The party who cuts these benefits will commit suicide. EVERY citizen (independent, Democrat, undecided, Old school republican and yes even MAGA) will vote every single one of you out of office, whether you personally supported it or not!
Off topic...the camera is doing something weird to your shirt and it is giving me a headache and making me nauseated. Thought you should be aware.
Spend less.
I have no pity for anyone who voted for this
Elections have consequences! 😢
James…starting the video by saying “according to recent reports Social Security benefits are projected to be cut by 20% in 10 years..etc”… is click bait. “Reports” can’t lower SS benefits… only our elected politicians can.
The content was good…Disappointed in the setup….would have been more appropriate to say, “there is economic uncertainty in every aspect of our financial lives…. We should all plan on offsetting changes in funding pools to reduce your chances of having financial problems. This includes Social Security, stock market performance, interest rates, expense management, etc… let’s talk about how potential changes in social security could help or hurt your financial health (e.g. reduced social security tax rates could help, larger standard deductions, etc)
By starting this video as click bait you’re eliciting a political reaction vs. helping your viewership… I listen to you for unbiased factual representation of financial issues.. don’t get sucked into RUclips click bait nonsense.
Well, this is what we knew would happen but people still voted for that horrible orange man and his billionaire friends.
Leave US. “Down to the banana republics..,”
Bottom line: if SS is going to be cut then TAXES have to be cut. You can’t have one cut and not the other.
It needs ro be cut completely since everyone can make more money in investments
Propogading misinformation.
You should be focused on solutions. Be a lion, not a lamb. So disgusting this was not a bigger issue in the campaign.
It’s going to zero unfortunately