When Medicare/Social Security become insolvent.

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  • ArcadiaGP

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    Just curious what people think about survival/disaster in-relation to a major entitlement going away.

    News today:

    Government says Medicare will become insolvent in 2026, three years earlier than expected, Social Security to follow in 2034.

    Obviously, things could change by then... but if it happens, how do you think that will affect society?

    Will the young adults/adults be angry? Or perhaps they'll say "that's a long way until I'd need it..." and not care (and at that point... how effective would a senior be at causing a ruckus anyway...?)

    Or will the older adults reaching the age that they would benefit from it... be angry enough to demonstrate that anger? None of this should be coming as a surprise to anyone that pays attention... but you can be sure plenty of people will have relied on those entitlements and are not financially prepared for retirement. I don't have anything to base this on, but I'm guessing fiscal responsibility isn't huge on the minds of millenials.

    So... what do you think?

    A. Nothing to worry about. Daddy Gubment will fix it somehow, with some new entitlement, something different.
    B. People will riot in the streets!
    C. People will riot in the streets.... in 40 years!
    D. (Something different)
     

    churchmouse

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    Just curious what people think about survival/disaster in-relation to a major entitlement going away.

    News today:



    Obviously, things could change by then... but if it happens, how do you think that will affect society?

    Will the young adults/adults be angry? Or perhaps they'll say "that's a long way until I'd need it..." and not care (and at that point... how effective would a senior be at causing a ruckus anyway...?)

    Or will the older adults reaching the age that they would benefit from it... be angry enough to demonstrate that anger? None of this should be coming as a surprise to anyone that pays attention... but you can be sure plenty of people will have relied on those entitlements and are not financially prepared for retirement. I don't have anything to base this on, but I'm guessing fiscal responsibility isn't huge on the minds of millenials.

    So... what do you think?

    A. Nothing to worry about. Daddy Gubment will fix it somehow, with some new entitlement, something different.
    B. People will riot in the streets!
    C. People will riot in the streets.... in 40 years!
    D. (Something different)

    They need to put the stolen funds back into it. Nuff said.
     

    d.kaufman

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    First, i don't see Social security as an entitlement. Some do abuse the system thats for sure. Ive been paying into it for 30 years now. I wont be eligible till 2038. Guess im screwed, but i already knew that. There needs to be a way to recoup the money that people have been putting into it. One giant ponzi scheme! Actually surprised they've been able to carry the scheme this long.
     

    snorko

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    AARP won't let it happen. And no one will be screaming about the thuggery of the most powerful lobby there is.

    SSI is at its core not horrible program. Keeping in mind the I stands for insurance, it has helped greatly reduce poverty among the elderly. But it was not meant to be your retirement alone. The age it kicked in, 65 yo, was approximately the average life expectancy when the system started. Thus it was intended for those who lived beyond the typical age. You are not "putting in" funds or investing. It is a tax. I suspect in the next decade or so they will:

    Increase the retirement age.

    Decrease the SSI income for those who have adequate retirement income.

    And set an income limit which if exceeded eliminates SSI for you.
     

    spencer rifle

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    We do not figure SS into our retirement, since it will either be insignificant or gone. And that's less than 10 years from now. Besides, what good wil SS be when the currency goes kaput? Not if, when.
     
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    jinks

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    2/3 of my retirement income is from government sources (SSI and military retirement). If my government income was reduced, I could probably survive at the subsistence level with careful planing. Medicare and Tricare for Life might be affected but hopefully the VA system will remain.
     

    1nderbeard

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    I don't see the older recipients rioting (no offense).
    I can easily see the younger (abusers) recipients of the system rioting. I'm talking about the PJ zombies that are "mentally disabled" and "Unable to work." If not outright riots, certainly increased brazen burglary and violence against the perceived 1%.
     

    eldirector

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    a) My future assumes SSI, Medicare, etc... will not be available. That is all lost income from my perspective. A tax, not savings. I assume I will never see a dime.

    b) I also assume the .gov will just turn up the tax rate to make up for the "shortfall" (by shortfall, I mean theft), and all of the social/political fallout from that. Devalued dollar, inflation, high unemployment, a greater divide between the haves and the have-nots.

    So, do what you can now to insulate yourself from what may happen in 10, 15, or 20 years.
     

    spencer rifle

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    a) My future assumes SSI, Medicare, etc... will not be available. That is all lost income from my perspective. A tax, not savings. I assume I will never see a dime.

    b) I also assume the .gov will just turn up the tax rate to make up for the "shortfall" (by shortfall, I mean theft), and all of the social/political fallout from that. Devalued dollar, inflation, high unemployment, a greater divide between the haves and the have-nots.

    So, do what you can now to insulate yourself from what may happen in 10, 15, or 20 years.

    All this^^. I also see gov raiding 401Ks and IRAs, because that's where the money is. Same reason why bank robbers rob banks.

    3 Bs.
     

    DanO

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    Before this happens, the administration will pose an "earnings test" on Social Security. IE: If you have a pension, a substantial 401K, or savings, they will decide you do not need SS as much as the "poor". I am 6 years away and plan on taking the lower amount at 62 years of age to try to beat the Gov to the punch. Even if they did not reduce SS, I would have to live to 77 just to break even if I waited to take SS at 67. Bird in the hand....
     

    Wolfhound

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    All this^^. I also see gov raiding 401Ks and IRAs, because that's where the money is. Same reason why bank robbers rob banks.

    3 Bs.

    QFT
    That's what they did in parts of Europe. Stole all the private retirement accounts with a promise (wink, wink) that the government will take care of you when you retire.
     
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    Jackson

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    All this^^. I also see gov raiding 401Ks and IRAs, because that's where the money is. Same reason why bank robbers rob banks.

    3 Bs.

    QFT
    That's what they did in parts of Europe. Stole all the private retirement accounts with a promise (wink, wink) that the government will take care of you when you retire.

    This will cause riots. If it doesn't, I will organize one myself.
     

    Leadeye

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    Spencer rifle is spot on, but I think it will take the form of the government working with wall street to move the negotiable private securities into some sort of government bond. Brokerage houses would get a commission for the job. You would get a choice of full vestment in the bond or some sort of tax that would reduce the value of your IRA dramatically if you kept it private.

    SSI is simply going to means tested. Got an IRA and other investments? You don't get SSI regardless of how much you "contributed".

    Riots? Won't happen, lawsuits maybe, but by getting buy in from wall street for the scam by paying them big bucks, leadership holds all the cards. Ordinary folks will be out of luck, welcome to a mexican standard of living.
     

    Carmel Corn

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    Before this happens, the administration will pose an "earnings test" on Social Security. IE: If you have a pension, a substantial 401K, or savings, they will decide you do not need SS as much as the "poor". I am 6 years away and plan on taking the lower amount at 62 years of age to try to beat the Gov to the punch. Even if they did not reduce SS, I would have to live to 77 just to break even if I waited to take SS at 67. Bird in the hand....

    Agree...start the flow and "maybe" there is less chance they will take away something that is already in place. I am a conservative, but would rather see them eliminate the annual ceiling on regular earnings before going the means testing route. I think it penalizes those who have successfully planned a comfortable retirement and unjustly rewards those who squandered their income earning years on things other than retirement.
     

    dusty88

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    They need to put the stolen funds back into it. Nuff said.

    Who is "they"? The politicians made promises and diversions for decades. Central bankers are also part of the problem. Anyone who is truly accountable for this will be long gone.

    As for the other predictions of means testing, partial cuts, etc that would assume smooth planning.

    If it were politically acceptable to plan for this by making gradual adjustments, we would have done so over 20 years ago.

    If it becomes politically palatable to cut off funds for older people, it will only be when baby boomer voters no longer outnumber millenials.

    A lot of the millenials look at boomers are disgusted with the debt problem the boomers (supposedly) voted for. Some boomers did vote for it, but in reality the problem was written in stone which SS was started. While they perhaps could not have anticipated longer life spans, they still willingly started a program that people became dependent upon or at least learned to expect.

    I make fun of millenials sometimes, but financially speaking I do think they have been screwed. Government loans made college expensive then even those with college degrees can't find great paying jobs.

    We may very well find the boomers who haven't saved being at the mercy of staying with their kids.

    Or... we may have such a serious currency crisis before then that social security is paid out in dollar terms but becomes a real joke in spending terms. In which case those who haven't planned will still be at the mercy of staying with their kids.

    And I certainly do agree that there is risk to 401Ks and even bank holdings. It's important to diversify not just within the financial sector but in various hard assets.
     

    BigRed

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    Not many years ago, there was an investment advisor promoting attractive returns with little to no risk. Many who had invested with this advisor for many years were thrilled with their returns. Investments were made on a completely voluntary basis. There was no coercion.

    It came to light that returns to the long term believers in this investor were being funded with money from new investors; not returns from sound investments . As long as the investment advisor could get enough new investors to pay off old investors, he could continue his sham and the taking of his cut.

    The investment advisor was named Bernie Madoff. He was sentenced to 150 years in prison for running a Ponzi scheme.

    Meanwhile, the federal government runs a Ponzi scheme at will. You do not participate by your own free will. You are coerced through the threat of prison and even death to participate. So to are your children and grandchildren. This is "social security" and "medicare".

    Bernie went to jail....the federal government can go to Hell, though I expect they will make any who fight their coercion a living Hell.

    May they burn nonetheless.
     
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