Not much I agree with Yellen on, but I do on this

[Chomsky]

That’s great for those in that situation. My girlfriend (age 70) and I (age 68) own our (fairly new, 17’ x 56’ manufactured) home, but we rent the 1/2 acre lot that it sits on and must maintain both the home and the lot. I still work some (as a self-employed handyman), but most of our income is from our (combined) SS benefits.

The land-rent costs is an often over-looked aspect by those not familiar with this type of living. This type of community is far & few between in my harsh Northern Climate, but the several I'm familiar with charge a surprisingly high amount of rent for the small patch of land involved! It's been awhile, but it was over half what a moderate-tier apartment goes for in the more reasonably priced areas outside the city. In other words, you can almost get a small apartment for the same rental costs.

I have a near-retirement age relative that talks about blowing-off northern urban life by getting some relatively moderately-priced rural acres somewhere warmer with cheaper taxes, and putting a double-wide up smack-dab in the middle of it. We often brainstorm & hypothesize about ditching urban-living, and I'm coming to the conclusion he might actually be on to something with his idea. That still leaves well & septic (& electric) to figure-out, but his idea might be doable. I suppose electric & an easy access potable water-table might be the highest priorities, as it seems to me everything else can be figured-out.

Rural land & taxes is often a steal by even further-out suburban standards in the large metro areas. And when you're retired, you don't need much of a structure if you have a similar-minded partner.

 

[Chomsky]

There are 3 stages of retirement: go-go, slow-go and no-go. If anything, expenses increase in the first stage. Most people don't stay in their homes for 30 years. Do not assume the kids are gone.

That's an interesting concept, and I wouldn't doubt you're right.

 

[reflechissez]

No situation is 100%.. And no fix to SS is either...

<snip>

I'm challenging this post:

2)..That said most people when they retire their bills decrease.. No more mortgage... Kids are gone.. Less traveling... Etc...

It is not accurate. And which bills would decrease? Your mortgage is the only expense that doesn't increase over time -- everything else does. By the time you get 30 years out, the mortgage is a pittance compared to other expenses.

 

[ttwtt78640]

The land-rent costs is an often over-looked aspect by those not familiar with this type of living. This type of community is far & few between in my harsh Northern Climate, but the several I'm familiar with charge a surprisingly high amount of rent for the small patch of land involved! It's been awhile, but it was over half what a moderate-tier apartment goes for in the more reasonably priced areas outside the city. In other words, you can almost get a small apartment for the same rental costs.

I have a near-retirement age relative that wants to blow-off northern urban life by getting some relatively moderately-priced rural acres somewhere warmer with cheaper taxes, and putting a double-wide up smack-dab in the middle of it. We often brainstorm & hypothesize about ditching urban-living, and I'm coming to the conclusion he might actually be on to something with his idea. That still leaves well & septic (& electric) to figure-out, but his idea might be doable. I suppose electric & easy access water-table might be the highest priorities, as it seems to me everything else can be figured-out.

Rural land & taxes is often a steal by even further-out suburban standards in the large metro areas. And when you're retired, you don't need much of a structure if you have a similar-minded partner.

Our lot rent is very low, since I do the maintenance work on our landlord’s rental properties (as well as some on his own house) on a priority basis. Rural land is much less expensive (to rent or buy), but harder to find with existing septic and utility drops already in place.

 

[Chomsky]

I'm challenging this post:


It is not accurate. And which bills would decrease? Your mortgage is the only expense that doesn't increase over time -- everything else does. By the time you get 30 years out, the mortgage is a pittance compared to other expenses.

True.-

But upkeep, taxes, maintenance, and ground-keeping on a larger older house have their due. Which is why many eschew it all, cash-out, and downsize to a new condo or townhouse - often in a cheaper (& warmer) area. This is very often done in my more expensive, highly taxed, northern urban metro area. So many in fact, that I'm starting to think of FL & AZ as far-out suburbs!

 

[Chomsky]

Our lot rent is very low, since I do the maintenance work on our landlord’s rental properties (as well as some on his own house) on a priority basis. Rural land is much less expensive (to rent or buy), but harder to find with existing septic and utility drops already in place.

Yep. The bolded seems to be the key!

As to the communities around here, the park owners/landlords seemed nearly predatory towards their tenants! So if rent is substantial and is going to go up every year, what's the point? In my state retiree's get to freeze their property taxes until their death, so that changes the economic calculus a bit.

But in a rural area, yeah I could see this working, especially if you own the land.

 

[SenorXm/Sirius]

I'm challenging this post:


It is not accurate. And which bills would decrease? Your mortgage is the only expense that doesn't increase over time -- everything else does. By the time you get 30 years out, the mortgage is a pittance compared to other expenses.

I disagree.. I lived it... I retired at 55..my kids were gone.. My mortgage was gone.. I didn't have to drive every day... Obviously everyone isn't in the same situation... And I said that right from the start... Nothing is 100%..But my bills drastically decreased as I got older..

BTW $1000-$2000 mortgage a month is NOT pittance...

And as I said many older people sell their houses and move into retirement complexes.. Much cheaper.. No maintenance.. Etc..

 

[reflechissez]

I disagree.. I lived it... I retired at 55..my kids were gone.. My mortgage was gone.. I didn't have to drive every day... Obviously everyone isn't in the same situation... And I said that right from the start... Nothing is 100%..But my bills drastically decreased as I got older..

BTW $1000-$2000 mortgage a month is NOT pittance...

Sigh. Your anecdote is not data. If your mortgage (P&I) from 30 years ago is $2,000, you're doing well; consider this is after multiple opportunities to refi at lower rates. 30 years ago, the PITI would have represented the purchase of a rather expensive house.

 

[SenorXm/Sirius]

Sigh. Your anecdote is not data. If your mortgage (P&I) from 30 years ago is $2,000, you're doing well; consider this is after multiple opportunities to refi at lower rates. 30 years ago, the PITI would have represented the purchase of a rather expensive house.

Sorry I edited my post... Many elderly just sell their high maintenance homes and move to retirement complexes.. Much cheaper...

 

[TOJ]

No situation is 100%.. And no fix to SS is either...

Any tweaks to SS will not benefit everyone... Might even make things worse for some...

But my point stands.. SS needs fixing, and it can be fixed... Congress just needs to get their heads out of their asses, work together... And fix it...

Cutting SS is unlikely. Demagogues would have a/many field days.

.

 

[craig]

I've long felt SS's upcoming shortfalls need to be tackled and ASAP. I've also been of the opinion SS should be tackled from various directions in in various ways (and did I say ASAP). It doesn't need to collapse and the burden of shoring it up doesn't need to happen in only one way. Smaller modifications, from multiple directions, would go a long way if implemented ASAP.
I think bipartisan support might be able to be found on this topic.

MSN

Get workers out of the underground economy and get them paying FICA taxes. That means giving undocumented immigrants who can demonstrate that they are not criminals and have been doing productive work for five years citizenship. 10 to 15 million additional workers paying in will be very useful and doesn't cost a thing.

 

[reflechissez]

Sorry I edited my post... Many elderly just sell their high maintenance homes and move to retirement complexes.. Much cheaper...

You said this:

That said most people when they retire their bills decrease..

It's not accurate. This is the only thing I'm addressing.

 

[SenorXm/Sirius]

You said this:

It's not accurate. This is the only thing I'm addressing.

Ok.. But I disagree... Most people I know, family and friends, and myself their bills decreased when they retired.. They changed their lifestyle... They moved.. Etc...

Again, it's not 100%..Nothing is... I know people who didn't adapt... But most people do..

Have a nice Christmas..

 

[reflechissez]

Ok.. But I disagree... Most people I know, family and friends, and myself their bills decreased when they retired.. They changed their lifestyle... They moved.. Etc...

Again, it's not 100%..Nothing is... I know people who didn't adapt... But most people do..

Have a nice Christmas..

You don't have to keep repeating this; it's a conversation that no one is having.

Maybe the people I advise are wealthier than those in your world.

Have a nice holiday.

 

[multivita-man]

SS ran a surplus for decades.. No reason it can't again...

Republican tax cuts are the reason.

 

[gbg3]

Good to see you again gbg3, Merry Christmas!

I'm not sure why Biden's plan needs the so-called "donut hole" between 162K-400K?

I'd like to see what the numbers look like when removing the exempt levels altogether, then putting it back in at 600K, 400K, etc. Would the system ever balance-out by removing the exemption? I'd need to know that in order to be able to form an educated opinion.

Merry Christmas to you too.

The problem with taxing all income of the middle class is, in order to make it fair, you'd need to also up the highest amount a SS recipient receives. Right now, there is a cap on a SS benefit. The logic of that cap coincides with the logic of only taxing income up to a certain point for SS. If all income were to be taxed and the benefit max remained as is - it would be an example of taxing the middle class too much to pay for the poor. When the middle class starts to suffer too much to pay for the poor, I think that becomes problematic. So that donut hole puts a protection in place to not unfairly tax the middle class.
Crushing the hardworking/employed middle class with increased taxes to support the poor just turns more and more households into the poor. There is only so much money you can take from self-sufficient households before they are no longer able to remain self-sufficient, they stop starting small businesses, and their ability to grow the economy diminishes. It's not the poorest of a society who are the ones who grow economies and create prosperous nations. But the employed, net tax paying middle class does effectively contribute to growing economies and creating prosperous nations.

 

[ALiberalModerate]

Republican tax cuts are the reason.

They are not the entire reason. However, they did greatly exacerbate the future demographic challenges with SS. Had we maintained Clinton era tax policy, we would be in better shape today regarding Social Security funding.

 

[iguanaman]

She's been a disaster. "Transitory" inflation was a perfect example of her ineptitude.
But shoring up SS is not complicated. Smallish tweaks from multiple directions would go a long way.

She failed to realize that American companies would use the supply shortages as an excuse to increase their profit margins. I don't think many saw that coming.

Since the trough of the COVID-19 recession in the second quarter of 2020, overall prices in the NFC sector have risen at an annualized rate of 6.1%—a pronounced acceleration over the 1.8% price growth that characterized the pre-pandemic business cycle of 2007–2019. Strikingly, over half of this increase (53.9%) can be attributed to fatter profit margins, with labor costs contributing less than 8% of this increase. This is not normal. From 1979 to 2019, profits only contributed about 11% to price growth and labor costs over 60%, as shown in Figure A below. Nonlabor inputs—a decent indicator for supply-chain snarls—are also driving up prices more than usual in the current economic recovery.

https://www.epi.org/blog/corporate-...to-inflation-how-should-policymakers-respond/

 

[reflechissez]

Merry Christmas to you too.

The problem with taxing all income of the middle class is, in order to make it fair, you'd need to also up the highest amount a SS recipient receives. Right now, there is a cap on a SS benefit. The logic of that cap coincides with the logic of only taxing income up to a certain point for SS. If all income were to be taxed and the benefit max remained as is - it would be an example of taxing the middle class too much to pay for the poor. When the middle class starts to suffer too much to pay for the poor, I think that becomes problematic. So that donut hole puts a protection in place to not unfairly tax the middle class.
Crushing the hardworking/employed middle class with increased taxes to support the poor just turns more and more households into the poor. There is only so much money you can take from self-sufficient households before they are no longer able to remain self-sufficient, they stop starting small businesses, and their ability to grow the economy diminishes. It's not the poorest of a society who are the ones who grow economies and create prosperous nations. But the employed, net tax paying middle class does effectively contribute to growing economies and creating prosperous nations.

How are you defining "middle class?"

 

[Chomsky]

Merry Christmas to you too.

The problem with taxing all income of the middle class is, in order to make it fair, you'd need to also up the highest amount a SS recipient receives. Right now, there is a cap on a SS benefit. The logic of that cap coincides with the logic of only taxing income up to a certain point for SS.

If all income were to be taxed and the benefit max remained as is - it would be an example of taxing the middle class too much to pay for the poor. When the middle class starts to suffer too much to pay for the poor, I think that becomes problematic. So that donut hole puts a protection in place to not unfairly tax the middle class.
Crushing the hardworking/employed middle class with increased taxes to support the poor just turns more and more households into the poor. There is only so much money you can take from self-sufficient households before they are no longer able to remain self-sufficient, they stop starting small businesses, and their ability to grow the economy diminishes. It's not the poorest of a society who are the ones who grow economies and create prosperous nations. But the employed, net tax paying middle class does effectively contribute to growing economies and creating prosperous nations.

Sorry 'bout the delay here, was a busy Holiday weekend followed by a Manic Monday!

Hope you had a good Christmas.

--

I'm not sure how you came to the bolded conclusion? The current $162K/yr per individual exempt level would seem to be well past the income level for "the poor", would it not? The exemption level is $320K per couple. It's also nearly 3X the average American income. The poverty line is 27K for a family of 4, and middle-class is often defined as 2/3 - 2X the median income, or $42K-130K.

So, I'm at a loss with your claim as to how raising the exemption past 162K further "taxes the middle-class".

 

[Chomsky]

How are you defining "middle class?"

Yep. I'm a bit lost with that. Because even in the more expensive American cities, $162K/yr isn't considered poor. It might be a preclusion in a high property value neighborhood, but that still does not imply "impoverishment" in my mind. It just means you can't afford to buy in the neighborhood.

 

[Jason Warfield]

If we were to take the right-wing definition of socialism and called it correct...as the pundits and politicians on the right insist that it is...then Social Security is a socialist program, given that definition.

But, because an enormous amount of boomers are right-wing, Social Security gets a pass from that definition.

Look, according to the right, it perfectly falls into the definition by being a handout, the boomers put no actual money into their own accounts, the checks that go to those collecting are based on the money that is taken from MY paycheck with checks the box of re-distribution of wealth. Socialism as per the right of the today.

The right should be clamoring for it to end...but they can't...because they need to make sure they get the votes....

 

[PeacefulWarrior]

1). I don't think SS was ever meant to be an only retirement benefit.. It suppose to be an extra benefit...

Yeahhhhh.....well its not 1965 anymore.
Pensions are a relic of the past. Hope you are able to sock enough away in that 401K while juggling modern life on $40K per year. Gnarlee FrEeDuMbZ$™!!

 

[SenorXm/Sirius]

Yeahhhhh.....well its not 1965 anymore.
Pensions are a relic of the past. Hope you are able to sock enough away in that 401K while juggling modern life on $40K per year. Gnarlee FrEeDuMbZ$™!!

I know.. Company pensions are a thing of the past... Which makes SS even more important...

 

[highroller]

Really? That means you (like Yellen) favor cutting (already meager) SS retirement benefit levels and reducing the amount of COLA adjustment which currently exists while (further) raising the ‘full benefit’ age.

The current average SS monthly benefit is $1667.52 (about $20K/year) or the full-time equivalent of job paying about $9.62/hour. If that benefit level is allowed to fall (as Yellen wants) then someone working an average full-time McJob (which already higher than the SS average) would (soon?) make (much?) more than a retiree is expected to be able to live on.

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That’s a small price to pay for decades of deficit spending. The Boomers played themselves