Smaller paychecks in 2013?

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k11
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Re: Smaller paychecks in 2013?

Postby k11 » Sun Jan 13, 2013 4:32 pm

My bad. You are right, my tax changed.

I was out of the country over the last two months on extended vacation and missed all the tax drama.

I feel we foreigners should be given options to opt out of SS.
I do not mind paying Medicare but SS is crazy.

Extra 6.2% from my paycheck would go a long way in acheiving early retirement goals.

I like Singapore's forced retirment contribution plan. You pay 20% of income ($800 min, when I last heard) to retiement plan and the govt gives you fixed return. You can also buy a home with this.

Not sure why we are not able to implement something like this.

Bichon Frise
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Re: Smaller paychecks in 2013?

Postby Bichon Frise » Sun Jan 13, 2013 5:16 pm

DoingHomework wrote:
I am glad as well that both republicans and democrats supported the $120 billion tax increase this year. I would not go so far as equating it with the problems of SS or say they previously threw SS under the bus. We have a unified federal budget. SS obligations are the responsibility of Congress to provide for regardless of the health of the trust funds. That's why they are called entitlements. It would be nice to have a separate fund to pay out the benefits and to force Congress to appropriate or tax as needed to maintain the health of that fund. But the reality is that no such fund exists so whether or not it got fed properly over the last two years is mostly academic.


I prefer to call a spade a spade. A tax was created to go into a specified fund. That fund is suppose to be "self-sufficient." Make it that way and don't mess with it. If the funds fall short, congress will have to take action to make it right. Or, you can look at it as if we are just one big pool of money.



k11 wrote:I feel we foreigners should be given options to opt out of SS.


I feel you foreigners should pay the same amount everyone who lives in this great country does.
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

avocado wrote:Good to see you back, I was starting to miss your incisive commentary!

k11
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Re: Smaller paychecks in 2013?

Postby k11 » Sun Jan 13, 2013 5:40 pm

Bichon Frise wrote:I feel you foreigners should pay the same amount everyone who lives in this great country does.


I am against entitlements for foreigners, SS, Medicare, Unemployment Insurance, Scholarships, etc.

So I do not beleive in paying into it either. I however do not mind my employer's SS contribution, I just would like my 6.2% part to go away.

I do understand SS funds are very important for older folks and it is running out and there needs to be some help from rest of the us who are doing well. So I do not mind a part of money going in form of my employer's 6%.

Personally, I am sure I would not need SS by the time I retire.

Though I will be completing the required credits in 2014.

N2Deep
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Re: Smaller paychecks in 2013?

Postby N2Deep » Sun Jan 13, 2013 7:00 pm

Im willing to bet social security wont even be around when I retire and all the money I have paid in over the years will be gone and waisted. I'd be much better if they would just let me keep my money and invest it in my own retirement.
I can not dwell over that to which I have no control...

k11
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Re: Smaller paychecks in 2013?

Postby k11 » Sun Jan 13, 2013 7:15 pm

My company pays 3% of salary into 401K whether you contribute or not.
They were doing matching only few years ago. Something like that for the whole 12.4% (SS contrbution) would yeild some serious bucks down the road.

Fixing SS seems very complex.
Only way SS would last longer is if COLA becomes smaller gradually reducing payouts and increasing the maximum income limit to 250K from the current 113K or maybe just do a phase out, where participants pay lesser% from 113K to 250K.

Higher marginal tax rates would also help, rich older folks would be paying higher taxes on these SS payments.

Bichon Frise
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Re: Smaller paychecks in 2013?

Postby Bichon Frise » Sun Jan 13, 2013 9:21 pm

N2Deep wrote:Im willing to bet social security wont even be around when I retire and all the money I have paid in over the years will be gone and waisted. I'd be much better if they would just let me keep my money and invest it in my own retirement.


Question: are you saying the Social Security Administration won't exist when yo retire?

k11 wrote:Only way SS would last longer is if COLA becomes smaller gradually reducing payouts and increasing the maximum income limit to 250K from the current 113K or maybe just do a phase out, where participants pay lesser% from 113K to 250K.

Higher marginal tax rates would also help, rich older folks would be paying higher taxes on these SS payments.


I would be interested in seeing this study about the COLA becoming "smaller gradually" and increasing the contribution limits makes SS "last longer." Everything I have read shows that neither of the things you mention will independently make SS "sustainable," but I would be interested in reading and seeing where you are getting this information.

I have no idea how higher marginal tax rates would "help," as having earned income over a pretty low amount (I think $30-$40k) and collecting a SS benefit has pretty stiff penalties.
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

avocado wrote:Good to see you back, I was starting to miss your incisive commentary!

VinTek
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Re: Smaller paychecks in 2013?

Postby VinTek » Sun Jan 13, 2013 9:59 pm

k11 wrote:
Bichon Frise wrote:I feel you foreigners should pay the same amount everyone who lives in this great country does.


I am against entitlements for foreigners, SS, Medicare, Unemployment Insurance, Scholarships, etc.

It's certainly easy enough to opt out of it. Simply make your living in your home country. You earn money here, you pay the taxes. But you also reap the benefits. Get over it.

brad
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Re: Smaller paychecks in 2013?

Postby brad » Mon Jan 14, 2013 4:40 am

N2Deep wrote:Damn that... I don't need to move north. They are way too greedy up there.


Think about it, though: everyone here gets free healthcare, affordable universities, and subsidized daycare (it costs parents $7/day). Everyone contributes toward those benefits and others, and those who can afford to contribute more are required to contribute more. Seems fair to me. When you look at the reasons why half of Americans are living paycheck to paycheck, medical expenses and student loans factor high on the list, and daycare is a challenging cost for many families.

DoingHomework
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Re: Smaller paychecks in 2013?

Postby DoingHomework » Mon Jan 14, 2013 6:56 am

brad wrote:
N2Deep wrote:Damn that... I don't need to move north. They are way too greedy up there.


Think about it, though: everyone here gets free healthcare, affordable universities, and subsidized daycare (it costs parents $7/day). Everyone contributes toward those benefits and others, and those who can afford to contribute more are required to contribute more. Seems fair to me. When you look at the reasons why half of Americans are living paycheck to paycheck, medical expenses and student loans factor high on the list, and daycare is a challenging cost for many families.


You left out the best reason...good beer!

brad
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Re: Smaller paychecks in 2013?

Postby brad » Mon Jan 14, 2013 6:58 am

DoingHomework wrote:You left out the best reason...good beer!


And poutine! And department stores that have an entire aisle dedicated to nothing but hockey equipment. Plus artisanal cheese that's as good or better than anything you can find in France.

kombat
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Re: Smaller paychecks in 2013?

Postby kombat » Mon Jan 14, 2013 8:13 am

brad wrote:there's no other province in Canada where I'd rather live.


How many have you actually tried living in?

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Re: Smaller paychecks in 2013?

Postby kombat » Mon Jan 14, 2013 8:18 am

brad wrote:daycare is a challenging cost for many families.


There are those who believe that if you can't afford to have kids, then you shouldn't have them, rather than simply having them anyway and sloughing the cost off onto an unwilling, overtaxed populace.

brad
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Re: Smaller paychecks in 2013?

Postby brad » Mon Jan 14, 2013 8:29 am

kombat wrote:
brad wrote:there's no other province in Canada where I'd rather live.


How many have you actually tried living in?


I've spent some time in five other provinces, all nice places to visit but I wouldn't want to live there.

k11
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Re: Smaller paychecks in 2013?

Postby k11 » Mon Jan 14, 2013 8:30 am

Bichon Frise wrote:I would be interested in seeing this study about the COLA becoming "smaller gradually" and increasing the contribution limits makes SS "last longer." Everything I have read shows that neither of the things you mention will independently make SS "sustainable," but I would be interested in reading and seeing where you are getting this information.

I have no idea how higher marginal tax rates would "help," as having earned income over a pretty low amount (I think $30-$40k) and collecting a SS benefit has pretty stiff penalties.


Smaller COLA increase means lower payouts, down the road. Anyway Govt's core inflation numbers always seem to be much lower than what we see.

Increasing limits will not help much as the payouts also have to increase, I do agree on this.

http://www.investopedia.com/articles/pf ... z2HxpTQZae

Remove the 25K-34K and 34+ barrier. There should be only two grades, less than 25K and more than 25K. Tax SS Income fully (100%, not 50% or 85%) like any other for people making 25K or more. State and city taxes should also apply on SS Income like any other Income.

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Re: Smaller paychecks in 2013?

Postby VinTek » Mon Jan 14, 2013 8:36 am

N2Deep wrote:Im willing to bet social security wont even be around when I retire and all the money I have paid in over the years will be gone and waisted. I'd be much better if they would just let me keep my money and invest it in my own retirement.

But that's not what you'd actually do. Think about it: for 2 years your SS tax went down from 6.5% down to 4.5%. That's basically a 31% reduction of that particular tax. Did you take that money and invest it? Did you use it to pay down debt? Or did you buy more stuff?

Human nature dictates that you spend money that you have. It's going against your nature that results in investment growth. That's why a lot of people don't invest well or invest at all: it requires that they go against their nature. It's hard to throw money into a declining market, yet that's the best time to back up the truck and load up on stocks. It's hard to stay out of the market (stock or real estate) when prices are zooming into the stratosphere and everyone around you seems to making money hand over fist, but that's really the time to hold back and wait for the bubble to burst.


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