How big a cut in SS benefits before too many going below poverty line?

[papau]

Can the GOP say that cutting Social Security benefits by phasing and with larger cuts for younger ages is NOT THAT BAD BECAUSE NOT AN OVERLY LARGE NUMBER OF BENEFICIARIES ARE PUSHED BELOW THE POVERTY LINE INCOME LEVEL IF YOU CONSIDER TOTAL, SOCIAL SECURITY PLUS SAVINGS INCLUDING SALE OF HOUSE, INCOME?

Perhaps yes.

The news release from the Employee Benefit Research Institute (EBRI) said researchers asserted that future political debate will concentrate on more than just how to bring the Social Security fund back into balance. "The political discussion is likely to be not just about cutting benefits, but also at what benefit level a cut is acceptable and what magnitude of a cut above that level is acceptable,” according to the report.

MY COMMENT: If this is cutting benefits for younger folks by phasing in an increase in the retirement age for full benefits to age 70 from The Reagan SS Law's current full benefit age of 67(while keeping the earliest early retirement age at 62), it might make sense. But if this a simple cut benefits idea, the GOP are sure to use it to turn SS into a Welfare program via "progressive indexing - meaning slower indexing of the non-poor" and by keeping the wage cap (which should not exist) low so as to take the middle class more and more out of the program, as the GOP makes actual arbitrary cuts in the current law benefit formula making SS into a program too small to allow Seniors to retire without going below the poverty line.


http://www.ebri.org/publications/notes/index.cfm?fa=notesDisp&content_id=3643

• This article builds upon a previous EBRI Notes study (April 2006) by determining the change in the distribution of the benefit levels beneficiaries would receive under various Social Security reform proposals. Some of these reforms would not achieve zero actuarial balance. This analysis also calculates for various age cohorts the amount of savings that would need to be accumulated in order to purchase a payout annuity (an insurance product that provides regular stream of income for life) that would compensate for the decrease in benefits from these alternatives, relative to current-law benefits.

• The Social Security reform options examined would cut benefits, more so for the young—Because various Social Security reform alternatives would phase in benefit reductions, the cuts for younger cohorts of workers would be larger than the cuts that middle-age or older workers would experience. For example, the benefit cuts for the 1962 cohort would range from a $300 decrease in annual benefits for beneficiaries with the smallest benefits to about $3,000 for those with the highest benefits. These annual reductions would grow steadily across age cohorts, reaching $2,200 to $10,370 for the 1997 birth cohort and from $3,790 to $18,360 for the 2022 birth cohort.

• Future wage growth helps—As mentioned in the earlier companion analysis to this study, the projected real growth in wages has the effect of providing higher real Social Security benefit levels for the younger cohorts, even with benefit reductions. However, various studies have shown that, even with current-law benefits, many future retirees will not have enough resources to maintain the same level of standard of living throughout retirement.

• Additional savings needed—Many Americans would need to save additional amounts just to make up for the reductions in current-law Social Security benefits (for some of these reforms, more changes would be needed to balance the costs and revenues of program), and even then their level of resources will still be inadequate to maintain the same standard of living throughout retirement. These findings suggest that reform options that reduce the benefit levels of Social Security will have a major impact on many retirees, especially the lowest-income beneficiaries who depend on the program the most.

http://www.ebri.org/pdf/PR_739_13June06.pdf
http://www.ebri.org/pdf/notespdf/EBRI_Notes_06-20061.pdf
http://www.ebri.org/pdf/briefspdf/EBRI_IB_05-20061.pdf
http://www.ebri.org/pdf/PR_738_24May06.pdf

[Virginia Dare]

1. The GOP would like nothing better...

than to trash social security all together.

I believe this was part of the original plan that the Bush administration was charged with:

A) roll back any vestiges of the New Deal

B) Permanent tax cuts for the wealthy

C) Complete the privatization of the federal government

In other words funnel tax payer money back into private hands...kind of a trickle up economy.

[Warpy]

2. Operative words: SALE OF HOUSE INCOME

They're ASSuming a senior is going to sell a house he's lived in for decades just to get money to live on, including paying RENT that is far higher than the mortgage payments that senior would have if he'd kept the house???

WHAT IS WRONG WITH THESE PEOPLE????

I mean beyond being math challenged, myopic, delusional and terminally CRUEL?

Social security is ALL most older boomers will have since they spent the first 20 years of their working lives having pension contributions legally stolen if they changed jobs and the rest of it with depressed wages that did not allow most of them to invest in anything but their HOMES.

This is hateful and unchristian.

[papau]

3. I agree - I know the sale of the house has been showing up in the latest

studies as an income source.

I guess the definition of the old folks income problem these days is "maintain an above the poverty level standard of living while not running out of money before death".

That above definition does not allow for any estate to be transfered to the kids at death - and the house would be an estate that would transfer,