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Thread: Medicare and Social Security

  1. #37

    Default Re: Medicare and Social Security

    the disturbance you feel in the force, luke, is that there is no there there.

    social security and csrs and even fers cash is charged to your payroll before you ever see it and put into a trust fund for later use. except that it is promptly borrowed against and replaced with a treasury bond (iou) and immediately spent for current extravagances. so the crying song goes like this: i saved my money, then i voted for politicians who spent my money on feel good things like fixing the world, and now i want to know where is my money?

    the boomers broke the bank, it just hasn't closed its doors yet. there is no asset to liquidate to repay the notes. except for the future revenue stream generated by the production of young workers. the only way it is solvent is if two things happen: 1) more young producers contribute now in exchange for a promise to get paid later, and 2) recipients get frugal and don't take too much. neither will happen voluntarily. that's why we have government.

    social security, csrs, and fers are all relatively good deals, as long as somebody else is paying for the ticket. debating the preference of one over the other only makes sense if you are sure the check won't bounce. few folks have that luxury these days. rice, and mud huts. get some.
    100g

  2.  
  3. #38

    Join Date
    Dec 2007
    Location
    inland Northwest
    Posts
    4,124

    Default Re: Medicare and Social Security

    Generations that came before created the institutions we're talking about, and have benefited from the boomers paychecks. promises were made to late boomers and those that came later, those promises won't be kept, not in full if at all, agreed. Boomers may have been the naive do-gooders but only part of the problem. GenX-they've played a role as well-who played the housing market with all the low/no doc loans?

    I see the late boomers/early genX being caught in the transition point from what was to what is coming, yes. See my sig. At least the nothing that we end up with will be transportable. All the more reason to have Roth account, as a priority over fully funding tsp catchup, when $ don't stretch to fully cover both.
    "life can only be understood backwards, but it must be lived forwards" - soren kierkegaard

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  5. #39

    Join Date
    Apr 2008
    Location
    Key West FL USA
    Posts
    184

    Default Re: Medicare and Social Security

    It's an old thread but I turn 65 in 6 months, therefore I am being bombarded with offers for health insurance! The whole world seems to know I am soon to be eligible for Medicare and would I care for any additional health insurance?

    It was a quandary until I reduced it to an inequality like SS itself. In SS you can take it 'early' at 62 and get 2/3rds or wait until 'full retirement' and get it all. Work it out and you will see you must wait until ten years after 'full retirement' to break even. I took it 'early' after I consulted the actuarial tables.


    In Medicare you get Part A free so no consideration there. Part B you pay X dollars for monthly. Part B replicates what I get from BCBS and costs a lot less but applies only to me. (If I took it I would still have to carry BC for my younger wife, canyadigit?) Not taking Part B incurs a 10% per year penalty on the premium should one decide to take it later. Supposing we planned to go on Medicare completely once she is eligible 5 years hence, should I sign up now and pay for nothing or should I wait and incur the penalty?

    The answer is in the 10% penalty. It equates to ten years payout before you break even, just like SS. That is, if I take Part B now and pay the premiums meanwhile, it will be ten years after wifey turns 65 that we begin to see any cost savings.

    Answer is, don't take Part B now, take it later if at all. I'll be 80 years old before the inequality turns against me and I don't think I'll care much one way or the other at that stage.

    FERS/CSRS: I am FERS and happy. SS about equals my pension and the TSP kicks in 40% of my annual income. I have more pocket money now than when I was working.

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