69 Retirement Age?

06-15-2005, 08:32 AM

GOP Senators May Make 69 Retirement Age

By DAVID ESPO
The Associated Press
Tuesday, June 14, 2005; 10:56 PM

WASHINGTON -- Key Senate Republicans are considering gradually raising the Social Security retirement age as high as 69 over several years as they struggle to jump-start legislation that President Bush has placed atop his second-term agenda, officials said Tuesday.

Under current law, the retirement age for full Social Security benefits is 65 1/2 and is scheduled to reach 67 for those born in 1960 or later.

The possible increase to 69 over two decades or more was among the suggestions that Iowa Sen. Charles Grassley, chairman of the Senate Finance Committee, presented to fellow Republicans on the panel last week as part of an attempt to give the program greater financial solvency, the officials said.

Grassley also suggested steps to hold down benefits for upper-wage earners of the future, these officials have said previously. They spoke only on condition of anonymity, saying the discussions were confidential.

The disclosures surfaced as Bush campaigned in Pennsylvania for changes in Social Security, including creation of voluntary personal accounts for younger workers _ a step that would be accompanied by a reduction in the promised government benefit.

Speaking to a convention of the Pennsylvania FFA _ formerly known as the Future Farmers of America _ Bush said he wants to "make sure the system is a better deal for younger workers" and assured older people in the audience that they would continue to get their promised benefits.

The students would get the same benefits that seniors today receive, Bush said, without mentioning that his plans involve a reduction in the benefits younger Americans have been promised in their own retirement.

In a fresh illustration of the political stakes surrounding the issue, Democrats charged that rural Americans would be hit hardest by Bush's plans, which they consistently describe as privatization.

"Rural Americans tend to be older and more likely to depend on Social Security. In fact, more than 90 percent of counties in America with high senior populations are rural counties. In 2001, 20 percent of rural Americans were 60 years old or older, significantly higher than the 15 percent of seniors living in metropolitan communities," Reps. Stephanie Herseth, D-S.D., and Bob Etheridge, D-N.C., said in a joint statement. The two co-chair the Democratic House Rural Working Group.

Republicans on the Finance Committee are scheduled to meet privately on Thursday as they continue searching for agreement among themselves on legislation that achieves the goals Bush laid out in his State of the Union address last winter.

The fate of the effort is unclear, and some Republicans in Congress have suggested in recent days that the issue may not reach the Senate floor until September at the earliest. House Republicans have said in the past it's possible they will wait for the Senate to act first before they plunge into the politically sensitive issue.

The president has called for a bill to create permanent solvency for the program, and he also wants the bill to give younger workers the option of establishing a personal retirement account financed from a portion of their payroll taxes.

Under current predictions, Social Security will begin to pay out more in benefits than it receives in tax receipts in 2017, and the trust funds will be depleted in 2041. At that point, benefits will be cut to adjust for the reduction in available funds.

Along with curbs in benefits or increases in taxes, raising the retirement age is one of three general approaches that lawmakers can consider as they try to improve the solvency of Social Security.

Officials statistics show that Americans, on average, can expect to live longer than was the case when Social Security was created, meaning that they will receive more in lifetime government benefits than projected. At the same time, there are fewer workers paying into the Social Security trust funds per retiree than was the case in past decades.

Raising the retirement age is unpopular, according to some surveys.

Several officials said Grassley's suggestion for raising the retirement age would be phased in, possibly over two decades or more. The details would depend on future demographic trends, they said.

Crafting legislation has proven to be a challenge in Congress, even though the president has campaigned energetically in an attempt to build public support for his proposals. With public opinion polls showing tepid support for personal accounts, many Republicans have been reluctant to embrace the idea.

For their part, Democrats are unified in their opposition and threatening to use the issue as a major theme in the 2006 elections, when all members of the House and one-third of the Senate are on the ballot.

**GALLO1** · 06-15-2005, 09:21 AM

For what itâ€™s worth, thatâ€™s exactly why Iâ€™m increasing my TSP contributions from 5% to 15%. One of the legs on our retirement plan is wobbly to say the least. It may not be totally broken, but itâ€™ll certainly be weakened. [/b]

[/b]

I can receive SS at age 62, but only with great penalty, to get 100% benefit Iâ€™d need to go until 66.5 years old, which would be 2023, just 18 years before SS funds are depleted.[/b]

[/b]

In reference to a step, suggested by Grassley, â€œto hold down benefits for upper-wage earnersâ€, thatâ€™s a real kick in the a_ _. It certainly doesnâ€™t provide much incentive to climb the GS ladder too high. More importantly for those currently taking risks and sacrificing immediate rewards by saving and investing might do so well that theyâ€™d not be entitled to any benefit or a reduced benefit.[/b]

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However, Iâ€™d rather find myself in the later case.[/b]

06-15-2005, 02:19 PM

Gallo

Something to think about? I know, just giving you some food for thought.

What will the tax rate be when you take the money out?

May be wise to fund the ROTH first then increase your TSP.

Reason. I believe in the future the tax rates must go up in order to pay our massive deficiets.

Just something to bounce of you.

Just wanted to give you something to think about.

When you take money out of roth correctly you pay no tax.

**GALLO1** · 06-15-2005, 02:53 PM

Thatâ€™s an excellent point:I. I will definitely take a ROTH into consideration, maybe 7% TSP and 7% ROTH. Thanks :!for the thought food. In a couple of more years I can use catch up funds too.

06-15-2005, 03:06 PM

No worries.

Thanks for being open minded. It is hard for me to post here now so thanks!

I would advise to insure you fund the TSP to get the full match. That is a great benefit so please use it.

Good luck!

**Mike** · 06-15-2005, 03:49 PM

I wouldn't be all that surprised if they decided we were in a "crisis" at some point down the line - and then took all sorts of nasty actions to bail the country out, including raising the payroll tax (yet again), raising the retirement age further, raising federal income tax rates, and assessing the capital gains tax on anything gained in Roth IRA's. :shock:

Congress can change the rules at any time and for any reason. We'd all be wise to remember that.

**GALLO1** · 06-15-2005, 04:01 PM

I don't think any of us that have beenin and around the government for very long need to be reminded on how they can change ona dime. And what ever change they come up with won't be in our best interest.

I don't know where my dad came up with this saying: "Life isn't fair, but then no one ever promised it would be." It seems to fit more often than not.

06-15-2005, 09:59 PM

Will be a lot harder for them to get the Roth changed to taxable before doing the other stuff.

But tax rates will need to go up greatly in the future.

**Birchtree** · 06-16-2005, 02:28 AM

Gentleman,

Taxes will only go up if a Democrat is elected to office. Frankly, I really don't see that happening - look how what's his name (hard to even remember him now) got sliced up. The same thing will happen to the other Clinton - Chinese money won't even help. Just relax - better days are coming. Could be Newt or Frist.

06-16-2005, 02:55 AM

DMA wrote:

Will be a lot harder for them to get the Roth changed to taxable before doing the other stuff.

But tax rates will need to go up greatly in the future.

I agree with both of these statements.

To cover all the future government obligations (federal debit, Soc Sec, Medicare, new drug bill, etc.), tax rates will need to be ~ 78%. That's why if I could take $100k out and buy a nicer house, I would. I think it would be a better investment this before-taxes TSP.

06-16-2005, 03:59 AM

Birchtree wrote:

Gentleman,

Taxes will only go up if a Democrat is elected to office. Frankly, I really don't see that happening - look how what's his name (hard to even remember him now) got sliced up. The same thing will happen to the other Clinton - Chinese money won't even help. Just relax - better days are coming. Could be Newt or Frist.

So you are saying a democrat will never be the Pres of the USA ever again?

Current Amount

06/14/2005 $7,804,534,405,437.48

Sooner or later there is going to be some tough love. That is what we need. You can not have emergency rates and pass a dividend tax cut for the rich and drop their tax rates. It is not working so we got hedious accounting now. A puppet fed which is suppose to be a neutral body. Like the point men for this administrative planks.

Will feel foolish when you are yanking your TSP money out and paying 55% of it to the tax man when you can invest in your ROTH and pay 0% tax on the back in.

Greg hit this current economic expansion on the head - using your house as a ATM machine. When the 10 year goes to its historic average. Watch out.

**Birchtree** · 06-16-2005, 04:34 AM

DMA,

No I didn't say ever never again a democrat - only hope I'm dead when it does happen. You know you have a tax cut coming in 2006 - if you don't want to keep it donate it to the TA's old rest home.