Collecting a salary and a pension at the same time

[Ursa Majoris]

Yes, exempt the first residence ... but, up to (say) $1 million or so ... maybe even adjust it regionally and/or base it on changes in Case-Shiller, CPI, or somesuch measurement --- $1 million in San Francisco is quite different than $1 million in Yankton, SD.

 

We don't need people selling their stocks and bonds a year before retiring so they can buy some sort of monstrosity so they'd qualify for the maximum distribution from SS/MM.

 

This is a good point but reeks of complexity, something that really ought to be avoided. I am still not convinced people will deliberately sell out to avail themselves of SS. It would be amazingly stupid.

 

I guess you are soooooo much closer to retirement age than I am...

Indeed. I've done some research. It makes the most sense for me to grab and use SS at the first opportunity, thus reducing the need to draw down my own assets like 401k, etc, which (hopefully) continue to grow in the background. IMO, from a national POV that's flat stupid and completely out of line with the intent of SS when introduced.

[Ice1]

A pension is a retirement instrument much like a 401K. These instruments have a funding percentage by employee and employer. It is your money to begin with and typically the withdrawal is based on age and funded with pretax dollars. Obviously, as they are disbursed taxes are taken out to feed the government.

 

People need to realize first that this is their money period. Even 401K instruments allow for getting to the money prior for job loss but the penalty is around 30% plus treated as taxable income. One can also borrow their money against many of these instruments in effect paying yourself back with interest.

 

Actually that was a rather foolish article given this is commonplace throughout pretty much public sector jobs. This is just political fodder acting like it is bad to get your own money.

 

The real gripe should be how much the taxpayer funds vs. the actual employer or if we should move pensions to 401K instruments. But getting to the funds actually owned is not a big deal unless of course it is an election year.

[Square]

I think it's BS when its a publicly funded pension and somehow a professor for 25 years can retire and then reapply for the same job (because obviously they are qualified to do their same job) so they can pull pension funds along with their current salary. If this money has been withheld from their pay over the 25 years than that is different but as I understand it many of these school deals have money much like the SS. It's just an IOU sitting in a file somewhere and the burden becomes felt by the current taxpayer because someone thought it was a good way to pass the buck back in the day.

 

Much like SS, I think that money paid in should be held in trust until that person withdraws it. This whole idea of delaying the funding so that the current people can pay for agreements of the current retiring has been one of the dumber things the government has come up with. Bush gave fixing SS some lip service when he was in office and I'm kind of pissed that the republicans had control of both houses of congress and the Presidency and didn't do chit to fix the SS system.

[Ursa Majoris]

Bush gave fixing SS some lip service when he was in office and I'm kind of pissed that the republicans had control of both houses of congress and the Presidency and didn't do chit to fix the SS system.

To be fair to Bush, he did have a proposal to privatize part of SS payments. As often happens with politicians, it was articulated extremely badly. As it turns out, it was probably a good thing for many people that it failed, since the market (and most private 401k and IRA accounts along with it) tanked shortly thereafter.

 

There's some merit in resurrecting parts of the proposal however, as part of a long term plan to stabilize and secure SS.

[Ice1]

To be fair to Bush, he did have a proposal to privatize part of SS payments. As often happens with politicians, it was articulated extremely badly. As it turns out, it was probably a good thing for many people that it failed, since the market (and most private 401k and IRA accounts along with it) tanked shortly thereafter.

 

There's some merit in resurrecting parts of the proposal however, as part of a long term plan to stabilize and secure SS.

 

I agree with this and also understand that even in 401K accounts there are conservative investment options not tied to the stock market if we went to a portion of self funded retirement as we begin to transition away from a government system which is in effect used in the general fund today giving back IOU's to the SS fund.

 

Ultimately we must take this money from the government as they are simply spending it on other things than the intended purpose driving unfunded liabilities thru the roof. The only real way to stabilize this was Al Gore's lock box which was campaign rhetoric back in the day but was the smartest things he ever suggested. That idea was never close to enacted ever since LBJ decided the government had the right to borrow from the fund. Every single Administration since has taken every penny from the fund to spend as they see fit.

 

The government doesn't deserve to actually be in control of these funds in my view as this is a massive fail.

[wiegie]

I'll note that Social Security really isn't a hugh problem. It could be fixed fairly easily (economically, if not politically).

 

The main thing that is going to screw up the government's long-term budget is medicare. There has to be a way to limit expenditures (without some nutjob screaming "death panels").

[CowboyGal2011]

without some nutjob screaming "death panels"

 

Loved ones not always told their relative is on controversial 'death pathway'

 

What would you call it?

[Ursa Majoris]

I agree with this and also understand that even in 401K accounts there are conservative investment options not tied to the stock market if we went to a portion of self funded retirement as we begin to transition away from a government system which is in effect used in the general fund today giving back IOU's to the SS fund.

 

Ultimately we must take this money from the government as they are simply spending it on other things than the intended purpose driving unfunded liabilities thru the roof. The only real way to stabilize this was Al Gore's lock box which was campaign rhetoric back in the day but was the smartest things he ever suggested. That idea was never close to enacted ever since LBJ decided the government had the right to borrow from the fund. Every single Administration since has taken every penny from the fund to spend as they see fit.

 

The government doesn't deserve to actually be in control of these funds in my view as this is a massive fail.

I'm not sure borrowing from SS fund is that big a deal. I don't see how it makes a difference to the overall picture as to whether one fund has been used to bolster another. Wouldn't the debt be exactly the same if we'd not used SS? It would just be that the "checking account" would be overdrawn more while the "savings account" was fine.

 

Bottom line is that it's all government debt regardless. Absent different spending practices and different circumstances, the net effect would be the same.

[Ursa Majoris]

I'll note that Social Security really isn't a hugh problem. It could be fixed fairly easily (economically, if not politically).

 

The main thing that is going to screw up the government's long-term budget is medicare. There has to be a way to limit expenditures (without some nutjob screaming "death panels").

Medicare needs to be subject to the same means testing as SS, though that's only really going to work for premiums. IIRC, wealthier people already pay higher premiums though I don't know by how much. Kinda limits the scope for a fix in that direction.

 

Medicare is much more complicated to fix than SS simply because SS is a finite benefit that no-one can draw more from than they are entitled to, while Medicare is, theoretically, an infinite benefit.

[CowboyGal2011]

 

Philadelphia Councilwoman Will Collect A $478K Pension Friday And Go Back To Work On Monday Read more: http://www.businessinsider.com/this-philad...2#ixzz1hw4z7iiQ

 

[Square]

I'm not sure borrowing from SS fund is that big a deal. I don't see how it makes a difference to the overall picture as to whether one fund has been used to bolster another. Wouldn't the debt be exactly the same if we'd not used SS? It would just be that the "checking account" would be overdrawn more while the "savings account" was fine.

You may be right, but I guess I tend to think that the argument to fund things would be different if the politician couldn't just trot out that they could spend all that money without borrowing anything. Basically they can sell something as "adding nothing to the deficit" but only because they are stealing it from the "savings account". I'd like to think that we wouldn't be quite as knee deep in some of this crapola if we hadn't given the politicos such easy access to stack of cash. But maybe that's just wishful thinking.

[Ursa Majoris]

You may be right, but I guess I tend to think that the argument to fund things would be different if the politician couldn't just trot out that they could spend all that money without borrowing anything. Basically they can sell something as "adding nothing to the deficit" but only because they are stealing it from the "savings account". I'd like to think that we wouldn't be quite as knee deep in some of this crapola if we hadn't given the politicos such easy access to stack of cash. But maybe that's just wishful thinking.

Perhaps. I tend to think the spending would have been identical regardless. It's not like they've given two craps about how to pay for anything up to now, so just sticking whatever it is they want to spend on the national credit card would come naturally to them.