Centerfield

Anyone below the age of 60 (and that definitely includes all of us boomers) who expects to ever see a dime out of Social Security simply must be counted a serious optimist. You can gauge the time when you noticed reality by the date that you realized that.

I disagree. All it takes is faith in democracy and an understanding of the percent of folks who simply won't have the means to get by without it PLUS the percent of folks absolutely unwilling to accept being denied what they have been promised.

That sum equals the percent of voters who will elect pols who substantially protect the entitlement. There will be changes...downward tweaks in dollars granted and upward tweaks in age and income qualifications. But telling all these folks they won't get a dime can only lead to one thing in a democracy: millions of folks with pitchforks standing on the white house lawn. Myself included.

My experience is the the blithe expression that we won't see a dime of SS is most likely to come from well-funded pessimists. It's a little bit funny to me that many folks squirrel away giant piles of money to insulate themselves from SS shortfalls. That would make more sense to me if I wasn't certain that the pitchfork crowd would come after that dough if SS collapsed.

Whish is not to say I haven't but away money myself. We have. A Lot. I simply haven't put it away in piles sufficient to sustain my wife and myself if say we live to 85 or 90 and there's no SS and we have to pay for our own healthcare. There simply aren't that many folks who have the means to put away money in rates sufficient for that. IMO, it's an unpleasant (to many) but fairly safe assumption that Uncle Sam is going to be on the hook for much of what has been promised SSwise, and some huge portion of elder healthcare costs.

And consider the bottomline real-life calculations. Imagine some old guy who expected SS and medicare and needs it and now he's being told he's SOL? At that point, what's the downside of going postal to earn 3 hots and a cot in the geri-ward at club fed? One way or the other, Uncle Sam ends up on the hook, unless we up the ante on Kevorkian and go Logan's Run style.

Of course, Uncle Sam being "on the hook" means we the taxpayers are on the hook. Then the pitchforks come out....

I expect to see SS and Medicare. But I don't expect to see it at the promised levels.

More useful than pitchforks on the White House lawn would be at the other end of Pennsylvania Avenue. And if all the Congressmen and women who made the promises over the years (especially those from the years when Congress was exempt) that would be better still.

But if someone is actually going to try to fix the system, there are two things to do first:
- remove the limit on how much income get subject to the tax. Why not pay on the second or third hundred thousand? Or million?
- tax everything, not just wages and salaries. Income is income, even if it is interest or dividends or capital gains.

And yes, both of those will hit me personally. But I like to think I can distinguish between right and self interest. Probably one of the reasons why I wouldn't do well in politics.

I think Gen X will see about $0.66-0.75ish on the dollar of the benefit/$ boomers get. E.g., we'll get it, but with some forms of trimming (e.g., having to wait alot longer, maybe some means-testing for some levels of payment). Said trimming will be much bigger wrt to Medicare/aid.

But the worst side is something we have to think about a bit. I think the gap between promises and money is going to grow. I think we'll probably see long term care insurance be added to Medicare/aid, in an form that's not affordable long-term.

Although, we're amassing big retirement funds mostly because SS pays small tomatoes compared to what a good mutual fund or three will do - for the same reasons many (most?) boomers did.

And it's the same thing with medicine. Fellow sub-boomers, do remember to get your own disability and long term care insurance as well as the already-usual medical, property, and life. Because SS disability is small, and there is no LTC and the Medicare experiment with it will be strictly limited-time, or hollow by the time you get there. And there really is a good chance you'll need it at some point, and it can save your family alot. Get the kind with adjustment for medical inflation.

For me, the nightmare scenario is that the government/politicians will not admit that they are not going to pay the full (unaffordable) benefits. To avoid that admission, they will release some massive inflation (to accomplish the same reduction in value). And, as a result, anything either of our generations has saved will be reduced in value as well.

My admittedly limited understanding of long-term care insurance (LTC) is that under current rules it only really makes sense from the point of view of protecting estates in the intermediate term.

After a 5-year lookback period on asset transfers, the government kicks in to pay for nursing home care. So if you manage your assets into a trust in anticipation of needing long term care later, you don't have to pay for nursing home care, the government will.

In this context, I think a sensible reform might involve looking into the range of long-term care options. For example, if an elderly person has Alzheimers and their means run out, the government will pay for nursing home care, and that's going to run 6, 8, 10, 12 grand per month. But it WON'T pay for living in the alzheimer's unit of an assisted living facility, which costs "only" 3 or 4 grand.

Long Term Care is going to become a gigantic issue as the numbers of older folks needing it mushrooms. It doesn't strike me as right that savvy wealthy folks can funnel their assets to their families and then make taxpayers provide for 2, 3, 5 or more years of care. It's one thing if an older person just runs out of money, but it's another thing entirely if "estate planning" includes planning to make someone else pay. But that's how the current rules are constructed.

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