"Dave Hammond" <dh1760[at]gmail.com> wrote:

- quote -

It's impossible to tell at this point, given that Bush has not yet
released a detailed proposal laying out his desired changes to SS.

--
D.F. Manno
dfm2a3l0t2[at]spymac.com
"The work goes on, the cause endures, the hope still lives and the dream
will never die."

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Dave Hammond" <dh1760[at]gmail.com> wrote:

- quote -

Since nothing's yet been proposed, other than a lot of
political hot air on all sides, I'd devote my time to more
productive pursuits, such as blowing dust bunnies across the
floor. There will be plenty of time to conjure and comment
once something's really happening.

--
Phil Marti
Clarksburg, MD

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

It's hard to tell since a firm program has not yet been
submitted to Congress. However Senate Bill 2005-1 is
reserved for this and currently blank at thomas.loc.gov.

The most commonly cited plan describes a phase-in starting
in 2009. It starts at $1000 a year, whereas you and
employer will be paying about $11000 to regular SS under the
current ceiling.

So in short, you are looking at a private account amount at
10-15% of your total lifetime SS contribution. That will
probabaly only pay you a few extra dollars a month and be
mostly an accounting headache. The story is different for
those under 30 where the private part whould be much greater
than the already contributed amount.

The great impact would be raising the tax-cap. Currently it
is going up about $3K (4%) a year- the rate of increase of
national income. The talk from both Dems and Repubs is to
increase the tax-cap much faster, say $10K-20K a year until
it reaches about $150K-$200K. This means your SS paycheck
taxes would increase $600-$1200 a year and from $5500 to
$12000 total a few years (employers paying an equal amount).

It's basically rescinding Bush's first term tax cut. The
half of your income you dont pay SS on, would now have an
extrax 6.2% tax, effectively a 3% increase. Bush cut most
tax brackets 3% in the first term.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Dave Hammond" <dh1760[at]gmail.com> wrote:

- quote -

You will continue to pay in to the system, in ever
increasing amounts.

You will not receive a dime in payments from the system.

Plan accordingly.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Dave Hammond wrote:

- quote -

As there are no changes that have actually made it into any
bill before Congress (let alone passed), your question may
be premature. However, if you're not already investing the
maximum possible in the usual retirement accounts (401(k),
SEP_IRA, etc.), then that's where your thinking should be.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I am trying to figure out how the proposed SS changes might
affect me, given my age, income bracket, etc. I am 48 years
old, earning close to $150k per year, married (my wife is 46
with about $30k in annual income). I'll probably start
drawing SS in 14 to 17 years.

Can anyone comment on whether the changes have more of an
upside or downside for me? Would the ability to move part
of my SS taxes to a private account be a benefit? I'm a
conservative investor, so unless the late 90s reoccur, it's
not likely that I would invest in stocks. Perhaps mutual
funds, but chances are that I would go for fixed-income
corporate or government bonds.

Also, since I earn more than the FICA ceiling, any proposed
increase in the ceiling affects me directly. Would a raised
FICA ceiling eliminate any potential advantages?

Are there other considerations that I am not taking into
account?

Thanks for any comments and/or advice.

-Dave H.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->