Very short post this morning, we're out the door for a hike ahead of a trip up to the Grand Canyon coming next week.As a follow up to my Five Best Places To Retire post from a few weeks ago that focused on a "tax arbitrage" the high temperature in Spearfish, SD was 22 degrees yesterday and it was 21 degrees over in Ranchester, WY. Oops.
Those temperatures are not necessarily too cold but it's the first week in October. Back to the drawing board on that one.
In response to comments from yesterday about whether social security will be around or not or whether there will be some sort of means test a reader left the following comment;
I cannot see how SSI will not be around. I understand that it is way underfunded but I think the Government will (they will have no other choice) find some way to get the money.
Let's hope that finding some way to get the money doesn't result in $28 loaves of bread and $34 for a gallon of milk.
8 comments:
The biggest problem with the "Anonymous" comment from yesterday is the "way underfunded" part. Social Security is not anyway near "way underfunded." In the context of our current runaway national deficit and national debt situation, Social Security becomes a vulnerable target and subsumed into the generally gloomy fiscal picture. However, separate and apart from the other major budget elements (Medicare, Medicaid, Military spending), Social Security is relatively fiscally sound. Perhaps President Bush's "the sky is falling" attempt to "rescue" Social Security served to increase the perception that this program is somehow a major part of the national fiscal problem. If the actual problem areas are adequately addressed, the Social Security fix will become a matter of "tweaking."
President Bush's "sky is falling"? This didn't start under Bush, in fact, under Clinton there were talks to allow SS investments to go into the stock market to hopefully make up for the short fall. Also, the numbers indicate that those paying into it vs. those receiving will continue to weigh heavier to the right of the equation. Less dollars flowing in, more dollars flowing out. Anyway, SS is not part of my retirement picture. I have a heaping dose of skepticism when it comes to the government. If I get SS when I retire, I'll have an extra happy meal with the missus every month or probably just give it to charity.
RE: retirement destinations, I'd much rather consider Lee, FL than SD, Roger. When it comes to cold, I shriek like a cheerleader.
to angry teacher from yesterday:
Well we've paid tens of thousands of dollars in taxes for wars we didn't want, teachers salaries in places where we had no children in school, possibly college scholarships for students in things like field hockey, footaball stadiums, welfare for scammers, etc.
Both my parents were teachers so I hear ya but it is what it is. I'm sure a lot of us would like to have every summer off and long holiday breaks.
Re. best places to retire, I have found this site useful: findyourspot.com
You can enter qualities of your desired location: climate, geographic region, outdoor activities, etc. Interesting to change housing cost/taxes and see what towns come up. My results for housing $170-200k included Milwaukee Oregon, Bremerton Washington and Brattleboro Vermont for example.
The way to not have to work again is to get injured on the job. The way to have your kids college paid for is to not save any money for college. The way to have your health care paid for in old age is to spend down your savings instead of stretching it. The way to fund your retirement: don't save for retirement at all so you can maximize your means tested SS benefit?
I was in Spearfish a few weeks ago and it is a nice little town and a beautiful setting. However, it wasn't as "artsy" as I was expecting. Black Hills State U is there so you get some college town feel.
As far as the tax arbitrage, the drive to Montana is farther away than you think and the town in that corner if the state is small!! Now Montana isn't dumb, they have laws to create LLC's that are "citizens" of the state. Thus, your LLC can buy that nice big RV or what have you and pay no income tax. Google for further information on how to work the tax system.
Regarding SS, it has been shown countless times that even without any "fixes" there will be around 75% of the the funds needed. Thus, it would seem that there will be SS benefits of some sort and those who ignore it COMPLETELY in their retirement calculations are almost as silly as those who count on government programs completely in their plan (ie, no savings, etc).
DE
SS is a Ponzi scheme. There are no savings to pay anyone. It is a pay as you go system. Just like investing with Mr Madoff except there are police that force you to continue to send in your money.
If you are in your thirties and counting on social security you are also planning on being dirt poor.
First they will say lets means test it. Eventually SS will become a welfare system.
If you do not believe me remember they sold the Federal income tax saying they would only take 1% of your income and 2% from the rich. Well Taxes may have started small but once they get something started LOOK OUT!
@ Jim L. I wouldn't call an $11 Trillion dollar deficit "tweaking". At best, they will be able to fund 3/4 of the current benefit as it stands now. However, these projections are proving to be optimistic. The SS fund is already experiencing deficits due to the layoffs and early retirements of 62-65 year olds who have been downsized. So the reality is the deficit will probably be much higher than they are saying.
Having worked in a government organization that dealt with military retirement pensions, I imagine the guv will change the cost of living adjustment to SS to keep payouts lower. That is how we saved money at the expense of the retiree. They can change the law by throwing it in the next 1,000 page defense bill. Then if any elected leader complains or threatens to vote against the bill, they can just paint the representative as weak on defense.
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