Decreasing income to increase benefits

[gerardc]

And there is probably an argument that true rich people avoid more tax than the people we're talking about here who are using programs (ie, the frugal/decreasing income person uses a program that costs $4k a year, but the rich-rich person is optimising to save $50k in tax...).

The variable to consider here is not the amount rich people save in taxes VS low income people, it is the total final amount of tax paid at the end of the calculation (which includes progressive tax rates, deductions, credits, etc.). Rich person may be paying $100k/year and poor person $500/year in taxes, so let's not focus on the delta from an arbitrary baseline (i.e. everything else BUT the credit you're singling out). Context is important.

[EnjoyIt]

The thing with ethics is that we must be able to formulate clear rules/laws that would improve the issue, being substantially free of negative side effects. @sol

Lets forget for a minute about legislation and politics and lets talk about our own moral compass.  Someone with moral and ethical standards can make their own choices.  I believe and this is my belief that it is unethical to utilize public services designed to help the needy when one is able bodied and doesn't need those services themselves. This becomes even more perverse when those services or resources are limited.  I find it reprehensible when that same person votes to increase their own benefits by expecting others to work and pay for them.  Services that one has paid into do not count.

I insist that you should be able to propose clearly formulated rules/laws to support your ethical viewpoints, that would be free of negative side effects. A moral compass is only useful insofar as it motivates you to conceive rules that would make the world better, but if you are not able or not willing to put them to the test, or to stronger scrutiny, then this moral compass of yours is not any better than opinion or feeling, i.e. it could be deeply flawed and you wouldn't realize it. The last thing we want as a society is to put side-eye pressure to do something that has overall harmful consequences. Also, the fact that a large number of people have the same opinion as you do absolutely does not prove its legitimacy.

Similarly in sciences, we might say that scientific intuition is important, the reason being that it allows you to formulate hypotheses that have a decent chance of passing the test of experimentation. But at the end of the day, only observed facts, proven by experiments, are considered useful results of science, and no one really cares about your inner scientific compass.

I don't need to propose rules because ethics is not necessarily a legal issue. Itis simply financially impossible to means test every government hand out. We must also rely on people to have their own scruples and do what is right. You do you, if you want to be a player who takes from the needy because the system allows it, that is your choice. But, don't go talking about humanitarian issues and trying to make others pay more so that your lazy ass life is better.

[anonymouscow]

What I hate to hear is how the  man receiving an ACA tax credit of hundreds of dollars looks down on the other who is getting medicaid.

I'm not really sure how people stand on ACA and medicaid, is it morally wrong to try and increase your ACA subsidy? Why would Medicaid be any different? The government requires you to have insurance, if you have a low income do you have a choice not to sign up for Medicaid? So, people have to work so they have a certain income or they are immoral?


Is food stamps really that big of an issue? A single person can get at most 200 dollars a month, and use it for 3 months out of 36 (not sure how easy it is to get it for more than 3 months).

[mm1970]

Consider the following statement, which I believe to be true: "It is immoral to marry someone and then kill them so you inherit all of their assets."

If you quoted that as MaizeMan: "It is immoral to marry someone" I'm be rather pissed off.

I didn't crop out B, I cropped out the "so you inherit all of their assets."  The rationale for why you would marry someone and kill them didn't seem relevant, just like the rationale for why you would you would choose to work, or work minimally, didn't seem relevant.

We ALL retire at some point.  My mother tried to tell me it was immoral that I was retiring at age 41, despite the fact that she is currently retired.  Why would it be immoral to do something at 41 and not at 62?  If you think it's a matter of how much you've contributed to society, or how much in taxes you've paid over your lifetime, I have already surpassed my mother on both of those counts by a wide margin.

I realize that lots of people are never going to agree with me on this one.  I've been in this position multiple times before, where the entire community disagrees with me, and that's fine!  I'm not telling you what to do, I'm trying to prevent you from telling other people what to do.  You (the generic you) are free to make your own choices, but a condition of that freedom is that you respect the same rights in others.  If I want to retire at 41 and you think that's immoral, that's a fine "agree to disagree" moment and you are free to judge me as immoral for it.

Right, and this is where the tricky part comes in - sliding scale and all.

- Is it immoral for a former military member to retire at 38 or 40 on their military pension and never work again?
- Does is matter (i.e., do we care) if their 20 years or whatever were in a war zone or were driving a desk?
- Are we obligated to work a certain number of years, or a certain number of hours, to help society function?
- In other words, since I'm capable of working until, let's say 75, as an engineer making six figures - should I?  Should I be required to work until then (assuming my brain function is all there) so that I can continue to pay 30-40% of my income in taxes - because it's my duty?
- Or is it a sliding scale?  Is it okay for me to quit working at 65 and take SS and Medicare? 
- Or is it okay for me to quit working at 60, so that maybe my second kid gets need-based financial aid and we are eligible for ACA subsidies (assuming we don't have anything better by then).
- When it comes to hours worked per week, am I obligated to work full time so I pay more taxes?
- If I couldn't make enough money, should I be obligated to piece together 2-3 jobs and work 60 hours a week?  If so, for how long, and at what age?  (Because the "obligation to work" is often extended to "work more jobs", "work longer hours", "work hard labor if you have to".)
- Am I obligated to work at my current job and pay?  What if I want to cut my hours and switch to a less mentally demanding job?
- Am I obligated to set a schedule that might not work well for my physical and mental health?

[DreamFIRE]

Yes, it is unethical for an able bodied person to choose not to work, or work minimally so that the rest of society will pay their way.

I will denounce you even further if your goal is to increase the taxes on those who actually work and give you even more benefits.

Government pensions comes to mind.  In my state, lawmakers that voters elected subjected all workers (includes private sector workers) to a major tax hike to pay for the generous government pensions and sweet retirement healthcare benefits that have driven the state into massive debt.

swampwiz soaking taxpayers for $180 per month in food stamps isn't as costly to taxpayers as gaming the system for taxpayer subsidized healthcare benefits (ie. Medicaid or ACA PCT/CSR).

These systems are already means tested, but they are not usually asset tested, which would be a penalty for saving, and I think it's generally a bad idea to punish savers while rewarding the foolish person who spent all his money like a drunken sailor.

[daverobev]

And there is probably an argument that true rich people avoid more tax than the people we're talking about here who are using programs (ie, the frugal/decreasing income person uses a program that costs $4k a year, but the rich-rich person is optimising to save $50k in tax...).

The variable to consider here is not the amount rich people save in taxes VS low income people, it is the total final amount of tax paid at the end of the calculation (which includes progressive tax rates, deductions, credits, etc.). Rich person may be paying $100k/year and poor person $500/year in taxes, so let's not focus on the delta from an arbitrary baseline (i.e. everything else BUT the credit you're singling out). Context is important.

Well yes, but then the whole thing becomes cyclical - how is someone 'worth' 400x what the lowest earner in a company makes, how is it fair that wealth can be passed down generations.

The whole stack is a bloody mess. There is no 'fair'. There is little to no 'equality', there is just a genetic lottery, some self determination of course, but being brought up in a frugal/rational household? Almost priceless.

And of course, the 'lazy early retired person' is probably doing a hell of a lot less environmental damage than your average working, tax paying person. There is no answer, I suppose, there is just... Eh. Discussion.

[Prairie Stash]

If they had any sense, they would put a full asset test on any programs that are supposed to be solely for those in need.

Food stamps but live in an expensive house, or have lots in investment accounts, or whatever? No.

That is how it should be. But - government is silly. If the tiny number of people like us avail ourselves of programs that we 'ethically' maybe shouldn't, it is a clear case of 'blame the game, not the player'.

In the UK, for example, there are all sorts of benefits you can't get if you have more than 16k GBP (just over $20k USD) (excluding your house and money in a pension scheme, I believe). You don't get the dole (Jobseeker's Allowance) if unemployed and you have the funds to support yourself.

IMHO the UK system is a bit harsh, but compared to other places I feel it is closer to right (as in, if you have millions of dollars in whatever tax shelters or investments, you really oughtn't be able to get SNAP). In Canada, we could get quite a lot into RRSPs and TFSAs and, with two children, get up to $6.5k CAD in child benefits per child if our income was below $35k. Add discounts on energy bills, property tax, sales tax rebates and whatnot... it's pretty crazy, really. Now, I was reading a thing saying that, in the UK, the after tax income of a minimum wage family vs a fairly reasonable earning one with multiple children was shockingly close, and that's wrong too. I think the numbers were 15k GBP and 50k GBP with 3 children, and the net difference was only a few hundred pounds. And, of course, the higher income family can put a big chunk of pre-tax money into a retirement account to bring their earnings down...

How many 'rich' people actually do this? Not many, I'd guess. But who knows. I mean - rich people obviously do all sorts to reduce the tax they pay. And there is probably an argument that true rich people avoid more tax than the people we're talking about here who are using programs (ie, the frugal/decreasing income person uses a program that costs $4k a year, but the rich-rich person is optimising to save $50k in tax...).

Rich canadians on this forum do this.

Face it, in Canada if you earn $100,000 and have two children, University is now free (potentially). At that income level you get $2500/child/year (CCB), which is the amount that optimizes RESP (where it gets bossted to $3000, 20% grant). After 18 years, assuming 3-4% (really low) returns, it pays for school completely. True story, my 2 kids will have school entirely covered without any of my wages, how is it that fair? Poor Canadians stupidly spend the money on food and clothing (sarcasm).

Rich Americans get the house credt, if the're homeowners, poor Americans don't buy large enough houses to benefit. In Canada we don't understand the point of the credit, we have similiar ownership rates without the tax deduction.

Everyone has a blind eye to the benefits they receive. It's easy to claim others are immoral and unethical getting something you don't personally receive.

[EnjoyIt]

- Is it immoral for a former military member to retire at 38 or 40 on their military pension and never work again?
- Does is matter (i.e., do we care) if their 20 years or whatever were in a war zone or were driving a desk?
- Are we obligated to work a certain number of years, or a certain number of hours, to help society function?
- In other words, since I'm capable of working until, let's say 75, as an engineer making six figures - should I?  Should I be required to work until then (assuming my brain function is all there) so that I can continue to pay 30-40% of my income in taxes - because it's my duty?
- Or is it a sliding scale?  Is it okay for me to quit working at 65 and take SS and Medicare? 
- Or is it okay for me to quit working at 60, so that maybe my second kid gets need-based financial aid and we are eligible for ACA subsidies (assuming we don't have anything better by then).
- When it comes to hours worked per week, am I obligated to work full time so I pay more taxes?
- If I couldn't make enough money, should I be obligated to piece together 2-3 jobs and work 60 hours a week?  If so, for how long, and at what age?  (Because the "obligation to work" is often extended to "work more jobs", "work longer hours", "work hard labor if you have to".)
- Am I obligated to work at my current job and pay?  What if I want to cut my hours and switch to a less mentally demanding job?
- Am I obligated to set a schedule that might not work well for my physical and mental health?

I will brake it down for you.  One is not obligated to do anything except not directly harm those around them.  That is the law.  What one feels is morally right and wrong is completely up to them.

I won't talk about each example above but I can break it down for you.  If a person has paid into a system via work such as a military  or adding to SS and medicare within their means then they clearly put in their fair share or what they were able to and deserve the money that was promised to them. 

This is not by years worked it is about self sustenance.  It is about badassity and not relying on the hard work of others to pay your way if you are able bodied and can do it for yourself.  It is about not taking from those who actually need the subsidies to survive because one is to lazy to work themselves.

If you can support your family by working part time without relying on government handouts then feel free to work part time.  But again, don't go part time and then rely on your hard working neighbors to work on your behalf just because you are sick and tired of work.

My moral compass is comfortable to exclude healthcare from this because our healthcare system is unscrupulously flawed and frankly almost impossible to afford for the majority of people.  To me it makes sense to do what is right for their own family simply because there is no better way.  So save up enough cash to support yourself, get some ACA subsidies and FIRE.  But please don't get WIC or section 8 housing and take away those resources from those who actually need them.

[simonsez]

It is immoral to weasel your way into funds defined for the needy just because you are lazy or hate your job.  .....So, if your goal is to be lazy and leach [sic] of [sic] the system without contributing anything towards it then more power to you, but I for one will give you no respect for it.  I will denounce you even further if your goal is to increase the taxes on those who actually work and give you even more benefits.

I reject the notion that those who retire earlier than a standard age are lazy across the board.  I'd wager that out of the white collar able-bodied, those who set their lives up in a way to walk away decades earlier than their peers are more active and motivated in general than those that rot away behind a desk until their eyes are dim.

I get the gist of what you're saying and don't fully disagree but I wouldn't call someone a leech that was high income during their working years and paid far more in taxes than average, especially when said taxes are used to fund the programs at hand.  If you think it is immoral/unethical for someone to take advantage of a program, I think channeling energy into making better eligibility rules rather than looking sideways at a person would be more productive.  Maybe not, though - venting does serve its purpose.

[mm1970]

If you can support your family by working part time without relying on government handouts then feel free to work part time.  But again, don't go part time and then rely on your hard working neighbors to work on your behalf just because you are sick and tired of work.

But what if I really am sick and tired of work?  I mean quite literally.

What if work makes you sick? 
- What if decades of stress makes you sick?  Thinking about white collar jobs here mostly, but many blue collar jobs could also work like this.  Mental health is still health, and mental health issues can affect your physical health also.
- What if decades of work breaks your body down to where you cannot do a physical job anymore, you cannot get hired in a non-physical job (no degree), and you are in your 50's so basically un-trainable? 

I mean, where is the line?  I have relatives who have always worked blue collar jobs who fall into the second category, and are quite literally in complete and constant pain from destroying their bodies in 3 decades of manual labor.  Then they switch to a different job, but it is still manual labor.  And you know, their backs/ knees/ shoulders cause them constant pain while they work.  But you know - you can still work!

I have former coworkers who have hit the age of being "unemployable" and then have had health issues - that may prevent them from working.  But they still aren't of the age to get SS.  The stress of a full time job on top of the health issues just makes the health issues even worse.

And...well you mentioned the military "paid in" and all that.  Well, how much is enough?  If I'm 50 and I've been in the top 5% - 20% of income for my whole life, and I've paid in hundreds of thousands of dollars in taxes - or even millions - why can't I just quit?  I've already paid in far more than the vast majority of Americans.  Why should I feel guilty about taking a break? 

Or thinking of it another way...are 20 years of 80 hour work weeks equivalent to 40 years of 40 hour work weeks?  How much work is "enough" work?  40 hours a week?  80? 30?

I fall into none of these categories, but the point I'm making is that it's a sliding scale, and you don't get to say where someone draws the line on the sliding scale.  Someone once mentioned to me on the internet (a local, anti-tax guy), that I should be ashamed that my kid got free lunch for 3 summers when he was in the local free "drop in" summer program.  HIS TAX DOLLARS paid for that!  I mean, dude really - that's 35 days per summer x $2.50 x 3 years = $262.  I pay that much tax every two days.

[joonifloofeefloo]

I disagree with two elements that seem to underlie some of the arguments in previous posts:

1. That the only way to contribute to society is by working in a paid job.

If a person quits their high-paying job early in order to provide excellent unpaid service within our society, they're not freeloading. They're working and contributing -just not getting paid crazy amounts. Maybe they're decreasing crime in their neighbourhood by being attentive, while tutoring struggling youth and administering meds to the elderly neighbour who has no nursing support. There are endless ways to contribute; many are simply unrecognized with wages or any other means. Receipt of salary ≠ contribution.

Should this person be able to access benefits intended for low-income that they meet all criteria for? I say yes.

2. That the pots of benefits are necessarily small and limited.

A change in how money is distributed, how a fraction of powerful people are paid, etc, can easily cover the needs of all. I see issue in how money is funneled, managed, mismanaged. I can't pretend the "issue" is a too-small pot of available funds. There is enough for everyone. I'd rather we resolve greed, theft, overpayment, hypersalaries, inefficiencies, etc. Of course, doing so would move many obscenely-paid people into the low-income bracket, at which point I would be fine with them getting a little piece of the collective pie. It makes little sense to fuss and fret about what's happening at that level instead of addressing the much bigger financial silliness.

[EnjoyIt]

It is immoral to weasel your way into funds defined for the needy just because you are lazy or hate your job.  .....So, if your goal is to be lazy and leach [sic] of [sic] the system without contributing anything towards it then more power to you, but I for one will give you no respect for it.  I will denounce you even further if your goal is to increase the taxes on those who actually work and give you even more benefits.

I reject the notion that those who retire earlier than a standard age are lazy across the board.

I reject that broad notion also and never made that statement. Actually I think it is really bad ass for someone to understand the value of money and be able to self sustain themselves and their family without labor.  The key is sustain themselves and not mooch off of others.  I also clearly defined that paying into a system that you later use is not mooching so as to not confuse things like a pension or SS. 

In my view it is not right for someone who can easily work to retire early and live in section 8 housing, and get food subsidies while their neighbors have to work and pay for them.  I have my views on healthcare as well but they are a bit blurry because our system is flawed and therefor do not want to confuse the discussion with something so complex.

[EnjoyIt]

@mm1970,
You can always find strawman examples that try and make the lines blurry.  I again tell you that your ethics are your line.  they are not mine.  I just share my views.  And those views have nothing to do with time working.  It is not bad ass to take from the needy and give to yourself because you are sick of work.  It is also not bad ass to take from the working class because one is too lazy to work.  You draw your own conclusions and what you want to do with your life.

[Fishindude]

Just because you could, does not mean you should.  Integrity comes to play here. I find it that applying for gov subsidies when you don't need them, even though you qualify, lacks integrity. Someone who actually needs it, should have it.

My thoughts also.

[EnjoyIt]

@mm1970,
You can always find strawman examples that try and make the lines blurry.  I again tell you that your ethics are your line.  they are not mine.  I just share my views.  And those views have nothing to do with time working.  It is not bad ass to take from the needy and give to yourself because you are sick of work.  It is also not bad ass to take from the working class because one is too lazy to work.  You draw your own conclusions and what you want to do with your life.

@joonifloofeefloo,
Yes, resources are limited.  You can obviously tax the working class more we can willingly take from the working class so that we can sit on your asses at home or travel.  Yes, lets tax the wealthy so little poor me could retire early. 

Just because you could, does not mean you should.  Integrity comes to play here. I find it that applying for gov subsidies when you don't need them, even though you qualify, lacks integrity. Someone who actually needs it, should have it.

My thoughts also.

Exactly.

[effigy98]

Yes, my kids get free lunch.  No, we don't need it.  But no, I don't think there is anything wrong with being poor, and my kids go to school with the poor kids.

The thing that is not obvious is the free lunch and welfare is really a farm subsidy, it is not really to help kids or families in need, that is just a good talking point for politicians. I think most people have been tricked into thinking these programs are primarily to help people in need.

[ixtap]

I can say that I have in the past been eligible for food stamps and decided I didn't need them.

What gets me about this whole discussion actually comes from biases formed outside of this discussion.

FIL is the kind of guy who insists that these welfare benefits make people lazy. At the same time, as long as they exist, people he knows should take advantage of these programs if they can. Because his relatives who are eligible for food stamps are somehow more deserving than other people who do so. I am told this is actually a common, often racially motivated, line of reasoning.

I like the idea of lunch in the school budget. I would like to think that some parents would get more involved in improving school lunches.

[effigy98]

Rich Americans get the house credt, if the're homeowners, poor Americans don't buy large enough houses to benefit.

Not true. My house is large and worth over 1m in America and I am not poor, I do not get a tax credit worth more than standard deduction.

[joonifloofeefloo]

@joonifloofeefloo,
Yes, resources are limited.  You can obviously tax the working class more we can willingly take from the working class so that we can sit on your asses at home or travel.  Yes, lets tax the wealthy so little poor me could retire early. 

This seems like a strange and unnecessary twisting of my contribution, EnjoyIt.

There are many ways to redistribute resources, decrease inefficiencies, etc.

[DreamFIRE]

Rich Americans get the house credt, if the're homeowners, poor Americans don't buy large enough houses to benefit.

Not true. My house is large and worth over 1m in America and I am not poor, I do not get a tax credit worth more than standard deduction.

Same here.  I never got a tax credit.

[BTDretire]

  I read a few posts at the beginning, it seemed like there was no one that saw any ethical line about taking money from the government when they actually had large assets. Said another way, I'm going to structure my income to collect welfare.
  I was glad to see the thread take a turn showing there are Mustachians that know right from wrong.
 We all know welfare is set up for poor people. When you have a large nest egg, you are not poor.
  I walked the walk and it was a challenge, I have paid about $60k in insurance for my family since the ACA started, I would have qualified for a large subsidy, I could have an additional $45k or $55k if I had taken the subsidy.
 I also can understand a confusion when people say the say SS should be means tested. I recoil and say, wait a minute I paid into a system that was designed to pay me back in old age. I'm a bit unusual in that
I have earned only slightly above median wage over my lifetime and just because I saved my money and the other 75% in my income group didn't doesn't mean I should be penalized.
  So, yes the line is a little blurry, but some people become blind and can't even see the line when it comes to money.
And to Sol, did you do all the justification of why it ok to take government money just because your mom didn't think it was right for you to retire early?
 Poor mom's, always getting the blame.
 

[calimom]

Due to their father's untimely, early death, my children have always qualified for Social Security Survivors' Benefits. When all three were eligible, we collected the Family Max. And then my stepdaughter aged out of the program, and while the benefits went slightly up for the younger two, I could have qualified for the Caregiver's Benefit* at that point. The SSA worker helpfully explained and laid it out for me during my appointment. I elected not to take those funds because 1) I was working and making somewhat more than the $16,000 cap and 2) It doesn't seem the worst thing in the world for my kids to witness the value of work=$$ and 3) I didn't want to be 48 with few skills and earning ability. I've seen it happen. We have long exhausted the actual contributions of my late husband. At 37, he had worked and put into the system for just 15 years, not counting camp counselor and college work-study jobs.

I guess I do have some ethics but I'm certainly no saint. Some years back when rates were lower, I refinanced my mortgage to a 15 year loan from 30 to payoff coinciding with my youngest child's 18th birthday. Their benefits currently pay for 2/3 of the payment, as allowed. And trust me, there is plenty left over to cover utilities, their share of the family car use, groceries and extracurricular activities. So in effect, the government is paying a big chunk of the expense of a house I will own free and clear when my child rearing years are (almost) done. I'm certainly no saint. I can't take the deductions for my kids on my tax returns, but I do realize a fairly hefty benefit each month.

*Fun factoid: until the early 1970s, only mothers could receive these benefits. Ruth Bader Ginsberg, in her early career, represented a widowed father of a young child, taking his case to the Supreme Court. And won, changing the law.

[DreamFIRE]

  I read a few posts at the beginning, it seemed like there was no one that saw any ethical line about taking money from the government when they actually had large assets. Said another way, I'm going to structure my income to collect welfare.
  I was glad to see the thread take a turn

I also can understand a confusion when people say the say SS should be means tested. I recoil and say, wait a minute I paid into a system that was designed to pay me back in old age. I'm a bit unusual in that I have earned only slightly above median wage over my lifetime and just because I saved my money and the other 75% in my income group didn't doesn't mean I should be penalized.

Interesting.  You state two opposing views in the same post.  First, you state that you think people should be penalized for having large assets in that they should not take advantage of government provided benefits that they are qualified for based on income (note: income and assets are not the same thing).  Then you follow up to say that you don't think you should be penalized for a government provided benefit because you saved your money.

Being a single guy with no kids, I paid very high taxes over my working career for my household income, so I won't feel the least bit guilty if I happen to get a small tax credit for an ACA plan, despite my high savings.  Savers shouldn't be penalized.  I saved 70 to 80% of my take home pay along the way, building a healthy stash, and I don't think I should be penalized for SS benefits when I'm older, either.

I'm not married with kids, so there's no way I'll qualify for Medicaid with my planned retirement income, and I wouldn't trust using it with the estate recovery provisions in my state.

[Erica]

Why would an able bodied [older person] not want to work?
Because they cannot afford it.
pure and simple
I’ll explain….
I currently work 30 hrs per wk
Working until I drop dead is perfect!
I like my job and do not want to be home all the time
30 hours a week all completed in one shift usually…while sleeping 5 hrs or so
I enjoy supervising 4 transitional homes.


A little later in life...

My wages+ taking social security at age 65 of $725 mo should cover the new additional medicare expenses
while providing BETTER and more coverage eh?
I mean combined with what my employer subsidizes,
our healthcare sharing ministry, part b & medigap,
we're very covered
Except....well.....no.

Social Security Office would keep over 1/3 of my check -$1 withheld for every $2 earned beyond $1450 mo)
You do not re-coup this,
not even close to fully.
It remains until the year of Full Retirement Age (FRA)
When you are allowed to earn $1 for every $3 then next yr, nothing else is withheld at FRA and beyond
It is "re-calculated" into benefits manifesting itself many yrs later in checks
So limiting EARNED income to max of $1450 mo. seems logical in order to keep 100%
Yet to earn EVEN LESS $$
keeps us eligible qualifying us for retro-active medicaid coverage- Long term care & catastrophic


Cons-
1. $1 for every $2 earned is withheld, aka Kept permanently by Social Security Administration
Sure they say they “re-calculate it into your benefit” but it takes many years and that generally does little to increase SS. overall
Will not break even at all.
2. Loose catastrophic & Long Term Care coverage retro-actively applied via medicaid.

So you’ve lost a good portion of your earned wages, over 30%…
trying to cover additional new medicare costs…..
in the most logical way…
an able-bodied individual would hit it…..
yet it keeps the poor...still poor
Giving no mercy even...
to our Seniors

We have no plans ever to actually sign up for Medicaid YET keep It as a last payer back up
Medicaid for Seniors, is retro-active so If you qualified during the time of the medical emergency
They just back date the app (or however they do it) to cover paying past medical bills up to 3 months
retr0-actively. Again, Long term care included, catastrophic without signing up UNTIL or IF, needed to pay a bill.

Our healthcare sharing ministry costs just $90 mo.
which covers 125K per incident.
We will likely never need Medicaid
as last pay resort
Yet want it for peace of mind

My social security check of $725 a mo. at age 65 will not fully cover our healthcare costs
per the medigap & part b quote=of about $850 a couple
So no reason to sign up
I have not a full 35 yrs earning years yet so will keep chugging along,
maybe well after age 70, it might be worth it to sign up for a Social Security check



In the end, the wisest idea is to limit my earned income to $900 a month
At age 65+
due to the way medicaid for seniors counts earned income differently than unearned income

$900 wages-$65 earned income deduction=$835 divided by 50%= $417 countable income.

$417 countable income+ Husbands Social Security of $1668= $2085
This is less than medicaid eligibility of $2168-$1668+ $500 spend-down allowed
$2085-$1666= $419 overage which needs to be spent down on medical costs to be eligible as a couple for current or retro-active medicaid  (long term care, catastrophic, deductibles, co-pays covered After healthcare sharing ministry kicks in)

Luckily my retiree benefits include a drug, dental & eye plan. Cannot imagine how we'd pay for all of that for me!

We'll live on $1668 SS and sometimes, pull 12k in RMD's one month a year...
rendering us in-elligible that ONE month if we have a medical emergency
or need long term care that month.
It will be turned into cash
not stored in a bank acct.
So the other 11 months a year
we are covered very well.
Likely we never actually signed up for medicaid
so one month out of 11 months a year,
we are in-eligble
yet still have our medicare & medigap coverage,
dental, eye, drug & Healthcare Sharing ministry coverage
And I have allowed my Ss to grow, getting in 35 years beyond age 70
Taking it when/if it can actually cover healthcare costs

I readily admit that our house is very nice
High quality, electric car by then
Retirement Acct is exempt as long as RMD's are taken

These are exempt assetts- aka allowable
Maybe we'll be moved into a different very nice home by then
Which started out as a fixer upper
I feel nothing immoral about this.
Everyone can find something which is welfare-
we utilize all kinds of things daily we don't pay into
without any thought whatsoever
Yet we all know a free-loader when we see it
Rich or poor

Just a thought of why I believe many SENIOR able bodied people don't work,
they'll screw themselves going into the red..
Loosing $$ and coverage
by earning barely any wages
If at all...
if they don't understand these methodologies

[Erica]

Since I moved out of the Kaiser coverage area, I have no medical insurance. It was 100% subsidized by Employer but now the other plans offered in our area cost about $300+ a month. No thank you.

So you're rolling the dice and putting your entire net worth and then some on the line? Hey we've seen this movie before.

We are looking for a fixer upper in a nearby town within Kiaser coverage area.
At least if we owned a home within that area, I'd feel better changing the address
Yes, rolling the dice for now.
With a few prayers added in

[Erica]

What I hate to hear is how the  man receiving an ACA tax credit of hundreds of dollars looks down on the other who is getting medicaid.

I'm not really sure how people stand on ACA and medicaid, is it morally wrong to try and increase your ACA subsidy? Why would Medicaid be any different? The government requires you to have insurance, if you have a low income do you have a choice not to sign up for Medicaid? So, people have to work so they have a certain income or they are immoral?


Is food stamps really that big of an issue? A single person can get at most 200 dollars a month, and use it for 3 months out of 36 (not sure how easy it is to get it for more than 3 months).

I believe Trump, shortly in office, did away with the IRS examining tax forms for whether insurance is listed which suffices the ACA. This isn't required to be reported any longer. Not sure if this is income based or not, I've forgotten now.

I don't know if they are immoral but fee for service medicaid doesn't cost that much when not utilized. As you stated, food stamps have a max benefit. In my lay opinion, corporate welfare blows away these small nickles and dimes which don't nearly add up as much

[seattlecyclone]

This is not by years worked it is about self sustenance.  It is about badassity and not relying on the hard work of others to pay your way if you are able bodied and can do it for yourself.

Let's talk about "self sustenance" for a moment. Let's look at just one area: groceries. From your posts I infer that you believe a low-income retiree who pays no taxes and uses food stamps to pay for their food is leeching off the public coffers, while a low-income retiree who pays no taxes and pays for their groceries out of their savings is practicing good self-sufficiency.

I would argue that they are both accepting public assistance, just in different amounts. The price of the food you buy is well below the true cost of growing that food and transporting it to market. There's a federal farm bill that provides a ton of direct subsidies to farmers that serve to reduce the price that people pay for food. The truck bringing your food to the supermarket travels on heavily subsidized roads. The laborers who pick crops often are paid so little that they themselves need some public assistance.

All this adds up. If you retired with an income low enough that you no longer have to pay taxes toward the farm bill or the highway system or Medicaid for your farm labor, you are most definitely accepting subsidies for your groceries. The difference between you and someone who takes food stamps is not a difference of kind, it is a difference of degree.

[gerardc]

The difference between you and someone who takes food stamps is not a difference of kind, it is a difference of degree.

When it comes down to it, there are different kinds of degree, e.g. a low degree, a medium degree, and a high degree. In fact, if you discretize degree, you can see that degree has multiple possible kinds! In other words, the difference between a "difference of kind" and a "difference of degree", is one of both kind, and degree.

[sol]

I would argue that they are both accepting public assistance, just in different amounts.

I stand by my original assessment.  Donald Trump certainly doesn't need any additional tax breaks or corporate welfare, and yet he takes far more in both than anyone on foodstamps ever could.  The rich know to exploit this system to maximum personal benefit, and most people think that this not only isn't immoral, it's praiseworthy.

It's borderline offensive to suggest that a low income person should voluntarily turn down social assistance programs, while billionaires get to write off their luxury yachts as business expenses.  Why is it only okay to subsidize rich people?  Are we still stuck on this ridiculously arcane notion that rich equals moral, or that hard working equals rich?  Because those things are all totally disconnected.

Seriously, of all the possible ethical conundrums you could potentially get your panties in a bunch about, it's law-abiding poor people who get the community's ire?  What about all of you who bought $600 blenders instead of buying vaccines for children in Africa?  What about investing in index funds that include evil corporations like oil and tobacco companies that lie and cheat while literally murdering people?  Why is a back-door-roth contribution a totally legit way to increase your tax refund, but the EITC isn't? 

I think some of you have some serious thinking to do.

[beltim]

Yes, my kids get free lunch.  No, we don't need it.  But no, I don't think there is anything wrong with being poor, and my kids go to school with the poor kids.

The thing that is not obvious is the free lunch and welfare is really a farm subsidy, it is not really to help kids or families in need, that is just a good talking point for politicians. I think most people have been tricked into thinking these programs are primarily to help people in need.

You and sol keep making this statement without any proof.  Would you like to supply any?

As I reminder, I showed the quoted text of the laws enacting SNAP and WIC showing that the purpose was to provide assistance for those who would not provide nutritious food without that assistance.

[beltim]

I would argue that they are both accepting public assistance, just in different amounts.

I stand by my original assessment.  Donald Trump certainly doesn't need any additional tax breaks or corporate welfare, and yet he takes far more in both than anyone on foodstamps ever could.  The rich know to exploit this system to maximum personal benefit, and most people think that this not only isn't immoral, it's praiseworthy.

It's borderline offensive to suggest that a low income person should voluntarily turn down social assistance programs, while billionaires get to write off their luxury yachts as business expenses.  Why is it only okay to subsidize rich people?  Are we still stuck on this ridiculously arcane notion that rich equals moral, or that hard working equals rich?  Because those things are all totally disconnected.

Seriously, of all the possible ethical conundrums you could potentially get your panties in a bunch about, it's law-abiding poor people who get the community's ire?  What about all of you who bought $600 blenders instead of buying vaccines for children in Africa?  What about investing in index funds that include evil corporations like oil and tobacco companies that lie and cheat while literally murdering people?  Why is a back-door-roth contribution a totally legit way to increase your tax refund, but the EITC isn't? 

I think some of you have some serious thinking to do.

This is a giant straw man argument, sol.  Show an example of what you're talking about here, before putting words in everyone's mouth.  You'll find that no one is making the argument that you're arguing against.

[EnjoyIt]

I would argue that they are both accepting public assistance, just in different amounts.

I stand by my original assessment.  Donald Trump certainly doesn't need any additional tax breaks or corporate welfare, and yet he takes far more in both than anyone on foodstamps ever could.  The rich know to exploit this system to maximum personal benefit, and most people think that this not only isn't immoral, it's praiseworthy.

It's borderline offensive to suggest that a low income person should voluntarily turn down social assistance programs, while billionaires get to write off their luxury yachts as business expenses.  Why is it only okay to subsidize rich people?  Are we still stuck on this ridiculously arcane notion that rich equals moral, or that hard working equals rich?  Because those things are all totally disconnected.

Seriously, of all the possible ethical conundrums you could potentially get your panties in a bunch about, it's law-abiding poor people who get the community's ire?  What about all of you who bought $600 blenders instead of buying vaccines for children in Africa?  What about investing in index funds that include evil corporations like oil and tobacco companies that lie and cheat while literally murdering people?  Why is a back-door-roth contribution a totally legit way to increase your tax refund, but the EITC isn't? 

I think some of you have some serious thinking to do.

@sol
Right, so a rich person like yourself should not be taking any subsidies...right?

I'm sure you were taught as a child that two wrongs don't make a right.  Just because someone is acting unethical doesn't mean everyone should.

[EnjoyIt]

This is not by years worked it is about self sustenance.  It is about badassity and not relying on the hard work of others to pay your way if you are able bodied and can do it for yourself.

Let's talk about "self sustenance" for a moment. Let's look at just one area: groceries. From your posts I infer that you believe a low-income retiree who pays no taxes and uses food stamps to pay for their food is leeching off the public coffers, while a low-income retiree who pays no taxes and pays for their groceries out of their savings is practicing good self-sufficiency.

I would argue that they are both accepting public assistance, just in different amounts. The price of the food you buy is well below the true cost of growing that food and transporting it to market. There's a federal farm bill that provides a ton of direct subsidies to farmers that serve to reduce the price that people pay for food. The truck bringing your food to the supermarket travels on heavily subsidized roads. The laborers who pick crops often are paid so little that they themselves need some public assistance.

All this adds up. If you retired with an income low enough that you no longer have to pay taxes toward the farm bill or the highway system or Medicaid for your farm labor, you are most definitely accepting subsidies for your groceries. The difference between you and someone who takes food stamps is not a difference of kind, it is a difference of degree.

You are looking for weird examples or round about ways of thinking. You want to rationalize for yourself your actions be my guest.  It is your life to live. If you think it is okay to take the resources of the needy because of some farmers in Ohio then that is your prerogative.   The question was asked by the OP and I answered it as my moral compass sees fit.  This is how I will live my life and how I hope to teach my offspring to live theirs.

[Cache_Stash]

Wow, I often disagree with EnjoyIt, but that's some of the most dishonest quoting I've seen on this site.  Read literally ten more words.

Okay, the next ten words talk about the intent of why able bodied person might choose not to work, but that doesn't change the literal (and I suspect unintentional) interpretation of what he said.

Do you think it's immoral to choose not to work for some reasons, but not for others?  Is my reason good enough for you? 

We all live in a society.  We all benefit from having an educated workforce, and national defense, and roads and internet and all of the benefits of living in an advanced society.  Am I required to work until my body gives out to enjoy those benefits, or not?

Perhaps you're simply missing his point.  He wasn't saying that it's immoral to not work.  He's saying it's immoral to have other people pay your way if you are capable of paying for your own way.

So if you scrape, save, invest and are responsible for yourself and practice a non-consumerist lifestyle from an early age and you accumulate enough wealth to retire early, it's immoral not to work if you get a government benefit. Yet those that didn't do the aforementioned get to have the benefit because they didn't do that?  Seems like a bit of a twisted view.

[Cache_Stash]

Does anyone really think that means based testing for ACA subsidy wasn't discussed when they passed O-Care?

Of course it was.  There is no doubt in my mind that there were discussions around all forms of who gets the subsidy and why and how to pay for it.

it's not in the law for a reason. (Reasons stated by myself, Sol and others)

[maizefolk]

This is not by years worked it is about self sustenance.  It is about badassity and not relying on the hard work of others to pay your way if you are able bodied and can do it for yourself.

Let's talk about "self sustenance" for a moment. Let's look at just one area: groceries. From your posts I infer that you believe a low-income retiree who pays no taxes and uses food stamps to pay for their food is leeching off the public coffers, while a low-income retiree who pays no taxes and pays for their groceries out of their savings is practicing good self-sufficiency.

I would argue that they are both accepting public assistance, just in different amounts. The price of the food you buy is well below the true cost of growing that food and transporting it to market. There's a federal farm bill that provides a ton of direct subsidies to farmers that serve to reduce the price that people pay for food. The truck bringing your food to the supermarket travels on heavily subsidized roads. The laborers who pick crops often are paid so little that they themselves need some public assistance.

All this adds up. If you retired with an income low enough that you no longer have to pay taxes toward the farm bill or the highway system or Medicaid for your farm labor, you are most definitely accepting subsidies for your groceries. The difference between you and someone who takes food stamps is not a difference of kind, it is a difference of degree.

This is a fascinating way to think about it. Let me see if I can propose ways to split government benefits into those of kind (qualitative) rather than those of degree (quantitative), although I don't necessarily disagree with your conclusion.

I'd propose there are three kinds of benefits which are qualitatively different:

A) Programs which apply -- or are at least available -- to everyone regardless of circumstances: roads, farm subsidies to keep food affordable, police protection from crime and military protection from foreign invasion.*

B) Programs which require people to meet certain criteria in order to receive them, but where anyone who qualifies can receive the benefit, spending just automatically goes up for our government as a whole: food stamps, medicaid, social security, ACA subsidies at the moment

C) Programs where there is a limited pot of money, so if too many people apply, no everyone gets it, or benefits are cut for everyone: these include medicaid's home and community-based (HCBS) waiver program for those with severe physical or intellectual disabilities where most states have a waiting list before people can receive services, section 8 housing assistance (waitlist), and ACA subsidies once total spending hits the 0.504% of GDP limit and additional enrollment starts triggering cuts to everyone else's subsidies.

*I believe most of these are the classic examples of "public goods" in the way that term is used by economists.

[Cache_Stash]

The thing with ethics is that we must be able to formulate clear rules/laws that would improve the issue, being substantially free of negative side effects. @sol

Lets forget for a minute about legislation and politics and lets talk about our own moral compass.  Someone with moral and ethical standards can make their own choices.  I believe and this is my belief that it is unethical to utilize public services designed to help the needy when one is able bodied and doesn't need those services themselves. This becomes even more perverse when those services or resources are limited.  I find it reprehensible when that same person votes to increase their own benefits by expecting others to work and pay for them.  Services that one has paid into do not count.

This isn't about straw men examples or anyone's particular needs, age or retirement horizons.  This is simply my view on morality.

I will not be going to a soup kitchen and taking food from the hungry, I will not be living in section 8 housing and taking shelter from the homeless, and I will not be on medicaid because I will be able to afford health insurance.  I will be glad to accept medicare when I am 65 and social security when I am 70 because I paid into it.  Everyone here can choose for themselves what is ethical, but don't expect others to respect you or your decision if you are taking limited resources from those who truly need them.

One Disclaimer: I find the healthcare industry in the US to be markedly flawed and can appreciate those who choose to game the system for their own benefit especially when there is so few if any better options.  Maybe it makes me a hypocrite but again these are just my views.

So someone who has been a spendy pants their whole life and wasted a lot of money should qualify because their income level qualifies too?  Given your logic, their moral compass is out of whack too.   They have a moral obligation to save and invest as much as possible and live a non-consumerist lifestyle so they won't need the help later in life that others need.

[Cache_Stash]

One of my experiences in life;  i worked for Hewitt Jackson doing taxes for a few years.  Guy comes in and gives me his w-2's.  Grand total of $7,000 for the year.  That's all of his income.  I asked him if he supported more than 50% of his daughters "needs" for the year. He said "yes".  i didn't believe him but I was obligated to comply with his answers.   He qualified for EIC and received a $1500 'Refund'.  After telling him of his fortunate situation his response was 'Great, I'm going to go out and buy a snowmobile'.

just a story of some people's moral compass.

[BTDretire]

  I read a few posts at the beginning, it seemed like there was no one that saw any ethical line about taking money from the government when they actually had large assets. Said another way, I'm going to structure my income to collect welfare.
  I was glad to see the thread take a turn

I also can understand a confusion when people say the say SS should be means tested. I recoil and say, wait a minute I paid into a system that was designed to pay me back in old age. I'm a bit unusual in that I have earned only slightly above median wage over my lifetime and just because I saved my money and the other 75% in my income group didn't doesn't mean I should be penalized.

Interesting.  You state two opposing views in the same post.  First, you state that you think people should be penalized for having large assets in that they should not take advantage of government provided benefits that they are qualified for based on income (note: income and assets are not the same thing).  Then you follow up to say that you don't think you should be penalized for a government provided benefit because you saved your money.

Thus the blurry line. And as I said, some don't even see a line.
I see SS being on the ethical side of the line and could justify it as others justify their positions. :-)
 Then their are those that could justify collecting on programs designed to help real poor people
while holding $1M.
 There are some arguments here that make me think I should have taken all the money available.
But we are doing fine, biggest life problem is spending too much time reading MMM! :-)
  EDIT to add,
Both my kids earned* state paid college tuition and I took it, (or they took it)
This one's tough, the money came from the poor peoples tax, (lottery tickets) and went to my kids
to go to college. That damn blurry line!

[jim555]

People have studied this issue of forcing people to draw down assets to qualify for programs.  It creates a cycle of dependency and the government doesn't want to discourage savings and wise choices.  This is why so many programs no longer have asset tests.

[Cache_Stash]

People have studied this issue of forcing people to draw down assets to qualify for programs.  It creates a cycle of dependency and the government doesn't want to discourage savings and wise choices.  This is why so many programs no longer have asset tests.

I agree completely!

[sol]

Show an example of what you're talking about here, before putting words in everyone's mouth.  You'll find that no one is making the argument that you're arguing against.

I thought this entire thread was an example of what I'm talking about.  Lots of people here think that you have a moral obligation to continue working if you are physically able.  I've previously linked to like four different people who said so in this very thread. 

Some of them are drawing a distinction (which I think is artificial) between taking handouts from "a program I've paid into" instead of "a program that benefits everyone" but that's just accounting trickery.  We've all paid into all of these programs (whether we use them or not), by virtue of our participation in the workforce.  Your taxes are used to fund every single government program out there, from invading Iraq to needle exchanges, and you can't honestly track which dollar goes to what purpose.  We live in a connected and interdependent society in which we all support each other, whether we like it or not.  No man is an island, no matter how much money he makes or how much tax he pays.  We're all dependent on the system for mutual support. 

Unless you're generating drinking water from a well you dug yourself, pumped with electricity generated by a bicycle you not only pedal yourself, but that you built yourself with ore you mined yourself.  It's ridiculous.

And this interdependence is a good thing!  It's what has allowed our society to flourish, by specialization of the workforce.  I could never grow and mill enough wheat to make all of the bread I eat, but I can buy bread for $2/loaf because someone else can.  This sort of efficiency is what has always allowed some class of society to live a life of leisure.  You think Trump's kids are milling their own flour instead of shopping and playing video games all day throughout their 20s and 30s?  I don't see the early retiree as any different from Trump's kids.  At least the retiree contributed something to society first, before being a full time leach.  Sorry I didn't mean leach, I meant "aristocrat".

Right, so a rich person like yourself should not be taking any subsidies...right?

I'm sure you were taught as a child that two wrongs don't make a right.  Just because someone is acting unethical doesn't mean everyone should.

I'm not suggesting that you should so something dishonest because someone else does something dishonest, I'm saying that neither of these things is dishonest.  We have a social safety net that applies to everyone, and it includes various tax breaks, nutrition assistance programs, educational credits, and social services like mental health counseling and unemployment services.  You are free to choose not to utilize any part of this system, but you should not be prohibited from using any part of it for which you qualify just because some stranger on the internet thinks you should stay away.

[maizefolk]

I thought this entire thread was an example of what I'm talking about.  Lots of people here think that you have a moral obligation to continue working if you are physically able.  I've previously linked to like four different people who said so in this very thread.

Would you mind linking to the post where you linked to the people you think are saying this? 

Because I'm reading the exact same thread and I'm not seeing lots of people saying that.

Edit: of course the simplest explanation is that we may have different definitions of what constitutes "lots."

[seattlecyclone]

The difference between you and someone who takes food stamps is not a difference of kind, it is a difference of degree.

When it comes down to it, there are different kinds of degree, e.g. a low degree, a medium degree, and a high degree. In fact, if you discretize degree, you can see that degree has multiple possible kinds! In other words, the difference between a "difference of kind" and a "difference of degree", is one of both kind, and degree.

Sure, you can discretize the amounts, but if you're discretizing them to draw a line between "ethical" and "unethical" you should have a principled reason for where you draw the line. Furthermore it's not clear to me that this amount can be perfectly aligned with acceptance of a particular benefit.

Going back to the food example, meat tends to be very highly subsidized because the inputs (commodity grains) are where much of our farm subsidies go. Most vegetables are subsidized much less by the farm bill, if at all. By my reckoning, a vegetarian who gets $1 of food stamps is being subsidized less than a meat eater who refuses food stamps. If the vegetarian is being criticized for unethically accepting government subsidies, should the meat eater not be criticized even more?

I'd propose there are three kinds of benefits which are qualitatively different:

A) Programs which apply -- or are at least available -- to everyone regardless of circumstances: roads, farm subsidies to keep food affordable, police protection from crime and military protection from foreign invasion.*

B) Programs which require people to meet certain criteria in order to receive them, but where anyone who qualifies can receive the benefit, spending just automatically goes up for our government as a whole: food stamps, medicaid, social security, ACA subsidies at the moment

C) Programs where there is a limited pot of money, so if too many people apply, no everyone gets it, or benefits are cut for everyone: these include medicaid's home and community-based (HCBS) waiver program for those with severe physical or intellectual disabilities where most states have a waiting list before people can receive services, section 8 housing assistance (waitlist), and ACA subsidies once total spending hits the 0.504% of GDP limit and additional enrollment starts triggering cuts to everyone else's subsidies.

*I believe most of these are the classic examples of "public goods" in the way that term is used by economists.

Interesting proposal. The difference between types A and B is pretty blurry to me. We're going back and forth about whether it's ethical to accept government subsidy when you're capable of choosing not to be subsidized. Assuming you're still capable of earning an income, you have just as much choice about paying your own way for "Type A" programs as you do about "Type B" programs: simply ensure that your tax liability is at least as much as your per-capita share of the government spending.

Put another way, I have a hard time drawing an ethical line between the action of filling out paperwork to accept a SNAP subsidy and the action of filling out paperwork to accept a low tax rate and all the subsidies that come along with that. Money is fungible.

[simonsez]

It is immoral to weasel your way into funds defined for the needy just because you are lazy or hate your job.  .....So, if your goal is to be lazy and leach [sic] of [sic] the system without contributing anything towards it then more power to you, but I for one will give you no respect for it.  I will denounce you even further if your goal is to increase the taxes on those who actually work and give you even more benefits.

I reject the notion that those who retire earlier than a standard age are lazy across the board.

I reject that broad notion also and never made that statement. Actually I think it is really bad ass for someone to understand the value of money and be able to self sustain themselves and their family without labor.  The key is sustain themselves and not mooch off of others.  I also clearly defined that paying into a system that you later use is not mooching so as to not confuse things like a pension or SS. 

In my view it is not right for someone who can easily work to retire early and live in section 8 housing, and get food subsidies while their neighbors have to work and pay for them.  I have my views on healthcare as well but they are a bit blurry because our system is flawed and therefor do not want to confuse the discussion with something so complex.

Okay, let me amend.  Someone who retires early AND takes advantage of a social program for low income people you would construe as lazy or a weasel or a leech.  A good chunk of this forum is dedicated to finding legal efficiencies to maximize finances along the path to financial independence and usually early retirement - it would seem that someone taking advantage of a low-income eligibility social program is even MORE badass with their financial discipline.  As others have said, would it be better to blow money throughout a person's 20s and 30s so they can be low income AND have no stash so that their utilization of social programs is more "moral" in the eyes of others?

Mooch off others?  Taxpayers pay into ALL systems - it goes far beyond a pension and SS.  Out of people who work and eventually retire after being financially independent - we all pay and we all mooch, just the times of doing each are variable.  Someone who FIREs (regardless of their program participation) likely was above average income and thus paid a good deal in taxes.

I guess at the end of the day, we all have our own moral compass and don't have to give a damn about what someone else thinks especially as it pertains to legal actions by a sub-population of an already small minority, i.e. FIRE'd folk that take direct (impossible to avoid the indirect even if one wanted to besides someone 100% off-the-grid and self-sustaining, but then you wouldn't need a stash in the first place) advantage of low income social programs.  Although I will happily admit that if enough people want to change a policy (e.g. eligibility for a social program) and the change is enacted, good for democracy.

Side note: in a satirical tangent, this convo reminds me of a portion of lyrics from my favorite Alan Parsons Project song - "I am the maker of rules, dealing with fools, I can cheat you blind"

[Erica]

Due to their father's untimely, early death, my children have always qualified for Social Security Survivors' Benefits. When all three were eligible, we collected the Family Max. And then my stepdaughter aged out of the program, and while the benefits went slightly up for the younger two, I could have qualified for the Caregiver's Benefit* at that point. The SSA worker helpfully explained and laid it out for me during my appointment. I elected not to take those funds because 1) I was working and making somewhat more than the $16,000 cap and 2) It doesn't seem the worst thing in the world for my kids to witness the value of work=$$ and 3) I didn't want to be 48 with few skills and earning ability. I've seen it happen. We have long exhausted the actual contributions of my late husband. At 37, he had worked and put into the system for just 15 years, not counting camp counselor and college work-study jobs.

I guess I do have some ethics but I'm certainly no saint. Some years back when rates were lower, I refinanced my mortgage to a 15 year loan from 30 to payoff coinciding with my youngest child's 18th birthday. Their benefits currently pay for 2/3 of the payment, as allowed. And trust me, there is plenty left over to cover utilities, their share of the family car use, groceries and extracurricular activities. So in effect, the government is paying a big chunk of the expense of a house I will own free and clear when my child rearing years are (almost) done. I'm certainly no saint. I can't take the deductions for my kids on my tax returns, but I do realize a fairly hefty benefit each month.

*Fun factoid: until the early 1970s, only mothers could receive these benefits. Ruth Bader Ginsberg, in her early career, represented a widowed father of a young child, taking his case to the Supreme Court. And won, changing the law.

No one disputes those types of situations, the are the epidemy of why these programs were created.
So sorry that happened, everyone's worst nightmare as a young mom but glad you could go on. Good job all the way around!

[TomTX]

If they had any sense, they would put a full asset test on any programs that are supposed to be solely for those in need.

Not if it costs more to perform the asset testing on everyone than letting a tiny number get benefits despite having assets.

I have this problem at work with contracts I oversee. It just isn't worth the time and effort to make our (full time, in-the-field) contractors keep meal receipts, scan them, have their supervisor review, total it up, add them to the invoice and send them in. It literally costs us more money to pay them to track receipts than if we just paid them a per diem at the cap of what they can get reimbursed for meals. Not even including the time/money/effort wasted on our side reviewing receipts, verifying totals to the penny, etc. Just the gross outlay to the contracting company is higher because our contracts people insist on meal receipts. Wasting dollars to chase pennies.

[TomTX]

Yes, it is unethical for an able bodied person to choose not to work, or work minimally so that the rest of society will pay their way.

I will denounce you even further if your goal is to increase the taxes on those who actually work and give you even more benefits.

Government pensions comes to mind.  In my state, lawmakers that voters elected subjected all workers (includes private sector workers) to a major tax hike to pay for the generous government pensions and sweet retirement healthcare benefits that have driven the state into massive debt.

What state? I know the Texas benefits ain't all that generous (especially if you don't spend an entire career and retire directly from service) and employees chuck in nearly 10% of every paycheck, while earning less than the private sector.

[gerardc]

This is not by years worked it is about self sustenance.  It is about badassity and not relying on the hard work of others to pay your way if you are able bodied and can do it for yourself.

Let's talk about "self sustenance" for a moment. Let's look at just one area: groceries. From your posts I infer that you believe a low-income retiree who pays no taxes and uses food stamps to pay for their food is leeching off the public coffers, while a low-income retiree who pays no taxes and pays for their groceries out of their savings is practicing good self-sufficiency.

I would argue that they are both accepting public assistance, just in different amounts. The price of the food you buy is well below the true cost of growing that food and transporting it to market. There's a federal farm bill that provides a ton of direct subsidies to farmers that serve to reduce the price that people pay for food. The truck bringing your food to the supermarket travels on heavily subsidized roads. The laborers who pick crops often are paid so little that they themselves need some public assistance.

All this adds up. If you retired with an income low enough that you no longer have to pay taxes toward the farm bill or the highway system or Medicaid for your farm labor, you are most definitely accepting subsidies for your groceries. The difference between you and someone who takes food stamps is not a difference of kind, it is a difference of degree.

This is a fascinating way to think about it. Let me see if I can propose ways to split government benefits into those of kind (qualitative) rather than those of degree (quantitative), although I don't necessarily disagree with your conclusion.

I'd propose there are three kinds of benefits which are qualitatively different:

A) Programs which apply -- or are at least available -- to everyone regardless of circumstances: roads, farm subsidies to keep food affordable, police protection from crime and military protection from foreign invasion.*

B) Programs which require people to meet certain criteria in order to receive them, but where anyone who qualifies can receive the benefit, spending just automatically goes up for our government as a whole: food stamps, medicaid, social security, ACA subsidies at the moment

C) Programs where there is a limited pot of money, so if too many people apply, no everyone gets it, or benefits are cut for everyone: these include medicaid's home and community-based (HCBS) waiver program for those with severe physical or intellectual disabilities where most states have a waiting list before people can receive services, section 8 housing assistance (waitlist), and ACA subsidies once total spending hits the 0.504% of GDP limit and additional enrollment starts triggering cuts to everyone else's subsidies.

*I believe most of these are the classic examples of "public goods" in the way that term is used by economists.

Nice but how do you classify someone who gets a $40k tax credit by retiring from their $100k/year job and then having to pay no tax? This benefit is certainly not applicable to everybody. How is it different than someone who gets ACA tax credits (for mandatory coverage) or child credits after retiring?

[beltim]

If they had any sense, they would put a full asset test on any programs that are supposed to be solely for those in need.

Not if it costs more to perform the asset testing on everyone than letting a tiny number get benefits despite having assets.

I have this problem at work with contracts I oversee. It just isn't worth the time and effort to make our (full time, in-the-field) contractors keep meal receipts, scan them, have their supervisor review, total it up, add them to the invoice and send them in. It literally costs us more money to pay them to track receipts than if we just paid them a per diem at the cap of what they can get reimbursed for meals. Not even including the time/money/effort wasted on our side reviewing receipts, verifying totals to the penny, etc. Just the gross outlay to the contracting company is higher because our contracts people insist on meal receipts. Wasting dollars to chase pennies.

You don't have to test everyone.  In fact, I would strongly oppose testing everyone.  But you could audit a small percentage (works reasonably well for the IRS), or just have penalties if someone is cheating the system and they find out another way (like FBAR).