Social Security Expansion

[HeadedWest2029]

I'm going to say upfront I have zero interest in talking the politics around this, just posting the proposed change to social security because it would have significant impact on FIRE

https://www.cnbc.com/2019/02/22/social-security-expansion-bill-poised-to-gain-traction-in-congress.html

It would potentially fix the year (2031-2034) projected 21% shortfall with social security.  Plus, potentially increase the benefit (at the expense of higher taxes during accumulation).  I usually test cfiresim with 75% of expected benefit or no social security for the most conservative planning. 

[Arbitrage]

I saw that article (or a similar one) this weekend, but I'm assuming it's moot for now.  "Traction in Congress" would just be in the House.  Is there a nonzero chance of it getting past either the Senate or President? 

[six-car-habit]

 So if i read it correctly, work related income under ~ $133,000 would be subject to tax [ as currently ] , and work income over $ 400,000 also. - But the amount beween those two figures is not taxable.
   
 Thanks for the link , good reading.

[GetItRight]

So a tax increase? Maybe I'm missing how this has any effect other than some delay to FI date on account of paying more taxes. I do not factor social security or any other welfare programs into my retirement numbers. I don't expect to receive any welfare but if I do I'll just account for it under taxes as a refund.

[HeadedWest2029]

I mean, if you make more than $400k a year this is bad news, but anyone making more than $400k should be able to FIRE regardless in short order.  Moving the payroll tax gradually from 12.4 to 14.8% over the next 24 years probably doesn't move the meter much in terms of reaching FIRE for anyone making a more average salary with most folks hoping to FIRE in less than 10 years (plus, offset by increasing the SS benefits by a similar amount).  However, I'd argue this does impact FIRE if there's more certainty on SS solvency.  Of course, as shared earlier I think this is just an exercise in what ifs.  It won't get approved, and would be attacked for years if it somehow does get pushed through in the future.  Still, I'd hardly call legislation like this meaningless or of no impact to FIRE.  Having more certainty in SS (if possible) would make cfiresim much better at projecting.  For instance, 4% WR on a 50-60 yr retirement is just north of 80%.  You plug in SS and the success rate is 100%. 

[mm1970]

So a tax increase? Maybe I'm missing how this has any effect other than some delay to FI date on account of paying more taxes. I do not factor social security or any other welfare programs into my retirement numbers. I don't expect to receive any welfare but if I do I'll just account for it under taxes as a refund.

Well, if the $ amount is over $400k, not gonna affect me.  I already don't cap out on SS anyway.

The effect would be to reduce the 21% shortfall...RIGHT when spouse and I hit retirement age.  Because I'm sure, if there's a shortfall - there will be some sort of means testing and we'll lose out.  We don't exactly plan on getting SS anyway.  BUT if it's there, I want it.