Newly retired couples may lose $16,900/year in Social Security in 2033 • Hacker News Board

Re: Newly retired couples may lose $16,900/year in Social Security in 2033

#41

Post by phil21 » Sat, Jul 18, 2026, 4:05 AM UTC

Grombobulous wrote: post #26

bronco21016 wrote: post #16

Earlier quoted context omitted.

It doesn’t even have to be raiding of accounts. They can modify rules of RMD to drive tax revenue or even entirely change the rules of 401k withdrawals such that if your balance is over a certain amount you pay an extra tax. I don’t think it’s far fetched that 401ks of a certain value start to experience penalties to make up shortfalls. After all, the whole reason they would need to do this is because they failed on…

It’s far-fetched for a number of reasons: 1. It upsets the most influential voting demographics. I struggle to find any national policy implemented in the last few decades that has truly disrupted the kind of upper middle class voter that has a lot of money in a 401k. 2. If you tax 401ks higher than long term capital gains tax then higher earners just won’t use 401ks/IRAs. 3. 401ks and IRAs are completely detached fr…

> I struggle to find any national policy implemented in the last few decades that has truly disrupted the kind of upper middle class voter that has a lot of money in a 401k.

Capping SALT deductions was a big one. For upper middle class folks in HCOL cities this is tens of thousands of dollars of additional taxes being paid.

> If you tax 401ks higher than long term capital gains tax then higher earners just won’t use 401ks/IRAs.

How does that help those who funded a 401k/IRA during their working career? Sure, new earners won't use them but that doesn't help you very much if you're retired. I also don't think it would be more than long term capital gains, it would first start as a very small "reasonable" tax on the top "rich folks" accounts and slide upwards from there like nearly all taxes do.

Totally agree on points 3 and 5, but I absolutely expect my tax advantaged retirement accounts to become less advantaged than they are today by the time I'm drawing on them. You have to collect revenue from where the money is, and with all the talk about "wealth taxes" I predict will eventually hit 401k/IRA accounts as well. I bet it will be politically very popular to add a 5% tax on withdrawals from "millionaire" retirement accounts. Most folks have very little concern over the upper middle classes $3m brokerage account being taxed regardless of account type.

Re: Newly retired couples may lose $16,900/year in Social Security in 2033

#42

Post by toast0 » Sat, Jul 18, 2026, 4:08 AM UTC

paytonjjones wrote: post #35

phil21 wrote: post #34

Earlier quoted context omitted.

Social Security will not run out. It simply won't be taxing current workers enough to pay current retirees. This demographic problem was easily foreseen which is why there is a trust fund to "run out" to begin with. For quite some time social security operated in a surplus since there were many workers per retiree collecting benefits. Now we are around 3:1 workers:retirees and expected to drop to something like 2.2:1…

Is there any entitlements program that's not politically impossible to repeal? Taking away "free stuff", especially once people have come to rely on it, is a political nightmare no matter the structure.

> Is there any entitlements program that's not politically impossible to repeal?

> Taking away "free stuff", especially once people have come to rely on it, is a political nightmare no matter the structure.

Entitlements, namely Social Security, Medicare, VA benefits are (for the most part[1]) not "free stuff", they're programs that people paid into and so they're entitled to the benefits.

When you have a program where you say "work for 10 years and you'll get something when you hit retirement age" or "be in the military and qualify and we'll take care of you in various ways", taking that away should be a political nightmare. That said, the sooner you make changes, the smaller they have to be, and we're running out of time.

[1] There's some stuff in social security for people who have been permanently disabled since before they could work and establish eligibility.

Re: Newly retired couples may lose $16,900/year in Social Security in 2033

#43

Post by Terr_ » Sat, Jul 18, 2026, 4:11 AM UTC

exabrial wrote: post #22

I wish i could just opt out of social security and invest the money myself. I'd pay the long term cap gains tax if this was an option, and I'd come out way ahead. The federal government can only mishandle money. Maybe we need two systems: 1. You may move to be a certified responsible saver. You inherit all risk. But you opt out of the taxes. You must prove retirements assets are being contributed to. 2. Mandatory sav…

> I wish i could just opt out of social security and invest the money myself.

I'd like to emphasize that SS/OASDI is not an investment program in the first place, it is an insurance program. The two kinds cannot be directly compared, and have very different mechanics and features. You might already have known that, but the misconception is distressingly common in America--which I blame on misinformation from big-bank lobbyists.

> You inherit all risk. But you opt out of the taxes. You must prove retirements assets are being contributed to.

Is inheriting all the risk even possible? Suppose someone signs some dark legal contract in blood, like: "I refuse all public assistance, let me die in a ditch because I shall make my own fate."

What happens if they commit crime (perhaps out of desperation) and are sentenced to time in jail? Now there are three outcomes which all suck differently:

1. The government caves and supports them anyway with taxpayers funding their jail-food and jail-shelter. This distorts the original incentives, and recidivism is going to be a bitch.

2. They are let go, to commit more crimes? Locals won't stand for that.

3. They are indirectly executed by being forcibly exiled to a walled-off isolated place with no food and no shelter, as their families (quite reasonably) cry about the brutality on TV.

Then there's the issue of dependents, and mechanisms for fraud, and both of those are much bigger cans of worms than I want to open in this edit...

Re: Newly retired couples may lose $16,900/year in Social Security in 2033

#44

Post by phil21 » Sat, Jul 18, 2026, 4:12 AM UTC

mgh95 wrote: post #40

wahern wrote: post #29

Earlier quoted context omitted.

The narrative and word choices are deliberate. Republicans want to get rid of Social Security. So the narrative is Social Security is fundamentally broken, and it can be silently ended through passive negligence without having to take responsibility for ending a popular entitlement. No matter that it was created with the expectation that Congress would periodically adjust the retirement age to keep it solvent, and th…

I don't quite understand what you mean the narrative here -- cash flow going negative is a fact. Attempts to discuss the COLA issues in 1970s-1980s [1] have failed. Attempts in the early aughts to divert funds by Bush Jr. [2] (long before I could even vote) were rejected in part because of skepticism stock returns would not perform well. And even today where we have additional tax breaks for seniors under the OBBA. T…

> This has been a long running "heads we win tails you lose" with the older generations toying with the future dating back ~50+ years

Yep. I call it the old eating their young. Society cannot exist in such a condition for very long. They will collect full benefits while paying in relatively less, and die before it becomes their problem.

And while Social Security is the big one everyone talks about, there are a whole lot of state and municipal level public pensions that are exceedingly underfunded. These come due at pretty much the same time. The problem was the same with those - workers at the time did not want to pay more taxes but wanted to enjoy the benefits that those current pensioners provided them. They borrowed from the future generations to do it.

Re: Newly retired couples may lose $16,900/year in Social Security in 2033

#45

Post by bluefirebrand » Sat, Jul 18, 2026, 4:17 AM UTC

Grombobulous wrote: post #9

jauntywundrkind wrote: post #2

I've known I can't really rely on Social Security to exist when I retire, in any notable form, but man, this is so dark. And it's just a start. (Edit: I'm not certain either way! But it seems like too great a risk to rely on. And the prognosis seems not great! I have heard for decades needs serious help, and nothing seems to change. More broadly, with a few exceptions, I've seen overwhelmingly obstructionism and dest…

This isn’t what my financial advisor told me and I doubt many others would, either. Social Security is almost certainly going to exist in some form. The question is how much retirees will get from it and how that compares to the cost of living. Excessive cynicism is often dangerous because it converts the mundanely pleasant reality into an enthralling doom and gloom scenario. Of course, I’m not really saying that eve…

> the mundanely pleasant reality

There are a shocking number of people who do not experience anything resembling a mundanely pleasant reality

Those of us who do are extremely fortunate

Re: Newly retired couples may lose $16,900/year in Social Security in 2033

#46

Post by seanmcdirmid » Sat, Jul 18, 2026, 4:34 AM UTC

rpdillon wrote: post #15

seanmcdirmid wrote: post #6

Earlier quoted context omitted.

The math has been constant, if you were reading reports saying it would hit the breaking point in the 90s or 2000s, you are either misremembering, confusing it with something else, or willfully distorting facts. Anyways, if you make claims like that you should take advantage of internet linking features and just provide your evidence directly vs a “I remember reading” anecdote. There was a point where social security…

Exactly this. The date has been very consistent for many years, and the math checks out. 2033 unless something significant changes.

The date used to be later but COVID drove it forward a bit since they got rid of contributions for some people for a couple of years I think? Generous cost of living increases have also caused the date to creep forward, but I don’t think it has ever moved backward.

Re: Newly retired couples may lose $16,900/year in Social Security in 2033

#47

Post by [deleted] » Sat, Jul 18, 2026, 4:34 AM UTC

phil21 wrote: post #36

paytonjjones wrote: post #35

Earlier quoted context omitted.

Is there any entitlements program that's not politically impossible to repeal? Taking away "free stuff", especially once people have come to rely on it, is a political nightmare no matter the structure.

As we saw with the whole DOGE fiasco, a substantial portion of the population would love to tear down current entitlement programs. Social Security is (or was?) unique in that it was politically untouchable by either side of the aisle. No one was telling anyone they were running for office to cut social security benefits. Plenty run to say they will cut welfare spending.

[deleted]

Re: Newly retired couples may lose $16,900/year in Social Security in 2033

#48

Post by [deleted] » Sat, Jul 18, 2026, 4:35 AM UTC

toast0 wrote: post #42

paytonjjones wrote: post #35

Earlier quoted context omitted.

Is there any entitlements program that's not politically impossible to repeal? Taking away "free stuff", especially once people have come to rely on it, is a political nightmare no matter the structure.

> Is there any entitlements program that's not politically impossible to repeal? > Taking away "free stuff", especially once people have come to rely on it, is a political nightmare no matter the structure. Entitlements, namely Social Security, Medicare, VA benefits are (for the most part[1]) not "free stuff", they're programs that people paid into and so they're entitled to the benefits. When you have a program wher…

[deleted]

Re: Newly retired couples may lose $16,900/year in Social Security in 2033

#49

Post by seanmcdirmid » Sat, Jul 18, 2026, 4:39 AM UTC

secabeen wrote: post #10

seanmcdirmid wrote: post #5

Earlier quoted context omitted.

If nothing is done it’s a mathematical fact. The problem is that there are no plans to do anything yet, each administration and congress seeing it as too politically volatile to deal with, which means we will have a last minute suboptimal solution. Obviously there are solutions. Maybe if America survives that long we might see one implemented.

Sure, if nothing is done. The trust fund redeeming its bonds is little different than the congress appropriating money for Social Security benefits; both come out of the current revenue of the USG. When the trust fund no longer has any bonds to redeem, there's nothing stopping congress from continuing to transfer money into Social Security to pay benefits at existing levels. They'll just have to vote on it rather tha…

2033 is when all the bonds should have been redeemed and there is no money left to redeem, just contributions coming in and more payments going out. And yes, congress can do a straight injection from the general fund, it’s just even more deficit spending at that point.

Re: Newly retired couples may lose $16,900/year in Social Security in 2033

#50

Post by seanmcdirmid » Sat, Jul 18, 2026, 4:41 AM UTC

bluefirebrand wrote: post #31

adam_arthur wrote: post #30

Earlier quoted context omitted.

The hole can be filled overnight by just raising the retirement age. And if you normalize for longer lifespans, it's perfectly reasonable.

People are living longer sure, but are they fit for work longer? Or just living longer with dementia and stuff?

Ya, there are wide different outcomes to consider with respect to health. Also people should really be retiring earlier, not later, as automation picks up. The way things are progressing right now are just whack.