PLS 347-01

Social Security cont’d

  • 1983 Reagan
    • retirement age increased from 65 to 67
    • Medicare contribution cap eliminated
    • SSI newly taxable
  • 1988 Reagan
    • IRA restricted
    • Roth IRA
      • 10% penalty for withdrawal
      • $5k maximum per year to age 59
      • $10k after age 59
  • 1990 Moynihan
    • earn over $33k, 85% of SSI benefits are taxable
  • 2006 Bush/McCain
    • proposed private accounts
    • market exposure
    • fees
    • reduces “trust fund”
    • move from defined benefit to defined contribution
      • public sector: 403(b)
      • equivalent to 401(k) in private sector
  • 2011 Obama proposal?
    • keep payroll tax contribution (6.25%) at 3.1%?
    • raise age to 70?
    • decrease benefits?
    • raise income cap on contributions (now $107k)
    • cut COLA
    • means testing
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