Unlike another recent … uhhhh post from a blogger who shall go un-named (v-queen) – this CEO is female.
IBC meet Claire Chambers – CEO of Journelle.
What’s Journelle.. Well in Claire’s words it’s a “Lingerie shop for women who have outgrown Victoria Secret”. Whatever the hell that means. Not that anyone cares anyway, when you look like Claire
I don’t look over my checking account statement that closely. I keep a healthy balance and don’t write many checks. Most of my payments are on line and I rarely have to use my debit card (fuck you Sam’s Club). They include my lockbox at no charge and I just assume my bank makes enough interest off my money they don’t need to try and fuck me with any hidden little fees.
Wrong.
I had just read this article and decided to dig out my most recent statement. Low and behold I am getting charged $2 a month for getting a paper statement. I’m not sure how long I’ve been getting dinged for this, but am planning to give them a call Monday.
It’s not the $2 – it’s the fucking principle.
For those of you not up to clicking the link, or wondering if it will give you a typical Yahoo Page Not Found Error – here’s the other fees:
1. Early account closure fee.
Many banks require you to have your account open for a certain period of time before closing it, or else you get slapped with a fee. BB&T and Citibank charge a $25 fee if your account is closed within 90 days of opening it. Meanwhile, U.S. Bank, HSBC, and PNC Bank charge a $25 fee to close an account that has been open for fewer than 180 days. “There’s significant cost to opening and closing an account, and the banks are trying to recover some of their costs,” Feddis says.
Odysseas Papadimitriou, chief executive of credit card comparison website Cardhub.com, adds that banks impose early account closure fees to dissuade you from closing your account at all. “It’s a way to deter people from closing their accounts, because after 90 days they’re less likely to leave,” he explains.
To avoid that early closure fee, you can keep your account open past the minimum period.
2. Monthly or annual maintenance fee.
A number of banks charge monthly or annual maintenance fees for certain accounts. For example, a regular checking account at Bank of America comes with a $12 monthly maintenance fee. However, if you fulfill any number of requirements, such as maintain a minimum daily balance in checking of $750 or more, you can get the fee waived.
Check your bank’s policy to see if you’re being charged a maintenance fee and to find out ways to avoid it.
3. Minimum balance fee.
Some banks charge a monthly fee for customers with low account balances. For example, Citibank customers who have the bank’s EZ Checking account are charged $15 a month if they don’t carry a minimum balance of $6,000.
“We’re in an environment of low interest rates, which means that the interest banks earn on their customers’ money–especially the money they get on accounts with low balances–doesn’t cover the costs of providing the account,” Feddis says. She says that it costs banks on average about $300 a year to provide checking account services, so enforcing minimum balance fees is one way for banks to recoup that cost.
To avoid a minimum balance fee, review your bank’s policy to see what amount you have to maintain.
4. Returned deposit fee.
If you deposit a check that bounces, your bank could charge a fee. Customers of Sovereign Bank are charged a $15 fee ($25 for an international check) when a check that’s been deposited is returned unpaid. Similarly, Bank of America charges a $12 fee ($15 for international checks) for a returned deposit item.
A majority of big banks charge a returned deposit fee, but many small banks and credit unions don’t tag on this fee, so it might be worth looking into changing where you bank if you think you’re going to encounter a lot of bounced checks.
5. Foreign transaction fee.
If you buy something from another country with a U.S. credit card, the bank may charge you a conversion fee. For example, Bank of America generally charges a 3 percent fee on foreign purchases used with its credit cards. So for an $80 purchase, the bank charges a $2.40 transaction fee. With Bank of America, it’s also important to note that even if a transaction is in U.S. dollars, the bank still applies a foreign transaction fee if it’s processed outside the U.S.
“There’s a greater potential for fraud with international transactions, so it costs the banks money to protect the consumer,” explains Feddis.
If you want to avoid this fee, you can use any number of cards that don’t charge for foreign transactions, such as Capital One’s Venture and Platinum Prestige cards or Chase’s Sapphire Preferred card.
6. Lost debit card fee
Accidentally misplaced your debit card? It’ll cost you. Bank of America charges $5 to get a replacement debit card; PNC charges $7.50.
“There is a cost [for the bank] to providing a new debit card, and it’s not just the manufacturing,” Feddis says. “Banks also pay for the mailing and the fraud protection systems connected to the card.”
In addition, some banks charge extra for rush orders, like PNC’s $25 expedited delivery fee for a new debit card. To lessen the blow, you don’t have to request expedited delivery on your new card–you can simply use cash for payments or a different card in your wallet until the new one arrives.
7. Paper statement fee
If online banking isn’t your thing, receiving paper statements could be costing you. For most TD Bank accounts, it costs an extra dollar per month to receive paper statements. Meanwhile, U.S. Bank charges customers who opt for paper statements up to $2 a month on some checking accounts. Such paper statements are expensive to produce and they’re not environmentally friendly, so banks try to dissuade people from getting them, Feddis says.
“The price of postage keeps going up, and it costs banks more than $1 to send a paper statement,” Papadimitriou says. “If they do that once a month, that’s a lot of money going out.”
If you’re being charged for paper statements, you have the option of searching for banks that don’t charge the fee or looking into an account that enables you to bank entirely electronically.
8. Redeeming rewards points fee
A few banks have begun charging customers a fee for redeeming the points they’ve accumulated on their rewards cards. At Wells Fargo, for example, you have to pay a $24 processing fee for each airline ticket issued through the bank’s rewards vendor. However, this type of fee isn’t particularly common, Feddis says. Nonetheless, if you want to avoid paying for using your rewards points, Feddis says you need to shop around and compare various banks’ policies.
9. Returned mail fee
When you move, a mail forwarding request with your post office may not be good enough for your bank. Many banks print “return service requested” on their envelopes, so your mail gets sent back to the bank if it can’t be delivered, upon which a number of banks charge a fee. U.S. Bank, for example, charges a $5 fee for the second and subsequent months that a statement is undeliverable. Many regional banks also charge a fee for this: FirstBank & Trust, Bank of Arkansas, and Bank of Oklahoma charge undeliverable mail fees of $15.
“There’s a potential for identity theft with returned mail, so it triggers other actions on the part of the bank that cost money,” Feddis says.
These fees can add up, so make sure you update your address with your bank upon moving.
10. Human teller fee
Some banks even charge a fee for using a person to handle certain transactions. For a Bank of America checking account, there’s no fee when you choose online paperless statements and make your deposits and withdrawals online or with an ATM. However, if you use a teller, you have to pay the monthly maintenance fee of $8.95. If you’d like the ability to consult a teller, seek out bank accounts that don’t levy this charge. “It’s easily avoided by choosing an account that aligns with your behavior,” Feddis says.
According to this article in the NY Times, Supermarket chains like Kroger, Safeway and Ahold (Stop ‘n Shop) are experimenting with with personalized pricing for their customers.
What’s personalized pricing? It’s providing different pricing to customers based on their specific buying habits like this:
At a Safeway in Denver, a 24-pack of Refreshe bottled water costs $2.71 for Jennie Sanford, a project manager. For Emily Vanek, a blogger, the price is $3.69.
The difference? The vast shopping data Safeway maintains on both women through its loyalty card program. Ms. Sanford has a history of buying Refreshe brand products, but not its bottled water, while Ms. Vanek, a Smartwater partisan, said she was unlikely to try Refreshe.
So Ms. Sanford gets the nudge to put another Refreshe product into her grocery cart, with the hope that she will keep buying it, and increase the company’s sales of bottled water. A Safeway Web site shows her the lower price, which is applied when she swipes her loyalty card at checkout.
Safeway added the personalization program to its stores this summer. For now, it is creating personalized offers, but it says it has the capability to adjust prices based on shoppers’ habits and may add that feature.
Basically it’s “on the fly” coupons targeting customers likely to try a specific product.
So what’s the downside?
If your a regular customer of a brand or product, say Tide for example, you may have to pay more for a box of the detergent than someone buying the product at the exact same moment. The pricing model is expected to extend to other grocery chains — and over time could displace standardized price tags.
Joseph Turow, a professor at the Annenberg School for Communication at the University of Pennsylvania, said shoppers should be cautious. The pricing at grocery stores and other retailers is not transparent enough to give consumers any real power or choice, he said, and “there’s a sense of fairness that’s derailed here.”
In a 2005 survey conducted by Professor Turow, most adult respondents did not know that retailers could legally charge different prices, and more than 90 percent said they would dislike it if their supermarket charged different prices to different people within the same hour.
Retailers say the groundwork has been laid with individualized coupons, which are resoundingly popular. Sites like Amazon have also made consumers comfortable with custom offers and varying pricing, they say
So if personalized pricing is the future for retail, how can you win?
Some shoppers are already figuring out ways to beat the system. Two women, both of whom live in the Denver area, were among the first customers that Safeway asked to test its pricing program in return for a $50 gift card.
Like any good shoppers, these ladies are already starting to game the system: One noticed that she received cheaper prices on ground coffee when she alternated between Starbucks and Dunkin’ Donuts brands rather than buying just Starbucks.
Either way wih technology , retailers are trying to get the shirt of your back
Read a very entertaining thread at Tradertalk. It started out about sentiment but evolved (disintegrated?) into rationalizations.
The crux of it is whenever a trader is on the wrong side of the charts… ..there must be a reason.
The Bear Rationalization: Rallies are a result of Fed, ECB, QE, POMO, Repo, Twist, Dollar debasement, Goldman. Any temporary down-drafts in the markets are heralded as the return of free markets and vindication of old school TA, only to followed by cries of manipulation when the reversal occurs. Even on a technical basis most rallies are either on fumes, breadth not confirming, volume MCO lagging, VIX too low, too much complacency, overextended/parabolic, divergent, dangerously topping, three peaks and domed house, hindenburg omen, imminent pole flip, dangerous planetary combinations, et al. And when the technicals are too strong, the fundamentals which are in a perpetual gutter, are always there to help. So there is always a reason to suspect any up move in the markets
The Bull Rationalization: blaming the Fed or the ECB for not doing enough when there are major sell offs or crashes. There’s Naked shorting and no regulations and it’s all a rigged game by the big boyz. And, we can also throw in excuses like the “Fat Finger” and computer glitches and flash crashes. All sell offs are buying opportunities because there’s a lot of money on the sideline, stocks are cheap, it’s a market of stocks, I’m a long term investor, and the return on T-bills won’t beat inflation.
A really good trader named Jess Livermore once said “when the facts change, I change my mind”
Sage advice indeud
For those of you who travel, seeing the words “We Know About This” scrawled on the damaged wing of your aircraft, as you taxi down the runway probably sounds like something from “the Twilight Zone”
But that’s just what happened to a passenger on this Alaska Air flight bound for Seattle from Burbank:
According to Alaska Air the flight was perfectly safe…
Alaska Airlines spokeswoman Bobbie Egan said that the photo showed a permanent approved trim repair to the corner flap of the right wing, and that the plane was absolutely safe to fly.
“The small indent shown in the photo was reported multiple times in multiple flight crew reports. A maintenance technician wrote on the wing to acknowledge to flight crews that the repair was made, documented and that the plane was airworthy,” she said.
Egan said the airline immediately removed the message from the wing upon hearing about it, and apologized for any alarm it may have caused.
uhh… gee… Thanks Alaska Air (ALK)
Cue the scary music………
In the No Shit Sherlock category AP reports Social Security “Not the deal it once was” for workers.
People retiring today are part of the first generation of workers who have paid more in Social Security taxes during their careers than they will receive in benefits after they retire. It’s a historic shift that will only get worse for future retirees, according to an analysis by The Associated Press
If you retired in 1960, you could expect to get back seven times more in benefits than you paid in Social Security taxes, and more if you were a low-income worker, as long you made it to age 78 for men and 81 for women.
As recently as 1985, workers at every income level could retire and expect to get more in benefits than they paid in Social Security taxes, though they didn’t do quite as well as their parents and grandparents.
Not anymore.
A married couple retiring last year after both spouses earned average lifetime wages paid about $598,000 in Social Security taxes during their careers. They can expect to collect about $556,000 in benefits, if the man lives to 82 and the woman lives to 85, according to a 2011 study by the Urban Institute, a Washington think tank.
Social Security benefits are progressive, so most low-income workers retiring today still will get slightly more in benefits than they paid in taxes. Most high-income workers started getting less in benefits than they paid in taxes in the 1990s, according to data from the Social Security Administration.
Obviously all of us that really counted on a Govt. backed Ponzi Scheme to fund our lavish retirement are both shocked and saddened at this sudden and unforeseen turn of events:
The trustees who oversee Social Security say its funds, which have been built up over the past 30 years with surplus payroll taxes, will run dry in 2033 unless Congress acts. At that point, payroll taxes would provide enough revenue each year to pay about 75 percent of benefits.
To cover the shortfall, future retirees probably will have to pay higher taxes while they are working, accept lower benefits after they retire, or some combination of both.
“Future generations are going to do worse because either they are going to get fewer benefits or they are going to pay higher taxes,” said Eugene Steuerle, a former Treasury official who has studied the issue as a fellow at the Urban Institute.
So how can we game the system…. why the answer is perfectly clear…..
Live longer. Benefit estimates are based on life expectancy. For those turning 65 this year, Social Security expects women to live 20 more years and men to live 17.8 more
Because that is of course something we have total control over. It also reminds me of this joke:
Why do husbands die sooner then their wives?
Because they want to
Unlike another recent … uhhhh post from a blogger who shall go un-named (v-queen) – this CEO is female.
IBC meet Claire Chambers – CEO of Journelle.
What’s Journelle.. Well in Claire’s words it’s a “Lingerie shop for women who have outgrown Victoria Secret”. Whatever the hell that means. Not that anyone cares anyway, when you look like Claire
I don’t look over my checking account statement that closely. I keep a healthy balance and don’t write many checks. Most of my payments are on line and I rarely have to use my debit card (fuck you Sam’s Club). They include my lockbox at no charge and I just assume my bank makes enough interest off my money they don’t need to try and fuck me with any hidden little fees.
Wrong.
I had just read this article and decided to dig out my most recent statement. Low and behold I am getting charged $2 a month for getting a paper statement. I’m not sure how long I’ve been getting dinged for this, but am planning to give them a call Monday.
It’s not the $2 – it’s the fucking principle.
For those of you not up to clicking the link, or wondering if it will give you a typical Yahoo Page Not Found Error – here’s the other fees:
1. Early account closure fee.
Many banks require you to have your account open for a certain period of time before closing it, or else you get slapped with a fee. BB&T and Citibank charge a $25 fee if your account is closed within 90 days of opening it. Meanwhile, U.S. Bank, HSBC, and PNC Bank charge a $25 fee to close an account that has been open for fewer than 180 days. “There’s significant cost to opening and closing an account, and the banks are trying to recover some of their costs,” Feddis says.
Odysseas Papadimitriou, chief executive of credit card comparison website Cardhub.com, adds that banks impose early account closure fees to dissuade you from closing your account at all. “It’s a way to deter people from closing their accounts, because after 90 days they’re less likely to leave,” he explains.
To avoid that early closure fee, you can keep your account open past the minimum period.
2. Monthly or annual maintenance fee.
A number of banks charge monthly or annual maintenance fees for certain accounts. For example, a regular checking account at Bank of America comes with a $12 monthly maintenance fee. However, if you fulfill any number of requirements, such as maintain a minimum daily balance in checking of $750 or more, you can get the fee waived.
Check your bank’s policy to see if you’re being charged a maintenance fee and to find out ways to avoid it.
3. Minimum balance fee.
Some banks charge a monthly fee for customers with low account balances. For example, Citibank customers who have the bank’s EZ Checking account are charged $15 a month if they don’t carry a minimum balance of $6,000.
“We’re in an environment of low interest rates, which means that the interest banks earn on their customers’ money–especially the money they get on accounts with low balances–doesn’t cover the costs of providing the account,” Feddis says. She says that it costs banks on average about $300 a year to provide checking account services, so enforcing minimum balance fees is one way for banks to recoup that cost.
To avoid a minimum balance fee, review your bank’s policy to see what amount you have to maintain.
4. Returned deposit fee.
If you deposit a check that bounces, your bank could charge a fee. Customers of Sovereign Bank are charged a $15 fee ($25 for an international check) when a check that’s been deposited is returned unpaid. Similarly, Bank of America charges a $12 fee ($15 for international checks) for a returned deposit item.
A majority of big banks charge a returned deposit fee, but many small banks and credit unions don’t tag on this fee, so it might be worth looking into changing where you bank if you think you’re going to encounter a lot of bounced checks.
5. Foreign transaction fee.
If you buy something from another country with a U.S. credit card, the bank may charge you a conversion fee. For example, Bank of America generally charges a 3 percent fee on foreign purchases used with its credit cards. So for an $80 purchase, the bank charges a $2.40 transaction fee. With Bank of America, it’s also important to note that even if a transaction is in U.S. dollars, the bank still applies a foreign transaction fee if it’s processed outside the U.S.
“There’s a greater potential for fraud with international transactions, so it costs the banks money to protect the consumer,” explains Feddis.
If you want to avoid this fee, you can use any number of cards that don’t charge for foreign transactions, such as Capital One’s Venture and Platinum Prestige cards or Chase’s Sapphire Preferred card.
6. Lost debit card fee
Accidentally misplaced your debit card? It’ll cost you. Bank of America charges $5 to get a replacement debit card; PNC charges $7.50.
“There is a cost [for the bank] to providing a new debit card, and it’s not just the manufacturing,” Feddis says. “Banks also pay for the mailing and the fraud protection systems connected to the card.”
In addition, some banks charge extra for rush orders, like PNC’s $25 expedited delivery fee for a new debit card. To lessen the blow, you don’t have to request expedited delivery on your new card–you can simply use cash for payments or a different card in your wallet until the new one arrives.
7. Paper statement fee
If online banking isn’t your thing, receiving paper statements could be costing you. For most TD Bank accounts, it costs an extra dollar per month to receive paper statements. Meanwhile, U.S. Bank charges customers who opt for paper statements up to $2 a month on some checking accounts. Such paper statements are expensive to produce and they’re not environmentally friendly, so banks try to dissuade people from getting them, Feddis says.
“The price of postage keeps going up, and it costs banks more than $1 to send a paper statement,” Papadimitriou says. “If they do that once a month, that’s a lot of money going out.”
If you’re being charged for paper statements, you have the option of searching for banks that don’t charge the fee or looking into an account that enables you to bank entirely electronically.
8. Redeeming rewards points fee
A few banks have begun charging customers a fee for redeeming the points they’ve accumulated on their rewards cards. At Wells Fargo, for example, you have to pay a $24 processing fee for each airline ticket issued through the bank’s rewards vendor. However, this type of fee isn’t particularly common, Feddis says. Nonetheless, if you want to avoid paying for using your rewards points, Feddis says you need to shop around and compare various banks’ policies.
9. Returned mail fee
When you move, a mail forwarding request with your post office may not be good enough for your bank. Many banks print “return service requested” on their envelopes, so your mail gets sent back to the bank if it can’t be delivered, upon which a number of banks charge a fee. U.S. Bank, for example, charges a $5 fee for the second and subsequent months that a statement is undeliverable. Many regional banks also charge a fee for this: FirstBank & Trust, Bank of Arkansas, and Bank of Oklahoma charge undeliverable mail fees of $15.
“There’s a potential for identity theft with returned mail, so it triggers other actions on the part of the bank that cost money,” Feddis says.
These fees can add up, so make sure you update your address with your bank upon moving.
10. Human teller fee
Some banks even charge a fee for using a person to handle certain transactions. For a Bank of America checking account, there’s no fee when you choose online paperless statements and make your deposits and withdrawals online or with an ATM. However, if you use a teller, you have to pay the monthly maintenance fee of $8.95. If you’d like the ability to consult a teller, seek out bank accounts that don’t levy this charge. “It’s easily avoided by choosing an account that aligns with your behavior,” Feddis says.
According to this article in the NY Times, Supermarket chains like Kroger, Safeway and Ahold (Stop ‘n Shop) are experimenting with with personalized pricing for their customers.
What’s personalized pricing? It’s providing different pricing to customers based on their specific buying habits like this:
At a Safeway in Denver, a 24-pack of Refreshe bottled water costs $2.71 for Jennie Sanford, a project manager. For Emily Vanek, a blogger, the price is $3.69.
The difference? The vast shopping data Safeway maintains on both women through its loyalty card program. Ms. Sanford has a history of buying Refreshe brand products, but not its bottled water, while Ms. Vanek, a Smartwater partisan, said she was unlikely to try Refreshe.
So Ms. Sanford gets the nudge to put another Refreshe product into her grocery cart, with the hope that she will keep buying it, and increase the company’s sales of bottled water. A Safeway Web site shows her the lower price, which is applied when she swipes her loyalty card at checkout.
Safeway added the personalization program to its stores this summer. For now, it is creating personalized offers, but it says it has the capability to adjust prices based on shoppers’ habits and may add that feature.
Basically it’s “on the fly” coupons targeting customers likely to try a specific product.
So what’s the downside?
If your a regular customer of a brand or product, say Tide for example, you may have to pay more for a box of the detergent than someone buying the product at the exact same moment. The pricing model is expected to extend to other grocery chains — and over time could displace standardized price tags.
Joseph Turow, a professor at the Annenberg School for Communication at the University of Pennsylvania, said shoppers should be cautious. The pricing at grocery stores and other retailers is not transparent enough to give consumers any real power or choice, he said, and “there’s a sense of fairness that’s derailed here.”
In a 2005 survey conducted by Professor Turow, most adult respondents did not know that retailers could legally charge different prices, and more than 90 percent said they would dislike it if their supermarket charged different prices to different people within the same hour.
Retailers say the groundwork has been laid with individualized coupons, which are resoundingly popular. Sites like Amazon have also made consumers comfortable with custom offers and varying pricing, they say
So if personalized pricing is the future for retail, how can you win?
Some shoppers are already figuring out ways to beat the system. Two women, both of whom live in the Denver area, were among the first customers that Safeway asked to test its pricing program in return for a $50 gift card.
Like any good shoppers, these ladies are already starting to game the system: One noticed that she received cheaper prices on ground coffee when she alternated between Starbucks and Dunkin’ Donuts brands rather than buying just Starbucks.
Either way wih technology , retailers are trying to get the shirt of your back
Read a very entertaining thread at Tradertalk. It started out about sentiment but evolved (disintegrated?) into rationalizations.
The crux of it is whenever a trader is on the wrong side of the charts… ..there must be a reason.
The Bear Rationalization: Rallies are a result of Fed, ECB, QE, POMO, Repo, Twist, Dollar debasement, Goldman. Any temporary down-drafts in the markets are heralded as the return of free markets and vindication of old school TA, only to followed by cries of manipulation when the reversal occurs. Even on a technical basis most rallies are either on fumes, breadth not confirming, volume MCO lagging, VIX too low, too much complacency, overextended/parabolic, divergent, dangerously topping, three peaks and domed house, hindenburg omen, imminent pole flip, dangerous planetary combinations, et al. And when the technicals are too strong, the fundamentals which are in a perpetual gutter, are always there to help. So there is always a reason to suspect any up move in the markets
The Bull Rationalization: blaming the Fed or the ECB for not doing enough when there are major sell offs or crashes. There’s Naked shorting and no regulations and it’s all a rigged game by the big boyz. And, we can also throw in excuses like the “Fat Finger” and computer glitches and flash crashes. All sell offs are buying opportunities because there’s a lot of money on the sideline, stocks are cheap, it’s a market of stocks, I’m a long term investor, and the return on T-bills won’t beat inflation.
A really good trader named Jess Livermore once said “when the facts change, I change my mind”
Sage advice indeud
For those of you who travel, seeing the words “We Know About This” scrawled on the damaged wing of your aircraft, as you taxi down the runway probably sounds like something from “the Twilight Zone”
But that’s just what happened to a passenger on this Alaska Air flight bound for Seattle from Burbank:
According to Alaska Air the flight was perfectly safe…
Alaska Airlines spokeswoman Bobbie Egan said that the photo showed a permanent approved trim repair to the corner flap of the right wing, and that the plane was absolutely safe to fly.
“The small indent shown in the photo was reported multiple times in multiple flight crew reports. A maintenance technician wrote on the wing to acknowledge to flight crews that the repair was made, documented and that the plane was airworthy,” she said.
Egan said the airline immediately removed the message from the wing upon hearing about it, and apologized for any alarm it may have caused.
uhh… gee… Thanks Alaska Air (ALK)
Cue the scary music………
In the No Shit Sherlock category AP reports Social Security “Not the deal it once was” for workers.
People retiring today are part of the first generation of workers who have paid more in Social Security taxes during their careers than they will receive in benefits after they retire. It’s a historic shift that will only get worse for future retirees, according to an analysis by The Associated Press
If you retired in 1960, you could expect to get back seven times more in benefits than you paid in Social Security taxes, and more if you were a low-income worker, as long you made it to age 78 for men and 81 for women.
As recently as 1985, workers at every income level could retire and expect to get more in benefits than they paid in Social Security taxes, though they didn’t do quite as well as their parents and grandparents.
Not anymore.
A married couple retiring last year after both spouses earned average lifetime wages paid about $598,000 in Social Security taxes during their careers. They can expect to collect about $556,000 in benefits, if the man lives to 82 and the woman lives to 85, according to a 2011 study by the Urban Institute, a Washington think tank.
Social Security benefits are progressive, so most low-income workers retiring today still will get slightly more in benefits than they paid in taxes. Most high-income workers started getting less in benefits than they paid in taxes in the 1990s, according to data from the Social Security Administration.
Obviously all of us that really counted on a Govt. backed Ponzi Scheme to fund our lavish retirement are both shocked and saddened at this sudden and unforeseen turn of events:
The trustees who oversee Social Security say its funds, which have been built up over the past 30 years with surplus payroll taxes, will run dry in 2033 unless Congress acts. At that point, payroll taxes would provide enough revenue each year to pay about 75 percent of benefits.
To cover the shortfall, future retirees probably will have to pay higher taxes while they are working, accept lower benefits after they retire, or some combination of both.
“Future generations are going to do worse because either they are going to get fewer benefits or they are going to pay higher taxes,” said Eugene Steuerle, a former Treasury official who has studied the issue as a fellow at the Urban Institute.
So how can we game the system…. why the answer is perfectly clear…..
Live longer. Benefit estimates are based on life expectancy. For those turning 65 this year, Social Security expects women to live 20 more years and men to live 17.8 more
Because that is of course something we have total control over. It also reminds me of this joke:
Why do husbands die sooner then their wives?
Because they want to
