It's Only (Your?) Money

[japhy]

I think this goes here.....

The Social Security Administration found last week that Minnesota Rep. Angie Craig’s proposed tax legislation may indeed extend the lifespan of the retirement program.

Craig originally introduced the You Earned It, You Keep It Act in August 2022 with the goal of eliminating federal taxes on Social Security benefits for retirees nationwide. Craig called the double tax on those payments “unjust” at the time and posited that her legislation would put money directly into the pockets of middle-class retirees suffering from the severe impact of inflation.

Under current law, Social Security beneficiaries are taxed on up to 85 percent of their Social Security benefits, based on measures of their total income.

According to Craig, the bill, which was reintroduced in the House of Representatives last week, would have no effect on the monthly benefits that enrollees receive each month.

Furthermore, she said the measure would be “fully paid for” by taxing individuals who earn more than $250,000 a year; currently, the income subject to FICA taxes is capped at $168,600.

Craig also cited a “nonpartisan analysis” that said the legislation would also improve the “long-term solvency of Social Security compared to current law” and would ensure the program would be able to support waves of future American retirees for years.

“Taxing the very benefits American workers have earned after decades on the job diminishes our promise and threatens to undermine the financial security of retirees already struggling with rising prices,” Craig said. “Eliminating this tax will help Social Security benefits go further and ensure that American retirees have all the resources they need after a lifetime of hard work.”

Last week, Stephen Goss, chief actuary for the Social Security Administration, responded with his own estimates. In a letter to Craig, Goss said the provisions of the You Earned It, You Keep It Act would indeed extend the ability of the Old Age, Survivors, and Disability Insurance program to pay scheduled benefits in full and on time for an additional 20 years.

“The date of projected depletion of the combined OASI and DI Trust Fund reserves would be moved from 2034 under current law to 2054 assuming enactment of the proposal, under the intermediate assumptions of the 2023 Trustees Report,” Goss said.

I asked for a tax cut but didn't expect this. Good timing.

[Shirley]

Gen Z, millennials' net worth, wealth ballooned during pandemic

A new analysis from the Liberty Street Economics blog at the Federal Reserve Bank of New York looks at how wealth changed for different groups from the first quarter of 2019 through the third quarter of 2023. And Americans under 40 did pretty darn well.

Coming into the pandemic, Americans under 40 were holding just under 6% of all US wealth, according to Liberty Street Economics, even as they made up just under 40% of adults. That's changed a bit since their pandemic-era boon. And it was a boon: Americans under 40 — who comprise both Gen Zers old enough to be in the full-time workforce, and almost all millennials — saw their real wealth skyrocket by around 80%.

That's not the case for all age groups; Americans who are more firmly Gen Xers (44-59 y/o) saw more modest growth in wealth, and while those over the age of 55 also saw sizable gains, it wasn't anywhere close to the youngest Americans.

It's yet another wrinkle in the pandemic-era story of wealth accumulation. The pandemic led to a boom-bust cycle for some Americans, especially younger ones, who suddenly had a cushion of savings — it's hard to spend when you can't go outside — and were additionally bolstered by unprecedented stimulus checks, enhanced unemployment benefits, and the pause on federal student loan payments. And while Gen Zers and millennials say they're facing more of a crunch now, the latest data shows that the particularly unique pandemic-era combination of stimulus, savings, and investing paid off.

"The youngest age group is also the poorest and thus received much of the COVID-era fiscal stimulus, granting them excess savings to invest in equities," report authors Rajashri Chakrabarti, Natalia Emanuel, and Ben Lahey write.

Financial assets were the big driver of younger Americans' wealth accumulation, according to Liberty Street Economics' analysis, with the real value of their assets growing by over 50% — far greater than the 3% increase in value for Americans ages 40 to 54.

Real estate assets saw similar increases across all age groups — around 40%, per the analysis — but younger Americans were especially putting their money towards equities and mutual funds.

Those younger Americans were willing to make riskier investments, as the analysis notes, perhaps due to just how far out they are from retiring. While Gen Z and millennials might face a tougher retirement overall — although many are aiming and working towards being able to clock out early — that investment strategy has paid off for them.

But those net worth increases also come as younger Americans shoulder more debt. Consumer debt swelled by $212 billion in the last quarter of 2023, and Gen Zers and millennials lead the pack when it comes to debt transitioning into delinquency. For millennials, that's a slight uptick in delinquency from the fourth quarter of 2019, although Gen Zers are hovering slightly below late-2019 levels.

Generation Age
Gen Z 12 – 27
Millennials 28 – 43
Gen X 44 – 59
Boomers II 60 – 69
Boomers I* 70 – 78
Post War 79 – 96
WWII 97 – 102

[Shirley]

Professor and author Scott Galloway joins Morning Joe to discuss his new book 'The Algebra of Wealth: A Simple Formula for Financial Security'

Young people have every reason to be enraged

[japhy]

I found this to be more interesting than the video as it tells more of the story. "No Mercy/No Malice" goes beyond the pity party.

https://www.profgalloway.com/the-algebra-of-wealth-3/

[Shirley]

I found this to be more interesting than the video as it tells more of the story. "No Mercy/No Malice" goes beyond the pity party.

https://www.profgalloway.com/the-algebra-of-wealth-3/

Obviously you have a higher regard for the collective attention span here, than I do.

[japhy]

I found this to be more interesting than the video as it tells more of the story. "No Mercy/No Malice" goes beyond the pity party.

https://www.profgalloway.com/the-algebra-of-wealth-3/

Obviously you have a higher regard for the collective attention span here, than I do.

The "Oh Woe Is Me" crowd is always happy with a simple affirmation. Losing with empathy deserves a medal. But the follow up on how to change things for the better is what they need to read and understand.