Thread: Careening from one budget crisis to another is no way to govern

No it is because "they" are not clever enough to go after it. And frankly as more people go into retirement status, and their taxable income drops, flat tax and fair tax lose their appeal. Paul Ryan has a single track mind apparently---he seems devoted to cratering the social safety net. I met him in 2010 and told him there were smaller fixes to entitlement reform. Diminishing Social Security or Medicare will automatically turn the GOP into a minority party. I would think that if employment is picking up Medicaid should be dropping. Reforming the SSI system is another reform. And probably several other piecemeal programs. Ryan doesn't have the patience for that.

Why would fair tax lose its appeal when you go into retirement status?

The Average American Has This Much Retirement Income. How Do You Compare?

Most retirees count on Social Security for a majority of their income, but there are other ways to pad your lifestyle after 65.
Jeremy Bowman
Apr 24, 2016 at 7:45AM

This is article was updated on Jan. 11, 2017, and originally published on April 24, 2016.

If you're stressed out about retirement, you're not alone. Many Americans are, and not just those who are over age 65. Major life-changing events and money are two of the leading stressors we face, according to survey data, and retirement involves both of them.
Senior couple standing together on sailboat with the sun shining on their faces

For many Americans, stepping away from a career and giving up a salary, and committing to a fixed source of income and whatever savings you have can be a difficult transition, but how much money should you expect to live on in retirement?

According to a 2012 AARP analysis of data from the Census Bureau, the average retirement income for Americans 65 and over was $31,742 -- 84% of those received Social Security, getting an average retirement benefit of $1,298.98 a month. Social Security provides more than a third of income for many retirees, and retirees in the lowest income quintile count on Social Security for more than 80% of their income.

While Social Security is the principal source of income for many retirees, it's not the only one. Nearly 30% of retirees count on savings either from their own accounts like 401(k)s or through pensions from their employers. Retirement savings tend to skew toward higher-income retirees as more than half of the wealthiest retirees said they had savings that provided them with a median income of $30,000.

Finally, many Americans are forced to continue working past 65 in order to maintain their desired lifestyle. About 22% continue to work into the traditional retirement years with many taking part-time jobs. Working during retirement is becoming more common with the percentage of retiree income earned by working doubling from 15% in 1990 to 30% in 2012.

If you haven't already retired, it's never too late to start a savings account or add to it. But with interest rates remaining low, you're better off looking to the stock market for meaningful returns. A good place start may be dividend stocks on the Dow Jones Industrial Average, blue-chip companies with familiar names like McDonald's and Verizon. Investing in a real estate investment trust, or REIT, is also a good way to maximize your dividend income as REITs are required to pay out a minimum 90% of earnings in dividends.

A dividend reinvestment plan (or DRIP), which automatically puts dividends back into the stocks they came from can help boost your returns while you're still working. For more passive investing, consider buying shares in an S&P 500 index fund, which will keep you diversified and removed from the need to follow individual stocks. And finally, a retirement account like a 401(k) or an IRA can help maximize tax benefits.

As a current retiree looking to maximize your income stream from your savings, you may want to consider selling covered calls on your stocks, in addition to collecting dividends. This strategy can provide additional income on a monthly or even weekly basis, but you are at risk of being forced to sell your stock if the price goes up significantly.

If you're retired and counting mainly on Social Security checks for your income, you may want to focus on minimizing your expenses. Senior discounts are often available but unadvertised. Many supermarkets offer discounts of 5%-10% on certain days of the week, and programs at major pharmacies allow seniors to save up to 50% on prescription drugs. Many restaurants and clothing chains offer discounts of 10% or more, and most public transportation systems offer reduced fares for seniors as well.

Finally, if you need to boost your income but getting a part-time job is beyond your abilities, consider renting out some of your assets. The so-called sharing economy has made it possible to rent out a spare room in your home through sites like Airbnb. If you don't have a spare room, consider renting the entire place out when you travel away for a weekend or a vacation. You can even rent out your car by the day on sites like Turo, where vehicles generally rent for $30 a day and up.

The best way to improve your retirement income and standard of living is likely a combination of the above options. Those still planning their retirement may also want to carefully consider retirement location as moving can reduce expenses and help save on taxes. Whatever you decide, planning ahead is always a smart move, and it's never too late to start saving.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Verizon Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

https://www.fool.com/retirement/gene...ment-inco.aspx

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Captainron, this was the first article I found when trying to determine what average income for people over 65 is and although it's based on a 2012 study, it looks like even if adjusted to today's numbers, it is less than $33,000 a year. Obviously a lot of people are going to be above this average as well as below, but that's the average number to work with. There isn't anything about being a retired person that would cause appeal of the FairTax to wane. Retiree's now pay income tax on their Social Security, pensions, interest, dividends, capital gains and payroll taxes as well on any earned income from part-time jobs to supplement their income. Getting rid of all these income-based taxes benefits them the same as everyone else. Plus they actually benefit more because their deferred income taxes on IRA's and 401 K's if they have them goes away. Furthermore, because presumably their incomes are lower as retiree's than when they were working, the effective benefit of the FairTax Rebate is a higher percentage of their income and thus more advantageous to them as they go out and spend than to someone with higher incomes because they are not retired, still working and presumably earning higher incomes.

So, The FairTax should appeal to retirees as much as it would to anyone, and in a lot of cases, even more so.

The "flat tax" is something entirely different, it's just a single rate non-progressive income tax with all the same problems and issues of any income-based tax scheme whereas the FairTax repeals the income tax code that taxes income, earnings, interest, dividends, capital gains, gifts, estates and payrolls, all those income-based taxes are eliminated and replaced with a national retail sales tax on new goods and services at the final point of sale (consumption).

http://fairtaxfraud.com/fair.asp