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Social Security ‘Maximum Taxable’ Inches Higher – But Will It Make an Impact on the Trust?

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The Social Security payroll tax cap has been raised to nearly 9% for 2023, meaning more income will face Social Security taxes next year, but the rise is unlikely to affect the solvency of the funds underpinning the system.

Citing the increase in average wages, the Social Security Administration said the maximum amount of earnings subject to Social Security tax (the maximum taxable amount) will increase to $160,200 from $147,000 starting in January. The ad was part of Release of Cost of Living Adjustment, or COLA, Thursday. The taxable maximum for 2021 was $142,800.

While the increase is steeper than in recent years, the taxable cap is unlikely to affect the overall social security system, experts said.

The taxable cap “will generate more revenue and tax benefits from higher-income families,” said Rob Williams, managing director of financial planning at Charles Schwab. “It will contribute more to the system. Generating more income may help solvency but we won’t know for sure until Social Security trustees release their next report.”

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Each year, the Social Security and Medicare Board of Trustees releases a closely watched report on the financial health of the two program trust funds that support benefits for retired, survivors, and disabled beneficiaries. In June, the latest report stated that without any changes in the next 13 years, social security beneficiaries You can expect to see a 20% reduction in their Social Security checks in 2035.

Only people with income thresholds between $147,000 and $160,200 will feel the change in the taxable cap. People who earn more than this maximum — even millions of dollars over this level — will pay the same taxes as someone who earns $160,200, said Eric Bronenkant, head of taxes at Betterment at Work.

“These changes are not designed to move the needle one way or the other,” Broninkant said. “It would require legislative changes to do something in order to change the retirement age or change benefits.”

Roughly 80% to 85% of all wages are below this taxable maximum, according to the Center for Retirement Research at Boston College.

Only 6% of all income earners will be affected by the change, or roughly six to seven million people, said Jim Blankenship, a New Berlin, Illinois-based financial advisor who specializes in Social Security retirement benefits and who also writes for MarketWatch.

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There were proponents who called for higher increases in the taxable maximum as a way to help boost Social Security. When campaigning for president for the 2020 election, Bernie Sanders and Buttigieg’s house He proposed raising the salary tax cap.

Read: Social Security is at a crossroads this election season — and older voters wield tremendous power

“We have so much inequality in income and wealth that I think people with higher incomes should pay more,” said Nancy Altman, president of the Social Security Corporation.

There have been proposals to stabilize Social Security, such as raising the retirement age, increasing payroll taxes or reducing benefits, and allowing more legal immigration, but lawmakers have been reluctant to get involved in the main topic of reform. Social Security has long been referred to as the “third barrier” of politics, because it is deadly if you touch it, but lawmakers are not expected to act until trust funds are down.

“What it will take is a Disaster looms Similar to what happened in 1982, Blankenship said.

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Read: This might be the perfect time to fix Social Security — except for one thing

Allows higher wages for workers under full retirement age

The profit limit For workers who claim social security before full retirement age The Social Security Administration also announced that the maximum earnings for people who reach full retirement age in 2023 will increase to $21,240. There is no income limit for workers who have reached full retirement age or older throughout the year.

“Essentially, if you claim Social Security before your full retirement age but are still earning above a certain threshold ($21,240 in 2023), Social Security will withhold a portion of your benefits and give it back to you later. This is because when you claim early, you get “Most people time retirement and Social Security together,” said Anqi Chen, assistant director of savings research at Boston College’s Center for Retirement Research.

“It just allows someone to earn a little bit more,” said Williams of Schwab. But working in retirement isn’t just about income. It’s a social and activity and some people still want it.”

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Some advocates of the law argue that allowing retirees to earn money during retirement raises the question of why Social Security has not gone up to make such work unnecessary.

“It’s another indication that Social Security benefits are too low,” Altman said.

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US Futures Rise, Yields Flat as Dollar Falls: Markets Wrap

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(Bloomberg) — US stock futures rose on Friday ahead of a report on US producer prices that will be one of the final batches of data to inform an interest rate decision by the Federal Reserve next week.

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Contracts on the S&P 500 rose 0.4% after the benchmark made its first advance this month. The European stock index turned gains, trimming its weekly loss to 1.2%. Asian stocks headed for their sixth weekly gain, the longest such period in two years.

Treasury yields were little changed, with the 10-year rate just under 3.5%. The erased dollar scale slipped.

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Investors are encouraged by any signs of price weakness which could allow policymakers around the world to be less hawkish and more supportive of growth.

At the same time, Fed officials worry about fueling stock gains that ease financial conditions too much and frustrate the task of fighting inflation. Strategists have lined up to warn investors against returning to risk in the hope that the Fed will move closer to an easier policy shift.

“Central banks will remain on the safe side when it comes to future inflation after they underestimated inflationary pressures last year,” Carsten Junius, chief economist at Bank J. Safra Sarasin, wrote in a note to clients, adding that a pause in price increases is far from over. little bit.

On Friday in November, the US producer price index will provide a progress report on the effectiveness of the Fed’s campaign to suppress inflation, with consumer price data due next week. Producer price index cooled in October more than expected. And there are some signs that the labor market has softened, with jobless claims still rising to their highest levels since early February.

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“Traders will be keeping a close eye on today’s PPI data, with the S&P 500 options markets pricing the biggest potential move around any PPI release this year,” said Hugo Bernaldo, chief multi-asset trader at Optiver. Investors will also look for clues in today’s data on how Tuesday’s more important CPI numbers will turn out.

Elsewhere in the markets, oil rose on Friday while heading for a weekly decline of about 10% after a choppy session on Thursday on concerns about the economic outlook. Gold advanced for the fourth day.

Main events this week:

Some of the major movements in the markets:

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  • S&P 500 futures were up 0.4% as of 7:26 a.m. New York time.

  • Nasdaq 100 futures rose 0.5%.

  • Futures on the Dow Jones Industrial Average rose 0.2%.

  • Stoxx Europe 600 rose 0.4%

  • The MSCI World Index rose 0.3%.

currencies

  • The Bloomberg Spot Dollar Index fell 0.1%.

  • The euro was little changed at $1.0559

  • The British pound rose 0.3 percent to $1.2274

  • The Japanese yen rose 0.6% to 135.86 per dollar

Digital currencies

  • Bitcoin rose 0.4% to $17,245.72

  • Ether rose 0.9% to $1,289.2

bonds

  • The yield on the 10-year Treasury note was little changed at 3.48%.

  • The German 10-year bund yield advanced six basis points to 1.88%.

  • The yield on the 10-year British Bund advanced three basis points to 3.12%.

goods

  • West Texas Intermediate crude rose 0.9 percent to $72.09 a barrel

  • Gold futures rose 0.6% to $1,812.10 an ounce

This story was produced with help from Bloomberg Automation.

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— with assistance from Rob Verdonk.

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© Bloomberg LP 2022

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Starwood Property Trust announces dividend of $0.48

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Starwood Property Trust announces dividend of $0.48

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Nick Bollettieri, tennis coach, 1931-2022

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After young Andre Agassi wins an important match while wearing jeans, make-up and earrings, his coach Nick Bollettieri summons him to appear in front of 200 classmates at his tennis academy. As punishment for “defiling” the Center of Excellence, Agassi was sentenced to flush all of the toilets on site. In the next tournament, his coach threatened him that he would have to play in a skirt.

Few people can claim to have produced more champions than “The Michelangelo of Tennis”. Agassi, Jim Courier, Monica Seles, Maria Sharapova and the Williams sisters all trained under pioneering coach Bollettieri, who has died at the age of 91.

In the late 1970s, Politieri pioneered the creation of the Living Academy for young athletes aspiring to achieve greatness. But his methods were as notorious as they were innovative. He would stand bare-chested on the field, berating his young subjects for every stray shot or mis-slashed fist, as they would repeat the same actions thousands of times.

The vision was to bring the best young players together in one place where they could “play, break rackets, gamble, fight, bat”. Students were forbidden to watch television, listen to the radio, eat junk food, or call home during the week. The misdemeanor penalty in court includes forced running without water. But at the end of each practice session, the kids would step in front of their teacher uttering the catchphrase, “Thank you, Nick.”

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In his academic diaries, Agassi described it as “a glorified concentration camp. Not all that glorified.” However, those aiming for the summit continued to pour in there. And despite Pollettieri’s reputation as abrasive and obsessive—he got up every morning at 4:30 a.m. to stretch and lift weights—many of those he taught speak of him affectionately as a surrogate parent. They also became winners. Of the tens of thousands of players who had trained under him, ten would reach the world number one rank.

“I was living my dream,” Sharapova, who joined the academy at the age of eight, said. he told the Financial Times in 2015. “I saw all these great champions come and train. I would wake up every morning and I couldn’t wait for my alarm to go off at 6.30am and go get my lesson.”

Bollettieri and Andre Agassi in 1988 after winning on the field in New York © Caryn Levy / Sports Illustrated / Getty Images

Nicholas James Bollettieri was born in 1931 in Pelham, New York. His parents were Italian immigrants. He was the quarterback on the football team in high school, before his uncle convinced him to try out the “sneaky sport of tennis”.

After studying philosophy in college in Alabama, Politieri joined the army, became a paratrooper and reached the rank of lieutenant. His time in the army would be central to his coaching ethos later in life. He said, “I started to learn a lot being a parachutist—the discipline, the feeling that you’re the best in the world, that you can do anything.”

After leaving the military in 1957, he enrolled to study law at the University of Miami. To help make ends meet, he began offering tennis lessons at $1.50 an hour, despite having no experience as a coach and no more than that as a player. Less than a year later, he gave up his studies to devote himself to tennis.

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“A lot of coaches know tennis a lot more than I do,” he said. “What I do know is how to work with you as a person.”

In 1961, he discovered Brian Gottfried, who was then nine years old, on the field and took him under his wing. Gottfried would later become Bollettieri’s first hit, reaching No. 3 in the world in 1977.

That same year, after a stint teaching wealthy hotel clients to play tennis, he landed at Colony Beach & Tennis Resort near Sarasota, Florida. A year later, he founded the Nick Bollettieri Tennis Academy.

He went on to borrow $1 million to transform his 40-acre tomato plants in Bradenton, Florida, into a sprawling tennis training camp that opened in 1981. Agassi referred to his time there as “a forehand master of the flies,” but he attended for free. His father only had money to pay for three months’ tuition, but Bollettieri called him to say he was “tearing up the check” after seeing how good he was. The pair suffered an emotional split in 1993, shortly after Agassi won the first of his eight Grand Slam titles.

Bollettieri was known for his money management problems. With financial problems looming, he sold the Academy to IMG in 1987. But he continued to run it.

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Today the site covers approximately 600 acres, and teaches a wide range of sports to the 1,200 full-time residents and thousands more children and adults who attend sports camps there. In 2014, Politieri was inducted into the Tennis Hall of Fame, one of only four coaches to receive the award.

Josh Noble

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