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Old Yesterday, 01:33 PM
 
Location: Grosse Ile Michigan
25,777 posts, read 61,347,888 times
Reputation: 28891

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Quote:
Originally Posted by DaveinMtAiry View Post
This was literally my first thought. Does the OP really believe the big bad government will take our 401(K)? Dear Lord is must be quite a burden to be so paranoid.
No. The OP is simply wise enough to not be naive. Will they simply reach out their hands and take the accounts - no. When you have been around a while, you will realize the government has lots nad lots of ways of taking the money they want to take. Will they take all of it? No. they can take half or 2/3s and leave you with some. You may still have more than other people, but you are going to have to share. That is simply how it is.

In the same manner, social security will not evaporate, but it will lose "spending power" in other words that amount paid to each person will be a pittance compared to the cost of living at the time. We are lalready there for some people. It does nto take much to realize the SS system simply cannot keep up with inflation and pay all of these people a reasonable living pension. Sure you will get something, but it may well be today equivalent of $200 a month in 30 years from now.

When I retire, if nothing goes awry, my wife and I should get about $6,000 a month from SS according to their website. That is pretty good right now, but in 12 years, it will not be so great, still you can live on it in all likelihood. In 20 years it will not be enough to live on. If I live for 30 years after retiring, it will be well below subsistence living costs. On top of that, there is a very good chance they will be forced to reduce the payouts either before I retire or soon after (look at the numbers) Relying on SS is foolhardy. If they print more money, they will drive up inflation more than the amount they can increase payouts and retirees will be even worse off.
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Old Yesterday, 03:49 PM
 
Location: Ohio
14,633 posts, read 13,013,766 times
Reputation: 19856
Quote:
Originally Posted by Coldjensens View Post
No. The OP is simply wise enough to not be naive. Will they simply reach out their hands and take the accounts - no. When you have been around a while, you will realize the government has lots nad lots of ways of taking the money they want to take. Will they take all of it? No. they can take half or 2/3s and leave you with some. You may still have more than other people, but you are going to have to share. That is simply how it is.

In the same manner, social security will not evaporate, but it will lose "spending power" in other words that amount paid to each person will be a pittance compared to the cost of living at the time. We are lalready there for some people. It does nto take much to realize the SS system simply cannot keep up with inflation and pay all of these people a reasonable living pension. Sure you will get something, but it may well be today equivalent of $200 a month in 30 years from now.

When I retire, if nothing goes awry, my wife and I should get about $6,000 a month from SS according to their website. That is pretty good right now, but in 12 years, it will not be so great, still you can live on it in all likelihood. In 20 years it will not be enough to live on. If I live for 30 years after retiring, it will be well below subsistence living costs. On top of that, there is a very good chance they will be forced to reduce the payouts either before I retire or soon after (look at the numbers) Relying on SS is foolhardy. If they print more money, they will drive up inflation more than the amount they can increase payouts and retirees will be even worse off.
As I said earlier, if the government is foolhardy enough to do something like that most people will stop investing for retirement which will set off a whole different set of economic problems in this country.

Not going to happen.
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Old Yesterday, 06:28 PM
 
Location: Thailand
5,528 posts, read 2,633,665 times
Reputation: 10259
Quote:
Originally Posted by Coldjensens View Post
When you have been around a while, you will realize
Are you seriously using your age as an argument implying greater wisdom? There are fools old and young, I'm pretty sure a posters who have been responding are in their 60s does age/experience not count for their opinion too?

Quote:
Originally Posted by Coldjensens View Post
Sure you will get something, but it may well be today equivalent of $200 a month in 30 years from now.
Quote:
Originally Posted by Coldjensens View Post
That is pretty good right now, but in 12 years, it will not be so great, still you can live on it in all likelihood. In 20 years it will not be enough to live on.
They (both SSA and CBO) are constantly trying to calculate at what point benefits will be reduced without changes, they are quite transparent with all of it. The latest report (from Trustees Report 2017) says that without any alterations to system of ingress they will be able to pay full benefits until 2034, after which they would be able to pay approximately 75% of benefits at least through end of projection period of 2092. Again, that is with no changes. There was some amount (I don't recall exactly maybe 3%) raise in payroll taxes would make up the shortfall and there are a million permutations of changes payroll tax, income limit, age to receive full benefits, etc. that shore up the program.

Your "but in 12 years" makes no sense because in 12 years they will be paying the same benefits including the annual COLA. Your "30 years from now" also makes no sense because even at paying 75% of estimated benefits it's far more than the $200 you're all wound up about.
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Old Yesterday, 06:48 PM
 
2,418 posts, read 585,945 times
Reputation: 2714
If someone is that suspicious of retirement accounts, I'd imagine they'd be suspicious of any bank accounts, and have a lot of paper cash (as opposed to "cash" in more liquid accounts). I wish them the best in regards to the income necessary to fund a retirement without interest. Some people can, I'm sure.

I don't see it happening in quite this way as it would cause riots. But I do see it happening in a "de facto" seizure by nickel-and-diming plan holders via early-withdrawal penalties, taxing gains as regular income, and perhaps even stopping contributions pre-tax.

The U.S. has a good track record of using the frog-in-pan technique to pull a fast one on its tax base.
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Old Yesterday, 06:52 PM
 
Location: Florida
21,140 posts, read 8,906,494 times
Reputation: 17210
Quote:
Originally Posted by mathjak107 View Post
No , our retirement funds will not be taken , and it is not my job to solve the countries problems ..

A- I am not smart enough

B - they donít pay me enough to think about it
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Old Today, 06:33 PM
 
Location: Ohio
18,841 posts, read 13,768,081 times
Reputation: 14983
Quote:
Originally Posted by Coldjensens View Post
It does nto take much to realize the SS system simply cannot keep up with inflation and pay all of these people a reasonable living pension.
Ah, now we arrive at the crux of the matter, which is your lack of understanding of all things-economic.

When reporting Inflation data, your government has never sought to differentiate between the various forms of Inflation: Monetary Inflation, Wage Inflation, Cost-push Inflation, Demand-pull Inflation and Interest Inflation.

Instead, your government reports an aggregate of all forms of Inflation, which is grossly misleading.

Those forms of Inflation are not mutually exclusive. They can and do operate simultaneously.

Each form of Inflation has a different causal factor, and because that is true, there is no one-size-fits-all solution.

Each form of Inflation must be addressed with a unique solution or set of solutions.

Twice in your history, you've experienced Wage Inflation. The underlying cause in both cases was a labor shortage, but the root cause differed. In the first it was global war, and in the second it was radical technology. Barring global war, or the introduction of radical technology, you will never again experience Wage Inflation.

Wage Inflation began creeping into the economy in late 1938. There was an acute labor shortage in the ship-building and armaments industries, especially ship-building, as the rest of the World was preparing for war. That labor shortage was exacerbated in 1942 with the draft that took Millions of men out of the labor force.

In the period 1968-1973 it was caused by the rapid introduction of computer and computer-related technology, and to a lesser extent, medical technology. For example, key-punch operators were being paid the unheard of wages of $10.00/hour, which is more than $20,000/year at a time when the average American only made $5,300/year.

Wage Inflation not only causes wages to rise rapidly, it causes prices to rise rapidly, too.

Both Presidents, FDR and Nixon, wrongly chose to levy a Wage & Price Freeze. Freezing prices was the correct solution, but freezing wages was not. Wages should have been allowed to float, because ultimately, wages would have peaked and then started declining, which is what actually happened anyway.

High schools responded to the shortage of key-punch operators by offering classes to Juniors and Seniors. My high school offered the last classes in 1978. By that time, the Market was flooded with key-punch operators, and because wages are based on the Supply & Demand of a given Skill-set within a specific defined labor market, the wages had dropped to minimum wage. That didn't really matter, since everyone was transitioning away from the key-punch to keyboard desk terminals.

Nixon's error had no lasting effect. Unfortunately, FDR's negligent error resulted in your employer lording over your health plan coverage.

Monetary Inflation is the result of bad fiscal policy. There are a few solutions: government can raise taxes or reduce spending, or the central bank can raise interest rates, or any combination of the three or all three simultaneously.

With rampant Monetary Inflation in the 1970s and early 1980s, government raised taxes and the central bank increased interest rates to as high as 13% at one point.

Note that in the 1970s, you had Wage Inflation and Monetary Inflation occurring simultaneously, in addition to Demand-pull and Cost-push Inflation.

Cost-push Inflation is caused by governments at the municipal, county, State or federal levels through taxation or regulation. Generally, these are one-time price increases, but they may result in continual price increases for certain goods and services.

Since government caused the price increases, only government can eliminate the price increases.

For example, EPA Tier-1, Tier-2 and Tier-3 regulations relating to Sulfur content in gasoline has resulted in permanent price increases in gasoline.

EPA regulations pertaining to ethanol have resulted in continual price increases of gasoline.

EPA regulations governing electric power generation plants have resulted in continual price increases of electricity.

As you can see, the government raising taxes, reducing spending, or the central bank increasing interest rates in response to Monetary Inflation will not have any effect on Cost-push Inflation, because those actions are separate and apart and the causal factors are different.

Demand-pull Inflation is caused by you.

When your Demand for goods and services exceeds the Supply of goods and services, prices rise.

The Laws of Economics say wages should rise when Monetary Inflation exists. Wages do, in fact, rise, and there's never been any instance in the whole of history when they haven't.

Not only do wages rise, but the price of everything rises, as in every thing, as in every single thing, as in every single good and service that exists in your economy all rise at the rate of Monetary Inflation.

Over the past several decades, your wages have risen and are rising in response to Monetary Inflation.

The problem is Monetary Inflation is not a problem in your economy.

Demand-pull Inflation and to a lesser extent Cost-push Inflation are the principal drivers of price in your economy.

The average wage in 1990 was $21,027 so wages have increased 139.31% since then, while all forms of Inflation have increased 81.94% giving a net increase of 57.37%.

But, that 81.94% is not 81.94% Monetary Inflation. It's only about 22% Monetary Inflation. The other 60% of Inflation is entirely Demand-pull and Cost-push Inflation.

The correct response to Demand-pull Inflation is stop consuming, or increase Supply.

The Laws of Economics say wages should not rise in response to Demand-pull Inflation or Cost-push Inflation.

In fact, increasing wages to match Demand-pull Inflation creates even more Demand-pull Inflation.

If Demand-pull Inflation for a good or service is $0.50/year, then raising wages will cause it to rise to $1.00/year, and then eventually $1.00/month, $1.00/week, then $1.00/day, then $2.00/day, then $5.00/day until it is impossible to increase wages, or the good or service has been totally depleted, over-used or over-consumed to the point it no longer exists.

Why would you want to do that?

If you can't afford a good or service, then find a substitute or do without.

Your only other option is to increase Supply, assuming that's even possible.

If you want to reduce gasoline prices, then increase the Supply of gasoline.

Given that it takes 15-17 years to build a refinery, that isn't in the realm of possibility.

You have 314 operating refineries, but only 57 actually produce gasoline, and for some of those, they produce less than 5,000 barrels per day.

Of the remaining 257 refineries, not all are even capable of producing gasoline. They would have to be modified at great cost and expense and that would take 1-3 years.

For those that could produce gasoline, you can only produce gasoline at the expense of other petro-chemical feed-stocks.

In other words, you can make gasoline, or you can produce feed-stocks for pharmaceuticals, cosmetics, personal hygiene, household cleaners, food flavorings, food colorings, food preservatives, packaging of all kinds and inks, dyes and colors of all kinds, and other items, but you can't do both at the same time.

You might pay less at the pump, but you'll pay more for everything else, so you save exactly $0.

The same for food.

Sometimes it isn't profitable to increase Supply.

If you started farming corn now, you'd lose your shirt.

You have to wait until food prices go higher, then you can start farming corn and either break even or make a profit.

So, in the end, people are just going to have to make adjustments in their lives, and if that means doing less with less, then that's exactly how it should be.

Trying to maintain a certain Life-Style or Standard of Living that you falsely believe you're entitled to have has never worked in history, it won't work now, and it's not going to work in the Future, and trying to do so will only drive prices higher at faster rates.

This is a game you simply cannot win.
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Old Today, 10:31 PM
 
5,837 posts, read 2,627,871 times
Reputation: 5629
Quote:
Originally Posted by Coldjensens View Post
Yes. Income is used in a manner that makes it no longer qualified as taxable income. Can I give you specifics? No, not without breaching confidentiality losing my job and my license. Unfortunately those things outweigh your curiosity.
Just to make sure that I understand, before I call you out as either a liar or a fool, are you claiming that how income is used can change the nature of that income from taxable to non - taxable?

What license do you hold that would be in jeopardy if you were to provide some details of what you are claiming?
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Old Today, 11:29 PM
 
105 posts, read 17,383 times
Reputation: 152
Quote:
Originally Posted by TheShadow View Post
As for what the people with no savings will do when they get old, they will do exactly what the people with no savings do today. Live on SS and the money they have, or continue to work to supplement their SS. Go to the Retirement Forum on this very website and read how lots of people on this forum do just that. It's not rocket science. There are also numerous programs available today that assist low income individuals, especially seniors. Need healthcare? Medicare and Medicaid. Need help with rent? Section 8. Need help with food? Food banks and SNAP. Need a cell phone? Get a free or $10 cell phone from the government. Have trouble paying the utilities? There are low income rates for gas and electric, as well as low income weatherization programs for your home. Need clothing? Thrift stores and church clothing closets. Need transportation? There are senior passes for almost no money through most mass transit agencies. The list goes on and on. But if you want to believe in some conspiracy of your own creation that the government is going to start stealing your bank accounts and investments, by all means go right ahead and keep that money under your mattress.
^We have a winner!!!!

I know quite a few people including myself who survive this way. We aren't taking trips to the Bahamas but we aren't living on the streets either. We are thankful for what we have and not worrying about what we dont. Your 401k and Retirement are safe. Carry on.
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