i dont get why people think social security is an entitlement (Congress, money)
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Social Security was insurance so when the market collapses and the banks all fail the elderly will still be able to pay the rent and buy food. It was designed to keep some cash flowing through the economy and incidentally prevent the elderly from becoming completely impoverished when the business system inevitably collapsed. It has changed into a low grade pension and regressive income tax because the taxes do not apply to all income and the payments are made to everyone that contributed.
The current funding has to be changed to include all income from all sources and the payments only made to elderly with pensions less than the 50th percentile. That would provide enough money in and restrict outlay enough to keep the system operating forever.
The current rate of return for Social Security is 1.4%. The average rate of return for the market as a whole over the last 25 years is 11.2%. The average person would have exponentially more retirement savings if they could pocket their SS money and invest it in the stock market.
How can anyone say (with a straight face) that SS is a good idea?
Millions of Americans DON'T get back what they paid in. It depends on WHEN you paid in and when you collect - the first generation of workers to collect did indeed receive way more than they paid in, with the financial return declining over time. Boomers and Gen X would have been far better off in old age if their Social Security taxes had instead been invested privately.
And then if you die before you collect you lose all the money you paid in.
oh please
Quote:
Originally Posted by freemkt
I'm on track to get $900 a month from Social Security. Take that away and I'm in deep doo doo. Poor grandpa, that will be me in a few years.b
What's that you say, I should have saved for retirement? How much do you realistically expect people to save on a $15K income?
Quote:
Originally Posted by workingclasshero
so let's see if I get this straight
you settle for a 15k a year job
save NOTHING
and then plan on getting a 2/3 pension when you retire (900/month is over 10k a year )
btw your contributions to ss 6%...6% of 15k is 900 A YEAR
so you think it good that you contribut 900 a year (and your employeer matches it) for you to get 900/month????? how liberal of you
Social Security was never meant to be the sole source of income after retirement, but a source to supplement retirement savings or pensions. Those who try to live on their monthly SS check probably are not doing so well.
Though Social Security contributions were initially designed to be a small percentage currently the government takes roughly 15% from the self-employed, and a similar amount from employee/employer contributions. Over the years (had these amounts been invested) there would have been a substantial amount of growth that might have guaranteed a person a much larger nestegg than the government provides.
Entitlement? Hardly! Entitlements are seldom mandated with force.
Social Security was insurance so when the market collapses and the banks all fail the elderly will still be able to pay the rent and buy food. It was designed to keep some cash flowing through the economy and incidentally prevent the elderly from becoming completely impoverished when the business system inevitably collapsed. It has changed into a low grade pension and regressive income tax because the taxes do not apply to all income and the payments are made to everyone that contributed.
The current funding has to be changed to include all income from all sources and the payments only made to elderly with pensions less than the 50th percentile. That would provide enough money in and restrict outlay enough to keep the system operating forever.
That would make it a welfare program. The amount that you pay on is capped because the maximum you can receive is capped.
Any time that someone receives more than they put in, it's an entitlement. The 1st person to collect social security was Ida May Fuller. She paid a total of $49.50 into the system and received $22,889 in benefits.
That is a poorly designed system if I ever saw one.
Any time that people who never paid in receive a benefit, it's an entitlement.
Any time that someone receives more than they put in, it's an entitlement. The 1st person to collect social security was Ida May Fuller. She paid a total of $49.50 into the system and received $22,889 in benefits.
That is a poorly designed system if I ever saw one.
Any time that people who never paid in receive a benefit, it's an entitlement.
Well then an IRA or a 401K must be entitlements.............
My dad retired in 84, he got back every dollar he had ever paid in ALL taxes, in the first 5 years. H is still collecting BTW.
is this real dollars or nominal dollars?
i am guessing nominal, and your dad only THINKS he got back what he paid in.
Anyway, social security fulfills several roles in the minds of voters. I would describe it as a very inefficient social insurance program, run by the government.
i am guessing nominal, and your dad only THINKS he got back what he paid in.
Anyway, social security fulfills several roles in the minds of voters. I would describe it as a very inefficient social insurance program, run by the government.
Considering he said this in 1989 and he is still receiving benefits along with my moms spousal benefit from the that time, I bet he is correct in any kind of dollar you want to look at.
Raising the retirement age increases the number of people who pay in for decades and die before collecting a dime.
In other words, raising the retirement age is highly regressive.
Which has never stopped conservatives.
WOW, good post. Yes this is what exactly can happen.
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