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But when the economy came crashing down and so many people lost money as 401ks dropped precipitously, everyone started singing a different tune.
All of a sudden, it was "wow--glad that my entire retirement fund was not in a private account". It became a bad idea.
Yeah, the catch 22 is that a huge number of American's are financially illiterate so they don't know how to prepare for the future, but they also are too scared to break away from SS into something that can be better for them long term because to them all of Wall St. = Bernie Madoff or the 2008 crash.
I myself like it when my Social Security statement arrives as it will be -in theory- a nice cherry on top of the sundae.
The only problem is that it is in the red and thus not viable for the long term.
It's not in that bad of shape. It just needs some adjustments, and there are a variety of relatively minor tweaks that will buy us many decades of solvency.
The perception that "Social Security is going under" is because some folks -- mainly politicians -- like to use the phrase "Social Security and Medicare." They lump them into one single idea, and Medicare is in much, much worse shape than SS.
But then if you wind up broke and homeless, don't expect anyone to help you ...right?
That should already be true, anyway. No Federal spending on welfare. Only private charities. Let the people decide who deserves help. They can donate and vote with their wallets.
The average annual return in the stock market since 1980 has been somewhere around 6.5%. Meanwhile, the rate of return for Social Security is around 1%. I would have been better off putting that money into a savings account.
According to the actuaries who crunch Social Security's numbers, the rate of return ranged from 0.04% to 9.19% per year, depending on your contributions, when you began receiving benefits and the length of time you received benefits.
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Originally Posted by le roi
SS is neither illegitimate nor is it an investment.
The fact that you think it is supposed to be an investment is why you're so confused.
No doubt.
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Originally Posted by t206
OK, so I stand corrected, the technical poverty level is less than SS, but SS alone still isn't a comfortable level of income in most parts of the country.
It is possible for someone to be eligible for Social Security benefits, yet receive only $28.97 per month in benefits, for an annual income of $347.75.
There are many seniors both single and married whose annual Social Security income is less than the federal poverty level not adjusted or less than the State poverty level.
Those persons are free to move to another locale where the Cost-of-Living is lesser.
Quote:
Originally Posted by PilgrimsProgress
Social Security benefits should be means tested.
They are means-tested. You pay a tax on Social Security benefits if you earn more than $25,000 annually and are single. The means-test for married couples is $32,000.
Note that many wealthy individuals never bother to apply for Social Security benefits.
Quote:
Originally Posted by le roi
It's not a "better" option, it's a different one, with a different purpose.
SS was never intended to maximize returns, it was intended to minimize risk.
Asking people with a Financial IQ of Zero or less to invest their money would result in disaster.
Railroad workers are exempt. We have our own solvent system recognized by the fed.
lucky! probably get better retirement benefits also.
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