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Thank you, TuborgP. The last sentence of the second quote in your post number 60 above does indeed directly address the question I raised: "Thus the income-related redistribution that occurs because of the progressive benefit formula is partially offset by the longer life expectancies of higher income individuals and by the larger spouse-and-survivor benefits received by the spouses of higher earners." I took the liberty of bolding the two key words.
This answers a debate I had some time ago, perhaps not even in the Retirement Forum, with a poster who was claiming that the lower earners were in effect subsidizing the higher earners via the longevity business (about which I had not yet heard at that time), while I was claiming the opposite via the progressive benefit forumula. Now the "partially offset" phrase seems to indicate that I was more correct than my opponent, but not as correct as I thought at the time.
One further comment on this matter: While the greater longevity of high earners does not apply to everyone in that group, just as the lesser longevity of low earners does not apply to all of them, as those things are averages, the benefit formulas do apply to every single individual.
Thank you, TuborgP. The last sentence of the second quote in your post number 60 above does indeed directly address the question I raised: "Thus the income-related redistribution that occurs because of the progressive benefit formula is partially offset by the longer life expectancies of higher income individuals and by the larger spouse-and-survivor benefits received by the spouses of higher earners." I took the liberty of bolding the two key words.
This answers a debate I had some time ago, perhaps not even in the Retirement Forum, with a poster who was claiming that the lower earners were in effect subsidizing the higher earners via the longevity business (about which I had not yet heard at that time), while I was claiming the opposite via the progressive benefit forumula. Now the "partially offset" phrase seems to indicate that I was more correct than my opponent, but not as correct as I thought at the time.
One further comment on this matter: While the greater longevity of high earners does not apply to everyone in that group, just as the lesser longevity of low earners does not apply to all of them, as those things are averages, the benefit formulas do apply to every single individual.
So are you starting to think personal accounts are the way to go? What about high earners in poor health? What about high earners with both spouses in poor health. What about high earners with both spouses having high SS benefits and one passing at 66? What about? What about the reality that SS is funded with a payroll tax, meaning someone got up day after day and went to work and earned money that was taxed by government for redistribution at a later date. Now your pension is redistributed as death can end it and if you die before before starting to collect prevent it from beginning in many cases. Again redistribution. So what does that leave you as your own my friend? Your personal investments like your 401K or 403B etc that is your own to have, to hold and to decide how to distribute for yourself. Wait isn't there a thread about people wanting to redistribute that across the population?
The most immediate crisis perhaps is the separate disabilty program that as I recall is expect to runout in 2016.The current thinking in congress is raisng taxes and lower benefits with a indivdual opton for younger workers.Some say the lower benefit for older people can be avoided but not if time starts reducing the pay go margin that exist now.My guess is they will just raise the tax and extend the time atble like they did years ago.
So are you starting to think personal accounts are the way to go? What about high earners in poor health? What about high earners with both spouses in poor health. What about high earners with both spouses having high SS benefits and one passing at 66? What about? What about the reality that SS is funded with a payroll tax, meaning someone got up day after day and went to work and earned money that was taxed by government for redistribution at a later date. Now your pension is redistributed as death can end it and if you die before before starting to collect prevent it from beginning in many cases. Again redistribution. So what does that leave you as your own my friend? Your personal investments like your 401K or 403B etc that is your own to have, to hold and to decide how to distribute for yourself. Wait isn't there a thread about people wanting to redistribute that across the population?
Aaahh! This is getting confusing. I think personal accounts will be OUT. Why? SCOTUS. If the Supreme Court determines that the Affordable Care Act is unconstitutional because the act requires private citizens to purchase health insurance (not a tax like Social Security) than there is a compelling argument that Social Security cannot be replaced by restricted private accounts. OTOH, if the Supreme Court makes a broader ruling that the Constitution does not give Congress the power to compel citizens to purchase any insurance, via penalty or taxation...well, you can guess where that could lead.
Sorry. I started researching your prior reply on the other thread and my ADHD kicked in. It occurred to me that the decision issued in this particular case could be a major game changer in terms of Constitutional Law. It looks like no one has challenged the constitutionality of Social Security since the 1930's. As far as I know, no one has ever challenged the constitutionality of Medicare. Considering that a significant number of sitting Justices are not as receptive to Congress claiming power through the Interstate Commerce Clause, or to provide for the nation's welfare, I wait for this decision with bated breath. On that note, I am going out to have a drink with a good friend and attorney. Should be fun.
So are you starting to think personal accounts are the way to go? What about high earners in poor health? What about high earners with both spouses in poor health. What about high earners with both spouses having high SS benefits and one passing at 66? What about? What about the reality that SS is funded with a payroll tax, meaning someone got up day after day and went to work and earned money that was taxed by government for redistribution at a later date. Now your pension is redistributed as death can end it and if you die before before starting to collect prevent it from beginning in many cases. Again redistribution. So what does that leave you as your own my friend? Your personal investments like your 401K or 403B etc that is your own to have, to hold and to decide how to distribute for yourself. Wait isn't there a thread about people wanting to redistribute that across the population?
No, I am not particularly in favor of personal accounts for Social Security. If someone dies prematurely, that's the way the cookie crumbles.
Aaahh! This is getting confusing. I think personal accounts will be OUT. Why? SCOTUS. If the Supreme Court determines that the Affordable Care Act is unconstitutional because the act requires private citizens to purchase health insurance (not a tax like Social Security) than there is a compelling argument that Social Security cannot be replaced by restricted private accounts. OTOH, if the Supreme Court makes a broader ruling that the Constitution does not give Congress the power to compel citizens to purchase any insurance, via penalty or taxation...well, you can guess where that could lead.
Sorry. I started researching your prior reply on the other thread and my ADHD kicked in. It occurred to me that the decision issued in this particular case could be a major game changer in terms of Constitutional Law. It looks like no one has challenged the constitutionality of Social Security since the 1930's. As far as I know, no one has ever challenged the constitutionality of Medicare. Considering that a significant number of sitting Justices are not as receptive to Congress claiming power through the Interstate Commerce Clause, or to provide for the nation's welfare, I wait for this decision with bated breath. On that note, I am going out to have a drink with a good friend and attorney. Should be fun.
Hope you enjoyed your drink and company. You have lots of good thoughts/thinking. My understand that Medicare and SS are on sound constitutional ground because they are a tax and individual mandate is just that a mandate to behave in a certain way. Not everyone needs to join Medicare or participate in SS as those not employed don't and public employees in some states don't. The individual mandate is an attempt to compel behavior on the part of the individual. SCOTUS is mindful of what is at stake. In fact there is appears to be a growing hope that the entire bill is not thrown out because the ending result would be chaos.
Certainly SS was challenged and the supreme court ruled that certain gropus could not be force to pay the tax and join SS. But this case is not about even that ;forcig peopel to pay a tax to get a government service. Its about governamtn forcig peope to buy on the market a service from priavte service provider. Kind of like forcing life insurance;disabilty insurance etc.They don't even force auto insurance as long as a perosn can post a bond on responsibilty.If this was a tax to provide healthcare thru government provided service the same ruling might apply as with SS but it isn't. Its a mandated to buy from a private company mandated coverage as specified by government.
Certainly SS was challenged and the supreme court ruled that certain gropus could not be force to pay the tax and join SS. But this case is not about even that ;forcig peopel to pay a tax to get a government service. Its about governamtn forcig peope to buy on the market a service from priavte service provider. Kind of like forcing life insurance;disabilty insurance etc.They don't even force auto insurance as long as a perosn can post a bond on responsibilty.If this was a tax to provide healthcare thru government provided service the same ruling might apply as with SS but it isn't. Its a mandated to buy from a private company mandated coverage as specified by government.
That's what I thought the issue was...until I listened to the argument and read the transcript.
BTW, I never heard of posting a bond in lieu of purchasing auto insurance until last week. Apparently it's a state thing. Certainly not available in my state.
So are you starting to think personal accounts are the way to go? What about high earners in poor health? What about high earners with both spouses in poor health. What about high earners with both spouses having high SS benefits and one passing at 66? What about? What about the reality that SS is funded with a payroll tax, meaning someone got up day after day and went to work and earned money that was taxed by government for redistribution at a later date. Now your pension is redistributed as death can end it and if you die before before starting to collect prevent it from beginning in many cases. Again redistribution. So what does that leave you as your own my friend? Your personal investments like your 401K or 403B etc that is your own to have, to hold and to decide how to distribute for yourself. Wait isn't there a thread about people wanting to redistribute that across the population?
You can make an an argument that any form of government taxation and spending is "redistribution of income". I don't get gooey-eyed over it at all. Our representatives that we elect and send to Congress make these decisions by a majority vote. Its the way our system functions.
Social Security is not a private retirement program that was intended to have options A through Z. Its not really a retirement program at all. Its a program that is set up to provide to "income security" to groups of people who fall into different categories. The first category is the elderly. The second category would be disabled people. A third category would be children who experience the loss of a parent.
It doesn't bother me at all that you can't set up accounts that "survive you" if you die prematurely. Its not the point of Social Security. Dead people don't need income. The point is to private benefits for living people who need those benefits. Its not to confer some kind of windfall on others.
If we were to structure Social Security in the way you describe than we'd have to raise taxes because there would be relatives and such getting lump sums from these accounts who don't get them now.
We all know how popular raising Social Security taxes is....
No, I am not particularly in favor of personal accounts for Social Security. If someone dies prematurely, that's the way the cookie crumbles.
I am thinking not about their contributions being redistributed after they pass but while they are living at their expense if the thinking of some becomes implemented.
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