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Old 02-20-2008, 12:22 PM
 
1,861 posts, read 3,025,186 times
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Quote:
Originally Posted by cpg35223 View Post
That is incorrect. Once you earn over $90,000 in a year, only then you stop paying social security on all paychecks for the rest of that year. What's more, people in that income range only get out of social security what they put into it. Further, social security was set up under the notion that you would draw benefits based on what was put into it.

However, you can blame FDR and LBJ for creating a situation that is financially untenable. The worker/beneficiary ratio has narrowed dramatically over the past 60 years. Further, LBJ decided that it was perfectly okay to pillage the Social Security funds in order to pay for his Great Society program. While I'm not a Republican, why you're laying this at the feet of George Bush is beyond me. What you have on your hands is the world's largest Ponzi scheme, one that will fall apart in my lifetime. And, as voters, we are all responsible for the coming fallout.

What's more, this is a crisis that has formed in slow motion. Twenty-five YEARS ago, people were pointing to the looming demographic crisis, and nobody had the political courage to do anything about it then. It has been absolute public knowledge that Social Security would be insolvent by the time the Baby Boomers died, even if SS taxes were raised 50%. Every financial magazine, financial planner, bank, and personal finance guru has been screaming it from the housetops since the early 1980s. Why weren't you paying attention? When I was 22, I knew the Social Security wasn't going to be around.

Of course, there are plenty of bright spots, namely that household wealth has soared over the past 25 years, and 70% of all workers now have investment accounts.
We older folks weren't paying attention because we were brought up on the "3-legged stool" idea - social security, pension, and savings. Now, that is a "4-legged stool" - social security, pension, savings, and a job! - so they say.

Even with Bush's plan (that "private savings" plan), my social security would only go down 1% or something. I was born in 1950. I'm right at the cutoff.
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Old 02-20-2008, 12:40 PM
 
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"Further, LBJ decided that it was perfectly okay to pillage the Social Security funds in order to pay for his Great Society program. While I'm not a Republican, why you're laying this at the feet of George Bush is beyond me. What you have on your hands is the world's largest Ponzi scheme, one that will fall apart in my lifetime. And, as voters, we are all responsible for the coming fallout."
LBJ created the payroll tax to fund Medicare and added a 10 percent income tax surcharge to fund his surge in Vietnam.

Bush is being faulted because Social Security is currently running huge surpluses of 250-300 billion dollars a year and he's siphoning off those surpluses to partially fund his budget. If you look at the Treasury web site, you'll find that Bush has already borrowed 280 billion dollars in the first 4 1/2 months of this fiscal year, 140 billion is being raised by issuing public debt and the other half is funded by "borrowing" from the Social Security program. Since they raised the payroll taxes in 1991 to create large cash flow surpluses to "build up" the trust fund to handle the baby boomer retirements, the politicians have seen fit to use it for wars, tax cuts, etc.
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Old 02-20-2008, 01:22 PM
 
28,905 posts, read 46,750,956 times
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Quote:
Originally Posted by lchoro View Post
"Further, LBJ decided that it was perfectly okay to pillage the Social Security funds in order to pay for his Great Society program. While I'm not a Republican, why you're laying this at the feet of George Bush is beyond me. What you have on your hands is the world's largest Ponzi scheme, one that will fall apart in my lifetime. And, as voters, we are all responsible for the coming fallout."
LBJ created the payroll tax to fund Medicare and added a 10 percent income tax surcharge to fund his surge in Vietnam.

Bush is being faulted because Social Security is currently running huge surpluses of 250-300 billion dollars a year and he's siphoning off those surpluses to partially fund his budget. If you look at the Treasury web site, you'll find that Bush has already borrowed 280 billion dollars in the first 4 1/2 months of this fiscal year, 140 billion is being raised by issuing public debt and the other half is funded by "borrowing" from the Social Security program. Since they raised the payroll taxes in 1991 to create large cash flow surpluses to "build up" the trust fund to handle the baby boomer retirements, the politicians have seen fit to use it for wars, tax cuts, etc.
Good point. But to lay anywhere close to most of the blam on Bush is just ludicrous, and I'm a critic of the man.

The point is, lots of people in the Baby Boom generation just didn't pay attention as this catastrophe slowly developed. However, most of my friends and relatives my age (45) and under have been saving like bandits since we left school. Everybody I know has SOME kind of IRA or investment account. All because we knew that the Baby Boomers and Greatest Generation were going to hose us on this issue. No reforms were undertaken despite 25 years of warning. And if you weren't paying attention, that's your fault.
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Old 02-20-2008, 01:33 PM
 
1,861 posts, read 3,025,186 times
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Quote:
Originally Posted by cpg35223 View Post
Good point. But to lay anywhere close to most of the blam on Bush is just ludicrous, and I'm a critic of the man.

The point is, lots of people in the Baby Boom generation just didn't pay attention as this catastrophe slowly developed. However, most of my friends and relatives my age (45) and under have been saving like bandits since we left school. Everybody I know has SOME kind of IRA or investment account. All because we knew that the Baby Boomers and Greatest Generation were going to hose us on this issue. No reforms were undertaken despite 25 years of warning. And if you weren't paying attention, that's your fault.
Yes, you are a younger group, so you would have paid attention. WE did not think we had to, simply. It was always a given. We would have never believed that anything would ever happen to social security because for God's sake, what the heck would anyone do without it? Our parents lived on it; we figured we'd live on it (partially, that is).

Guess we were only thinking of ourselves.
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Old 02-20-2008, 02:25 PM
 
Location: WA
5,396 posts, read 21,404,537 times
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The Social Security tax cap gets adjusted every year and is currently $102,000.

Even if you pay the maximum tax for an entire career the SS payout may not be a terrible deal. Since it includes a COLA provision as well as spousal benefits it would be very expensive to buy a similar annuity that covers you for as long as you may live.

Obviously the SS plan must be adjusted as demographics will put it in the red pretty soon, but it can be saved... unlike Medicare which is a far worse situation.
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Old 02-20-2008, 03:53 PM
 
Location: Oxygen Ln. AZ
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I think it may be there but the bill for the younger workers will be staggering.
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Old 02-21-2008, 07:36 AM
 
Location: Forests of Maine
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With either a three-legged-stool theory, or a four-legged-stool theory; you are still never expecting SSA to support you.

Which is wise
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Old 02-21-2008, 09:36 AM
 
1,861 posts, read 3,025,186 times
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Quote:
Originally Posted by forest beekeeper View Post
With either a three-legged-stool theory, or a four-legged-stool theory; you are still never expecting SSA to support you.

Which is wise
No, it can't totally. My parents had social security (when he died, it was cut for my mother who didn't work), and he had a pension. Unfortunately, lots of places don't have pensions now, although I do.

There are quite a few elders (can't remember the percentage) who do live on social security alone. That's probably why 1/3 of elderly single women are in poverty. I don't want to be in that number - deciding on food or prescriptions.
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Old 02-21-2008, 01:42 PM
 
29,782 posts, read 34,880,403 times
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Quote:
Originally Posted by cousinsal View Post
No, it can't totally. My parents had social security (when he died, it was cut for my mother who didn't work), and he had a pension. Unfortunately, lots of places don't have pensions now, although I do.

There are quite a few elders (can't remember the percentage) who do live on social security alone. That's probably why 1/3 of elderly single women are in poverty. I don't want to be in that number - deciding on food or prescriptions.
The retirement consequences for being a middle class house wife are enormous.

The retirement consequencs of divorce are enormous.

Add the two together and it is a recipe for old age disaster.

Imagine being a housewife for 30 years and having your husband divorce you and remarrying and your children are all grown.
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Old 02-21-2008, 02:39 PM
 
Location: WA
5,396 posts, read 21,404,537 times
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Quote:
Originally Posted by TuborgP View Post
The retirement consequences for being a middle class house wife are enormous.

The retirement consequencs of divorce are enormous.

Add the two together and it is a recipe for old age disaster.

Imagine being a housewife for 30 years and having your husband divorce you and remarrying and your children are all grown.
If you were married to your ex-spouse for ten years before your divorce became final, you are entitled to Social Security benefits based on his/her earnings by federal law.
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