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Old 01-29-2017, 08:35 AM
 
2 posts, read 5,988 times
Reputation: 26

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If ever there were an argument for privatizing Social Security... I am 55 years old. For over 20 years I have made over six figures a year. My mother, who is still alive at 86 and is getting my deceased father's social security, receives $1200 a month from the government. My father was an uneducated blue collar worker who never made more than 8 bucks an hour base pay. He retired at 62 back in the mid 80s, so he didn't get the full benefit. My mother never worked...a home maker her entire life. So...$1200 a month...which is based on meager increases over the last 15 years. Now me, I have worked constantly since I was 15 years old, the only gap is when I took a year off while going to school when I was in my early 20s. Over 20 years now I have made over $100K a year each year. According to the SSA.gov web site, my benefit if I retire at the same age that my dad did will be $1900 a month. Yes, only $700 more than my mother who never worked and my father who was a low income worker who retired early over 30 years ago.


I am speechless. Where the heck has all our money gone for these decades paying into the government fund? This is a lesson to everyone out there in their 30s and younger. Don't even consider SS as potential income in retirement. Save as much as you possibly can as early as you can and take advantage of as many investment opportunities as you can - like 401K and Roth IRAs. Your government is squandering your social security so do not expect to get anything resembling a return on what you are paying in.
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Old 01-29-2017, 08:41 AM
 
71,643 posts, read 71,777,271 times
Reputation: 49235
ss is designed to be income insurance , not your sole income to live on . all our other insurance we pay in to for a lifetime we get nothing back on unless bad things happen to us .. ss is means tested so those who pay little get proportionately more out . it has never been any different .

there is nothing wrong with what ss pays out , what is wrong is your impression of what ss is supposed to be .

ss functions as income insurance since you are expected to fund your own retirement , it functions as disability and it functions as survivor benefits . what it is not supposed to do is bank roll your retirement .
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Old 01-29-2017, 08:48 AM
 
2 posts, read 5,988 times
Reputation: 26
Default Math?

Proportionally, yes, I agree. But those numbers do not make sense. It is grossly disproportionate for someone making $16K a year (at his peak earning years...significantly less most of his life) to make only slightly less in returns from someone making $100K+ for 2 decades and not significantly less before that.


And my view of what it is could be wrong...but it should not be as you state. Otherwise, why would there be ANY difference in anyone's returns? If it was this communal pool and everyone just got a hunk of it, then it would be an even socialist pie that did not fluctuate at all based on income. Clearly, income does have something to do with the formula, correct?


IMO, it should be privatized and be more akin to municipal or treasury bond fund. And regardless of what you say it is supposed to be, millions of elderly do people live on it 100%. Modern savings vehicles like 401Ks are a relatively recent invention. Before those existed, most people had either pensions or SS at retirement. The lucky had both, but you know good and well that millions depended solely on SS.

Last edited by AtlantaNative1968; 01-29-2017 at 08:57 AM..
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Old 01-29-2017, 08:59 AM
 
Location: minnesota
6,348 posts, read 2,124,917 times
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If someone dies with no dependents there isn't some pay out. Even if payment were totally based on income the person who lived longer would get more. It's just to put a floor under any American not an investment vehicle.
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Old 01-29-2017, 09:00 AM
 
Location: Pennsylvania
16,357 posts, read 10,346,234 times
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The assumption is that making that much money for that length of time you would have invested in your own privatized retirement fund.

And you should have.

As mentioned, SS is meant as a supplement, not a mainstay.
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Old 01-29-2017, 09:13 AM
 
6,321 posts, read 5,061,406 times
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Isn't there an upper limit on the amount your income is taxed for SS? Only 115K or so is taxed.
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Old 01-29-2017, 09:14 AM
 
71,643 posts, read 71,777,271 times
Reputation: 49235
Quote:
Originally Posted by AtlantaNative1968 View Post
Proportionally, yes, I agree. But those numbers do not make sense. It is grossly disproportionate for someone making $16K a year (at his peak earning years...significantly less most of his life) to make only slightly less in returns from someone making $100K+ for 2 decades and not significantly less before that.


And my view of what it is could be wrong...but it should not be as you state. Otherwise, why would there be ANY difference in anyone's returns? If it was this communal pool and everyone just got a hunk of it, then it would be an even socialist pie that did not fluctuate at all based on income. Clearly, income does have something to do with the formula, correct?


IMO, it should be privatized and be more akin to municipal or treasury bond fund. And regardless of what you say it is supposed to be, millions of elderly do people live on it 100%. Modern savings vehicles like 401Ks are a relatively recent invention. Before those existed, most people had either pensions or SS at retirement. The lucky had both, but you know good and well that millions depended solely on SS.
it is no more dis-proportionate than what i pay for healthcare with my 1 annual check up a year. those that can get aca subsidy's and cost sharing because of low incomes pay a fraction in . that is just how any insurance works .
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Old 01-29-2017, 09:18 AM
 
Location: ☀️ SWFL ⛱ 🌴
2,435 posts, read 1,671,079 times
Reputation: 8704
Quote:
Originally Posted by AtlantaNative1968 View Post
Proportionally, yes, I agree. But those numbers do not make sense. It is grossly disproportionate for someone making $16K a year (at his peak earning years...significantly less most of his life) to make only slightly less in returns from someone making $100K+ for 2 decades and not significantly less before that.


And my view of what it is could be wrong...but it should not be as you state. Otherwise, why would there be ANY difference in anyone's returns? If it was this communal pool and everyone just got a hunk of it, then it would be an even socialist pie that did not fluctuate at all based on income. Clearly, income does have something to do with the formula, correct?


IMO, it should be privatized and be more akin to municipal or treasury bond fund. And regardless of what you say it is supposed to be, millions of elderly do people live on it 100%. Modern savings vehicles like 401Ks are a relatively recent invention. Before those existed, most people had either pensions or SS at retirement. The lucky had both, but you know good and well that millions depended solely on SS.
His $16,000, if made around 1980, if the equivalent of $50,363 in today's dollars
Calculate the value of $16,000 in 1980

He made 1/2 the money you have and is/was getting 63% more in SS than you.

A 13% difference.

Last edited by jean_ji; 01-29-2017 at 09:28 AM..
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Old 01-29-2017, 09:19 AM
 
6,885 posts, read 7,286,872 times
Reputation: 9786
And of course, if you want more you can always work longer (or make more money). Nothing says you have to start taking SS at 62.

Retire on your own savings at 62, and delay SS as long as you can to get more.
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Old 01-29-2017, 09:30 AM
 
Location: Out West
273 posts, read 180,831 times
Reputation: 558
AtlantaNative1968:

A simple CPI calculator shows that a $1200 SS check in 2016 "deflates" to a $538 check in 1985, meaning that most of the increases in your mother's survivor's check has come over the course of 31 years of COLA increases. (Side note: The U.S. social security system has had a couple of years with no COLA increases, but the ones which took place from 1985 - 2000 were pretty healthy.)

Your own early SS calculation also reflects the fact that you would take a steeper discount from your full retirement benefit, since your full retirement age is close to 67. Your father's FRA was 65, so he took a smaller discount.
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