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Old 05-17-2011, 08:11 PM
 
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When I think about this it comes down to what the purpose of the programs is, and it is my understanding they were designed as a social insurance, a safety net for the elderly, disabled, or survivors. Does a wealthy retiree need a social safety net?

If it was means tested would it be based on income or net worth? How would the limits be set? More importantly, are there enough wealthy people receiving benefits where implementing something like this would make any difference in the programs?
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Old 05-17-2011, 10:48 PM
 
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The way I see it is if you were smart enough to forgo the near car every 5 years, new cell phone every 6 months etc. and instead invest why should you not get what you are entitled to? You did in fact pay into the system. It would also have a negative effect moving forward, in that less people would save for retirement because they'd end up in about the same position but instead without having enjoyed life along the way.
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Old 05-18-2011, 05:27 AM
Status: "But in the aggregate..." (set 29 days ago)
 
Location: The Triad (NC)
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Quote:
Originally Posted by slackjaw View Post
...as a social insurance, a safety net for the elderly, disabled, or survivors. Does a wealthy retiree need a social safety net?
Certainly not to the degree that the others do.

Quote:
If it was means tested would it be based on income or net worth?
Who know what evil Congress would concoct...

The problem with having a means test on the out go...
is the concomitant desire for a means test on the in come.

There are a lot of measures being batted around to raise the limit on earnings for SS withholding too which are being fought tooth and nail by the well, lets say, higher income faction who would be affected.

So far all I see are a lot of bloody oxen.
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Old 05-18-2011, 07:58 AM
 
Location: Victoria TX
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I have always thought of Social Security as a form of insurance, on which premiums are collected from the insured, and then paid back when the insured meets the benefit criteria or experiences a covered casualty.

Would you also propose that your car insurance be means-tested, and wouldn't pay for your damage or liability if you have the funds to pay it yourself?

l agree with you, that too much of the Social Security benefits are going to people who do not need them. It's not a lot, but it might be enough to bankrupt the system. I would propose, rather, that the maximum benefit be reduced. Currently, the upper limit of benefits, for a retired man and his wife, is equal to median per household income of an American family. That is much more than is needed as a safety net. since those retirees are no longer raising a family. About half of the current maximum is sufficient as a safety net, and a supplemental fund can be established, means tested, to provide additional grants in cases of demonstrable hardship. Currently, a safety net should require no more than about $1200-1500 a month per retiree, which is still more than what the working poor are actually raising a family on.

That would be a more reasonable approach than to simply tell people who have contributed that they can't get anything back. And, would guarantee solvency.

Last edited by jtur88; 05-18-2011 at 08:22 AM..
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Old 05-18-2011, 08:13 AM
 
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Quote:
Originally Posted by wheelsup View Post
The way I see it is if you were smart enough to forgo the near car every 5 years, new cell phone every 6 months etc. and instead invest why should you not get what you are entitled to? You did in fact pay into the system.
This is true, but what I question is whether you are entitled to it. If the purpose of the program is a safety net, I don't feel entitled to that anymore than I feel entitled to food stamps when I can afford food.

Quote:
It would also have a negative effect moving forward, in that less people would save for retirement because they'd end up in about the same position but instead without having enjoyed life along the way.
Depends on where the limits are set, I don't think the purpose would be to snag someone who lived under their means so ended up with a nest egg that can help them enjoy their senior years in a middle class lifestyle. Not that I have any clue how that would implemented.
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Old 05-18-2011, 08:19 AM
 
Location: Sierra Vista, AZ
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Why not just remove the cap from the wage tax. That would make Social security solvent
The Baby boom is an anomally that will be gone in 50 years, why destroy the system over it
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Old 05-18-2011, 08:25 AM
 
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Quote:
Originally Posted by jtur88 View Post
I have always thought of Social Security as a form of insurance, on which premiums are collected from the insured, and then paid back when the insured meets the benefit criteria or experiences a covered casualty.
Proposing possible refinement on the benefit criteria.

Quote:
Would you also propose that your car insurance be means-tested, and wouldn't pay for your damage or liability if you have the funds to pay it yourself?
Well car insurance pays out a lump sum to cover the costs of a single event, so it smooths out expenses. I don't think that was the intent of social security, it was so that Americans can live their lives with some dignity when they can no longer work because of old age, disability, etc. That purpose can still be met.
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Old 05-18-2011, 08:26 AM
 
8,265 posts, read 11,196,577 times
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Quote:
Originally Posted by Boompa View Post
Why not just remove the cap from the wage tax. That would make Social security solvent
Another excellent idea.

Quote:
The Baby boom is an anomally that will be gone in 50 years, why destroy the system over it
I don't think anyone has proposed destroying the system, it would still serve its purpose to our society.
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Old 05-18-2011, 08:48 AM
 
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I think it's going to come to something like this eventually, but like others have mentioned, I'm really uncomfortable with that for the moral hazard reasons (i.e. two identical families, one saves everything for retirement, one spends everything and then we force the savers to spend everything they have until they exhaust it but we give the spenders social security). Drawing that line is going to be awfully difficult, and if we set it really high so that it only has an impact on the wealthy (say top 2%), then we're only going to save the program somewhere in the ballpark of 2% in costs right?

In 1935 the original age to collect full benefits was 65. The average life expectancy at the time was under 62 years old. Today the age to collect full benefits is 65-67 depending upon when a person was born. The average life expectancy is now almost 78 (Life Expectancy at Birth by Race and Sex, 1930–2007 — Infoplease.com).

So basically we've gone from a system where the average person didn't collect social security until 0-4 years after their average life expectancy to a system where we start paying out 12-16 years before the average life expectancy. To me that's just a simple math problem, but then again, most of our politicians are lawyers, not CPAs.
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Old 05-18-2011, 09:37 AM
 
Location: NJ
29,529 posts, read 34,021,295 times
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social security is a total scam and should be scrapped for a defined contribution plan where individuals have actual accounts with money in them. however, the reality is that social security will be means tested and the cap on the income they take it from will be lifted or eliminated.

now that it is in the negative the financial problems of our country will be sped up even more because not only will social security go bankrupt but there is no more excess money put in annually to invest in treauries.
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