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this is simply nonsense
if you had been saving your whole adult life, while 2008 would suck you would still be a lot better off if you were investing in the stock market for 40 years and then lost half of it then if you werent saving at all or just saving in the bank at garbage interest.
You obviously have no idea what a risk premium is. The difference between equities and annuities, for instance.
Then there are the folks who lost their jobs and home equity in their fifties during the last recession and needed to tap their investments at the worst possible time. Lots of folks who now have nothing, except... wait...Social Security to fall back on. Too bad Grandma couldn't follow your plan and "opt out"!
A quote from the article talking about a two earner couple earning the average wage: "If a similar couple had retired in 1980, they would have gotten back almost three times what they put in. And if they had retired in 1960, they would have gotten back more than eight times what they paid in."
Now, people retiring currently are getting back on average approximately what they paid into Social Security. However, they are getting far more back from Medicare than they paid in. If you dispute this, look at this the graph in the link I provided.
However, the money they are getting back isn't money in a pot with the Federal gov't. All that's there are IOU's from the Treasury. The money's coming out of current revenues/debt. If there were a pool of existing money that SS was getting paid out of, why was there a threat to cut benefits if the debt ceiling wasn't raised?
What much older people fail to realize is that when they say they paid into it, they didn't pay the same rate that some of us have had to pay our whole lives. In the 80's, payroll taxes were raised drastically. So don't act as if the smaller amount you paid in the 50's, 60's, and 70's is the same as those of us who have started working since the taxes were raised.
There are only three options to this unfunded mess. Raise taxes, cut benefits, or run inflation to a point where the benefits are worth less. At any rate, Generation X and Y will get screwed. The Greatest Generation made out like bandits, as they didn't pay anything remotely close to the payroll taxes that are paid now, for the benefits they got. If you dispute that, look again at the quote of the benefits paid to a couple retiring in 1960 and 1980. The Silent Generation also benefited. The question is how long the system will be able to be maintained, which will affect the results for the Boomers. I'm guessing the older end will do OK, while the younger end who have paid the higher rate the whole time will lose out.
The system will be maintained forever, unless some dimwits get it into their heads that people will save on their own. Which would be the very definition of insanity, since they simply do not or can not. Having vast numbers of retirees who couldn't afford a place to live or food to eat would be a disaster for the entire country. Whether previous generations got more than they paid in (after taking into account compounding and inflation) is irrellevent. Whether taxes were/are increased to compensate for anticipated obligations is irrellevent. Here is an idea, rather than fixate on the 6% you pay in SS contributions, figure out a way to make more money. In other words, take action on something you can influence, rather than bemoaning something you cannot influence.
The wage cap will be increased and the benefits adjusted as needed. In the end some may have gotten more, some may get less, but we won't end up looking like Mumbai with starving elderly sleeping on the streets everywhere. The boomers are pretty much guaranteed their checks. But, at some point if the younger generations want to shoot themselves in the foot, I say good luck with that! Don't say you weren't warned though. Because the vast numbers of starving homeless elderly who never paid in (opted out) will have to be dealt with and that is far worse than the alternative of forcing them to contribute to their own benefits.
Gee, I wish everyone was pragmatic, responsible and could manage a portfolio like a pro. But like the saying goes, "If wishes and buts, were candy and nuts, every day would be like Christmas."
Except for the nasty fact that the benefits kept increasing, people are living longer, while the proportion of workers paying into the transgenerational chain letter scheme have declined.
The retirement age will have to be jacked up to 70 at least and probably 75. Some degree of private investment options (e.g., the Chilean style plans) will also have to be undertaken.
Irony of history: Social Security, when proposed in Great Depression 1935, was sold as a youthful benefit, putting older people out to pasture so the unemployed young could work more.
And now that SS is threatened, you can expect old people to work longer. No sense whining about it. You either have to give people what they need to retire or deal with them continuing to work.
Before the recession of 2008, there were probably baby boomers planning on retiring who are now still working.
Is it possible they are still working because they are financially supporting their adult children? Wouldn't it make more sense for them to retire, so their adult children could eventually get work experience and start supporting themselves?
Maybe instead of paying for the children's college, they save first for their own retirement.
Younger people can earn less and save less, and still have more at retirement age.
They're still working because the economy is uncertain. It takes some level of stability to live off of one's resources even if they planned well. Many boomers took huge losses on their investments in the past decade that they have not recovered.
Regarding your statement I bolded: Yes they can but what percentage of the population will? You have to deal in realities here. Savings would have to be automatic and mandated and people wouldn't stand for that. Plus, SS takes care of children and widows/widowers. My dad didn't get a lot in SS but it sure helped when mom died and left him with three children still at home.
I think they will have no choice but to figure out how to save SS. Sadly, had everything paid in been invested, or even most of it the system would be running a surplus. What has been collected has already been spent and the biggest wave of contributors is just now starting to draw on the system. I'm a tail end boomer and I do not expect to see what I was promised which will most likely mean I will work longer. What other choice is there? I can't go back in time and change my savings plan because I counted on SS and it's not going to be there now.
Uhhhh. The people receiving Social Security paid into Social Security. They will probably never get as much as they paid in. No one is stealing money from anyone's paycheck. Maybe if the government hadn't SPENT the money that was in Social Security, it wouldn't be such a problem. Social Security and Medicare are not entitlement programs. The people receiving those benefits paid for them.
You wish you had a fixed income and didn't have to go to work? Well, why don't you work for 50 years like they did and then complain. You really have very limited understanding/insight, or you're just a spoiled brat who can't see past himself.
Now if you want to blame someone for stealing from your paycheck, that would be the people receiving welfare, Medicaid, food stamps, people who have not paid into the system but are taking from it.
Right on the money on this one. More people in there 20's and 30's are collecting entitlements, welfare, food stamps EBT and hud, now in my community then ever before. Some only have a couple years of work out of there last 10-12 years. Oh and they cant accept any work that's to hard or to low of a wage or where they can't have access to media through there IPADS IPHONES etc. during working hours. It makes me sick to think about it.
Should older workers retire instead of working to support their adult children?
My wife and I retired in 2008 (yeah, not the best timing, but that's when we planned to retire, and we could afford to even with the recession) and both of our adult children moved out within 3 months of that happy day.
One moved back after six months and is still here; the other has needed our financial help, although the degree to which we are helping her has steadily decreased.
I'd say that we were lucky to have been able to both retire *and* support our adult children through some difficult times, but in truth I think we planned well.
We are both federal retirees. When I first started working for Uncle Sam in 1974, my goal was to retire at age 55. And I reached that goal. Same for my wife.
We both retired under the Civil Service Retirement System. CSRS does not include Social Security. We had an opportunity to switch to a different retirement plan - the Federal Employees Retirement System, or FERS - in the early '80s, and elected to stay with CSRS.
FERS retirements are based on a reduced annuity, a type of 401(k) called Thrift Savings, and Social Security. CSRS retirements are based on an annuity only, although CSRS employees could also participate in Thrift Savings (albeit with any matching contributions from Uncle Sam).
My wife and I both made contributions to Social Security prior to federal service - mostly part-time and summer jobs during high school and college, so we're not talking about a huge amount of money. And that's money we'll never see.
Also, during our 30- and 35-year careers, we earned significantly less than we would likely have in private industry. It was a conscious decision on our part, knowing that in getting less in terms of pay, we'd be getting more in terms of benefits - leave, health insurance, and retirement at 55.
But that's OK - we're doing fine.
To answer your question directly, yes, as long as they have run the numbers and are sure they can swing it, workers eligible to retire shouldn't delay their retirements due to the status of their adult children. Life is too short as it is. Today is the first day of the rest of your life - if it makes financial sense, why delay retirement?
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Quote:
Originally Posted by curly_Q
Before the recession of 2008, there were probably baby boomers planning on retiring who are now still working.
Quote:
Originally Posted by bxlefty23
this is simply nonsense
if you had been saving your whole adult life, while 2008 would suck you would still be a lot better off if you were investing in the stock market for 40 years and then lost half of it then if you werent saving at all or just saving in the bank at garbage interest.
Why do people think that mortgage meltdown in 2008 is the only crisis that has happened, which harmed peoples savings/investments, in the past 30 some odd years?
To name just a few of the most recent downturns that did a lot of financial damage, or had completely wiped out the savings, for many people within the past 30 years was the Dot-com bubble, the S&L crisis, Black Monday, the energy crisis, the subprime mortgage meltdown (that one seems to be the only one that younger people are fixating on). People lost money during those, and other, events. They sucked it up and started rebuilding - and gee, here comes another crisis that people had to rebuild from, and then another, and another.... It's these same people who had put their kids through college, tried to give their kids the best they could, supporting their adult children who go back home to roost or just supporting them whether they move back home or not ... it's a wonder that older adults still have money left to retire on.
And people on here are wondering why older people are still working, and giving them the stink eye because they are still working.
Whether previous generations got more than they paid in (after taking into account compounding and inflation) is irrellevent. Whether taxes were/are increased to compensate for anticipated obligations is irrellevent.
Taxes being increased to compensate for anticipated obligations is absolutely relevant. I'd rather the benefits (including my own future benefits) be cut.
Quote:
Here is an idea, rather than fixate on the 6% you pay in SS contributions, figure out a way to make more money.
It's 15%, when taking into account all payroll taxes. People working in 1960 paid 6%.
People saying they paid for their SS benefits (which many did, though some are getting back a good bit more than they paid in) doesn't bother me too much. However, almost everyone who says they paid for their Medicare are full of it. Read the link:
"Medicare beneficiaries on average pay about $1 for every $3 in benefits they receive. [2] However, about two-thirds of the public believe that most Medicare recipients get benefits worth about the same (27%) or less (41%) than what they have paid in payroll taxes during their working lives and in premiums for their current coverage."
Through Medicare, seniors are stealing from the working public. What's worse is most people don't even know it.
"Medicare beneficiaries on average pay about $1 for every $3 in benefits they receive. [2] However, about two-thirds of the public believe that most Medicare recipients get benefits worth about the same (27%) or less (41%) than what they have paid in payroll taxes during their working lives and in premiums for their current coverage."
Through Medicare, seniors are stealing from the working public. What's worse is most people don't even know it.
Yea, I can picture grandma holding a gun to the head's of the tax payers, demanding they pony up... The issue is not the program. It's the math, and the formulas that these programs were designed around. Outside of that, the cost of healthcare in this nation is out of hand, and completely unsustainable. How can the younger generation support the larger population of aging boomers going forward? Under the current system, they won't be able to. Don't expect anyone in Washington to address these issues though. The can will continue to be kicked down the road.
Taxes being increased to compensate for anticipated obligations is absolutely relevant. I'd rather the benefits (including my own future benefits) be cut.
They will be cut and the wage cap raised. Almost certainly. You don't want people to pay on income over $113,700 (a tax increase)? OK, with me! That just means current recipients with higher incomes won't contribute more, everyone else will see deeper cuts. But, they still won't touch baby boomers. Too late for that. Too politically unpalatable, just not going to happen.
Quote:
Originally Posted by majinkoola
It's 15%, when taking into account all payroll taxes. People working in 1960 paid 6%.
Social Security tax rates have been modified many times, starting in 1951... So what? Changing demographics and benefit schedules require changes to stay relevant.
Social Security is not 15%. It is 6.2% to the employee and another 6.2% from the employer. The rate has not been 6% since 1961, when benefits were expanded significantly. That was more than 50 years ago. A little late to be crying over that spilled milk.
Quote:
Originally Posted by majinkoola
People saying they paid for their SS benefits (which many did, though some are getting back a good bit more than they paid in) doesn't bother me too much. However, almost everyone who says they paid for their Medicare are full of it. ...
I am not talking about Medicare. I am talking about Social Security, Medicare is a completely different discussion.
Some folks get more than they paid in, some get less. Same thing with all sorts of insurance. Medicare is a completely different story and a much bigger problem. And no different than group insurance, in the sense that some pay in and act responsibly. Others pay in and drive up costs irresponsibly. What's you plan, cut off the elderly at a certain age? A system that denies medical services based on age? I don't know how old you are, but if Medicare goes away, you are still going to pay deeply for coverage past age 50. I can only imagine what an annual premium might look like for an over 65 individual with no medicare. You will likely work your whole life only to see all your planning torn asunder by insurance premiums or a catastrophic illness. I don't think you truly understand this issue.
On a side note, I work with a guy who is a vocal supporter of conservative principles and the Tea Party. Both he and his wife are overweight and refuse to eat right or exercise. Both are undergoing expensive surgeries for stomach banding, rather than acting responsibly. Supposedly, it is necessary for diabetes, but that follows from his choices and lifestyle! You think they paid enough in premiums to cover this and the many medications they take for various problems related to lifestyle and choice? Absolutely not! The company we work for, meaning his coworkers premiums, are going to pay for this. Total hypocrisy is part of our society and certainly not limited to medicare.
I am convinced that short-sighted people think that if only they could keep their Social Security and Medicare premiums they would be much better off. They all have big plans to save it and then life comes along and the vast majority do not! The US will be supporting all those people one way or another. Better that they contribute to their own future, than wait until their plans disintegrate and the rest of us have to pick up the pieces! Forget about the windfall you imagine that elimination of those taxes might bring and focus on a plan to improve your income instead.
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