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I think Social Security (as implemented) is a dumb idea to begin with. Its a perfect example of a government program gone bad.
While it is true the excess money collected through the tax are held in bonds, the borrower side of those bonds is our dear uncle sam who spends like a drunken sailor and is rapidly approaching an unmanageable debt level.
Other countries handle this much better. They should have long long ago directed those taxes into individual retirement accounts that have directed investments into broad markets. Accounts that don't simply vanish when one passes but instead are property of the individual and are an inheritable asset.
I have planned my retirement without considering Social Security. If I get it, then it will just be the cherry on top to go have a little extra fun.
Yes, they do handle it better. I worked overseas for quite a few years and saved up through that country's sovereign wealth fund. I contributed 9%, and the employer contributed 12%. The money was invested by the government into a variety of asset classes and dividends ran 10-12% initially, and then 6-8% later on, after the 1997 Asian financial crisis hit. The politicians had their own money invested in the same which aligned their interests with the general population.
When, I left that country, I was able to cash out the entire amount which I then invested in US stocks (and a house). Uncle Sam is less trustworthy for their politicians have their own retirement and medical plans apart from that of the general population.
If they did that, can you imagine how many people would be insider trading? Instead they should eliminate some of the tax breaks for individuals and corporations and the increased revenue will shore up the social security trust fund and payoff some of the national debt
If they did that, can you imagine how many people would be insider trading? Instead they should eliminate some of the tax breaks for individuals and corporations and the increased revenue will shore up the social security trust fund and payoff some of the national debt
it would simply decrease the amount of taxes individuals would pay in an indirect way which would hurt general funds .
as an example lower taxes increase corporate profits which increase share price …that passes greater gains and there for greater taxes on to the stock holder when they sell
Last edited by mathjak107; 08-05-2023 at 02:58 PM..
Other countries handle this much better. They should have long long ago directed those taxes into individual retirement accounts that have directed investments into broad markets. Accounts that don't simply vanish when one passes but instead are property of the individual and are an inheritable asset.
I have planned my retirement without considering Social Security. If I get it, then it will just be the cherry on top to go have a little extra fun.
One reason to not have SS do stocks is further diversification for many if not most people. Most already have stock investments, 401 or whatever. And like 2008, SS is always stable, stocks are not.
Allowing SS to invest in the stock market instead of just buying treasuries should increase the overall returns and at least partially cover the funding shortfalls. However, my question is what happens in an extended downturn (recession/depression)?
What do you think about this?
I think it is going to make the stock market even more volatile
Allowing SS to invest in the stock market instead of just buying treasuries should increase the overall returns and at least partially cover the funding shortfalls. However, my question is what happens in an extended downturn (recession/depression)?
What do you think about this?
Social Security is required to hold special issue Treasury securities. They may be stuck with 30 years of low interest rates.
Having Social Security buy stocks would be considered high risk.
Not sure I would trust anyone in government to pick investments.
SS should be abolished. If you want to implement some sort of forced savings plan, the funds from FICA should just be deposited into your 401k. Australia has a variant of this.
~10% on top of your regular contributions are more than sufficient to replace your entire income in retirement in perpetuity without eroding principal at long term average S&P 500 returns. Anyone who wants a "risk free" guaranteed cash flow is more than free to invest that money in treasuries.
There should be no pensions for government workers either. Defined contribution plans only for everyone. Not only that, but virtually all of elected politicians' compensation should be in the form of deferred compensation on a 10+ year long term vesting schedule.
Last edited by albert648; 08-05-2023 at 07:30 PM..
If SS is going to invest in something like the "Stock Market" then, just create the money from imagination they need to fill up SS coffers. The NYSE, Nasdaq, and Wall Street in general have been getting bailouts, stimulus, etc etc, whatever being propped up by the Govt, Treasury, FED or whatever iteration of the people that control the money supply manifest as anyways. Just skip the step and give it to the end users.
The "Stock Market", Wallstreet machinations can only make more by causing the COL for everyone to rise anyways. You get money to SS recipients only for that money to lose its bidding power. You end up back to where you did not want to be. You will just end up having to increase benefits even more as people complain it is not enough.
SS should be abolished. If you want to implement some sort of forced savings plan, the funds from FICA should just be deposited into your 401k. Australia has a variant of this.
~10% on top of your regular contributions are more than sufficient to replace your entire income in retirement in perpetuity without eroding principal at long term average S&P 500 returns. Anyone who wants a "risk free" guaranteed cash flow is more than free to invest that money in treasuries.
There should be no pensions for government workers either. Defined contribution plans only for everyone. Not only that, but virtually all of elected politicians' compensation should be in the form of deferred compensation on a 10+ year long term vesting schedule.
Wouldn't that make it a little difficult for elected officials who live on their salaries? Like mayors, county sheriff's, etc? Or are you saying only the wealthy should get elected positions?
There's nothing wrong with defined benefit pensions. Companies have done away with them to screw employees, putting all market risk on them and no risk on the employer. In fact, all employers should be forced to implement defined benefit plans plus minimum 6% 401k match. The pension should be portable aswell.
Last edited by WRM20; 08-06-2023 at 03:33 AM..
Reason: Spelling
When social security was set up, investing in the stock market was discussed. They didn't do it because that would give the US government a more direct involvement in corporations and in the event of a crash, more incentive to get involved.
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