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So essentially you want the people who plan well enough that they don't need it to reward those people who are stupid/irresponsible enough to blow their money on things other than retirement accounts?
If what you are saying is true, then why don't we punish those people who use it as a sole retirement account to motivate people to plan ahead? Why punish success and reward irresponsibility?
Gee, I think people who wind up with only Social Security to live on were not necessarily stupid or irresponsible. I think many of them never earned enough in their lives to have the luxury of saving money. I think many of them lost their savings because of unscrupulous or incompetent investment advisers. I think many of them had enormous health care bills that nobody could budget for. I think many of them lost well-paid jobs and have had to coast by for years on end. You may be successful now (I hope so for you), but will you always be? Nobody can predict the future.
Are you at retirement age? Did nothing unplanned ever happen to you? Sorry, I'm at an age now where I realize it is impossible to plan for every contingency. There is irresponsibility, but there is also bad luck and unfortunate circumstances. And that can happen to me and that can happen to you. In the blink of an eye.. a death, an illness, an accident, a Bernie Madoff can make all your long planned for hopes and dreams disappear.
Every developed country in the world has created this safety net. Because stuff happens and never tempt fate..
No! I want an income insurance system for those that lost their retirement income through the collapse of their saving banks, investments or having their pensions stole by Bain Capital or other thieves. That insurance should be paid for by everyone and only provided to those unfortunate enough to need it.
We all pay accident insurance on our cars but those of us that do not have accidents never collect. Is that unfair? Old age income insurance should be the same.
Now if we want to discuss an Universal Pension System we can certainly do so but it is another topic.
So start a company that does just that. What does the government have to do with an insurance system?
Quote:
Originally Posted by transatlantic
Gee, I think people who wind up with only Social Security to live on were not necessarily stupid or irresponsible. I think many of them never earned enough in their lives to have the luxury of saving money. I think many of them lost their savings because of unscrupulous or incompetent investment advisers. I think many of them had enormous health care bills that nobody could budget for. I think many of them lost well-paid jobs and have had to coast by for years on end. You may be successful now (I hope so for you), but will you always be? Nobody can predict the future.
Are you at retirement age? Did nothing unplanned ever happen to you? Sorry, I'm at an age now where I realize it is impossible to plan for every contingency. There is irresponsibility, but there is also bad luck and unfortunate circumstances. And that can happen to me and that can happen to you. In the blink of an eye.. a death, an illness, an accident, a Bernie Madoff can make all your long planned for hopes and dreams disappear.
Every developed country in the world has created this safety net. Because stuff happens and never tempt fate..
You are right, nobody can predict the future. No one should be responsible for a person's livelihood other than themselves too. Irresponsibility is not planning ahead for those times when things go bad. Do you buy an iPhone instead of investing that money? Do you live in a 2,000sqft home instead of a 800sqft home and invest the money you save? The vast majority of people are very frivolous with their money, don't save a thing, then expect the government to bail them out with social welfare programs when things go wrong.
My 96 yr old grandmother worked just 6 years in the early 30s, putting in just a few thousand to SS. However my grandfather worked nearly 50 years and put in 100s of thousands. She is now collecting her benefit plus the spousal benefit which has totalled approx. $250,000. This is much needed and a small blessing for her. It covers her medicare and part 2 coverage with a little for bills left over.
On the other hand, my mother passed away early this year at the age of 73. She was single so no spousal payments. She worked for over 45 years and put over $300k into SS, collecting a mere 180k in return.
- My wife and I have put thousands into it, and we'll probably not see a dime of it back. At the current projections, SS will be insolvent in 10-15 years, right about the time we'd be retiring.
For my family, SS seems to be net loss overall. I'd rather see 15% of income being placed into IRA or some form of self managed accounts, out of the hands of politicians. SS has been illegally raided to help fund government expansion and we all see how that's working out.
I do believe that anyone with additional retirement benefits, investment income and a certain threshold of savings above XXX dollars, shouldn't be collecting on the ponzi scheme that SS is. This is one form of wealth redistribution that would be fairer than insane tax burdens. It would also extend the program, and might even make it solvent (cash positive).
The program is INSURANCE NOT A PENSION! Apparently your Grandmother did not have or inherit a private pension or savings/investment. Unfortunately you mother died before she saw many payments in addition to any pension or investment payments. I assume you inherited the bank accounts and investments but not the presumed pension.
I buy auto accident insurance. I have not been responsible for any accidents so far. I have not yet received ANY of my money back. Will I stop buying insurance? Not so long as I still drive a car. Will I stop paying into Social Security? Not so long as I have a job. That is fine with me.
Please complement hnsq as a paragon of fiscal virtue upon whom mammon always smiles.
Unlike the rest of us.
Can you answer my question instead of resorting to sarcasm? If you want to create an insurance program for income, why does the government need to play a role?
And wealth does NOT always 'smile' on me, I simply accept responsibility for my own life. That apparently is something other people on this board are unwilling to do.
The program is INSURANCE NOT A PENSION! Apparently your Grandmother did not have or inherit a private pension or savings/investment. Unfortunately you mother died before she saw many payments in addition to any pension or investment payments. I assume you inherited the bank accounts and investments but not the presumed pension.
I buy auto accident insurance. I have not been responsible for any accidents so far. I have not yet received ANY of my money back. Will I stop buying insurance? Not so long as I still drive a car. Will I stop paying into Social Security? Not so long as I have a job. That is fine with me.
Actually it is a retirement account managed by the government. It may be termed OASDI, or old age insurance, but it's just a name. You pay for car insurance because of the risk that you may be in an accident. If you never have an accident, good for you, but you paid for coverage "just in case". Nobody runs the risk of "accidently growing old", we all will grow old without a doubt. So that removes SS from actually being an insurance, at least from your comparitive point. IF you make it to retirement age, then you'll reap your share of the pool. It's a spread risk retirement plan, and bad one at that for those who joined late.
Nothing more than a ponzi scheme that we are legally bound to buy into. Retirement ages, lifespan, income inequalities, benefits beyond the scope of SS all have to be figured in, yet they are not.
The ones in first are secure. My generation and the next, and the next, will likely not see a dime back. If this is insurance, it's the worst insurance company ever.
People who sit back and collect Social Security, are already living in poverty. If you abolished it, you'd
A) Simply change the definition of poverty, not the numbers because SS isnt theirs.
B) Decrease future poverty because people who save up on their own, rather than relying upon SS, wont be poor.. They have an asset that has value, which can be given to their estate to reduce future poverty.
Of course you would claim that abolishing SS would reduce poverty, despite the overwhelming evidence that says otherwise....
Social Security benefits play a vital role in reducing poverty. Without Social Security, according to the latest available Census data (for 2008), 19.8 million more Americans would be poor. Although most of those kept out of poverty by Social Security are elderly, nearly a third are under age 65, including 1.1 million children. (See Table 1.) Depending on their design, reductions in Social Security benefits could significantly increase poverty, particularly among the elderly.
Looking back at how much I have paid into Social Security in the last 35 years, and looking ahead to the probabilty that there may be nothing there in 15 years...
There will be something there in 15 years, just not the amount you thought there would be.
As best I can tell, from all present data, benefits will be cut 28%-32% across the board. Social Security says 25% in their April 2012 report, but then they were saying 23% in 2011.
Quote:
Originally Posted by Mayiask
I'm confused when you say it isn't theirs.
Then try reading the law.
Applying common sense...
Mircea
Quote:
Originally Posted by A Common Anomaly
As for a investment policy, SS will not bring you significant returns....
Fail.
Social Security is not an investment policy. Only a Göbbelesque propaganda artist or disinformation specialist would attempt to equate a basic insurance plan to an "investment policy."
Pointing out the obvious...
Mircea
Quote:
Originally Posted by hnsq
If you were born in 1950, and averaged an income of $50,000 in today's dollars, your average lifetime rate of return on social security would be 1.67%. If you put that money into the stock market as a well diversified portfolio over the same time period, your average rate of return would be 7.05%. Using social security instead of the stock market is an incredibly poor decision. This isn't a political question, it is a math problem.
Fail.
Social Security is not an investment policy. Only a Göbbelesque propaganda artist or disinformation specialist would attempt to equate a basic insurance plan to a "well-diversified investment portfolio."
Talk is cheap. The rate was 1.5% in 1950, so who was so pathetic that they couldn't set aside a measly $1.50 out of very $100 they made for their "well-diversified investment portfolio?"
Quote:
Originally Posted by hnsq
Greg - Social Security has averaged 4.22 times less than the stock market over the last few decades. Can you show your data that suggests otherwise? Without SS, retirees would have several times more money than they do today. If you can make this claim, I assume you have done the math. Please show your calculations where you found out that SS is better than the stock market.
GregW is right. You fail again.
You claim that retirees would have more money than they do today, based on what? Some math equations?
One of my undergraduate degrees is a BA in Economics, yet my Investment IQ is a friggin' ZERO.
I can set up and run an economy in a developing State, but I don't know how to invest. And I really don't want to know, and I don't even give a damn. It's a lot of time wasted that could be better spent studying something else. And I don't believe in stocks or the stock market. If it was up to me, there wouldn't be either of them. There are many ways to invest; dozens of ways to invest, without stocks.
If Joe McTrader in his McMansion with his McDesktop can barely manage without getting screwed, then how in the hell are the majority of Americans who don't have the skill or knowledge or even common sense to "play the market" going to make money for retirement?
You make an awful lot of assumptions not rooted in reality.
Oh, you want them to hire someone and pay them to manage their accounts for them. I see.
The flaw in your argument is that if it was so easy, everyone would be rich or at least comfortable in their retirement, but they are not. But none of that matters since Social Security is an insurance plan. There's nothing stopping people from saving money on their own.
Quote:
Originally Posted by hnsq
If you want to create an insurance program for income, why does the government need to play a role?
Because the world is full of people who are clueless, and dumb, and filled with fear, and uneducated, and ignorant -- even when they are educated, and stubborn and lazy and pathetic and apathetic and because apparently people aren't very good at predicting the future.
Someone has to take responsibility and exhibit some leadership.
That's the role government plays. To have the federal government fill that role is stupid, illogical, and harmful, but State governments can fill that role extremely. The States are superior, since the States recognize that the cost-of-living varies greatly across the US, and each State can mandate a minimum amount to be set aside so that no one is left in the streets in their old age.
Economically...
Mircea
Quote:
Originally Posted by Oldhag1
The biggest problem with Social Security is that it was designed when the average life expectancy was 62 for men and 65 for women. Our life expectancy now is 74 for men and 79.5 for women. Living expenses for 12 to 14 years is substantial so it's no wonder we are having trouble paying for it.
No, that is not the biggest problem. The biggest problem is that it was always inadequately funded for its purpose, not to mention it wasn't properly established with "seed money." You'd have to be totally insane to believe that a 1% tax would fund Social Security in perpetuity.
Every single president from Truman to Bush the Elder did their proper duty, and insisted that Congress increase the FICA tax rate to ensure it would be adequately funded. Every single one of them. Some of them, Johnson, Ford and Reagan even set up commissions to study the issues and make recommendations.
Blow Job Bill, Bush the Younger, and The Boy Kingâ„¢ failed in their duty as presidents. They neither demanded that Congress raise the FICA (and SECA) tax rates, nor did the set up commissions to study the problem. If Blow Job Bill had done is duty, the FICA tax rate would have been about 7.5% when he left office. If Bush the Younger had done is duty, the FICA rate would have been about 8.5% when he left office. If The Boy Kingâ„¢ had done his duty, the FICA rate would be about 9.0% to 9.2% right now, instead of 6.2% with a 33% rebate.
Historically....
Mircea
Quote:
Originally Posted by tinman01
I know that I would be much better off if I had never had to pay into SS. I would have invested that same money as I did others and would be retired already.
You're so full of it it's not even funny.
How pathetic are you, that you couldn't even set aside a measly $6.20 out every $100 you earn?
The 6.2% rate didn't even kick in until 1990.
You're all talk and no doing.
Amused....
Mircea
Quote:
Originally Posted by malamute
Actually that isn't true. It was set up to be a forced but inefficient retirement program.
And you're basing that nonsense on what? A reading of the law? Fail. FDR's fire-side chats? Fail. Go read the law and listen to FDR's fire-side chats. He uses the analogy of a three-legged stool:
1st Leg] Your pension (now a 401(k)); and
2nd Leg] Your personal savings/investments; and
3rd Leg] Social Security.
So, ideally, when each American retires, they have a pension/401(k) and their personal savings/investments and Social Security.
If their pension plan fails, or their 401(k) craps out, then they still have their personal savings and Social Security.
If for some reason their bank should fail and they lose their personal savings, then they still have their pension/401(k) and Social Security.
If for some bizarre reasons, their pension/401(k) fails, and their bank fails causing the loss of the personal savings........at least you have Social Security to keep you from eating out of garbage cans.
So, tell us, what are you using, huh? Tarot Cards, I Ching, chicken guts, tea leaves, Crystal Ball, Ouija Board, what?
I nominate you to be the Seer of Life for all Americans.
Obviously, you have all the answers, and you can know and see the future for each and every American, so you can script out their lives for us so we'll know who will be successful and have a Beautiful Lifeâ„¢ and whose life will be so frighteningly horrible that even M. Night Shyamalan would refuse to do an horror film about it.
Hell, you can even charge for your services.
Also amused....
Mircea
Quote:
Originally Posted by steven_h
I'm torn when it comes to SS.
My 96 yr old grandmother worked just 6 years in the early 30s, putting in just a few thousand to SS. However my grandfather worked nearly 50 years and put in 100s of thousands. She is now collecting her benefit plus the spousal benefit which has totalled approx. $250,000. This is much needed and a small blessing for her. It covers her medicare and part 2 coverage with a little for bills left over.
On the other hand, my mother passed away early this year at the age of 73. She was single so no spousal payments. She worked for over 45 years and put over $300k into SS, collecting a mere 180k in return.
- My wife and I have put thousands into it, and we'll probably not see a dime of it back. At the current projections, SS will be insolvent in 10-15 years, right about the time we'd be retiring.
For my family, SS seems to be net loss overall.
Another fail.
Would you like an hint?
Okay.
OASI = Old Age and Survivors Insurance
Get it? Here, let's use this as our starting point:
Black's: Insurance is a contract whereby for a stipulated consideration, one party undertakes to compensate the other for loss on a specific subject by specified perils.
You are paying a weekly insurance premium in the form of a tax in order to insure against a specified peril, namely you living under a bridge and pan-handling on a street corner while your bag-lady wife roams the city eating out of garbage cans.You are not paying an insurance premium in the form of a tax to insure that you can take monthly cruises to the Bahamas and shop at Sak's 5th Avenue, and then fly every other weekend to Monaco to play Baccarat at the casino's and enjoy fine dining.
Seriously, I'm sick and tired of hearing, "If only I didn't have to pay into Social Security I would have my diversified investment portfolio sitting at $3.7 Million right now."
Bull-****.
If people can't do that while paying the tax on Social Security, then they cannot do that without a tax on Social Security.....and anyone who wants proof of that....I give you America.
Quote:
Originally Posted by steven_h
I'd rather see 15% of income being placed into IRA or some form of self managed accounts, out of the hands of politicians.
That's an excellent idea, and I've been advocating something similar for a long time.
The simple reality is that if people are left to their own devices, they will not save money unless a gun is stuck to their head. Government's only function here is to be the gun pointed at people's heads to force them to save money. Government can do that by mandating the percentage to be deducted, but government doesn't need to have their hands on that money.
And the federal government shouldn't be involved here at all. This is a State issue. The State you dictate the amount to be set aside, based on the cost-of-living in that State, so the rate would vary from State-to-State, since the cost-of-living varies from State-to-State (something *******s don't understand).
And you need proper devices to protect that money.
That money is a liability, since it represents future payments to you. You cannot use it as collateral for loans or mortgages. That would be a disaster. And you have to protect it from seizure through other means like alimony, child support, creditors, judgments, other tax agencies etc.
Quote:
Originally Posted by steven_h
SS has been illegally raided to help fund government expansion and we all see how that's working out.
That is totally irrelevant and has no bearing whatsoever on anything.
Whether the OASI Trust Fund has $2.47 TRILLION in special treasury securities or $2.47 TRILLION in cold hard cash, the story ends the same way......you don't have the money to pay the benefits owed.
True, converting that $2.47 TRILLION in special treasury securities will be very painful for Americans but the fact remains that some time between 2023-2025 the OASI Trust Fund will be history, and the only thing funding Social Security will be the FICA payroll tax.
Since the amount of the FICA payroll taxes collected in 2025 won't fund 100% of the payments, everyone's Social Security benefits will have to be slashed 28% to 32%.
You could eliminate the wage/salary cap resulting in some "pain and suffering" (snicker) in your society, and that would do nothing, except result in your benefits being slashed maybe 12%-15%.
If you did that, and raised the FICA rate to 9.2% causing additional "pain and suffering" (snicker) in your society, you could extend the OASI Trust Fund to about 2030 or so, before taking a slight cut (2%-3%) in benefits, but the cuts would increase (almost doubling each year) after 2035 steadily.
You can do both of those, and means-test -- pick a number between 100% and 200% of poverty level, and extend to maybe 2040. After that, it's dead in the water. I've been thinking about putting up some graphs and charts with data sets in a blog so people can see that. It's pretty interesting. Because the present and past two administrations failed you, you're very limited in your options, and no matter what you do, a lot of people aren't going to like it.
Realistically...
Mircea
Quote:
Originally Posted by GregW
The program is INSURANCE NOT A PENSION!
I buy auto accident insurance. I have not been responsible for any accidents so far. I have not yet received ANY of my money back. Will I stop buying insurance? Not so long as I still drive a car. Will I stop paying into Social Security? Not so long as I have a job. That is fine with me.
Couldn't rep you for that, but you're spot on.
In a Perfect Worldâ„¢ you would have a Beautiful Lifeâ„¢ and you would have no need to hedge your bet with an insurance plan like Social Security....but it is far from a Perfect Worldâ„¢ and my I lost my Crystal Ballâ„¢ when we crashed and burned in the Harz Mountains, so there it is.
Also, the pictures from the 30's of soup lines and widespread poverty haunt me. Would we be better going back to that??
How can anyone even ask that question? A country as rich as ours has no excuses to not take care of the old and the sick.
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I'm confused when you say it isn't theirs.
