Ignore the fear-mongering on Social Security

[mawilson 2,133]

The system owes 7.9 trillion more in benefits this year than it will receive? That's a low shot even for the Heritage Foundation.

What they mean is that the people currently paying into the system are owed $7.9 trillion,

assuming today's ratio of employed workers to retirees and contribution levels.

[Pinocchio Liberal 268]

Because the government can manage your money better than you can?

Indeed. my mom lives high on the hog on 900.00 a month. :dance: Yay SSI!

[Mr. Big Dog 10,747]

What they mean is that the people currently paying into the system are owed $7.9 trillion, assuming today's ratio of employed workers to retirees and contribution levels.

I know what they mean but it isn't what they say. This is the long range outlook. Sure, 7.9 trillion sounds like a huge number - and indeed it is a huge number. However, this is not an annual figure but an accrued number over several decades. And it assumes, as you point out, that nothing changes in terms of contributions and benefits. It's undisputed that changes will need to be made but those changes are not as dramatic as the Heritage Foundation would like to make it seem with statements like that.

Indeed. my mom lives high on the hog on 900.00 a month. :dance: Yay SSI!

So what you're saying here is that your mom failed to plan ahead. Not planning ahead would leave her with $0.00 per month absent of SSI.

[Pinocchio Liberal 268]

So what you're saying here is that your mom failed to plan ahead. Not planning ahead would leave her with $0.00 per month absent of SSI.

She's almost 80. She bought into Roosevelt's BS. If there was no ssi then I would say you would be forced to plan.

[evli1966 88]

She's almost 80. She bought into Roosevelt's BS. If there was no ssi then I would say you would be forced to plan.

My mother is 74 and did not plan and probably never thought she would live this long.

She recieves less than 800 a month to live on.

She lives in a trailer my sister owns; I pay her utilities and supplement her medical/prescriptions when needed, she has her own car and pays her own insurance and lives decently but without assistance it wouldn't happen.

The thing she realizes is it was her choice to raise her 5 children and for go savings until it was to late. she doesn't expect the government to hand it to her but if it is supposed to be there then she expects her fair share.

It is my choice to help her and ensure she is comfortable; I love her, respect her and owe her that as my mother.

[Pinocchio Liberal 268]

My mother is 74 and did not plan and probably never thought she would live this long.

She recieves less than 800 a month to live on.

She lives in a trailer my sister owns; I pay her utilities and supplement her medical/prescriptions when needed, she has her own car and pays her own insurance and lives decently but without assistance it wouldn't happen.

The thing she realizes is it was her choice to raise her 5 children and for go savings until it was to late. she doesn't expect the government to hand it to her but if it is supposed to be there then she expects her fair share.

It is my choice to help her and ensure she is comfortable; I love her, respect her and owe her that as my mother.

And to think a welfare mother of 3 can get a 1000.00 a month. The welfare mom doesnt pay a dime to either ssi or or welfare cuz she doesnt work.

[Texanadian 10]

Americans view Social Security as a central component of the nation's social contract. It is probably the most popular federal government program. Not surprisingly, when President George W. Bush tried to privatize Social Security — essentially asking Americans to put the security of their future in the stock market — the people considered it a preposterous idea, especially after they had watched thousands of Enron investors lose their savings and saw the stock market lose 38% of its value between January 2000 and October 2002.

The people who worked at Enron and put 100% of their 401k plan money into Enron stock were fools. Diversification is key to any retirement plan. And while the stock market can lose 38% of it's value over a 2 year period, that is only relevant if you had only worked for 2 years. The average person who works for 50 years (age 15-65) would be hard pressed to see their retirement plan go down by 38%. A person who is in their 60's and still 100% invested in stocks is also not thinking straight. You need to move to less stock and more bonds as you reach your upper 50's and 60's.

First of all, SSI is not an investment - it's insurance. Second, the maximum taxable income for 2010 is about 107g's at a rate of 7.65%. So assuming that you're not putting any money into a pretax retirement account, and were earning that max amount this year, your total FICA tax would be about 8g's. The max in 2005 was 90g's with a total FICA tax of about $6,800. The max SSI benefit for this year is $2,346 or about 28g's. Most retirees get paid out more in SSI than what they paid into it, especially if they've been receiving benefits for 20 years. But again, it is not an investment - it's insurance. If God forbid, you become disabled, you will receive SSI. If you, God forbid, die before your spouse does, she receives a benefit.

The only people who benefit from SS are people who paid lower rates on lower taxed income in the past. The very old of today and more so the very old of the past. For the young person or middle aged person today, it's a loss. My grandfather paid into the Canada Pension Plan for 11 years and retired. He lived to age 94. To the argument of disability and life insurance, there are private policies which can account for both of those. And they each have the benefit of not being a tax on working.

Also, social security death benefits are small. A life insurance plan on the other hand gives you the full amount immediately. SS can maybe keep you in your house barely paying the mortgage. Private life insurance can pay off the mortgage, pay off the kid's college, pay off your cars, and still leave you money in the bank. You're forgetting that the total Social Security tax putting aside the medicare aspect of it isn't 6.2% but rather 12.4%.

What was Social Security when it first started? 2%. And 2% of $3,000 earned income max. That's equivalent to about $45,000 of income in today's world. So we have a system today that is taxed 6.2x as high as the original tax rate. And on more than twice as much income too. The future prognosis is to raise the tax rate and amount taxed even more so that we can pay future people less.

There is no private investment that can compete with SSI's benefits because, again, it's not an investment, it's insurance.

Hahahahahaha. It most certainly is not an investment.

Focusing on retirement benefits alone, most workers with moderate and low incomes will receive an annual rate of return slightly in excess of the 2 percent that government bonds typically provide above inflation. For example, a couple with one worker who earned an average income and retires in 2029 would receive an average real rate of return of 3.97 percent. Those with high earnings would receive a lower, but still positive rate of return.

Woop de do. A 2-4 percent rate of return. You're forgetting about the lost income that could have been generated had that money been put into a private retirement plan. Somebody who starts collecting in 2029 would have probably started working around 1979. The stock market from 1979 to 2029 is most certainly going to provide a better rate of return than 2-4 percent. Heck, an ING savings account with no risk was paying 4.75% back in 2007 when I moved to the US. My grandmother bought Canada Savings Bonds in the early 1980's that paid 18% compound interest for 5 years. She doubled her money. Again, low risk.

From the standpoint of taxpayers, Social Security is enormously efficient. Its administrative costs are less than 1 percent of benefits. In contrast, the fees in privately managed investment accounts are likely to reduce the ultimate retirement value of the accounts by 20 percent

20%? This is taking compounding of annual fees to the extreme while solely calculating the current cost of Social Security fees over the course of one year. My 403b plan at work offers an S&P 500 based fund that has a management fee of 0.07%. Besides, you have to ask the question 20% of what? 20% on a million dollars leaves you with $800,000. A far cry from the meager living that Social Security pays you.

[Texanadian 10]

[Hilarious Clinton 452]

Come on now, you have to see that the SS program must take in more than it pays out to stay solvent. We were running surpluses until Congress broke open that piggy bank. I don't care if you call it insurance or a retirement program that fact is still there. Now that all of the trust fund is gone and the boomers are retiring that means we have about 2 workers for every retiree. The math just isn't there. They system is broke and in major debt. Without drastically increasing premiums and reducing benefits it will not last for much longer. "Tweaks" will not fix it. The government is totally to blame. I say take SS out of the hands of the government and give it to a well regulated and controlled private company. The only alternative is not having it there when our kids want to retire.

Oh, and BTW. I will not see a total return on my investment if I live to the life expectancy of 75 years old. If I had that money that I was forced to give SS and invested it in a simple retirement account I could have a much better retirement. Case in point, After my divorce I had to cash in my retirement account and give my ex a bunch of it. Since then I have invested 15% of my gross (4 years) in a 401K. If I retire at 62 ten years from now the charts say I will have a income, FOR LIFE, of about $2000/month. I have been paying into SS for 35 years now and at age 62 I will get about $1200. Tell me which is the better investment. SS is only good for people that don't plan for the future. For everyone else it is a raw deal.

Exactly. Have looked around around anywhere you go? I do and I don't see too many that can chew bubblegum and walk, let alone 'plan for their future'.

[one...two...tree 2,762]

I suppose in another 75 years, there will still be people trying to make the same arguments against social security, but it will be even more ridiculous.

[evli1966 88]

I suppose in another 75 years, there will still be people trying to make the same arguments against social security, but it will be even more ridiculous.

No they won't it will not be there.

Or be so insignificant that it might pay for a weeks groceries or a power bill etc.

If I were you I wouldn't count on it in your future as you seem to be doing with your statements.

[I AM NOT THAT GUY 5,715]

No they won't it will not be there.

Or be so insignificant that it might pay for a weeks groceries or a power bill etc.

If I were you I wouldn't count on it in your future as you seem to be doing with your statements.

It won't be there in 30 years. It sucks to be Gen X, Y, or Z. But, thanks in advance for paying for the boomers. Thank you, so very, very much!

ETA: Spelling

Edited August 18, 2010 by ##########

[one...two...tree 2,762]

Yeah, yeah....sure. They've been saying Social Security wouldn't make it past a decade. Some people refuse to accept reality.

[I AM NOT THAT GUY 5,715]

Yeah, yeah....sure. They've been saying Social Security wouldn't make it past a decade. Some people refuse to accept reality.

[one...two...tree 2,762]

Do you make house calls?