Hot Topic: Social Security

[Spaceman Spiff]

^^^In my opinion most younger people feel they won’t get to enjoy the benefits or it will not be near enough to matter in their retirement....

I think you are correct. They see a system that will collapse under its own weight eventually (nothing lasts forever). And someone is going to be left with nothing.

..... Much of the problem is the fact there is a cap on the tax and with the huge gap in wealth distribution in this country it becomes even a bigger problem....

That won't fix anything (although I think it should be done). SSA did an analysis on that a few years ago and the conclusion was that all that does is push the problem out a few years.
Wealth inequality is a huge problem in the world that all governments are guilty of enabling.

U.S. citizens won't let others in need go without social security income .....

Political will is very fickle. The world will be a very different place in 10 years; who knows what the economic situation (or political will) will be in the US.

 

[tx2sturgis]

Several posts have been deleted, and I always sign my work so if your post is gone, I'm probably the mod who deleted it.

Please stay on topic, and lets not argue about politics.

 

[Dirtrider]

As I stated earlier in this thread, SS is by far the worst "investment" anyone can do. Why would you place your money in an account that will lose 4.3%?
You're better off letting it sit in a standard bank account than this BUT we are forced to pay into it IF you are working. About half of American citizens don't pay any taxes so over time, this program will fail if left untouched. The politicians won't /can't pull it away but hopefully can offer an alternative plan for you to invest your own money for retirement and then pass it on after your death, unlike the government taking whatever is left in the account.

 

[BlueMarkOhio]

A number of persons here have stated directly or inferred that 'Social Security is going broke' is a lie yet offer no supporting evidence to rebut the SSA's own analysis. Without support it's just an uninformed opinion

SSA does NOT say Social Security is going "broke", it says the Trust Fund will be drawn down. That is NOT the same thing.

If that is "broke" then every single other government program that is funded year by year is also "broke". Calling it broke is just fear mongering promoted by Wall Street in order to scare us into turning it over to them to manage so they can gamble with it just the like the wizards of 2008 did.

 

[BlueMarkOhio]

As I stated earlier in this thread, SS is by far the worst "investment" anyone can do. Why would you place your money in an account that will lose 4.3%?

Because SS is insurance, not an individual investment account.

Social Security is also called OASDI which stands for Old Age, Survivors, and Disability Insurance program.

 

[rruff]

As I stated earlier in this thread, SS is by far the worst "investment" anyone can do. Why would you place your money in an account that will lose 4.3%?

I am highly skeptical... can you show your work on that?

https://www.epi.org/blog/social-security-is-looking-like-a-pretty-good-investment-these-days/"A young worker today with average career earnings will receive Social Security retirement benefits equivalent to total employer and employee retirement contributions plus a 5.7 percent annual rate of return. This “internal rate of return” is not much lower than the 7.0 percent net return for 401(k)-style defined contribution plans between 1990 and 2012, and it’s higher than more recent returns for these plans and IRAs (3.1 percent and 2.2 percent, respectively, over the 2000–2012 period)."

Even a very young person is likely to get a better return on SS payments than investments. People who are retiring now or early did even better.

 

[Cajunwolf]

All I can say is that I'm on my 70th year on this planet, and I ended up retiring at 62 to take care of a seriously disabled daughter, and I'm grateful I was "forced" to invest in SS payroll deductions; I wouldn't be surviving now. I worked my backside off for better than 40 years, paid my taxes, and had all kinds of retirement investments, but it was either another failed marriage, kid needing braces, or college fund that took them down one by one. In life, one never knows what's coming around that blind corner. All one can do is be ready to roll with it. For me, the SS was a rainy day thing, and folks, It's going to rain hard someday. I live in a 30-foot RV now. I have my daughter on the way to being taken care of, and I live okay. How's that old song go... "I'm a man of means, but by no means, king of the road," Roger Miller, I think it was.

 

[bullfrog]

The majority of people like me are not really smart about investing time or money. When I was young and healthy living where I was in a time where I really didn’t expect to live to see middle age it just wasn’t near as important as staying alive. Once I saw I might just survive I struggled working 3 jobs and going to college to become a teacher. Later when I managed by a miracle to reach middle age keeping a roof over our heads and a vehicle running so my wife and kids could survive was my main focus. Having survived cancer and a bankruptcy due to medical bills I starting to think about retirement. I realized my small teacher retirement wouldn’t cut it especially since my job didn’t participate in Social Security. I immediately cashed in my teacher retirement and invested in a house which we needed anyway, changed careers to one that did participate in Social security and allowed me to count or purchase all my military and teaching years towards being vested in a state pension. As soon as I was vested in my pension I sold the house and bought an Old RV I knew I could pay cash for, started work kamping and I feel lucky to get Social Security later on have enough to get by. I feel fate treated me well even though I got a late education, but by no means would that have worked in old age without Social Security and Medicare and it needs to be better, there are just too many people living barely or worse on just Social Security. I have thought for years since being in service a citizen in this country should be required to serve in the military, do community service or something to benefit others to in order receive government benefits later on in life, let smarter people than me do the investing and insure everyone in this country at least is taken care of in old age.

 

[mpruet]

Folks need to think of SS as a forced savings plan, not a forced investment plan. Is it a great investment plan - nope. Why not - because the money taken into to program must be invested in rather safe funds - i.e. government bonds. And that means you don’t keep up with inflation. This is a requirement by law. Because of that it will not grow as well as just investing in the broad indexes. But it doesn’t have as great of a risk.

But is it a good plan - yes. Why? - because most people simply don’t save and invest on a regular basis. To have a safe and secure retirement, you really need to be saving/investing some 15-25% of your income on a regular basis. Do folks really do that? Nope. If they were then your wouldn’t be hearing so many folks complaining that they can’t live on SS.

Oh yes - and as far as not being savvy enough to invest. For most folks just buying a S&P index fund will work just fine and can be done fairly cheaply. Just by buying 15% of your income in the SPY ETF from one of the discount brokers will suffice for a fairly decent retirement.

 

[mpruet]

Oh yes - I don’t know about other folks, but my SS is bringing in right at 25% of my working income. Is it enough to cover my expenses? - nope, but when coupled with income from my retirement nest egg is pretty sweet.

 

[Cajunwolf]

I'm sure grateful for my SS. And I live in a small RY, too, and love it. I also have a side stream. Social Security is good because saving and planning for the future are not in the nature of human nature. It's no longer taught in schools, and most folks haven't a clue how to invest in anything except drugs and alcohol. SS is good for society because those less fortunate have a means of income in their golden years. It's less of a burden on the rest of us. That said, everyone needs a way to contribute because it's also like those who have contributed over a lifetime being upset with those who contributed nothing at all getting a free ride. Maybe I'm being too harsh, @bullfrog said it better, but I am a bit clumsy. Now, I'm not talking about someone with a lifetime disability that prevents them from contributing in any way; I have a disabled daughter from birth on disability. If you're disabled, you're disabled, but the thing keeping the some disabled from earning extra income is the government one size fits all mentality. If we could do more about mental illness, there'd be fewer people who are disabled and homeless. You have to be careful with mental illness. Some folks are mentally ill from a broken childhood, and you can't fix that, but we can try to prevent it—just my two cents worth.

 

[SLB_SA]

The article Social Security: Could the New Congress’s Sharp Divide Lead to Compromise on Reform? is an interview of Laurence Kotlikoff by Nathan Abse. Here is the final question & answer:

GovExec: Can you go deeper on why you think Democrats could make a deal with Republicans whose positions are further from theirs than ever?

Kotlikoff: You know, you highlight that now Republicans are pushing hard toward their aims, toward cuts, and you imply Democrats in the Senate would likely try to block that. But it could even be the opposite, that many Democrats go with some sort of compromise, because there’s only so many years before an actual crisis on Social Security—and they want to preserve the system for poor people, and well into the future. Now about the likely benefits cuts the Republicans will want, Democrats are going to be far less inclined. But on a tax increase for Social Security, they would possibly go with that. So, it’s possible there could be a compromise on some of these things. Everybody could go after a compromise, in my opinion.

 

[bearbayou]

All I can say is that I'm on my 70th year on this planet, and I ended up retiring at 62 to take care of a seriously disabled daughter, and I'm grateful I was "forced" to invest in SS payroll deductions; I wouldn't be surviving now. I worked my backside off for better than 40 years, paid my taxes, and had all kinds of retirement investments, but it was either another failed marriage, kid needing braces, or college fund that took them down one by one. In life, one never knows what's coming around that blind corner. All one can do is be ready to roll with it. For me, the SS was a rainy day thing, and folks, It's going to rain hard someday. I live in a 30-foot RV now. I have my daughter on the way to being taken care of, and I live okay. How's that old song go... "I'm a man of means, but by no means, king of the road," Roger Miller, I think it was.

Hello Cajunwolf:
We have a long term disabled son--born with several challenges. Thankfully he now has disability insurance (under social security)....which means, because of Medicare, he gets his seizure medicine 'free' as well as his cancer treatment. Otherwise, we'd be facing $765 per month just for the seizure med. PS: I guess there's no need to remind anyone that pharmaceuticals make certain they're always in high cotton.

 

[RvNaut]

We have a coming crisis, but we can't talk about why.... and we can't talk about who is doing the why.... as such...
I depend 100% on my SS that I paid for. The last thing I want is it to go private and have someone making money off my SS as they attempt to roll it over and make a buck... OR, they fail and my SSI goes they way of Maddoff or another stock scammer.

 

[Cajunwolf]

Hello Cajunwolf:
We have a long term disabled son--born with several challenges. Thankfully he now has disability insurance (under social security)....which means, because of Medicare, he gets his seizure medicine 'free' as well as his cancer treatment. Otherwise, we'd be facing $765 per month just for the seizure med. PS: I guess there's no need to remind anyone that pharmaceuticals make certain they're always in high cotton.

I bet we're talking about Kapra, that's what my daughter takes to prevent seizures, and it's like 700-800 per month.

 

[Cajunwolf]

We have a coming crisis, but we can't talk about why.... and we can't talk about who is doing the why.... as such...
I depend 100% on my SS that I paid for. The last thing I want is it to go private and have someone making money off my SS as they attempt to roll it over and make a buck... OR, they fail and my SSI goes they way of Maddoff or another stock scammer.

Yeah, I agree 100%. If I ran the House, it would be with a ball peen hammer and not a gavel.

 

[towboater]

I'm sure grateful for my SS. And I live in a small RY, too, and love it. I also have a side stream. Social Security is good because saving and planning for the future are not in the nature of human nature. It's no longer taught in schools, and most folks haven't a clue how to invest in anything except drugs and alcohol. SS is good for society because those less fortunate have a means of income in their golden years. It's less of a burden on the rest of us. That said, everyone needs a way to contribute because it's also like those who have contributed over a lifetime being upset with those who contributed nothing at all getting a free ride. Maybe I'm being too harsh, @bullfrog said it better, but I am a bit clumsy. Now, I'm not talking about someone with a lifetime disability that prevents them from contributing in any way; I have a disabled daughter from birth on disability. If you're disabled, you're disabled, but the thing keeping the some disabled from earning extra income is the government one size fits all mentality. If we could do more about mental illness, there'd be fewer people who are disabled and homeless. You have to be careful with mental illness. Some folks are mentally ill from a broken childhood, and you can't fix that, but we can try to prevent it—just my two cents worth.

Agree 100%! Unless I missed it, has anyone commented on where all that SS money goes? It goes back into the economy providing jobs to millions of working class people so they can feed their families, buy houses, cars etc. Try doing that without our SS. But what the hell do I know.

 

[Spaceman Spiff]

We have a coming crisis, but we can't talk about why....

Why? Because for at least 30 years the SSA has been collecting less money than necessary. And they have been investing in a vehicle that hasn't kept up with inflation.

and we can't talk about who is doing the why....

Who? SSA has been sounding the alarm bells and both political parties have had full control of the legislature and presidency at the same time for a while and nothing got done. The political will is not there: everyone wants to fix SS but nobody wants to pay for it.

as such...
I depend 100% on my SS that I paid for.....

What you paid in was used to pay your parents SS benefits. Your benefits is being paid for by your kids contributions (plus the small reserve built up). In <15 years that well runs dry and all SS can pay out is what is coming in, which will be less than what you get now, unless something is done.

We are so fractured as a society that any solution is going to be a compromise that is painful to both sides. The other option is nothing substantial gets done and retirees get less in the future.

And demonizing and name calling the other side doesn't help.

 

[user 22017]

I just did a search on Duck Duck Go for "Fear Mongering Social Security," because I heard these same arguments about the demise of SS 20+ years ago. There are tons of articles about the current fear mongering, but one stood out. It lists almost everything mentioned in this thread. Including "Ponzi Scheme" and how we would be better off investing on our own.

The article is from 2015. Here:

The Unending Task of Debunking Social Security Fear-Mongering (at Justia )​

 

[bullfrog]

^^^ As pointed out most all Social Security benefits get spent and put back in the economy at least in my case! Lol!!! Raise the income cap to help increase the economy and solve some of if not all the Social Security issues. The rich are still gonna get richer but they will have to work for it and the majority of the poor elderly will be better for it. It is a win win.