Social security

[mpruet]

The Security part of Social Security is what matters to many.

Yes, but the polls all seem to indicate the primary desire is to see payouts increase. Way too many people have SS as their sole income, which it was never intended to do.

 

[mpruet]

Maybe a hybrid of private and traditional.

 

[mpruet]

The Security part of Social Security is what matters to many.

I’m not sure how secure SS really is. I know that it has a really bad ROI.

I’ll admit that for many of my working years I maxed out my payroll contributions. In absolute dollars I and my companies paid over $300,000 into SS. But in absolute dollars after 10 years retirement, I’m still less than what I paid into it. However if I consider inflation, I suspect that in purchasing power I paid much closer to $600,000 in current dollars and that means in all probability, I’ll never really break even.


The funding problem is a problem, and I suspect that it’s going to be an ever-increasing issue with the current wage spread between the workers and upper management, AI, and the social effect of things like the FIRE movement.

But lt’s go back to the idea of some kind of forced private retirement system. The risk factor can be drastically reduced by using a bucket approach when a person starts collections, also let’s impose some kind of a 4% withdrawal rule. But instead of making the funds inheritable, let’s say upon death the remaining funds are put into a pool which is then used to insure a minimum secure payout. That would eliminate the current dependency on a payroll tax. And I think doing that would be a wise move because then the funding would not be dependent on 1) how long folks remained as an employee, 2) no real effect from a recession/depression, 3) no real impact from a growth of AI, or any other items which might cause fewer folks actually receiving a payroll income.

 

[RvNaut]

I’m not sure how secure SS really is.

Because FUD works.

Why are you unsure? Do you think it is possible that you think this because of the information you get?

FUD = Fear Uncertainty and Doubt. I learned about this a few decades back. It is a sales tactic used by Microsoft ( and others) to sell Server Software packages. The basic process would be to say things that would cause the buyer to have Doubt in their minds about competitors products. Byu creating Doubt, it then creates Uncertainty about what decision to make, and the Fear associated with making the wrong decision and the consequences.

The SSI system is only in Jeopardy if you listen to the voices that want to eliminate it, and/or make it go private.

There are massive sums of money to be made by taking Government programs, by taking them private. Look at the for-profit prison system. Look at the effort to create the voucher system in education, privatizing the post office, the fight against single payer, and privatizing other porgrams. It is all about the money and the effort to get some as it passes through the hands of those that want them privatized.

The SSI is failing by intent. This is also a tactic used to delete companies, programs and other organized efforts... take away resources, prevent impriovements and then point at the lack of success and claim it needs to end. I have seen it over and over.

So SSI... it is only in poeril because it is being put theri on purpose, by those that want to get their hands on all those trillions of dollar so thery can skim off the top.

 

[RvNaut]

Way too many people have SS as their sole income, which it was never intended to do.

This is untrue. It was absolutely intended to do just what it is doing.

 

[RonDean]

Ya-know...

Private investments have never been illegal. Anyone can go ahead and invest in the stock market or other such any time they want. That's a good thing, but everyone else shouldn't be dragged along against our will and the current regulations penalize us if we choose not to go along.

For myself, the stock market stopped being an actual investment based on the actual merits of companies and became more like a game of chance long ago. I had no choice about having some of my retirement funds in a private 401(k) fund. The rules also dictated my company could restrict my choice of who administered the fund and what my benefits under it might be. When the market took a dive, so did those investment. In my view I was providing my retirement money for someone else to "play" with. THAT is what "private" retirement planning looks like.

 

[mpruet]

Ya-know...

Private investments have never been illegal. Anyone can go ahead and invest in the stock market or other such any time they want. That's a good thing, but everyone else shouldn't be dragged along against our will and the current regulations penalize us if we choose not to go along.

For myself, the stock market stopped being an actual investment based on the actual merits of companies and became more like a game of chance long ago. I had no choice about having some of my retirement funds in a private 401(k) fund. The rules also dictated my company could restrict my choice of who administered the fund and what my benefits under it might be. When the market took a dive, so did those investment. In my view I was providing my retirement money for someone else to "play" with. THAT is what "private" retirement planning looks like.

Ron, I went through all of the recession periods that you went through. I also lost a lot of money, on paper. My first big hit was with the dot-com bubble. My second was the 2008 mortgage recession. I don’t want to mention the actual numbers, but will state that it was pretty substantial. The big difference is how I reacted, and because I responded the way I did by mid-2010 I was in pretty good shape. I did not let those down-turns control me.

 

[mpruet]

This is untrue. It was absolutely intended to do just what it is doing.

Ok - I’ll agree, but will state that it was only designed to provide only the most basic retirement.

 

[RonDean]

Ron, I went through all of the recession periods that you went through. I also lost a lot of money, on paper. My first big hit was with the dot-com bubble. My second was the 2008 mortgage recession. I don’t want to mention the actual numbers, but will state that it was pretty substantial. The big difference is how I reacted, and because I responded the way I did by mid-2010 I was in pretty good shape. I did not let those down-turns control me.

What you or I did as individuals is not the issue. Different people at different junctions in their life may have done better - or far worse. I would still prefer a government administered retirement program than a private one run by people looking to maximize THEIR profits. As I said, you have always had to option of making your own private plans. But forcing everyone else to do the same is not something I would agree with.

 

[mpruet]

What you or I did as individuals is not the issue. Different people at different junctions in their life may have done better - or far worse. I would still prefer a government administered retirement program than a private one run by people looking to maximize THEIR profits. As I said, you have always had to option of making your own private plans. But forcing everyone else to do the same is not something I would agree with.

Yes, it is your choice. I chose to have both the government SS and my retirement accounts. So which of us has a more comfortable retirement?

 

[RonDean]

Yes, it is your choice. I chose to have both the government SS and my retirement accounts. So which of us has a more comfortable retirement?

Which of us has done better has never been the question. And I'm not going to get in a measurement battle with anyone. I am just saying that I want private corporate American to stay on their side of the street and keep their hands off Social Security. IF you or I ALSO choose to make private investments, that was and is our choice.

 

[mpruet]

Because FUD works.

Why are you unsure? Do you think it is possible that you think this because of the information you get?

no - because I think way too many people are trying to make SS into something it was not designed to be. That and I sense too many things that could disrupt the inherent cash flow that SS uses as its engine. Fewer folks paying into SS, smaller workforce population, AI, popularization of FIRE, for starters.

 

[mpruet]

Which of us has done better has never been the question. And I'm not going to get in a measurement battle with anyone. I am just saying that I want private corporate American to stay on their side of the street and keep their hands off Social Security. IF you or I ALSO choose to make private investments, that was and is our choice.

Then don’t expect SS to provide more than it is designed to do.

 

[Gr8ful]

All I can say is SSDI saved my bacon. When I broke my back I was in great physical shape, the farm was paid for & had everything needed or wanted done & had no debt. Had just doubled my 401k in the 2008 Stock drop, was making very good $$ & maxing out my contributions. I get 2X the average SSDI, haven't had to touch my IRA so I'm happy with the SSA. GOD has always taken care of me. I've always been very Happy & Thankful! Maybe the naysayers should count their blessings & not worry about "what may happen" as I doubt worry will change anything but bring you down.











+

 

[RonDean]

Then don’t expect SS to provide more than it is designed to do.

I don't know where you get your information on what SS was designed to do. Not that it couldn't or shouldn't have evolved over the years since then, but my research says: "The Social Security Act, signed into law by President Franklin D. Roosevelt in 1935, created Social Security, a federal safety net for elderly, unemployed and disadvantaged Americans. The main stipulation of the original Social Security Act was to pay financial benefits to retirees over age 65 based on lifetime payroll tax contributions."

Nothing in that limits it to bare minimums to survive and thankfully we have seen yearly cost of living adjustments. What might seem to be a sufficient amount will vary between people and that was not part of any argument in this thread that I am aware of. Nor am I complaining about my personal financial condition, which is probably better than I think you may assume. What I find objectionable is this drumbeat that the system is failing - so we need to privatize it. IF, and there is debate on that, social security is in trouble then I am fine with fixing it. Perhaps by raising the worker contribution or even means testing.

As far as increasing SS age, many are already concerned about losing jobs to immigrants, workplace efficiency, robotics, changes in the energy sector, AI, and I don't know what else. I don't think we need to add to that concern by pushing old folks to keep working. If anything, I think we need to go the other direction.

 

[mpruet]

I don't know where you get your information on what SS was designed to do. Not that it couldn't or shouldn't have evolved over the years since then, but my research says: "The Social Security Act, signed into law by President Franklin D. Roosevelt in 1935, created Social Security, a federal safety net for elderly, unemployed and disadvantaged Americans. The main stipulation of the original Social Security Act was to pay financial benefits to retirees over age 65 based on lifetime payroll tax contributions."

Nothing in that limits it to bare minimums to survive and thankfully we have seen yearly cost of living adjustments.

The mission statement from the SS web site states:

“Social Security is committed to helping maintain the basic well-being and protections of the people we serve.”

Two key words - helping and basic. Only the basic. In another spot they use the phrase “to provide for the basic financial needs of individuals and families”. Again the key word “basic”, only the basic financial needs.

 

[mpruet]

What I find objectionable is this drumbeat that the system is failing - so we need to privatize it. IF, and there is debate on that, social security is in trouble then I am fine with fixing it. Perhaps by raising the worker contribution or even means testing.

We already have a method in place which benefits the poorer over the richer. The first $100 paid into SS has a higher ROI than the second $100, and the second has a higher ROI than the third. That means that the person that is able to max out their yearly payroll tax will not get as large of a ROI percentage as a person who only pays 1/10 as much.

As far as increasing SS age, many are already concerned about losing jobs to immigrants, workplace efficiency, robotics, changes in the energy sector, AI, and I don't know what else. I don't think we need to add to that concern by pushing old folks to keep working. If anything, I think we need to go the other direction.

I don’t see how having immigrants would affect SS payroll taxes. It’s the employer that pays the tax, and immigrants are also taxed with the payroll tax.

 

[Gr8ful]

Here's who tried 3 times to cut or cut benefits or raise contributions. They only succeeded once in 1983.https://www.fool.com/retirement/2023/03/04/joe-biden-has-cut-social-security-benefits-3-times/ Ron I know you won't read this but bet you can figure it out.

 

[RonDean]

We already have a method in place which benefits the poorer over the richer. The first $100 paid into SS has a higher ROI than the second $100, and the second has a higher ROI than the third. That means that the person that is able to max out their yearly payroll tax will not get as large of a ROI percentage as a person who only pays 1/10 as much.

I don’t see how having immigrants would affect SS payroll taxes. It’s the employer that pays the tax, and immigrants are also taxed with the payroll tax.

Nowhere does it say "ONLY" basic needs. Basic is the floor and has changed over the years. None of this means we need to privatize retirement. I believe this is pushed more by a desire from the private sector to get access to more of our money than any actual need to "save" SS. Greed knows no bounds! I don't want a repeat of the 401k crash to similarly affect SS. There are too many people that cannot take a cut and expect to recover over time like you claimed for 401k. Any drop in monthly SS checks would be catastrophic.

At this point we are arguing in circles and just repeating the same things but using slightly different words. Why not drop it?

 

[RonDean]

Here's who tried 3 times to cut or cut benefits or raise contributions. They only succeeded once in 1983.https://www.fool.com/retirement/2023/03/04/joe-biden-has-cut-social-security-benefits-3-times/ Ron I know you won't read this but bet you can figure it out.

When I tried to go to that site, I got the following warning.

Your connection isn't private. Attackers might be trying to steal your information from https (for example, passwords, messages, or credit cards).​

But from the like title "joe-biden-has-cut-social-security-benefits-3-times" can I assume that is what it is about?

So I searched for the question and Motley Fool says:
The fact is there is some truth to the idea that Joe Biden has advocated cutting Social Security benefits in the past. Keep in mind that when I say "cutting Social Security benefits," I'm not talking about Biden taking scissors and lopping off a percentage of monthly benefits to the program's tens of millions of beneficiaries. Rather, the idea of benefit cuts is most often viewed as a way to reduce lifetime benefits paid...he would be open to the idea of a bipartisan solution to resolve Social Security's long-term cash shortfall. This would include the Democratic Party's core proposal of an increase in taxation on the wealthy (via the payroll tax) to raise additional revenue, as well as the Republican Party's favored solution of gradually raising the full retirement age.

That said, I am not a big fan of Biden and do not agree with this raising of benefit age. But, if I only have 2 choices come election time, I would pick him over "you know who." I am sure "his" plan would include stuffing his own pockets even more.