Social security

[Gr8ful]

Don't you find it odd they put younger people with covid in nursing homes where no one had covid? Most times the younger person with covid survived but many older folks caught covid & died.

 

[mpruet]

You joke but there are those on the right who want it to happen. Not shooting them, but withholding care.

I don’t know how true that is any more. Generally when benefits are granted they become so popular that they become hard to get rid of. That’s one of the reasons that congress couldn’t remove Obamacare even though there was a republican majority in both houses when Trump was president.

I think that now most of the folks on the right are so not for financial reasons, but because of social conservatism. Also a lot of the folks on the far right are actually benefiting from SS, medicare, Medicaid, and even SNAP. At one time maybe the right wanted to get rid of SS, mainly because they failed so badly during the Great Depression and their focus was on big business, but eventually big business started favoring SS and many of the things that FDR had pushed through.

One of the key things is that many of the folks on the far right feel that they are missing out on the American Dream, and to a large degree economically they are. This feeling is causing many of them to want to retain what they have, and that encourages them to take a conservative stance.

 

[mpruet]

You joke but there are those on the right who want it to happen. Not shooting them, but withholding care.

One more thought - and this might be controversial.

I’d like to see SS disappear. I think that most folks could do much better the money they put into SS than what SS provides. But I don’t think that it will go away, nor do I think that most folks would be that successful on their own. It requires knowledge, discipline, and a bit of luck.

But I’d much rather that all folks were able to build a good sized nest-egg for their retirement than to have to rely on SS.

 

[RonDean]

We wouldn't vote for a congress or senate if we were a democracy. It would be a majority vote of the people. Just show me where the constitution says democracy.
Websters was published in 1828, Oxford in 1884. If we we're a democracy why didn't H. Clinton win in 2016 as she got more votes?

Nor have you explained what your point is. That we have democratic elected representatives and an outdated electoral college? Or that our constitution has already gone through several revisions and needs several more? I'll give you that much. But whichever word or term either of us chooses to use will find many different sources to support each. So, I'll ask again ... what is the point ???

 

[user 22017]

One more thought - and this might be controversial.

I’d like to see SS disappear. I think that most folks could do much better the money they put into SS than what SS provides. But I don’t think that it will go away, nor do I think that most folks would be that successful on their own. It requires knowledge, discipline, and a bit of luck.

But I’d much rather that all folks were able to build a good sized nest-egg for their retirement than to have to rely on SS.

It's something you find fun and interesting... the stock market. It's not fun, and not interesting, to most people. There are tradeoffs to increasing wealth. Many, even people without a large amount of wealth, have no desire to be extremely wealthy. What most want is to be comfortable.

Have you read about the owner of an insurance company in Washington state who learned that people need to make $70K a year to live comfortably? After learning that, he reduced his salary to $70K and raised every employees salary to $70k.

Imagine if every company owner thought like him. Instead, we get too many greedy, entitled grifters.

https://thehill.com/news-by-subject...-all-employees-70k-minimum-wage-says-6-years/

https://interestingengineering.com/...es-on-70k-minimum-salary-explains-how-it-went

 

[RonDean]

Don't you find it odd they put younger people with covid in nursing homes where no one had covid? Most times the younger person with covid survived but many older folks caught covid & died.

I don't find it at all odd at all that older or less healthy people are more likely to die from Covid 19. I had a younger brother that refused to get any covid shots while I got one every chance I had. My brother is now dead and I'm still kicking. That is about what I would have expected.

How evil does anyone really think medical scientists and doctors are? That they would knowingly encourage people to risk their lives so they could make a few more dollars? Not just a one or two - here or there, but the whole medical establishment? And that they were both evil and smart enough to hide such a worldwide conspiracy?

 

[mpruet]

It's something you find fun and interesting... the stock market. It's not fun, and not interesting, to most people. There are tradeoffs to increasing wealth. Many, even people without a large amount of wealth, have no desire to be extremely wealthy. What most want is to be comfortable.

Have you read about the owner of an insurance company in Washington state who learned that people need to make $70K a year to live comfortably? After learning that, he reduced his salary to $70K and raised every employees salary to $70k.

Imagine if every company owner thought like him. Instead, we get too many greedy, entitled grifters.

https://thehill.com/news-by-subject...-all-employees-70k-minimum-wage-says-6-years/

No - I don’t consider it fun at all. It’s simply a means of compounding a portion of what income I had. I basically did most of my investing on auto pilot. I used index funds and just had a portion of my income to go into investing in those funds. I was very passive. I turned on automatic dividend reinvestment rather than directly receive the dividend. It’s really not that much more different than folks who automatically buy savings bonds from a portion of their salary.

But there are other ways to build a nest-egg besides the stock market. Probably the best way is to buy real-estate for rent. And that can be done through mortgages. That means you can use the rent to pay the mortgage.

And about the gentleman who lowered his salary. He still could get stock grants and options which increased is income, while not increasing his salary. (And which sheltered him from paying higher payroll taxes.).

 

[wanderlust]

I’d like to see SS disappear. I think that most folks could do much better the money they put into SS than what SS provides.

Problem with this approach is, many people would NOT save anything. I know a guy who is not fully funding his 401K, missing employer's matching funds, because "he needs the money now". SS is forcing people to save at least a little. Nanny state?

It's something you find fun and interesting... the stock market. It's not fun, and not interesting, to most people.

One of the most successful investors, David Swensen of Yale (who earned Yale about $30B) wrote also a book about personal investment. And gave a summary: invest 10% monthly in index fund, and forget about it until you retire. Carla, can you do that? If yes, you will be fine. Much better return than on SS contribution.

Problem is, that is school they don't teach financial literacy, like the above. Or the cost of NOT paying your credit card in full every month.

 

[Happy Camper]

"I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all."

I think since no one has changed those words, except to add God, everyone accepts it's a Republic. A democratic Republic.

 

[mpruet]

Problem with this approach is, many people would NOT save anything. I know a guy who is not fully funding his 401K, missing employer's matching funds, because "he needs the money now". SS is forcing people to save at least a little. Nanny state?

Which is why I said that I didn’t think most folks would be successful because it required discipline. ;-)


I’ve argued many times that the best way to teach personal finance is to create a spreadsheet which demonstrates the power of compounding, both on the savings side and on the expense side when you let credit card debt remain unpaid.

 

[Happy Camper]

One more thought - and this might be controversial.

I’d like to see SS disappear. I think that most folks could do much better the money they put into SS than what SS provides. But I don’t think that it will go away, nor do I think that most folks would be that successful on their own. It requires knowledge, discipline, and a bit of luck.

But I’d much rather that all folks were able to build a good sized nest-egg for their retirement than to have to rely on SS.

Sure. Because lottery winners have such a great track record of making smart informed financial decisions.

There are many, many people who given the chance, would go to Starbucks or whatever a few extra times a week is they had no deductions for SS.

Then when they get older, they would need more help because they would have nothing.

 

[mpruet]

Sure. Because lottery winners have such a great track record of making smart informed financial decisions.

There are many, many people who given the chance, would go to Starbucks or whatever a few extra times a week is they had no deductions for SS.

Then when they get older, they would need more help because they would have nothing.

True - we all need a nanny…

 

[bullfrog !]

Okay I’m gonna show my ignorance here. Seems that if any individual can invest and retire, why is it that as a group the entire nation can’t make it work at least well enough to meet basic needs like health care, housing and food?

 

[mpruet]

Okay I’m gonna show my ignorance here. Seems that if any individual can invest and retire, why is it that as a group the entire nation can’t make it work at least well enough to meet basic needs like health care, housing and food?

Because in order to be successful, it has to be used. For example the 401K system has produced many first time millionaires, but only to the folks that exercised the option to take advantage of them. We know that the median balance in Vanguard’s 401K system for someone in their early 60s is only $89K, but the average is $256K. Since the average is so much higher than the median, that means that the statistical curve is significantly skewed to the high end. There has to be a significant number of 401K millionaires in the plan. Otherwise the average wouldn’t be so highly different from the median. After all, all of the people in the plan had a similar number of years to be in the plan, all had the same funding limits, and had similar investment funds.

What this means is that a LOT of people who had access to the plan chose not to make significant contributions to the plan, for whatever reason.

But this is also indicative that for a lot of folks, having the choice to participate and to what degree, does not yield the optimal results. Yes, we need a nanny.

 

[user 22017]

Problem with this approach is, many people would NOT save anything. I know a guy who is not fully funding his 401K, missing employer's matching funds, because "he needs the money now". SS is forcing people to save at least a little. Nanny state?


One of the most successful investors, David Swensen of Yale (who earned Yale about $30B) wrote also a book about personal investment. And gave a summary: invest 10% monthly in index fund, and forget about it until you retire. Carla, can you do that? If yes, you will be fine. Much better return than on SS contribution.

Problem is, that is school they don't teach financial literacy, like the above. Or the cost of NOT paying your credit card in full every month.

When my ex died he was over $180k behind in support. That much when he was only ordered to pay $350 a month for four kids. There were times we sold squirrel corn found in a farmers field after floodwaters receded. And we dug up crickets to sell to ppl fishing. So . No. Didn't put aside an imaginary 10%. We did imagine our favorite meals and described them... When there was no food .

 

[wanderlust]

the 401K system has produced many first time millionaires, but only to the folks that exercised the option to take advantage of them. We know that the median balance in Vanguard’s 401K system for someone in their early 60s is only $89K, but the average is $256K. Since the average is so much higher than the median, that means that the statistical curve is significantly skewed to the high end. There has to be a significant number of 401K millionaires in the plan.

Big part of the difference might be Peter Thiel, who invested angel investor money to his ROTH account. Now it is worth more than $5B and he has 100 ppl in investment firm managing it. He will never pay any taxes from it. Just FYI.

 

[mpruet]

Big part of the difference might be Peter Thiel, who invested angel investor money to his ROTH account. Now it is worth more than $5B and he has 100 ppl in investment firm managing it. He will never pay any taxes from it. Just FYI.

But he wouldn’t even have a 401K with Vanguard.

 

[user 22017]

Because in order to be successful, it has to be used. For example the 401K system has produced many first time millionaires, but only to the folks that exercised the option to take advantage of them. We know that the median balance in Vanguard’s 401K system for someone in their early 60s is only $89K, but the average is $256K. Since the average is so much higher than the median, that means that the statistical curve is significantly skewed to the high end. There has to be a significant number of 401K millionaires in the plan. Otherwise the average wouldn’t be so highly different from the median. After all, all of the people in the plan had a similar number of years to be in the plan, all had the same funding limits, and had similar investment funds.

What this means is that a LOT of people who had access to the plan chose not to make significant contributions to the plan, for whatever reason.

But this is also indicative that for a lot of folks, having the choice to participate and to what degree, does not yield the optimal results. Yes, we need a nanny.

The man who invented the 401K has regrets. I stumbled on an article about him years ago. Some of you might find his input interesting:

Benna continued to work in the retirement benefits industry after creating the 401(k) plan and has been a vocal critic of some of the ways in which the plans have been implemented. He has also advocated for changes to the tax code that would make it easier for workers to save for retirement.

https://www.northcentralpa.com/news...cle_f60b336e-b210-11ed-9518-bfd8150e1ef8.html

 

[mpruet]

The man who invented the 401K has regrets. I stumbled on an article about him years ago. Some of you might find his input interesting:

Benna continued to work in the retirement benefits industry after creating the 401(k) plan and has been a vocal critic of some of the ways in which the plans have been implemented. He has also advocated for changes to the tax code that would make it easier for workers to save for retirement.

https://www.northcentralpa.com/news...cle_f60b336e-b210-11ed-9518-bfd8150e1ef8.html

I read much about his regrets. The big thing he regretted was that he felt they would push prices up too much. But that is somewhat circumvented by the greed factor and that they tend to be index funds consisting of hundreds of companies.

The greed factor is that by pushing the value of any stock too high becomes an incentive for institutions and other holders of the stock to sell and realize their profit, thus lowering the price. Also since the they tend to be very large funds, no one company is significantly impacted by an artificial spike.

The thing to also consider is that before the 401K, most companies had a pension, and the pension fund was investing in pretty much the same thing that the 401K funds are. In fact based on the numbers, the company pensions would have had more investments than the 401K does.

Personally I prefer the 401K much more than the old pension system because frequently when a company was not doing that well, they would raid the pension fund. And then there was the nasty hostile takeovers. Someone would buyout a company and liquidate the pension. They are insured, but only at a fraction of what they were worth. So retires would get told that after the buyout, they payments would be 50% less.

I fell victim of that. I had been at one of my jobs for 10 years before I sensed it was time to leave. I had been promised 75% of my salary upon retirement which would have been over $50K/year. But when I left all I got was a single check for $18K.

 

[Gr8ful]

Many people but not all live for the moment. I've seen people double their income & double their debt. Also I know people in their 70s with a mortgage? I've always been afraid of debt & lived below our means.