How to fix Social Security

[novaman]

....screw the people who saved diligently and don't really need it.

Fixing Social Security — the right way - The Washington Post

[MichaelB]

An opinion column by Allan Sloan. The key message

Quote:

So if we’re going to cut benefits — which I think is inevitable — let’s be careful to concentrate the impact on the likes of me (for whom Social Security is important, but not crucial) and mitigate the impact on the less fortunate.

[obgyn65]

I am expecting this thread to be closed sooner rather than later

[pb4uski]

Quote:

Originally Posted by novaman ....screw the people who saved diligently and don't really need it. Fixing Social Security — the right way - The Washington Post

or in other words, transfer wealth from those who saved diligently and don't really need it to those who lived beyond their means and didn't save. Mr. Sloan sounds like a liberal to me.

There are other actions that can be taken if the pols ever get courage but since they are gutless they will likely pick the easy way out and screw us. Phase out the SS holiday over 2 or 3 years so the economy won't be jolted and revise limits on SS taxes.

[Steel Rain]

Well, I would not try to fix it, i would ditch it altogher. Figure out some cut off age or a phase out approach so that current folks on SS are not hurt. Im 46, I would gladly forgo all SS if I was able to get my contributions suspeded going forward. My fear is not for myself so much, its clear some SS will be there for me, but for my children, I think its doomed. I have zero expectation that such an approach would be taken though

Steel

[Dog]

I don't understand why they continue with the "payroll tax" holiday if it is taking money out of the system. It's more of the same problem - spend today at the expense of having anything saved for a rainy day. I don't know why they want to extend it?

[BTravlin]

Quote:

Originally Posted by Dog I don't understand why they continue with the "payroll tax" holiday if it is taking money out of the system. It's more of the same problem - spend today at the expense of having anything saved for a rainy day. I don't know why they want to extend it?

Because it's an election year maybe?

[Speculator]

I think Social Security benefits are a necessity and the program needs to be fixed. It wouldn't surprise me if cuts to Social Security are made and it seems to me if they have to be made, to make them "across the board" wouldn't be fair to the folks whose primary source of income are these very benefits. Certainly, there are folks who don't have any savings due to poor choices, but there are other people who have experienced financial devastation because of unforeseen medical conditions to themselves or family members, or due to the effects of the downward-trending economy on their jobs, or to "late in life" divorce, or to just plain bad luck and Social Security income is all they have. I've met retirees who use their monthly Social Security check to pay off loans on fancy cars, to buy condos for rental income, to eat out every night, or just to indulge themselves in a lifestyle which is quite different from the lifestyle of the single widow who discovered a few days after her husband died that she was broke because she hadn't been aware of her late husband's poor financial decisions. Or how about a couple, one of which has been diagnosed with a chronic fatal medical condition and are slowly exhausting their savings with the only end in sight being death for one, and Social Security benefits for the other? As I understand it, that was why Social Security was created, as a safety net for the less fortunate, not as a way for well-off folks to indulge themselves. As I slowly approach age 62, I hope there are other ways to save Social Security than cutting my future benefits (because I really did have my eyes on that nice red Porsche,) but if I have to continue driving my plain old Toyota so some old person doesn't have to eat Ramen noodles every day, I would do it in a heartbeat and I would like to believe most Americans feel the same way as I do.

[travelover]

Quote:

Originally Posted by obgyn65 I am expecting this thread to be closed sooner rather than later

Tic.....tic.....tic..........

[haha]

Quote:

Originally Posted by Speculator As I slowly approach age 62, I hope there are other ways to save Social Security than cutting my future benefits (because I really did have my eyes on that nice red Porsche,) but if I have to continue driving my plain old Toyota so some old person doesn't have to eat Ramen noodles every day, I would do it in a heartbeat and I would like to believe most Americans feel the same way as I do.

Hey wait a minute, ramen is really quite nutritious, and red Porsches, if there is such a thing, are quite important as mating signals.

Beware of unintended consequences like a falling birthrate, and suffering in the wheat industry going all the way back to John Deere and the farm ecoomy.

Best to let someone else get the knife.

Ha

[M Paquette]

I've got a solution that should appeal to all of the Objectivists out there, while reducing the national debt, providing local jobs, and giving those who practice charity an exciting new outlet. It also provides older individuals an incentive to maintain their physical and mental health as well as their social skills.

The solution has three components:

First, we shut down Social Security and Medicare. The Trust funds are applied to the national debt, and the payroll tax is recognized for what it is, a tax used to provide general funds to the federal government.

Second, at full retirement age (hereafter referred to as a "senior") and every year thereafter, each person shall demonstrate that they have sufficient funds to medically self-insure or hold a fully paid medical insurance policy for the next year. Each person shall also provide proof that they hold sufficient funds to cover all living expenses for the next year. These criteria may be met via continued employment, from personal savings, or from a certificate issued by a sponsoring charity. Other persons, including family members, may contribute to a sponsoring charity so as to pay for a certificate. Upon demonstrating that the meet these criteria, a one year license will be issued for the senior.

Third, a special facility for unlicensed seniors shall be established. Local senior control officials will deliver unlicensed seniors to this facility, where they will be held temporarily. Each senior held at the facility will be provided with an opportunity to demonstrate that they hold medical insurance or funds to self-insure, as well as funds to cover living expenses for the next year. Seniors who meet these criteria will be issued a one year license and released. Seniors not eligible for a license will be made available for interviews and examination by charitable organizations and individuals who may wish to sponsor selected seniors for the next year. The facility shall collect a sponsorship fee sufficient to cover its operating expenses.

Communities may decide the appropriate holding period for seniors within each facility. Seniors not released by the end of such a holding period, through an inability to obtain a license or be sponsored for a license, may be humanely terminated so as to reduce the financial burden on the facility.

Oh, and look out for the Senior Catcher!

[Animorph]

The moderate options:
1) cut SS benefits to everyone equally.
2) cut SS benefits of only those who "can afford it".
3) raise the SS tax so that benefits are maintained.

I hate to think what would happen if those who can't even think about saving for their own retirement today have to deal with no SS in the future. I'd like to keep some form of "forced" retirement planning, sized at something close to minimum subsistance level, and paid for as needed. Hopefully with a "trust fund" function that avoids taxing current workers for past retiree benefits. It would be nice if we didn't have to do that, but that won't be happening any time soon.

[MichaelB]

Quote:

Originally Posted by M Paquette I've got a solution that should appeal to all of the Objectivists out there, while reducing the national debt, providing local jobs, and giving those who practice charity an exciting new outlet. It also provides older individuals an incentive to maintain their physical and mental health as well as their social skills.

Nah. I like Soilent Green better.

[pb4uski]

Quote:

Originally Posted by Dog I don't understand why they continue with the "payroll tax" holiday if it is taking money out of the system. It's more of the same problem - spend today at the expense of having anything saved for a rainy day. I don't know why they want to extend it?

It put more money in workers pockets, who presumably will spend it and the additional spending will help the economy. That's the theory anyhow.

That's why I would phase it out over 2 or 3 years so the phaseout would be less of a "shock" to working families.

[M Paquette]

Quote:

Originally Posted by MichaelB Nah. I like Soilent Green better.

Just like Grandmas used to taste!

[pb4uski]

Quote:

Originally Posted by Animorph The moderate options: 1) cut SS benefits to everyone equally. 2) cut SS benefits of only those who "can afford it". 3) raise the SS tax so that benefits are maintained. I hate to think what would happen if those who can't even think about saving for their own retirement today have to deal with no SS in the future. I'd like to keep some form of "forced" retirement planning, sized at something close to minimum subsistance level, and paid for as needed. Hopefully with a "trust fund" function that avoids taxing current workers for past retiree benefits. It would be nice if we didn't have to do that, but that won't be happening any time soon.

I agree. If we could trust people to sacrifice some today and save and invest so they don't have to work their entire lives and can retire, then it would be possible to phase out SS (retiiree benefits). However, a majority of Americans have proved themselves to be very shortsighted and undisciplined and I don't see that changing, so some scheme of forced savings is needed unless we want to see older people suffering.

I wish things were different.

I would hope that if there were no SS that people would save for retirement (or make a conscious decision that they would live for the present but work for their whole life) so they don't need to have society provide for them once they can't work. But unfortunately, I don't see that as realistic.

[Bestwifeever]

Quote:

Originally Posted by MichaelB Nah. I like Soilent Green better.

I think we should replace Social Security with the Geriatric Games, a new reality show. Every week 12 seniors are chosen and sent out....

[novaman]

Quote:

Originally Posted by pb4uski However, a majority of Americans have proved themselves to be very shortsighted and undisciplined

Therein lies the problem

[jimnjana]

Some ways to extend the life of the ss "trust fund"
- all taxes raised from taxed ss benefits go back to trust fund
- cap annual increases to benefits at no greater than the average growth of income by wage earners, not CPI.
- means test ss benefits for all
- separate accounting of the "trust fund" and allow trust fund to invest in other than fed govt securities
- increase ss tax and eliminate max wage limit on ss taxable income

[pb4uski]

Quote:

Originally Posted by jimnjana Some ways to extend the life of the ss "trust fund" - all taxes raised from taxed ss benefits go back to trust fund - cap annual increases to benefits at no greater than the average growth of income by wage earners, not CPI. - means test ss benefits for all - separate accounting of the "trust fund" and allow trust fund to invest in other than fed govt securities - increase ss tax and eliminate max wage limit on ss taxable income

I agree with most of your post except means testing.

Means testing would penalize those who were/are prudent and saved for retirement and reward those who were/are careless and did not save for retirement. IMO if you have means testing, it would simply further discourage responsible behavior - one might as well spend and enjoy during their working years and SS will bail them out in retirement. Is that what we really want?