Social Security Is The Best "Annuity" Deal, Say Experts

[Independent]

Quote:

Originally Posted by nun It is a different question, and SS is completely different from equities so to compare the returns on a given contribution without including the relative risks isn't of much use IMHO.

Yes, I could have gone further and said that SS is completely different from private pensions (at least since ERISA).

SS is an income transfer program in which current workers pay taxes that fund the benefits of current retirees.

The important question is not "What's my IRR, assuming the program is still around when I get old?"

The important question is "Am I comfortable paying taxes today to support people in my parents' and grandparents' generations? or, would I prefer to support them through direct cash assistance and private charity?"

[haha]

Quote:

Originally Posted by Independent The important question is "Am I comfortable paying taxes today to support people in my parents' and grandparents' generations? or, would I prefer to support them through direct cash assistance and private charity?"

I don't see how that can be an important question, let alone "The important question". This choice is not going to be offered, ever. Workers will continue to pay; the only difference from today is that their middle class parents may not get much, and will need help in addition to what is being extracted from their children via taxes.

IMO, the only possible way SS gets fully dismantled is during a possible future dictatorship when the Big Chief says-SS cancelled because of lack of funds.

In effect, SS taxes have been going into the general fund for a long time, via governmental borrowing from SS. SS seems to be undergoing a transition into an outright welfare program.

Ha

[ziggy29]

Quote:

Originally Posted by Independent The important question is "Am I comfortable paying taxes today to support people in my parents' and grandparents' generations? or, would I prefer to support them through direct cash assistance and private charity?"

And if you'd prefer the latter, you also have to ask if there are enough people out there who (a) agree with you *and* (b) put their money where their mouths are in order to make these senior services feasible with only voluntary donations.

It's a classic tragedy-of-the-commons situation: no one thinks they can make a difference alone, so few people try, thus ensuring no difference is made.

[Independent]

Quote:

Originally Posted by haha I don't see how that can be an important question, let alone "The important question". This choice is not going to be offered, ever. Workers will continue to pay; the only difference from today is that their middle class parents may not get much, and will need help in addition to what is being extracted from their children via taxes. IMO, the only possible way SS gets fully dismantled is during a possible future dictatorship when the Big Chief says-SS cancelled because of lack of funds. In effect, SS taxes have been going into the general fund for a long time, via governmental borrowing from SS. SS seems to be undergoing a transition into an outright welfare program. Ha

Okay, neither question is "important" in the sense that you and I could change things.

We should stick to stuff like when to start benefits - we actually have individual choices on that.

[gauss]

Quote:

Originally Posted by Independent Okay, neither question is "important" in the sense that you and I could change things. We should stick to stuff like when to start benefits - we actually have individual choices on that.

Regarding SS, you have the choice to contact your legislators and weigh in on your thoughts on how the program should be changed, if any, when it is being considered for reform.

This is what I try to get people to do after pointing out to them the great sums of money that many have accrued under the current system.

-gauss

[mpeirce]

Quote:

Originally Posted by haha IMO, the only possible way SS gets fully dismantled is during a possible future dictatorship when the Big Chief says-SS cancelled because of lack of funds. In effect, SS taxes have been going into the general fund for a long time, via governmental borrowing from SS. SS seems to be undergoing a transition into an outright welfare program.

I can see it happening without the end of the constitution...

Imagine that during a tax reform cycle it's decided to fold SS taxes into regular income taxes. This both removes the ceiling for payments and makes it graduated instead of a flat tax.

Imagine also that they split off the disability program and make that stand alone. Funded from general revenues like any other welfare program.

Finally, "normal SS benefits" get put into it's own program. Means tested of course, so that rich people aren't paid anything. Poor folks would get a fixed monthly payment when they reached a certain age. This would be phased out once one's assets reach a certain level.

This last program would probably still be called social security so as to placate those who fondly remember the original program and FDR.

Poof.

I could see pluses and minuses in this for both the liberal and conservative sides, so maybe I'll happen.

[Independent]

Quote:

Originally Posted by gauss Regarding SS, you have the choice to contact your legislators and weigh in on your thoughts on how the program should be changed, if any, when it is being considered for reform. This is what I try to get people to do after pointing out to them the great sums of money that many have accrued under the current system. -gauss

I took Ha to mean that the practical political forces are such that major changes to SS aren't going to happen. I'd say that one letter isn't going to change an congresscritter's vote. I suppose if millions of other people agreed with me so strongly that they'd be moved to write, that might have an impact. But, I'm pretty much unique in my views of SS, so I can't imagine millions of people pushing in the direction that I would.

(FWIW, I don't think that I have great sums of money accrued under the current system. So if you and I both wrote, I think we'd push in different directions.)