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Old 08-23-2007, 12:22 AM   #101
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That's only true if you believe in the trust fund fairy tale.

Wow.... under your thinking ..... ALL government is in the same boat.... they don't have a big stack of money sitting around... they get tax revenue every year and spend it (or more)... and have been for a LONG time.... it will not change in my lifetime... so yes, I believe in the 'fairy tale'...
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Old 08-23-2007, 03:38 AM   #102
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Look at it like this. Many of the boomers out there that have a high lifestyle and little savings will continue to work later than normal. They will be paying more taxes (SS and medicare) into the system.

On the subject of Medicare. I believe the government will be motivated to figure out how to reduce costs further. I believe that we are overpaying for health care in this country.

The short fall will be handled via increased taxes on all. Plus cuts to other programs. People using SS that have other income will likely have a more progressive tax on SS income. Increased immigration (in part because of worker shortage when boomers exit the workforce) and to put more payers into the system and directly in our economy.

SS will not go away... at least for those of us above some certain age.

Personal SS accounts might become a reality someday. But they would deplete the money coming into the system when it is needed most.

I know people who are younger that are upset and feel SS will not be there for them. I do not blame them for feeling that way. But look at it this way, we boomers have diligently paid into the system. We are depending on it for retirement. And it is not welfare, it is a pension that was paid for!

It is too late to erase that deal unless our country fails financially. I do not believe that the USA will fail. But I do think there are some tough choice ahead on government programs and politically difficult issues.

When the younger generation begins to approach retirement age, they will appreciate the SS system and be glad it is there.
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Old 08-23-2007, 08:33 AM   #103
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Wow.... under your thinking ..... ALL government is in the same boat.... they don't have a big stack of money sitting around... they get tax revenue every year and spend it (or more)... and have been for a LONG time.... it will not change in my lifetime... so yes, I believe in the 'fairy tale'...
The trust fund and SS are nothing more than the promise of slick pols. You have no say in if or what you will get. We will see now won't we !

But that wasn't the point of my post of which a couple of you took off on. The point of my post was that the projections that show we don't have a problem until the 2040's or so have assumed that there indeed is a "trust fund". Some of us believe that some form of cuts and or tax increases will occur decades before that as the SS cash flow changes from massive surpluses to massive deficits. The bond markets will see that it happens and force it upon us. It is inevitable. Ditto for Medicare cuts.
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Old 08-23-2007, 08:46 AM   #104
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And it is not welfare, it is a pension that was paid for!
I'd have to disagree somewhat. SS is neither strict welfare or a pension such as a company or an insurance annuity would pay out. But it certainly leans more towards the welfare side and away from the true pension aspect. Just look at how SS payments are structured relative to what was paid in. Look at the income tax structure regarding SS. A pension is guaranteed and there are real assets behind a pension to enable payments. Any SS payments that you receive are at the whim of congress.

Now there is talk of income caps that one must be below to receive SS. There is talk of increasing (even more) the payments to be received from higher wage earners.
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Old 08-23-2007, 09:03 AM   #105
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I know people who are younger that are upset and feel SS will not be there for them. I do not blame them for feeling that way. But look at it this way, we boomers have diligently paid into the system. We are depending on it for retirement. And it is not welfare, it is a pension that was paid for!
On your pension point I respectfully disagree, it is not a your pension that you paid for but instead you are paying to support people currently in the system. This is the problem with all entitlement programs, once they are started people in the pipeline feel they are entitled to the program...the government has shown their track record for managing our money and it is not too great. I'd happily sacrifice what I've paid in today if they would stop collection. As I mentioned in a previous post I'd happily sign the 4029 but doing so would be a lie as I don't disagree with insurance, it should be our choice to decide which insurance to use.

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The current Social Security system works like this: when you work, you pay taxes into Social Security. The tax money is used to pay benefits to:
  • People who already have retired;
  • People who are disabled;
  • Survivors of workers who have died; and
  • Dependents of beneficiaries.
The money you pay in taxes is not held in a personal account for you to use when you get benefits. Your taxes are being used right now to pay people who now are getting benefits. Any unused money goes to the Social Security trust funds, not a personal account with your name on it.
source: Understanding The Benefits
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Old 08-23-2007, 05:58 PM   #106
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I'd have to disagree somewhat.
Yup! SS payments provide a better deal for the lower wage person than the person at the top of the wage scale... for a reason. To ensure they have some minimal amount of money. The paid in to pay out is a curve that flattens on the upper end.

I do not have a problem with it. I do not want elderly people who can't afford to eat.

If you think about it for a minute. There are people that you know and probably care about that did not earn much in life. The depend on that in their old age.


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On your pension point I respectfully disagree, it is not a your pension that you paid for but instead you are paying to support people currently in the system.
I understand how it works. It is a pay as you go system. Strictly speaking SS is not a pension. But it is intended to pay payments to retired people like a pension. For those of us that are getting older, there is no going back it is too late. You must admit, it would not be fair to stop the program for people who paid in all those years.

What do you think would be a fair solution to the problem?
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Old 08-23-2007, 07:43 PM   #107
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I understand how it works. It is a pay as you go system. Strictly speaking SS is not a pension. But it is intended to pay payments to retired people like a pension. For those of us that are getting older, there is no going back it is too late. You must admit, it would not be fair to stop the program for people who paid in all those years.

What do you think would be a fair solution to the problem?
It wasn't fair for the people who retired soon after first enacted either. The problem with entitlement programs is that canceling them is going to be unpopular with some groups and most politicians don't have the intestinal fortitude to deal with that.

Aside from people who have a serious disability where they're not able to decide on things like whether to do SS or not everyone else should be responsible for themselves. Spend a fraction of that money on education and training on dealing with their finances and looking to their future, there will be some casualties but seeing those should be a deterent to some of the people who might not have been fiscally responsible in the future.

My solution although not pretty is that people that want to stay in should be able to stay in, other can elect to get out. Change the 4029 to sidestep the silly wording and allow anyone to opt out or allow them to contribute less and receive less benefits in the future, pay 50% of your responsibility you only get 50% at collection time. For them to have that option they are required to go to a 100 hour course (or whatever time but something that requires a serious time investment to make sure they're serious) on financial responsibility and have a ##% score to opt out, that way people who don't understand finances cannot opt out. There are other things I've thought of as well but it is just pie in the sky because it won't happen, entitlement programs almost always increase in spending, rarely do they decrease but instead run until a country bankrupts itself.

Thanks for the open discussion.
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Old 08-24-2007, 05:18 AM   #108
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...
Thanks for the open discussion.
Sorry for the long post. But!

I doubt that we will convince each other to look at the issue differently.

Just to ensure we are on the same page. The word entitlement does not mean welfare or charity.

Since the system seems to be in trouble, many people who fear it might not be around, would like to opt out. There are a few clever people that think they could invest it and be better off. I will keep my comments on that one to myself. Opting out is much more preferred by younger people because of all of the press and fear. People who have paid into it are not interested in doing so because they cannot retrieve their money. They just lose.

I find it interesting that those who would like to opt out are fine with those who have paid in taking a loss at the worst time (when they are old and worn out). Many of which are those same people's parents!

On the other hand, you have not experienced a loss. You have the promise from the government just like me.

Here are a couple of questions for you:
  • If you were 59 or 60 right now. And opting out meant you just dropped from the program. Would you opt out?
  • If you were 59 or 60 right now. Would you want everyone to have the ability to opt out?
My next statements are likely to cause a highly charged reaction. But here goes.

I agree that governments are not always efficient or as efficient as business. However the motive is different. Democratic Governments (for the most part) are geared toward the interests of society and citizens. Businesses are about making a profit. Businesses have a conflict of interest. Both of these types of entities are run by people who are imperfect and make mistakes or sometime have questionable motive or are sometime just out and out stupid!

I am not a big government type of person (i.e. ultra-liberal)... I am not an ultra conservative... I am in the middle!

I believe that certain programs are better off if they are run by the government or heavily regulated. Why? Because in many cases greedy (selfish) people will take advantage of the population. For example I am absolutely in favor of anti-trust laws. They are not perfect, but they attempt to keep business from exploiting us.

Likewise, infrastructure... roads, bridges. I do not think it would work well for private business to own these. Please do not bother to cite the couple of examples where these are owned. I am not sure they would invest in it unless they could (guaranteed) make a huge profit anyway. If it were in the hands of private business, it would need to be regulated heavily... just like the power industry.


Unfortunately businesses are filled with people and people often do not act in the interest of people... they are about maximizing profit in (typically) legal ways... which are not always fair or in some cases what you and I would think are moral.

When it comes to medical care in this country. People cannot get affordable health insurance. This is the reason that medicare (entitlement for retirement but paid into by the recipient) and medicaid (welfare in most cases not paid into by the recipients) exists.

SS would not exist if it were not mandatory. Why, because the fools who need it the most would not sign up. It is not unlike insurance and anti-selection. People only want insurance when they need it!


We may choose to disagree on the subject. But one thing is very unlikely. SS and Medicare are not going to be shutdown. But the fix is likely to be painful.
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Old 08-24-2007, 09:10 AM   #109
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I doubt that we will convince each other to look at the issue differently.
Agreed and I appreciate the way in which you agree to disagree without resorting to personal attack.

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I find it interesting that those who would like to opt out are fine with those who have paid in taking a loss at the worst time (when they are old and worn out). Many of which are those same people's parents!
We are already preparing to take care of my parents who have done zero planning for their future and our plan has zero inclusion of SS benefits because we have no idea where things will be when they reach retirement age, it is going to be a difficult financial process when it occurs. Where does the sacrifice need to be made? There is no good answer but there needs to be some serious discussions on fixing the system instead of political bantering by the people that are supposed to be representing us. They have zero financial risk (look at the congressional benefits packages) and having nothing in the game so they are not in any hurry to get things fixed.

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Here are a couple of questions for you:
  • If you were 59 or 60 right now. And opting out meant you just dropped from the program. Would you opt out?
  • If you were 59 or 60 right now. Would you want everyone to have the ability to opt out?
Honestly I can't answer that because I'm not there so I'll leave that to those already in that situation.

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I agree that governments are not always efficient or as efficient as business. However the motive is different. Democratic Governments (for the most part) are geared toward the interests of society and citizens. Businesses are about making a profit. Businesses have a conflict of interest. Both of these types of entities are run by people who are imperfect and make mistakes or sometime have questionable motive or are sometime just out and out stupid!
...
I would disagree on the point of motives being different.

My background is I.T. and I've worked on software projects at the city, state and federal government level and the motives are no different...the upper management wants maximum budget. There have been cases where, during requirements elicitation, I've seen that an entire group could be eliminated with some small adjustments to the software since the current process was flawed but was told to shut up. The American people need the responsibility and ownership of many things they don't really have ownership to now. There are many people who have become complacent and would prefer their A/C, nighttime TV shows and microwave food to getting off their hind end and doing some hard thinking and hard work.

The problem will continue until our country is totally bankrupt as all great societies have done throughout history unless people start the thinking process with, "I believe you Mr. & Mrs. taxpayer owe us this" not, "I believe the government owes us this." You said that in a way when you stated that you've paid into the system and so I should now be required to pay into the system ....okay you didn't say it exactly like that but in reality for you to collect your benefits I must continue to pay into the system. So you're saying that your wants trump my wants? I'm not saying that to attack you but in reality that is what is happening since you've done your time I must do my time now? I've paid a lot of money into the system in the last 20 years however I'd be willing to give it all up to be on my own but the only way to do that is to lie on a 4029.

I do agree that some people would opt out that need it most however isn't that an education issue, as I mentioned in my previous thread something needs to happen to encourage these people to learn if they want out, don't just allow them to sign a piece of paper but instead force them to take some personal responsibility and learn. If they don't have the ability to pick up a book and learn enough to pass a test then fine, they will still need to pay in but the reality is those people are probably not the ones contributed a significant portion to SS anyway. Personally I understand the risks and am willing to accept them but I have no choice, doesn't seem very republic oriented to me.

Added:
Every time I get my SS statement it defies financial logic, look at yours and tell me if it makes sense. How soon until what you've paid into the system is gone if you cash was stuck in a 0% savings account? That extra money was supposed to come from the additional people that were coming into the system right? Well they're not there and as you said we're coming up on some pain and the fix isn't going to be pretty.

Thanks again for the good conversation, I'm young and have much to learn so I always appreciate more input.
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Old 08-24-2007, 12:07 PM   #110
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Pyramid schemes are illegal in this country because the people at the botom get stuck paying, but not collecting. Illegal that is, unless you are the federal government.
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Old 08-25-2007, 05:06 AM   #111
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...

Honestly I can't answer that because I'm not there so I'll leave that to those already in that situation.
...


Oh, OKaaaaaaaaaaay. hehehehe...... Check Mate.

Just Joking. Nice to hear others thoughts.


I am not pleased about the state of SS either. I have many of the same concerns as you.


Also, when I was referring to government, I was not talking about some boss managing his budget, or bureaucrats, or even individual politicians. I was talking about the ideals that it embodies and the effort to implement a safe and free life based on those ideas for ALL of us. Our government is one of the best in the world (flawed as it is). I think down deep most of us want everyone to have some minimal level of existence. We all get a little put out with the free loaders. But most strive to contribute and are well meaning people.

I do not believe in socialism in the strict since. But I do believe we need to pool money for certain needs. And the government is the only thing that is really viable at this time to operate on the scale needed and have fewer conflicts of interest that result in personal gain...
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Old 08-25-2007, 03:03 PM   #112
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TeachMe.... either you have really gave your answer no thought or you just did not want to answer. At age 60, I would be looking at six year till my spouse and I would collect $32,000 a year for life. That is worth $800,000 at a 4% SWR! Now can you honestly say you don't know weather you would stay or leave a system that is going to give you $800,000 in six years? I guess if you think you will be able to save more than $130,000 a year for six years you would break even.
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Old 08-25-2007, 06:57 PM   #113
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I'd happily sacrifice what I've paid in today if they would stop collection.

I would seriously consider paying someones future SS requirements (as long as they were within 10 years of 62 YO and had paid into SS for at least 25 years) if they would sign a legal/binding contract whereby I would receive any SS benefit they would be entitled to upon reaching 62.

I would consider that a low risk, high return investment of my funds.
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Old 08-25-2007, 08:11 PM   #114
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I would consider that a low risk, high return investment of my funds.
And you would be smart to do so. Sign me up to be your partner when you work out the details.

Our first customers could be the right wingers on this thread.

Ha
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Old 08-25-2007, 09:53 PM   #115
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And you would be smart to do so. Sign me up to be your partner when you work out the details.

Our first customers could be the right wingers on this thread.

Ha

HaHa,

I would be a right winger myself if they just were not so darn liberal.

Happy to have you as a partner. Now if we can find any takers to our offer.
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Old 08-26-2007, 01:01 AM   #116
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TeachMe.... either you have really gave your answer no thought or you just did not want to answer. At age 60, I would be looking at six year till my spouse and I would collect $32,000 a year for life. That is worth $800,000 at a 4% SWR! Now can you honestly say you don't know weather you would stay or leave a system that is going to give you $800,000 in six years? I guess if you think you will be able to save more than $130,000 a year for six years you would break even.
Thank you for your response.

First it isn't 'the system', you're saying you want me and others still working to give you that return right? We can look at the numbers removed from the reality of the system but really you're telling us in the younger generation that you expect us to pony up because why? I'm not trying to assault you I just really want a good answer why I should continue to pay into the system aside from the requirement that I pay or else! We've been bringing our kids up to take as little as possible from the government and work towards having zero that they need from the government in the form of SS, Medicaid or Medicare.

On the issue of not answering I remember a phrase my father in law once said, "Where you stand depends on where you sit" Life has a way of changing our perspectives on things and I hate to throw out answers without have the additional 20 years of life experience to back me. There are forums everywhere where some self righteous poster talks about how when he gets to that point he knows what decision he'll make; life may change my view but in reality it will mean I'm probably moving closer to a socialist mindset instead of my current belief which is the founding fathers were extremely bright and realized starting a country based on personal responsibility and the belief that we should not look to the government to provide the 'best' possible solution.

We're on a forum where many here will acquire significant amounts of cash in their lifetime and will add SS as a 'bonus' to their retirement. The problem is that the income is not generated by corporate profits, it is generated by continuing to remove cash from those working. My contention is that we, as Americans (maybe Canadians eh?), have abdicated responsibility to the government for so long we have no idea how to take ownership of ourselves. I have the utmost of respect for people that have contributed to SS their entire working lives and are close to retirement but something has to change and until some people say I'm willing to sacrifice for that change the merry go round will continue.

Forgot to include this link to how Ron Paul addressed the issue of slowly phasing our SS and allowing younger workers to opt-out:
Quote:
The obvious question, should younger Americans be freed of participating in Social Security, is: How could the government continue to send monthly checks to the millions already receiving benefits? Congressman Paul answers: Abolish unnecessary and unconstitutional federal programs and agencies. Just for starters, he lists foreign aid, the Departments of Education and Energy, and undeclared wars that have U.S. forces policing the world. He also would terminate federal funding for organizations conducting and promoting abortion.
source: Presidential Candidate Ron Paul Suggests Letting Young Opt Out of Social Security | The John Birch Society - Truth, Leadership, Freedom
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Old 08-26-2007, 01:28 AM   #117
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Here is a great read from a man that I've had the opportunity to interact with through email.

Grandfather Social Security Report - page 1 - by MWHodges
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Old 08-26-2007, 01:51 AM   #118
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Here is a great read from a man that I've had the opportunity to interact with through email.

Grandfather Social Security Report - page 1 - by MWHodges

The government could cut off all payments being made to those collecting SS benefits to ease the tax pain to those presently paying into the system. But what happens then? Our parents do not have enough to sustain they standard of living. What do they do? They need their children to help them out financially or maybe they move back in with their children. What have we gained? :confused:
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Old 08-26-2007, 01:58 AM   #119
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Readme....

First... you could eliminate most all programs the federal gvmt does except what they are supposed to do (defense etc)... and you will STILL not get enough money to pay for SS without collecting SS taxes..

Why should you pay in to SS Because you will be getting it when you are old.. and if you have a family today and you die... guess what, SS pays for your children and wife survivors benefits...

So I think something should be done.. YES, should it be given only to people in "need"? NO.. that then makes it welfare...

IT was designed to be a safety net and not a full retirement system... it is the people that want it to be the only retirement system that people have it where the problem lies..

BTW... on another subject... people say that medicare will go broke very soon... yet at times these are the same people who say that the federal gvmt should be in charge of ALL medical for everybody... now, if they can't do it right for the 'old', why think they can do it for everybody??
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Old 08-26-2007, 03:28 AM   #120
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Teachme - you are a good egg... I can tell. Just listening to too much ultra-conservative propaganda without critically analyzing it and all sides of the issue. The same goes for ultra-liberal hog wash.


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...I just really want a good answer why I should continue to pay into the system aside from the requirement that I pay or else! We've been bringing our kids up to take as little as possible from the government and work towards having zero that they need from the government in the form of SS, Medicaid or Medicare.
Because other people that have contributed to it before you and are now depending on it. Veteran, honest workers, on and on. It would be unfair to trash the system when they do not have a way of recovering. You do have a societal obligation (whether you like it or not).

The same could be said for other government programs. Are you ready to opt-out of using roads? They are built with money collected by the government. I doubt it.

You do not get to cherry pick (although, we all would probably like to do so).


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On the issue of not answering I remember a phrase my father in law once said, "Where you stand depends on where you sit" Life has a way of changing our perspectives on things and I hate to throw out answers without have the additional 20 years of life experience to back me.
Your father in law is correct. It is fairly transparent. You obviously are arguing the a point of view about the reasons why you should be able to exit SS keep your money now. If your money were paid in for 40 years... you would likely be on the other side of the argument. Otherwise, it would likely not matter to you at all!

Here is another question for you. If you feel as strong as you do in a "we should be self-reliant" sort of way... Are you going to tell your parents to skip SS and Medicare, and that you will support them? Do you feel that strongly about your convictions?


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....founding fathers were extremely bright and realized starting a country based on personal responsibility and the belief that we should not look to the government to provide the 'best' possible solution.
Most people died in their 40s back then. While they were still able to fend for themselves if they did not die from disease (fairly quickly).


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We're on a forum where many here will acquire significant amounts of cash in their lifetime and will add SS as a 'bonus' to their retirement. The problem is that the income is not generated by corporate profits, it is generated by continuing to remove cash from those working.
It is not a bonus. It was paid for. Being in the system while working qualifies one to participate when a certain ages is reached.

If it makes you feel any better, people who have acquired a nest egg will have the day lights taxed out of them in a progressive way. That will be one of the ways that the program survives. Those that do not have a nest egg will not be taxed so heavily and have a way to purchase basics.

One Final Comment: If you were able to Opt-Out of SS and had a government mandated personal account. You still have the obligation to repay those Special Treasuries. You Will Pay For SS for the BB generation. If you have any income that generates any tax whether you are working or not. I hope you are not naive enough to take the bate of those who purport otherwise. And you had better believe this cause it is true. Just watch!

There is more to say, but this post is getting too long. One thing you had better understand. There are powerful people who have money motives behind SS personal accounts... and they are not politicians. (think Lobby and Fin Services). Do you really think they are that philosophical about govt programs... or even give a $h!t. What they are interested in is a business opportunity that guarantees them $$$ Billions.

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