Old Pharts are crushing us :-(

[lets-retire]

I must admit.... I have read... and re-read the above a few times just to make sure I was reading it right. And I guess I would have to start out with the obvious question. Where exactly is all the money that the government gets comming from? It does not come out of thin air, it is collected as taxes etc from the people. So I suppose from a certain point of view, your above statements are correct. If you allow the "mother govt" as you put it to tax all of us tremendously then out of their largesse give it back to us as "the govt" sees fit, then it works out. If the govt pays for your medical, housing, etc, then your costs really would go down. But there is no free lunch here either, your costs go way down, but you are taxed so highly that you do not HAVE very much either. So in a way you might say it balances out.

If you are at the end of your working life then the situation changes a little. If you have enough saved up to pay for retirement, but are just working for the health insurance then the question becomes how much taxes are you going to pay. There are several on this board who have proudly stated they haven't paid taxes in several years because their income is so low. Good for them. If all you are working for is enough money to pay for say health care at anywhere between $500 and $2000. How much would you have to make to cover the increase in the cost of goods since you probably are paying nothing in taxes? As with social security, I believe the people who initially receive the benefits will benefit the most. The people to follow will be saddled with the higher costs and an overloaded system.

 

[Sisyphus]

Let me choose

Seeing as the government has done a great job of raiding the SS funds, I really like the idea of being given a choice to invest a % of my SS taxes in an account with my name on it.

Unfortunately, this was killed for political reasons, and because there *is no money* unless they keep taking it from those who are still working... and, at a larger rate than they have in the past. For this reason, the gov't can't "afford" to give Gen Xers the choice of this personal SS account.

There MUST be a way to continue paying those who have paid in the past and ready to retire while giving Xers the choice of a personal account. As a nation, we certainly spend massive amounts of $ on dumber things.

 

[haha]

There MUST be a way to continue paying those who have paid in the past and ready to retire while giving Xers the choice of a personal account. As a nation, we certainly spend massive amounts of $ on dumber things.

I sure have to agree with your last point. And for you, and similarly clever and highly motivated young people it would likely be a good thing.

But for many, it would be a mess. If participants are given freedom in making the investments, they will lose the money. If it is tightly controlled, the political process will see to it that the choices are very high cost and this poorly performing.

The real winners, as usual, would be Wall Street and its minions who would sell and administer this stuff.

Ha

 

[Lister]

I am at the tail end of the boomer generation and too young to collect any SS benefits for some time but if I never work another day in my life I will still receive the maximum benefits under the current system. So from a purely SS benefit perspective I may as well no longer contribute.

However, while I am still working there are some other alternatives that could be considered in helping to provide some relief to this SS problem without an all or nothing approach. For instance the govt limits my pre-tax 401K contributions, if they opened this up then perhaps I would be willing to give up some of my future SS benefit since it would be somewhat offset by reduced taxes. Likewise if I could use my 401K benefits tax free during retirement then that would also offset some reduction of SS benefits. I realize that this approach reduces what I pay in non-SS taxes but something has to give somewhere and at least this way if we could get the govt to reduce some non-essential spending then maybe it would work.

The SS system ultimately was intended to help folks that were destitute from the depression and has grown out of control ever since. We need to get back to the original intent. At the end of the day I just wish the govt would stay completely out of my business in planning my future, I can do it much better myself.