Taking what you don't need...

[Khufu]

Given the next generation will have to pay more to benefit less, some may say taking Social Security when you don't even need it presents a moral dilemma.

By no means is that a given, nor is it even likely. What is likely is that productivity increases, standards of living increase, and the payroll tax in the future is a larger nominal dollar amount of a much larger income and the benefits of younger generations will be greater in real terms. Even in Japan, where the real GDP has not grown since the early 90's, the per capita GDP has indeed grown because productivity has continued to grow, for example, Toyota sells fewer cars than GM, has less revenue than GM, and makes three times the profit.

I know that some folks on this board are unable to grasp the concept of productivity increases and the effect on future funding of SS. The following graphs should help demonstrate the effect of productivity increases on GDP in Japan, a percentage of which goes to retirement benefits recipients. (BTW, during the periods shown the population of Japan has grown, not shrunk, although it will shrink in the future.)

 

[NW-Bound]

But your chart shows that Japanese GDP has been stagnant or rather fluctuating since 1994. On top of that, the annotation is that the number is not corrected for inflation.

Japan has been in a deflation, but the chart is in US dollars. And from Jan 1994 to Jan 2009, a dollar has shrunken down to $0.69.

It suggested that the productivity increase in Japan stopped in 1994, and has been declining since. Once the factory automation was completed, perhaps there was little more they could do.

PS. Just thought of another more likely reason: the number of workers has been declining, while productivity stays constant or does not improve enough to compensate. That's the problem that faces the developed nations.

In another thread, we talked about the big state pension in California. They are currently spending a 1.9%WR, so what's the problem? The projection is that in 2030, a mere 17 years away, the payout will quadruple from where it is today. Hence the big problem with demographic changes.

I know that some folks on this board are unable to grasp the concept of productivity increases and the effect on future funding of SS. The following graphs should help demonstrate the effect of productivity increases on GDP in Japan, a percentage of which goes to retirement benefits recipients.

 

[chilkoot]

As others have already said, if I leave any money on the table, the government WILL, absolutely, (make no mistake) spend my money stupidly.

I'd rather make that decision myself. It will be my last.

 

[gcgang]

taking Social Security when you don't even need it presents a moral dilemma. .

I'm financially in good shape, but morally I'm bankrupt. Gimme the money.

 

[timo2]

We have many posters on this board who say that they have achieved FIRE, and do not actually need SS. Given the next generation will have to pay more to benefit less, some may say taking Social Security when you don't even need it presents a moral dilemma. We all have the choice not to file for benefits, but I do not hear about very many taking turning it down. (other than by dying younger than expected).

Anyone here considering not filing for benefits? I know many will reply they ""earned" the benefits, but that is not my point.

I'd say your question pushed a major button here!!!

 

[Walt34]

No moral dilemma for me. I'd been paying into it since 1967 and not by choice so getting the ROI seems like a no-brainer. Perhaps not a great ROI, or maybe it will be, but one nonetheless so I'll take it.

 

[nun]

No moral dilemma for me either. And that goes double, because I will be claiming both US SS and UK state pension.....

 

[zedd]

Not claiming SS is the same as leaving money on the table for the gubmint to spend as it sees fit.
Tell you what, show me where the gubmint is taking seriously the problem of "moral hazard" and I'll consider taking seriously the OP's point on "moral dilemma".

 

[nun]

Yes and no, if you remove the cap on contributions, do you also remove the cap on payments you can collect? Would we then have very rich folks getting $50,000/month SS checks when they retire? I don't see how or why you would have a cap on contributions, but not on payouts.

And if there is a cap on neither, you don't really solve any problem do you? You take more money in on one hand, but pay more money out with the other.

The upper income cap on FICA should be removed. Then I would also change SS payments to be proportional to the number of years you've contributed and not linked to the amount you've contributed over the years. This is how the UK does things to ensure those that worked for low wages get a livable benefit. I know this is heresy in the US, but as a socialist it just seems like a decent thing to do.

 

[Larro Darro]

The question for me is not if, but when I will start drawing. To wait for full SS at age 67 means 14 1/2 more years. I go back and forth on this one all the time. More is good, but sooner is better. Like the ad on TV says, it's my money and I want it now.

I am doing my part to save SS. When I see a group of smokers outside a door, puffing away, I stop to say thanks. If it wasn't for Lotto, drinking and smoking, most poor folks wouldn't pay much tax other than SS.

 

[Chuckanut]

If I did not need SS, I would take the money anyway. And then liberally sprinkle it about my community by buying products from local small businesses in my town. And I would give some to local people whom I knew had a genuine need, and never-mind about it being tax deductible.

 

[Chuckanut]

The whole idea of "means testing" SS makes me angry. So the reward for anybody who is prudent and lives below their means for their whole lives, works hard, saves, and invests and pays into 401(k) programs and IRAs is to be "means tested" into lower SS benefits than someone else who may have earned the same and paid just as much into the system but who spent their take home pay away by living to the max?

+1

I am not opposed to helping the truly needy. But, to do 'fair' means testing it seems to me we need to view the entire motion picture of a person's life, not just a snapshot taken today. I doubt if the government could do that. Also, what makes SS so popluar is that everybody is in it. Start excluding people and you start building a group that will fight it. Be careful about that.

Years ago I had the opportunity to talk with the superintendent of Yellowstone National Park. He pointed out that if he did what the ultra-conservationists wanted to do - restrict cars, do away with amenities, keep the trails very rugged, remove lodgings, ect, the only people who could use the park would be rugged backpackers, a small percentage of the population. But, by providing an outdoor experience for as many people as possible, the park service generates a huge amount of public and political support.

 

[Chuckanut]

Why leave the distribution of your untaken benefits to chance? I, who have spend a lifetime of gambling, chasing women and drinking, definitely need your money. PM me for an address to send the checks to.

Ahhhhhhh.... I understand. You spent your money on booze and women, and wasted the rest.

 

[Chuckanut]

Maybe they should have acted more 'morally' in regards to their own future?

Sheesh! This board is full of dangerous radicals!!!

 

[Shanky]

There seems to be a heavy dose of judgment in many of the responses. The assumption seems to be it does not matter if others have more of a need then we do, what matters is why they that need. And we are willing to assume the need of others is because of their own failings.

If we were talking about food instead of money would our opinions change. Would actual need be what mattered as opposed to a pre-judgment as to why that need existed?

 

[REWahoo]

There seems to be a heavy dose of judgment in many of the responses.

You ask a judgement question, you get judgement responses.

 

[chilkoot]

Originally Posted by Shanky
There seems to be a heavy dose of judgment in many of the responses.

OP seems to think this is a bad thing.

 

[dmpi]

I've seen data that implies that poor people are more generous than wealthy people. Somehow it is "generous" for poor people on welfare, food stamps and other government handout to give aways a small part of that to others. But it's immoral for a wealthy person to even receive what rightfully theirs so they can give it away to others.

 

[jollystomper]

There seems to be a heavy dose of judgment in many of the responses. The assumption seems to be it does not matter if others have more of a need then we do, what matters is why they that need. And we are willing to assume the need of others is because of their own failings.

If we were talking about food instead of money would our opinions change. Would actual need be what mattered as opposed to a pre-judgment as to why that need existed?

The only "judgement" I see is "there are better ways to help people in need than by not talking ones Social Security benefit".

 

[NW-Bound]

Wikipedia says that Jeanne Calment of France lived to 122. If I lived anywhere near that long surely I would need it.

I happened to run across a review of a book that was written after an interview with 500 centenarians: "Celebrate 100: Centenarian Secrets to Success in Business and Life". See: Money secrets of centenarians- MSN Money. But you will not like what these 500 geezers said.

Hint: They said you should not retire early!

The upper income cap on FICA should be removed. Then I would also change SS payments to be proportional to the number of years you've contributed and not linked to the amount you've contributed over the years. This is how the UK does things to ensure those that worked for low wages get a livable benefit. I know this is heresy in the US, but as a socialist it just seems like a decent thing to do.

The SS benefit formula already favors the low-income group, but perhaps it does not go as far as other nations.

As SS discussions come up here often, a while back I spent some time studying the Australian pension reform, and as I recall, it has some good features. At full retirement age, the retiree is guaranteed a minimum income which is more than $20K US, as I recall. This minimum baseline retirement income is means tested.

However, there is compulsory saving contribution, and on top of that workers are encouraged to save extra and invest in what is called a superannuation. This is their own money, similar to the US IRA or 401k. This has the desired effect that "Australians now have more money invested in managed funds per capita than any other economy... Compulsory superannuation in combination with buoyant economic growth has turned Australia into a 'shareholder society', where most workers are now indirect investors in the stock market. Consequently, a lively personal investment marketplace has developed, and many Australians take an interest in investment topics." See: Superannuation in Australia - Wikipedia.

When people see that some money is set aside for them, and for themselves only, they will tend to save more. When people are taxed "according to ability", then the money is thrown into a common pot to be dished out "according to needs", they have no incentives to save, have no abilities left, and become very needy. People are no fools.

PS. That past thread is here: http://www.early-retirement.org/forums/f28/social-security-for-tail-of-baby-boom-62245.html.

 

[Al in Ohio]

If I happen to not need SS then I still plan on taking it, and our children will benefit from more inherited assets towards funding their future retirements.

Ditto that! If I was a Decca millionaire I would still "need" it so its a moot point for me.

 

[NW-Bound]

Time out for some music.

I have posted this song by Eurythmics before (this duo were the writers and performers of the 80 hit "Sweet Dreams (Are Made of This)"). The song "I saved the world today" was a hit in Europe, but not released in the US.

There's a million mouths to feed
I've got everything I need
I'm breezing
​

Eurythmics - I Saved The World Today - YouTube

 

[Bestwifeever]

There seems to be a heavy dose of judgment in many of the responses. The assumption seems to be it does not matter if others have more of a need then we do, what matters is why they that need. And we are willing to assume the need of others is because of their own failings.

If we were talking about food instead of money would our opinions change. Would actual need be what mattered as opposed to a pre-judgment as to why that need existed?

So you will not be applying for SS, it sounds like. Good for you for standing up for your convictions.

 

[haha]

If we were talking about food instead of money would our opinions change. Would actual need be what mattered as opposed to a pre-judgment as to why that need existed?

How many "poor" people have you seen lately in the US who seem to be suffering from a food shortage? I live in the central city, so my store has many SNAP recipients. Take a look at their grocery baskets!

In general, in the US BMI is inverse to income.

Ha

 

[Al in Ohio]

Time out for some music.

I have posted this song by Eurythmics before (this duo were the writers and performers of the 80 hit "Sweet Dreams (Are Made of This)"). The song "I saved the world today" was a hit in Europe, but not released in the US.

There's a million mouths to feed
I've got everything I need
I'm breezing


Eurythmics - I Saved The World Today - YouTube

Then there's the counter point theme song: