MOST middle class folks who plan to retire early need to take SS at 62

[Independent]

Policy Basics: Understanding the Social Security Trust Funds | Center on Budget and Policy Priorities
This said investing it invests the surplus in Treasure securities and Treasure bonds.
And according to this link, we had a surplus since 1984 to 2016. At least from what I can tell.
https://www.ssa.gov/policy/docs/ssb/v75n1/v75n1p1.html

Yes, there have been surpluses.

That does not contradict my statement that "the great majority" of payroll taxes were used to pay benefits in the same year the taxes were collected.

On your graph, compare the "primary income" to "expenditures". They are not identical, but the difference between them is much smaller than the overlap.

When people say "if I could have kept my taxes and invested them ...", they are assuming that the benefits didn't get paid in those years.

If the context is that the benefits got paid, the the phrasing should be "If I could have kept that fraction of my taxes that weren't actually used for benefits and invested that fraction ...."

The table I referenced in the Trustees Report can be used to calculate that fraction, if anyone is interested. (or, we could eyeball an estimate from your graph, it's probably the same data)

 

[pb4uski]

....When people say "if I could have kept my taxes and invested them ...", ...

It would probably work great for most of the people who frequent this forum, but given how many people with access to 401k do not participate or participate at meager levels.... or who "never get around" to funding their tIRA I'm skeptical of some who make such claims.

 

[travelover]

It would probably work great for most of the people who frequent this forum, but given how many people with access to 401k do not participate or participate at meager levels.... or who "never get around" to funding their tIRA I'm skeptical of some who make such claims.

It would be a disaster. Joe Average Grasshopper would spend every dime and "retire" with credit card debt and a mortgage. Then he would look for us ants to pay for his living expenses.

 

[Independent]

It would probably work great for most of the people who frequent this forum, but given how many people with access to 401k do not participate or participate at meager levels.... or who "never get around" to funding their tIRA I'm skeptical of some who make such claims.

That's true, too.

But I'm willing to accept the hypothetical at face value and talk about the connections.

 

[Fedup]

It would probably work great for most of the people who frequent this forum, but given how many people with access to 401k do not participate or participate at meager levels.... or who "never get around" to funding their tIRA I'm skeptical of some who make such claims.

There are many ways to skin the cat. People should be given options with stock investment choices, not necesssarily money in their own pockets. Just like TSP for federal employee. There are choices, but employees don't have a hold of them, SS has separate accounts. This is what I think would have been better for some people.

 

[Fedup]

Yes, there have been surpluses.

That does not contradict my statement that "the great majority" of payroll taxes were used to pay benefits in the same year the taxes were collected.

On your graph, compare the "primary income" to "expenditures". They are not identical, but the difference between them is much smaller than the overlap.

When people say "if I could have kept my taxes and invested them ...", they are assuming that the benefits didn't get paid in those years.

If the context is that the benefits got paid, the the phrasing should be "If I could have kept that fraction of my taxes that weren't actually used for benefits and invested that fraction ...."

The table I referenced in the Trustees Report can be used to calculate that fraction, if anyone is interested. (or, we could eyeball an estimate from your graph, it's probably the same data)

I don't think I suggested that. Perhaps you over simplified to make a point. I believe back in George Bush there was talk of some of the SS to be invested in stocks, but the account would still be managed by SS. People don't get a hold of it to spend on credit cards. It sounds like a straw man argument like Enron comment.

 

[Al in Ohio]

This is why you should try to raise over 1 MM in retirement investments before your FIRE date.

 

[Major Tom]

Overall, this is a fantastic on-line community and a well-modded board. I am sure we don't thank our mods enough for their hard work.

I am betting on the mods in this case. They've got more than post-parsing skills at their disposal to root out trolls and trolling.

+1

There are a few boards I frequent for my other interests, most of which I wish were moderated as well as this one.

 

[Hermit]

There are many ways to skin the cat. People should be given options with stock investment choices, not necesssarily money in their own pockets. Just like TSP for federal employee. There are choices, but employees don't have a hold of them, SS has separate accounts. This is what I think would have been better for some people.

This gets to the heart of "Nanny Government". The theory goes that if the government has to take care of those people who won't plan for their old age, then the government should have the right to control everyone's money. I can do much better with my money than the government and I don't want the government controlling my money. Certainly not more than they already do.

 

[travelover]

This gets to the heart of "Nanny Government". The theory goes that if the government has to take care of those people who won't plan for their old age, then the government should have the right to control everyone's money. I can do much better with my money than the government and I don't want the government controlling my money. Certainly not more than they already do.

I appreciate that the government doesn't let anyone die penniless in the gutter, but in order to do that we have to have some social agreement that everyone pays enough into SS to provide this safety net - no opting out, then showing up begging for money when it doesn't work out. I'm OK with this and to me it provides the basis of a civil society. I've traveled enough to see alternatives and it ain't pretty.

 

[Hermit]

I appreciate that the government doesn't let anyone die penniless in the gutter, but in order to do that we have to have some social agreement that everyone pays enough into SS to provide this safety net - no opting out, then showing up begging for money when it doesn't work out. I'm OK with this and to me it provides the basis of a civil society. I've traveled enough to see alternatives and it ain't pretty.

I am not suggesting any changes to Social Security. I just don't want the government to provide me any more "help" because some people who have the means do not plan for their retirement. Those without the means get government help and that is OK too.

 

[MrFlish]

It would be a disaster. Joe Average Grasshopper would spend every dime and "retire" with credit card debt and a mortgage. Then he would look for us ants to pay for his living expenses.

+1

We worked and saved for 35 years so I'm going to be pretty biased in regard to those who didn't.

 

[Independent]

I don't think I suggested that. Perhaps you over simplified to make a point. I believe back in George Bush there was talk of some of the SS to be invested in stocks, but the account would still be managed by SS. People don't get a hold of it to spend on credit cards. It sounds like a straw man argument like Enron comment.

Yes, I was simplifying. I didn't know exactly what you were suggesting, so I just did an example.

And, yes, the Treasury could have used the SS surpluses to buy stocks. It could have set up individual accounts or just invested the money as a single pool.

In either case, if it had, we still wouldn't have enough money to change the long term trajectory of SS. The surpluses were simply too small.

And, there is no free lunch. If the gov't had bought private stocks with the SS surpluses, it would have borrowed more money in the open market. To make that work, it would have had to pay higher interest on all the new debt issued while the "buy stocks" program was in effect. The extra return earned in the SS trust fund would have been offset by the extra interest paid by the general fund.

 

[unclemick]

+1

There are a few boards I frequent for my other interests, most of which I wish were moderated as well as this one.

Amen. I'm thinking of my U tube music surfing and some of the comments posted for 'plain old songs of yore'.

heh heh heh - Guilty of not thanking mods and taking their work for granted.