Protect SS, it's important

[Koolau]

I added the numbers

1) AFAIK, the increase in wives in SS covered jobs has helped SS finances. First, when they were entering the workforce they added to the paygo revenue and are partially responsible for the program running the surplus that it did. In the long run, they reduce the cost of spousal benefits, improving the tax/benefit ratio, so they help there, too.

2) I mentioned birth rates as a big deal. In the simplest terms, the WWII generation had 3 children per couple, the boomers had 2. If nothing else changed, either the boomers would have to settle for 2/3 the benefits that their parents got, or the boomers' kids will have to pay 3/2 = 150% of the taxes their parents paid. (Note that this impacts all retirement programs, not just SS.)

3) I've never looked at that. It seems that if legal immigrants come as young workers they impact the system just like births - more people paying taxes today and more receiving benefits in the future. If they come late in their working careers they may get a slightly better deal than workers who were here for a lifetime due to the skewed benefit formula.

Many illegal immigrants pay SS taxes but can't legally get benefits. So they are a net plus. The SS actuaries have gone back and forth in their projections. In some years they have assumed that illegal workers would eventually get some sort of amnesty and hence would get benefits. In other years, they've assumed no future benefits. I'd guess the current projections use the second assumption, but I haven't checked.

4) I'll agree with that.

Apologize if I'm confusing the source, but I think Burns and Kotlikoff discussed (documented) in GREAT detail the issues with SS (esp. effects of birth rates, women in the workplace and effects of migration) in "The Coming Generational Storm". IIRC, they DO point out that women in the workforce has been somewhat of a good thing to SS (as has immigration). However, they make a better case for the system as it stands being unsustainable, immigration or not.

But the good news for SS is that it is in dramatically better shape than Medicare!! Forget the numbers exactly, but I'm thinking they indicate a total deficit of something like 10 Tril. for SS and 60 Tril. for Medicare in the next (50 or 75 years - forget the details).

Anyway, I point all this out as a possible reference point for further discussion - if anyone wants to use (estimates of) facts and figures, all in one neat chapter of a book. Probably not.

 

[Independent]

Apologize if I'm confusing the source, but I think Burns and Kotlikoff discussed (documented) in GREAT detail the issues with SS (esp. effects of birth rates, women in the workplace and effects of migration) in "The Coming Generational Storm". IIRC, they DO point out that women in the workforce has been somewhat of a good thing to SS (as has immigration). However, they make a better case for the system as it stands being unsustainable, immigration or not.

.

I guess "the systems as it stands being unsustainable" could be read two ways.

The first is that no paygo system is sustainable - they are all doomed Ponzi schemes.
The second is that the benefit formulas within our paygo system are based on outdated demographics and need to be changed periodically to keep up with changes in births/deaths, but the concept of paygo is perfectly valid.

I'd agree with the second statement but not the first.

 

[Koolau]

I guess "the systems as it stands being unsustainable" could be read two ways.

The first is that no paygo system is sustainable - they are all doomed Ponzi schemes.
The second is that the benefit formulas within our paygo system are based on outdated demographics and need to be changed periodically to keep up with changes in births/deaths, but the concept of paygo is perfectly valid.

I'd agree with the second statement but not the first.

IIRC, B&K agree with you in the "short" run but disagree with you in the "long" run.

On a happier note, someone earlier suggested giving our SS payments to our kids. Had never thought of it quite that way, but, in a sense, that is what we are doing. We fund our kids ROTH IRAs. However, we plan on leaving our estate(s) to charities - with a small token to the kids. YMMV.

 

[Independent]

IIRC, B&K agree with you in the "short" run but disagree with you in the "long" run.

On a happier note, someone earlier suggested giving our SS payments to our kids. Had never thought of it quite that way, but, in a sense, that is what we are doing. We fund our kids ROTH IRAs. However, we plan on leaving our estate(s) to charities - with a small token to the kids. YMMV.

Of course, I think the numbers don't support B&K.

On the happier note, I was at least one of the people who suggested that - post #135. We haven't started SS yet. I'm sure that if we're in decent shape financially when we do my wife would vote for sending the money to the kids. Her argument will be "why not give it to them while they're alive?" and won't have anything do do with her opinion on SS as a system. I'm more concerned that we won't be able to afford it when that day comes, but we'll see how it works out.

 

[HFWR]

This morning on Squawk Box, the guest was Ken Langone. Generally uberconservative, and an unabashed cheerleader for Wall Street, but he wondered aloud why he was getting a SS check, being a brazillionaire and all. Said his wife donates it to charity.

Also stated he would be happy to pay more income tax, but he didn't want to see it [-]pissed away[/-] wasted...

Of course, he could voluntarily send the IRS a check, if he wanted. No need to wait for an invitation...

 

[haha]

This morning on Squawk Box, the guest was Ken Langone. Generally uberconservative, and an unabashed cheerleader for Wall Street, but he wondered aloud why he was getting a SS check, being a brazillionaire and all. Said his wife donates it to charity.

Also stated he would be happy to pay more income tax, but he didn't want to see it [-]pissed away[/-] wasted...

Of course, he could voluntarily send the IRS a check, if he wanted. No need to wait for an invitation...

Actually, like everyone who agitates for higher taxes, he is mainly interested that others will also have to send a higher check. Eff him and all the others of his ilk.

Ha

 

[keegs]

http://www.nytimes.com/2010/10/31/health/healthspecial/31finances.html?_r=1&hpw

 

[ERD50]

http://www.nytimes.com/2010/10/31/health/healthspecial/31finances.html?_r=1&hpw

Yes, it is sad if someone becomes unable to deal with their finances in retirement.

But let's take your all size fits one "solution" to its logical conclusion - anyone, at any time could end up in a position where they can't handle their finances and risk losing their nest egg. Gambling, substance abuse, mental or physical issues, or just bad decisions. Some people have failed to maintain their house, and it ends up with major damage and can be worth zero and be unlivable.

So it seems you are saying we should not have any personal possessions. We might lose them. Let the govt have control over every aspect of our lives so we can't possible hurt ourselves. We can live in govt housing, eat govt cheese. Nothing to lose. FREEDOM IS SLAVERY. No thanks.

So yes, we should have something in place to help avoid these sad cases where the infirm lose their nest egg. I don't think making everyone more reliant on government payments is the way to go (everyone would need to pay for it also). There must be more strategic solutions to fit the specific problem.

-ERD50