ridiculous approach to retirement??

[Independent]

If you want the majority of seniors living on $674 a month, then that's the way to go.

Take away SS and replace it with a SSI type benefit, the social negatives are going to outweigh any fiscal problems that such a plan would solve.

See table 2 here Monthly Statistical Snapshot, June 2012

 

[growing_older]

I've enjoyed a few mandatory pension plans during my working career. Two of them I participated in long enough to vest a benefit. In both cases (and in others where I didn't vest) the rules were changed without any input or consent from me and my "benefit" was reduced to almost nothing.

A significant advantage of 401k and IRA plans is that I actually OWN the account. The rules may change, but it would be hard to change the rules so that my ultimate benefit would be reduced as much as my pensions were.

Social Security (besides being a pay as you go plan) includes no particular guarantee that I will receive the benefit I think I was promised. That money is gone and the program explicitly promises that they reserve the right to change benefit formulas (means testing, revisions, taxation, underfunding) at any time. What would prevent any new program administered by the same Social Security Administration from the same problems.

 

[truenorth418]

I wouldn't.
We already have a REQUIRED program that annuitizes your contributions, is inflation adjusted, it's called social security. If we need more SS, we can just raise SS taxes and be done. Of course SS had it's own problems, problems that won't be solved by ANOTHER government program.
TJ

Exactly! There is already a compulsory plan in place called Social Security. Could the politicians please use whatever political capital they have left to reform that program rather than introduce yet another government tax and spend program that they can raid?

 

[truenorth418]

People on this board (myself included) do not want this type of plan because we have the discipline to save on our own. However, I would arge that they plan she describes would be better off for the majority of Americans and perhaps our country in general. The "average" American has proven they lack the discipline to save for their own retirement and thus need somebody else to do it for them.

I propose that rather than expand into yet another government entitlement, our government instead begin incorporating basic principles of personal finance into public school curriculum. It is a shame people go through 12 years and more of school in this country without learning basic fundamentals of modern life such as insurance, credit, compounding, investing for the future, etc.

 

[truenorth418]

It just seems ironic to me, given the criticism that SS and government pensions get on here, that the idea of mandated personal savings accounts, is equally offensive to some of you. Especially since the anti-nanny state, extreme fiscal conservatives, are the main ones spearheading these plans as part of SS reform.

On the subject of financial education in the schools. Yes, much needs to be done. Mainly in the area of personal budgeting, what it cost to raise a child, and the avoidance of predatory lending practices. If you really think you can teach the average teenager, who struggles with Algebra I, how to successfully invest in the stock market, you better think again.

Many of you come from careers requiring a strong mathematical background. That same ability lends itself well to investing. The bulk of the population doesn't have this ability, and is not likely to have it in the future.

The nanny state is fine when it benefits you. Just witness the several threads concerning how to use the "Medicaid" provision of the new health care act, to facilitate E-R.

There is a big difference. The nanny state has already forced ObamaCare through. I would have preferred this wasn't the case but for now what's done is done. Since I will be forced to pay for it as a taxpayer, I have the right to reap any benefits if I qualify for them.

 

[Alan]

Thanks for the discussion folks, these thread has run its course.

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