Play the Social Security Game

[REWahoo]

Want to take a shot at how to solve the Social Security problem?

The American Academy of Actuaries has created a Social Security game on their website. "Many solutions have been proposed. but no single approach is likely to succed alone." The game "...lets you decide the trade-offs and constructs a solution that will keep Social Security solvent."

The game is located here: http://www.actuary.org/socialsecurity/game.html

 

[wabmester]

I didn't see my plans in the game.    I figure we need to take a two-tiered approach:

1) Follow Canada's lead and institude a point system for immigration.    Basically, you get to move here if you're rich, smart, beautiful, and thin.

2) Institute Wab's child tax credit.   Parents who are rich, smart, beautiful, and thin get a $10K credit for each baby they have.

 

[REWahoo]

I didn't see my plans in the game. I figure we need to take a two-tiered approach:

1) Follow Canada's lead and institude a point system for immigration. Basically, you get to move here if you're rich, smart, beautiful, and thin.

2) Institute Wab's child tax credit. Parents who are rich, smart, beautiful, and thin get a $10K credit for each baby they have.

Yeah, well they described it as a game, not as an alternative universe.

 

[HFWR]

Well, I am thin...

 

[virginia]

REWahoo - I almost fell out of my chair when I read your response.

 

[Ed_The_Gypsy]

Basically, you get to move here if you're rich, smart, beautiful, and thin.

None of the above. Just another G*d-d*mned Yankee engineer who, like my Pa, who will go where no-one esle wants to go and do what no-one else wants to do.

Gypsy
Wooden shoes and wooden head

 

[MasterBlaster]

Unless I missed it...

The game didn't have the option to just up the US debt levels.

Ignoring the debt option is not realistic.

 

[cute fuzzy bunny]

Yeah, well they described it as a game, not as an alternative universe.

I reject your reality, and substitute my own!

 

[tryan]

Interesting ... I said "eliminate the SS payroll cap" and solved 93% of the problem.

Could it be THAT simple?

 

[cute fuzzy bunny]

That'll work out pretty well until the very well paid people that get whacked by it call their congresscritter buddies and have them put it back to the way it used to be.

 

[laurence]

Isn't it amazing? SS tax is the most regressive beast on the planet, yet somehow the cap is a third rail. The latest tax cut on investments and AMT is claimed to help the middle class, I didn't notice Joe Six-Pack was swimming in dividend checks, my bad! You can either laugh or cry.

 

[samclem]

Isn't it amazing? SS tax is the most regressive beast on the planet, yet somehow the cap is a third rail. The latest tax cut on investments and AMT is claimed to help the middle class, I didn't notice Joe Six-Pack was swimming in dividend checks, my bad! You can either laugh or cry.

Well, you have to admit that the SS benefits are weighted heavily to favor lower income workers (would that be "regressive" or "progressive? Or, just socialist?). Of course SS was designed to be an intergenerational wealth transfer mechanism, in the future it will likely increasingly be a means of transferring wealth from higher-income folks to poorer ones.

Is it time to just start means testing benefits, calling it the dole, and be done with it? That's the direction I think we are heading.

 

[Cut-Throat]

Of course SS was designed to be an intergenerational wealth transfer mechanism, in the future it will likely increasingly be a means of transferring wealth from higher-income folks to poorer ones.

Are you advocating that we need to back to the good old days of 1932?

 

[laurence]

Is it time to just start means testing benefits, calling it the dole,  and be done with it?   That's the direction I think we are heading.

Hey, it's practically there, anyway. Raise/remove the cap, maybe have a graduated elimination of benefits if your retirement income exceeds ~100k (phase out from ~150k to 200k?). Beats putting old widows out on the street when the fund goes belly up.

 

[youbet]

Hey, it's practically there, anyway.  Raise/remove the cap, maybe have a graduated elimination of benefits if your retirement income exceeds ~100k (phase out from ~150k to 200k?).

Tend to agree with you on this one Laurence.  But, since we're means testing those collecting SS, I think it would also be appropriate to test assets as well.  IMO, it wouldn't be fair to reduce the SS of some chump collecting a dbp because a dbp is income while letting another who supports himself off of non-taxable withdrawals from his multimillion bux portfolio goes free.

Assests to include house, cars, cellars full of expensive wine, financial portfolio, income property, works of art and that sort of thing.  The little ole retired lady still holding on to her million+ dollar home despite a low income should get hit just like a renter with a taxable pension coming in. 

 

[samclem]

"From each according to his abilities, to each according to his needs!" - Karl Marx

Hey, it's worked everywhere (except where it has been tried).

 

[laurence]

eh, I think it's a bit too soon to start making the communist inferences. BTW, does that kill a thread the way Nazi references do?

I'd like to think we are allowed to have a social safety net without being Godless communists. If we have to make a change, making it so Bill Gates and I aren't paying the same amount of Social Security tax sounds like a good start. The initial commercials for Social Security had widows and orphans buying milk and bread with the check. I don't think it was meant to give millionairs an additional income stream.

Youbet, intentionally or unintentionally, you bring up a good point, what constitutes deserving? If an old lady's home is a million dollars simply because the community built up around the ol' farmstead, should she be compelled to sell and move someplace new (and scary) in her old age to get cash?

As far as non-taxable withdrawals falling under the radar...why you messin' with my plan?

 

[samclem]

eh, I think it's a bit too soon to start making the communist inferences. BTW, does that kill a thread the way Nazi references do?

Nope--I've tried it before and the threads live on unhindered.

If we start talking about taxing wealth to fix SS, things are going to start gettng pretty close to home for a lot of folks here. I think, according to the mindset of the average Joe--anybody who can afford to retire before they do is stinking rich. Luckily, don't mind being taxed to pay the SS benefits of people who bought a new car every two years and lived on credit.

 

[Cut-Throat]

"From each according to his abilities, to each according to his needs!" - Karl Marx

Hey, it's worked everywhere (except where it has been tried).

Don't confuse Capitalism with Democracy!

 

[youbet]

That's right samclem.  If you were silly enough to LBYM and save and save, you deserve to have your SS reduced.  What were you thinking?

I've been reading posts from a few of the younger folks on the board saying we worry (obcess?) too much about having enough $$$ when we RE to ensure we don't have to shop at Pet World when we're 75 or 80.  The concept of means testing SS seems to give additional creditability to their position.  Memories of good times from your youth such as travel or entertainment can't, so far, be taxed later.

Spend! Consume! Enjoy!

 

[laurence]

It's definitely a complex issue.

 

[Cut-Throat]

I think that all of the folks that are against Social Security should just refuse to accept any money from the 'System'. - That will show em'!

- Just as I despise the War in Iraq and I'm forced to pay for it and get nothing in return!

And since they are using the Social Security funds to pay for all of the stupid decisions of this administration, and the Social Security program is still running a Surplus since FDR - It's a much more thought out and fruitful program.

 

[brewer12345]

Hmmm, raising the age for full benefits solved 68% of the shortfall. Raising the amount of income subject to the tax to $118k got it up to 94%. Close enough for gummint work.

 

[donheff]

It strikes me that means testing social security does a real disservice to just about everybody. Of course, I haven't really thought deeply about it, so feel free to flame me - I have a thick skin

In any event, despite all the rhetoric to the contrary, SS has become a RETIREMENT program. Even the Federal government in designing the FERS system identifies SS as the third leg of the government's retirement program (basic DBP, TSP and SS). People need to be able to plan for retirement and means testing disrupts that planning. Pensions, withdrawals from IRAs, pretty much whatever - counting them against SS would destroy the basic concept.

 

[d]

BOHICA: in a society concerned about the lack of savings, means testing would only exacerbate the problem.  to a large extent, as things currently stand, those who act responsibly already get the shaft.