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Old 08-09-2013, 10:22 AM   #41
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Interesting concept of "moral dilemma" when it comes to government payments/SS. I suppose I would have found this a question worth contemplating if the payments in had been voluntary. As the "contributions" were mandatory I see ZERO moral dilemma, but if you do, feel free to follow your conscience...
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Old 08-09-2013, 10:50 AM   #42
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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.
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Old 08-09-2013, 10:58 AM   #43
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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.
I think that is a disability check you need to file for. While I have not lost a step of speed in concern of gambling, I have found your other two vices much harder to stay up with as I have gotten older.
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Old 08-09-2013, 11:41 AM   #44
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I think that is a disability check you need to file for. While I have not lost a step of speed in concern of gambling, I have found your other two vices much harder to stay up with as I have gotten older.
The OP can call it what ever they want, as long as they sign the back before they forward the check.
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Old 08-09-2013, 03:44 PM   #45
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Originally Posted by NW-Bound View Post
Why a moral problem?

If my friend and I both made the income, hence the same SS contribution, but he never saved any money in his 401k while I did, why should I subsidize him now?

The reason I had been saving is that I can have extra beyond SS for more comfort in my old age. It is called delayed gratification, and it is good to encourage people to save and to invest. It is not good to punish savers.

If I have extra, I would rather give to charities (which I do) than to spendthrifts. Or I can leave to my children, who are paying into SS to subsidize those spendthrifts too.

If SS benefits have to be cut to avoid heavy lifting by younger generations, then cut mine and my friend's equally. Watching him suffer will teach youngsters to save. That's a good moral lesson.

+1 Those who have failed to learn the rewards of delayed gratification may still have the chance to learn that important lesson. Many of us could only ER because of lifetimes of LBYM, teaching ourselves basic investing, continual frugality/doing without the toys many of the "Joneses" bought (either on credit, or by living paycheck to paycheck). We "did without" during our working years, so that we would not "do without" in our elder years. We made those choices.

Those who used their $ differently (and did not save) were free to make that choice.....and enjoy that lifestyle. To me, freedom at 59 was way more important than extra "toys" in my '30's and '40s.

FWIW
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Old 08-09-2013, 04:20 PM   #46
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OP sets up a false proposition when he claims:

Quote:
Originally Posted by Shanky View Post
Given the next generation will have to pay more to benefit less, some may say taking Social Security ...
SS could be fixed by lifting the income cap on high income individuals. In 2013 any earned income over $113,700 is not subject to Social Security withholding. Why do only the middle and lower income folks pay 6% of their income to Social Security but the high income earners do not?

No need to cut benefits to future generations or raise their tax rates.

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Old 08-09-2013, 04:28 PM   #47
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OP sets up a false proposition when he claims:



SS could be fixed by lifting the income cap on high income individuals. In 2013 any earned income over $113,700 is not subject to Social Security withholding. Why do only the middle and lower income folks pay 6% of their income to Social Security but the high income earners do not?

No need to cut benefits to future generations or raise their tax rates.

-gauss
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.
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Old 08-09-2013, 05:27 PM   #48
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I do not know if they would plan to cap the distributions or not, but it still helps even if there is not.

As SS benefit formula is regressive, it's OK to pay very rich folks $50K/month, if we took in from them $100K/month while they were working. Of course, some people would gloss over that last fact, and lament that SS is a welfare for the rich.
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Old 08-09-2013, 05:36 PM   #49
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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.
Removing the cap on both would actually help, due to the redistributive nature (from higher to lower earners) of the payments. Presently, for the amount you earned per month in excess of $4,768, you only get 15% back in SS payments (vs 90% up to $791 and 32% from $791 to $4,768).
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Old 08-09-2013, 07:20 PM   #50
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Who keeps saying that getting posters on this forum to agree on anything is like herding cats?

I think this is about as close to consensus as one can come! I also think the OP just had a semi-interesting question, until he inserted "moral dilemma". Then it turned into a judgement.

I'm more concerned about the "moral dilemma" of those who chose frequent new cars, fancy vacations, and lots of (relatively) conspicuous consumption over the principles of LBYM, saving, and learning about investing, who are now dependent on that SS check. Maybe the govt will need to reduce those payments in the future. Most of us will survive, but those others will be hurt. Maybe they should have acted more 'morally' in regards to their own future?

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Old 08-09-2013, 07:47 PM   #51
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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.)



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Old 08-09-2013, 07:57 PM   #52
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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.

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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.
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Old 08-09-2013, 08:35 PM   #53
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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.
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Old 08-09-2013, 08:55 PM   #54
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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.
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Old 08-09-2013, 09:00 PM   #55
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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!!!
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Old 08-10-2013, 04:21 AM   #56
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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.
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Old 08-10-2013, 07:35 AM   #57
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No moral dilemma for me either. And that goes double, because I will be claiming both US SS and UK state pension.....
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Old 08-10-2013, 07:35 AM   #58
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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".
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Old 08-10-2013, 07:45 AM   #59
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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.
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Old 08-10-2013, 08:39 AM   #60
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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.
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