How's everybody feel about SS?

[Webzter]

Quote:

Originally Posted by wildcat So these immigrants won't demand the same benefits out of the system they pay into? I have a hard time believing that is the foundation of solvency. Sounds like topping off the car's oil every week without trying to fix the leak.

Well, I want to find out more sources... but, the farm that we buy from employs work visa labor from Mexico. He's busy writing a 3-part story on immigration right now that's been pretty fascinating.

His first fact is a bit alarming. It's true that there are 11mm or so illegal immigrants in this country. However, he states that most businesses can't afford cash-only employees (and thus can't account for expenses, etc). So, he has it's estimated that roughly 8mm illegal immigrants actually have forged papers that at least set them up well enough to be tracked in the system. In fact, many of the restaurants he supplies have told him that they've purchased said papers for their kitchen staff.

That means that we have about 8mm tax-payers paying into the system with no hope or way of getting their money out.

I think it's a bit fascinating. I'll find the article again and see what his sources for this are.

Another thing that I think would be interesting would be means testing that also takes into account net wealth. I'm actually a bit surprised it doesn't right now. Before we fired our financial advisors (no correlation to the story), they told us about two clients they have. He was a doctor for many many years and now has a portfolio that's hovering around 10mm. He can't figure out why he'd need SS so he takes his SS check every month and just rolls it into his investments.

Now, without arguing over if it's his money and if he's entitled to it or not, I wonder if his SS money wouldn't be better distributed elsewhere. Wealth sharing through taxation is a tricky area.. but at some point we're going to have to make more choices about what kind of society we want to be. Of course, those that have 10mm in net work and don't need SS are a minority, but it's an interesting straw man to talk about.

[cute fuzzy bunny]

I probably wont "need" the social security $$$ and I'm sure I'll only get a fraction back (if any), but I'm having a little bit of a hard time buying into the socialist (but certainly pleasing and reasonable) idea that if you've done well, you should get less so as to favor people who didnt plan or work as hard (or as effectively) in saving for their retirement.

I sure as heck could have used the money I paid out in FICA withdrawals back in my teens and twenties, when money was scarce, but that wasnt an option. It would have been pretty sweet to be able to throw out the ramen noodle packages with the mouse tooth marks in them.

For that sacrifice with 40 years of interest, I'd like to get a little extra spending money out of it for a while when i'm older...vs some schmuck who lived beyond his means, only to arrive in his 60's unable or unwilling to work but fully capable of looking sad and sorry and holding his hand out.

But thats probably how it'll unfold.

[wildcat]

Quote:

Originally Posted by cute fuzzy bunny I probably wont "need" the social security $$$ and I'm sure I'll only get a fraction back (if any), but I'm having a little bit of a hard time buying into the socialist (but certainly pleasing and reasonable) idea that if you've done well, you should get less so as to favor people who didnt plan or work as hard (or as effectively) in saving for their retirement. I sure as heck could have used the money I paid out in FICA withdrawals back in my teens and twenties, when money was scarce, but that wasnt an option. It would have been pretty sweet to be able to throw out the ramen noodle packages with the mouse tooth marks in them. For that sacrifice with 40 years of interest, I'd like to get a little extra spending money out of it for a while when i'm older...vs some schmuck who lived beyond his means, only to arrive in his 60's unable or unwilling to work but fully capable of looking sad and sorry and holding his hand out. But thats probably how it'll unfold.

People will always cheat the system. They will always find ways around it no matter what. My belief is unique. I would rather rely on myself, my ability to accumulate wealth and my ability to live off of what I saved than worry about some disfunctional govt program providing me with a tiny check each month that may or may not fill up my gas tank.

I too don't like to support dead beats and those who fail to manage their finances. Sure, the $$ you put in could have provided so much more in today's dollars. All valid points but I have no choice and it is part of living in this country.

I think their day of reckoning comes eventually. Surviving on SS alone will not provide much of a lifestyle in retirement. Your reward at least is you can retire far earlier and live a far more comfortable lifestyle than all of the deadbeats/those who lived beyond their means.

In response to Webzter, a guy taking an SS check with $10 mil in an account is beyond me but the systems allows it. To me at least, enough money is enough money at some point. Will those extra SS checks really add that much to his comfort level and lifestyle? Doubt it.

[maddythebeagle]

No offense....but I wouldnt call everyone that relies on SS "deadbeats/those who lived beyond their means."...I know of a few that lived frugally in the working years and with nothing more than SS simply continue with a similar lifestyle...I suspect that folks that live way above their means, just have to continue to work since SS wont be enough to continue on as before....

[FIREd]

Quote:

I probably wont "need" the social security $$$ and I'm sure I'll only get a fraction back (if any), but I'm having a little bit of a hard time buying into the socialist (but certainly pleasing and reasonable) idea that if you've done well, you should get less so as to favor people who didnt plan or work as hard (or as effectively) in saving for their retirement.

Although it is hard for some people to accept it, our whole system is already full of programs that are socialistic by nature. Social security, medicare, medicaid, food stamps, unemployment benefits are all socialistic programs. Even our current tax code is socialistic by nature (people who earn more pay a higher percentage of their income in taxes). Really, the only major program that socialist countries have and we don't have (yet) is universal healthcare (although in this country we already have a form of universal healthcare system in the way of Medicare and medicaid). So looking at it this way, we are facing the same choices other industrialized countries face: Do we move towards a more capitalistic model where people become solely responsible for themselves or do we move towards a babysitting model where the government picks you up everytime you take a tumble? The truth is, even European countries with a strong socialistic tradition, are starting to move more towards a capitalistic model. Why? because the socialistic model is not sustainable financially over the long run (except perhaps for those wealthy countries with relatively small populations like Norway). People HAVE to take responsibility for their future and well being. It's that simple.

[Zipper]

We had the same problems with CPP a few years back. The money was loaned out to the provinces at firesale rates and the investment return was basically nil.

The problem was solved by ramping up contributions and the formation of the Canada Pension Plan Investment Board.

The government has no say in the investment decisions and the plan has been racking up impressive gains for years.

The CPP is actuarily sound for many many decades.

We used to worry about the plan running out of funds up here, just like you, but no one talks that way anymore.

[wildcat]

Quote:

Originally Posted by maddythebeagle No offense....but I wouldnt call everyone that relies on SS "deadbeats/those who lived beyond their means."...I know of a few that lived frugally in the working years and with nothing more than SS simply continue with a similar lifestyle...I suspect that folks that live way above their means, just have to continue to work since SS wont be enough to continue on as before....

True. I don't think I wrote to imply that by any means. If I did, I did not mean it to sound that way. A lot of working poor people will have to rely on SS. I suppose in some ways that is how I justify my view. Those people are large contributors to our wealth but they do not always get to share it.

[wildcat]

Quote:

Originally Posted by FIREdreamer Although it is hard for some people to accept it, our whole system is already full of programs that are socialistic by nature. Social security, medicare, medicaid, food stamps, unemployment benefits are all socialistic programs. Even our current tax code is socialistic by nature (people who earn more pay a higher percentage of their income in taxes). Really, the only major program that socialist countries have and we don't have (yet) is universal healthcare (although in this country we already have a form of universal healthcare system in the way of Medicare and medicaid). So looking at it this way, we are facing the same choices other industrialized countries face: Do we move towards a more capitalistic model where people become solely responsible for themselves or do we move towards a babysitting model where the government picks you up everytime you take a tumble? The truth is, even European countries with a strong socialistic tradition, are starting to move more towards a capitalistic model. Why? because the socialistic model is not sustainable financially over the long run (except perhaps for those wealthy countries with relatively small populations like Norway). People HAVE to take responsibility for their future and well being. It's that simple.

I agree. Seems like we are closer to making that choice now more than ever.

[cute fuzzy bunny]

Quote:

Originally Posted by maddythebeagle No offense....but I wouldnt call everyone that relies on SS "deadbeats/those who lived beyond their means."

None taken, because I didnt imply that 'everyone' was a deadbeat.

I'd rather have the money back that I put into the system than some guy who didnt plan for retirement and therefore qualifies to get it more than I do.

Simply that.

[FinanceGeek]

This was just discussed a few days ago, my opinion remains that for those under about 45 now, Social Security will be means-tested by the time you hit retirement age. And unless you're near the poverty line you won't be getting any benefits.

As I tell DW, "with any luck, we won't qualify".

About all any of us can do to diminish the harm that the lack of future Social Security benefits will cause is to retire early and stop paying into something you'll never collect from.

[chinaco]

I need two or three of you younger people to continue working to fund my SS.

[Webzter]

Quote:

Originally Posted by chinaco I need two or three of you younger people to continue working to fund my SS.

You get me for another 10 years then you're on your own.

[chinaco]

Quote:

Originally Posted by Webzter You get me for another 10 years then you're on your own.

Correction: I still have 4 years myself.

The sad part about this thing is that it is a total pay as you go system because the govt didn't hang on to any of the boomer payments in a trust. It was spent!

They claimed it was borrowed. Who gets to pay it back? The whole thing is ridiculous.

[samclem]

Quote:

Originally Posted by chinaco Correction: I still have 4 years myself. The sad part about this thing is that it is a total pay as you go system because the govt didn't hang on to any of the boomer payments in a trust. It was spent! They claimed it was borrowed. Who gets to pay it back? The whole thing is ridiculous.

Maybe not as ridiculous as it seems. The "lockbox" was a laughable campaign gimmick.

How would the money actually have been kept? As physical currency in a safe somewhere earning no interest and subject to inflation? Invested in stocks /bonds of companies (do we really want the US government to be a major stockholder in major corporations? Look to Europe for the rat's nest of problems that causes). Or, maybe loaned back to the US government (which needed to borrow money from somebody since they were spending more than they were taking from us). Just like an individual would buy US bonds. That's what was done.

Who will pay the money back? US taxpayers, just like they pay bearers of all government bonds. The bucks owed to SS are allegedly just as firm an obligation of the USG as all of the other bonds issued by the treasury.

But, who knows how it will really work out. There's definitely gonna be a crunch as SS becomes a net "taker' rather than a net "giver" starting in approx 2018. By approx 2041, all the paper IOUs that the Treasury owes SS will be used up and "pay as you go" will have a new meaning.

[chinaco]

Quote:

Originally Posted by samclem Maybe not as ridiculous as it seems. The "lockbox" was a laughable campaign gimmick. How would the money actually have been kept? As physical currency in a safe somewhere earning no interest and subject to inflation? Invested in stocks /bonds of companies (do we really want the US government to be a major stockholder in major corporations? Look to Europe for the rat's nest of problems that causes). Or, maybe loaned back to the US government (which needed to borrow money from somebody since they were spending more than they were taking from us). Just like an individual would buy US bonds. That's what was done. Who will pay the money back? US taxpayers, just like they pay bearers of all government bonds. The bucks owed to SS are allegedly just as firm an obligation of the USG as all of the other bonds issued by the treasury. But, who knows how it will really work out. There's definitely gonna be a crunch as SS becomes a net "taker' rather than a net "giver" starting in approx 2018. By approx 2041, all the paper IOUs that the Treasury owes SS will be used up and "pay as you go" will have a new meaning.

I see your point.

But, it could have been invested like an endowment or pension. Perhaps the excess could have been used that way.

Otherwise, the SS tax should have been lower the last 30 years.

In the PAYG system the SS tax is more of a function of how many people are paying into the system. If they had stashed it away... it would be there. Where was all of the talk about private accounts 30 years ago?

We have been scr3wed! In any other area (such as personal or business)... this would be illegal.


Sorry for the rant!

[wildcat]

Quote:

Originally Posted by chinaco I see your point. But, it could have been invested like an endowment or pension. Perhaps the excess could have been used that way. Otherwise, the SS tax should have been lower the last 30 years. In the PAYG system the SS tax is more of a function of how many people are paying into the system. If they had stashed it away... it would be there. Where was all of the talk about private accounts 30 years ago? We have been scr3wed! In any other area (such as personal or business)... this would be illegal. Sorry for the rant!

Ahh yes. Take your complaint to Sudan and tell them how bad you have it here in the US

[lets-retire]

My thoughts are restrictive means testing will become a reality. Since nobody has any compassion for the wealthy, there will be a time when if a person earns, whether through pension, investment income, or something else, over a certain amount they will no longer be eligible for SS. The definition of wealthy will be rather low and will result in many people being told they are not going to receive any SS. I think this will be phased in over a very long time period, in effect making people who are either just entering the work force or younger the recipients of a very bad system. Most of the younger people working now will receive something, but much less than the current benefit.

Similar to how the military was promised a very lucrative retirement, but somehow it was cut. Look at what the recruiters were promising during the Vietnam era. If the military member served 20 years everything would be taken care of for free. Now military retirees are required to pay for their health care. Some will say, "oh big deal I don't have company paid retirement health care." The military, who the vast majority are enlisted and don't make much, are told they will have a very good retirement in exchange for very lo pay, yet their retirement is continually being cut, and modified to the members' detriment.

[OAG]

I thought this was about SS which, by the way, is already "means tested" just go look at the IRS Worksheet for determining ones taxable SS Benefits.

How come the rant on the military? About 50% (COLA'd) pay for 20 years service. Most reach that point at about 43 years or age, even younger if entering as an enlisted person (maybe as early as 37 years old). Plenty of time to enter a second career if one wanted to. Medical care currently $230 a year per person (or $460 a year for a Family) if you want the Prime program. You can go to a Military Facility for free or just go space available and forget the $230/$460. Care to provide some quotes about the "promising during Vietnam era" I was in before, during, and after the VN era and never remember anything like that. Although, I guess it all worked out pretty well since TRICARE is not too expensive (at about $40 to 80 a month) especially if you select the "free" levels (which I never did).

[lets-retire]

Quote:

Originally Posted by R Wood I thought this was about SS which, by the way, is already "means tested" just go look at the IRS Worksheet for determining ones taxable SS Benefits. How come the rant on the military? About 50% (COLA'd) pay for 20 years service. Most reach that point at about 43 years or age, even younger if entering as an enlisted person (maybe as early as 37 years old). Plenty of time to enter a second career if one wanted to. Medical care currently $230 a year per person (or $460 a year for a Family) if you want the Prime program. You can go to a Military Facility for free or just go space available and forget the $230/$460. Care to provide some quotes about the "promising during Vietnam era" I was in before, during, and after the VN era and never remember anything like that. Although, I guess it all worked out pretty well since TRICARE is not too expensive (at about $40 to 80 a month) especially if you select the "free" levels (which I never did).

My emphasis was on the restrictive part. I guess I didn't make that clear enough. I think in the future the benefit will be dropped so that the only people receiving SS will be those who are unable to make as much from whatever retirement they earned as those on SS. For example say SS pays a maximum of $20,000 per year. If you make that much in retirement you will not receive any SS. If you make less than that you will receive enough from SS to bring you up to that. I also believe these changes will not come to pass until the boomers are not running the show any longer. They don't want their legacy to be one of destroying the system.

I was drawing a comparison between SS and another government run retirement system. Have you tried going space-a at a military hospital. Most have gone to relying on the civilian sector and can't see military dependents in a timely manner, let alone a retiree. Space-a for retirees is almost non-existent. I am not a military retiree, however not too long ago I was talking to a person very involved with military veteran and retiree benefits and issues. From what he stated, the DOD came straight out and stated retirement benefits were never guaranteed by contract, however they realized many recruiters were using the rich retirement benefits as a recruitment tool. The DOD was put in a very bad position, but went on to say they would not honor any of the promises, even though they know the promises were being made. These recruits were given promises, even if it was only by a recruiter, by a representative of the military yet the military refused to honor the promises.

[deserat]

Not to hijack the thread - but my husband's active duty and he's having problems seeing the military docs - they're all deployed...

As for SS - I'm in between -- 43 - and will rely on a combination of pensions (smaller ones) and my own savings over the duration (hoping to retire at the latest at 50 - earlier if number pan out) - I'm of the mind that I paid in to SS, I want to benefit from that - I think it may be worse in that most of my retirement income from whatever source will be taxed heavily to meet all of the gov't obligations we are amassing - couple that with a probably Democratic turn in the next election and bad news fiscally for sure.

However, I remember reading that if the COLA was adjusted to just the
CPI versus the amount average amount of 'raises' (I may be stating that wrong), SS would be solvent - the big issue is healthcare - Medicare/Medicaid.

The comment earlier about Norway was interesting - when I visited there I spoke with several Norwegians - they are a very rich country, however, they are banking it and still taxing their people heavily -the comment made was that the oil wouldn't last forever and they wanted to make sure that they thought of the future.....