Social Security - your thoughts?

#1
Volunteer08

Volunteer08

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#1
As of late, more republicans are making headlines about extending the age of retirement, cutting Social Security benefits as a way to 1) preserve the program's longevity and 2) reduce the impact on our national debt. Democrats are arguing that no cuts should be made to Social Security, Medicare should be expanded and all increased costs should be paid for by high income earners ($400,000+).

I'm 37 and over the 16 years I've had a "real job" since graduating UT, I've been fortunate enough to "cap out" of the Social Security tax being withheld for a handful of those years. I feel I've paid a lot of money into the program already and each year that passes, I think my chances of seeing any of it in retirement appear to dwindle.

What does the board think about this?
 
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#2
#2
Volunteer08 said:
As of late, more republicans are making headlines about extending the age of retirement, cutting Social Security benefits as a way to 1) preserve the program's longevity and 2) reduce the impact on our national debt. Democrats are arguing that no cuts should be made to Social Security, Medicare should be expanded and all increased costs should be paid for by high income earners ($400,000+).

I'm 37 and over the 16 years I've had a "real job" since graduating UT, I've been fortunate enough to "cap out" of the Social Security tax being withheld for a handful of those years. I feel I've paid a lot of money into the program already and each year that passes, I think my chances of seeing any of it in retirement appear to dwindle.

What does the board think about this?
Click to expand...
I save like crazy with the thought that I won’t ever see SS. If they would have let me keep all I’ve paid into SS I would be retired now. And I’m not 45 yet
 
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#4
#4
I oppose it because it's the majority of our budget (Medicare and SS), it's a nanny state policy that assumes American's lack the ability to make their own decisions, and it's a regressive tax.

I would give every person below a certain age (maybe 40 or 45) a one time check equal to whatever they've paid in (possibly with 5% or so interest), and then allow anyone older to keep it (because many have wrongly counted on it for retirement). Then once that generation dies off, it's done.

Honestly though that will never happen and the best I can hope for is individual accounts. Everyone who advocates for SS now thinks of it in individual terms anyway "I paid in and I deserve it!". Okay, cool....you'll get what you paid plus x% interest. Nothing more.

It's also one of the many government policies that have lessened family ties in favorite of government and helped to erode our culture (similar to other forms of welfare).
 
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#5
#5
This has been talked about since I was a kid. The issue is we add more takers and have fewer givers. I thinks it's the main reason behind our open border policy.

As pj said, it's really just a government sponsored pyramid scheme and the wheels are going to come off eventually.
 
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#6
#6
I know what we all want (and PJ I think you nailed it), but that's not going to happen.

So what is the answer? Privatization? Cut benefits? Tax the wealthy more?
 
#7
#7
Volunteer08 said:
I know what we all want (and PJ I think you nailed it), but that's not going to happen.

So what is the answer? Privatization? Cut benefits? Tax the wealthy more?
Click to expand...

Private accounts is the only real option I see moving forward. The problem with other people's money is it eventually runs out and the wealthy already pay most of our taxes. On top of that all the billionaire's in this country combined wealth (way more than just income) isn't enough to run our country for a year.
 
#9
#9
I have always been a proponent of being able to opt out for half. they would never let you completely opt out. I am young so I know my ROI will be in the red.

Similar to 8188 said, one time out opt. Your SS tax rate gets cut in half. They keep whats already in there, and they still get half so the moochers have something. Taking the half tax rate I get back from the SS tax and being able to invest it in private accounts would still net me more than I will get from SS.

I would also support government mandated privately held 401ks for everyone. SS tax rates stays the same and it gets distributed similar to now, but instead of only getting it at the end, SS constantly drips into your own account.
 
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#10
#10
WoodsmanVol said:
A major issue with SS is also the fact that lawmakers borrowed SS funds to pay the national debt. Then never put the borrowed money back into the system. Basically, the rich making themselves richer at the little people's expense.
Here's How Much Money Has Congress Taken From Social Security
Click to expand...

1) I'm pretty certain that's not accurate 2) Do you have a better source than Money Inc?

I think where this gets misconstrued is how the SS funds were invested (gov't bonds) which you could consider a loan to the gov't. Therefore, saying they "spent my money" or "borrowed" is sort of accurate. However, that's not how it works with bonds because the gov't never really "realizes" it and it's not like the funds are gone. The Gov't continues to pay for it, they just go into more debt to do so.
 
#11
#11
Vol8188 said:
I oppose it because it's the majority of our budget (Medicare and SS), it's a nanny state policy that assumes American's lack the ability to make their own decisions, and it's a regressive tax.

I would give every person below a certain age (maybe 40 or 45) a one time check equal to whatever they've paid in (possibly with 5% or so interest), and then allow anyone older to keep it (because many have wrongly counted on it for retirement). Then once that generation dies off, it's done.

Honestly though that will never happen and the best I can hope for is individual accounts. Everyone who advocates for SS now thinks of it in individual terms anyway "I paid in and I deserve it!". Okay, cool....you'll get what you paid plus x% interest. Nothing more.

It's also one of the many government policies that have lessened family ties in favorite of government and helped to erode our culture (similar to other forms of welfare).
Click to expand...
A one time payout equal to whatever they’ve paid in? Plus interest? You been sniffing glue lol?

Who would take 33% of what they paid in to the program to escape clean and free? I would.
 
#12
#12
Volunteer08 said:
1) I'm pretty certain that's not accurate 2) Do you have a better source than Money Inc?

I think where this gets misconstrued is how the SS funds were invested (gov't bonds) which you could consider a loan to the gov't. Therefore, saying they "spent my money" or "borrowed" is sort of accurate. However, that's not how it works with bonds because the gov't never really "realizes" it and it's not like the funds are gone. The Gov't continues to pay for it, they just go into more debt to do so.
Click to expand...
Don’t play with that kid. He’s weird.
 
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#13
#13
LouderVol said:
I have always been a proponent of being able to opt out for half. they would never let you completely opt out. I am young so I know my ROI will be in the red.

Similar to 8188 said, one time out opt. Your SS tax rate gets cut in half. They keep whats already in there, and they still get half so the moochers have something. Taking the half tax rate I get back from the SS tax and being able to invest it in private accounts would still net me more than I will get from SS.

I would also support government mandated privately held 401ks for everyone. SS tax rates stays the same and it gets distributed similar to now, but instead of only getting it at the end, SS constantly drips into your own account.
Click to expand...
#TSPforAll
 
#14
#14
Volunteer08 said:
1) I'm pretty certain that's not accurate 2) Do you have a better source than Money Inc?
I think where this gets misconstrued is how the SS funds were invested (gov't bonds) which you could consider a loan to the gov't. Therefore, saying they "spent my money" or "borrowed" is sort of accurate. However, that's not how it works with bonds because the gov't never really "realizes" it and it's not like the funds are gone. The Gov't continues to pay for it, they just go into more debt to do so.
Click to expand...

Balanced view?
Social Security 'Fun Facts'
 
#17
#17
If Gingrich could have allowed SS to put in private 401k type funds, this would not be as bad of an issue

I also believe that living cost increases continue to kill our savings. Our dollar continues to get weaker
 
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#18
#18
It'll always be around as long as we're the reserve currency. We'll just make new money to fund it with. Biggest issue is people are living longer, that's why you don't see pensions anymore.

I personally think the opt out is a no go, they'd squander the extra money and we'd end up taking care of them anyway. We'll have to either make some cuts or up the age, if not both.

Think of someone getting SS at 62 then living until 100. That's 38 years (almost 40% of their life) on the SS payroll.
 
#19
#19
You can not let the public take a one time payment and opt out. Half are of less than average intelligence. Many will spend it all on lottery tickets or new pickup trucks. Then what happens after they spend it all? They’ll just end up on some sort of different government assistance program.

Worst case scenario is that the surplus of the trust fund disappears and is not replenished. Then the current retiree/beneficiaries will simply have their benefits cut to however much is collected from payrolls every year. Maybe something like a 25% cut in payouts.

It won’t take much to reverse the shrinking surplus. The 6.2% (12.4% with employer match) can be slightly increased. The politicians voting for this will be kicked out of office in the next election cycle.

The other way to reverse the trend is to cut benefits. There are several ways to do that. Raise the ages before the same level of benefits are paid out. 62 is the minimum. Most people don’t understand that you begin receiving benefits anytime from age 62 through age 70 with an increasing formula for benefits the longer you wait. So that formula could be adjusted by adding a year or two for each level. 64 instead of 62. 72 instead of 70. Etc.

Another option is to cut the COLAs.

The least painful method is to make SLIGHT adjustments to each piece. But again, the legislators that support ANY payment reduction will lose their job in the ne t election cycle. They all keep deferring the belt tightening to future office holders.
 
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#22
#22
I'm in the late-30s/early-40s demographic, and my personal retirement planning/thinking from the time I started working has not taken into account (hypothetical) future Social Security payouts. If it's there when I retire, swell. If not, ok.

From what I understand, Colombia presents its citizens with three options: privately-managed, public, and non-contributing. For the first two, in order to become fully vested, one must work the equivalent of ____ weeks (I think it's in the ballpark of 1300 or 1500 weeks, maybe?). Having options is a good thing, but without knowing the ins and outs of that program I'm by no means implying we should replicate it.

I would be elated if we had the option to roll over our contributions (or reasonable percentage thereof) into an IRA of some variety and reduce any future Ponzi-scheme contributions (SS taxes) to a corresponding percentage.
 
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