Fixing social security

[mxracer317]

It's funny you mention that. About 10 years ago, when I was about to retire, I ran through an exercise to see what rate of return I would have needed to receive over the 40+ years I paid into the system to get the payment I was promised. I counted my actual contributions and also my employer contributions over my 40+ work history. I believe I calculated that I would have needed a 13% rate of return over those 40 years to get a payment from 66 to my expected mortality. That's what amazed me. I think my employer & my contributions totaled around $300,000. I remember seeing something how the first woman that collected from social security only contributed $100 but because she lived pretty long had collected thousands of dollars in benefits, even accounting for the time value of money. Do we have any actuaries on here? I think most people are astonished. Benefits far outweigh contributions.

I also ran through a basic calculation to see if it matter whether I retired at 62 or 66.5, my full retirement age. It doesn't, otherwise the system would be incredibly unstable, even more than it is because benefits are so outsized. The actuaries make sure that you are roughly economically indifferent. Benefits for the whole are outsized because it's another handout from Congress. They own us.

Ida Mae fuller

 

[mxracer317]

Randy Newberg is a CPA. Ask him. Pose these commonly held beliefs to him. I would love to see what he responds. I'm just a simple CFA.

Wouldn’t discount being a CFA. Pretty dang hard designation. Especially level 3

 

[Desk Pop]

It shouldn't exist because it isn't voluntary.

It isn't the government's job, nor should it be.

Phase it out, and for those who put in who haven't gotten their benefits back, give them their money.

Charity should be done locally, privately and voluntarily.

The only thing SS and SSI have proven is that the government is inept in their ability to do this.

 

[AvidIndoorsman]

They've basically turned social security into another welfare program,

…

Seriously? Do you not actually understand what social security is or how the program was created.

It is welfare, that’s literally the premise.

 

[AvidIndoorsman]

It shouldn't exist because it isn't voluntary.

It isn't the government's job, nor should it be.

Phase it out, and for those who put in who haven't gotten their benefits back, give them their money.

Charity should be done locally, privately and voluntarily.

The only thing SS and SSI have proven is that the government is inept in their ability to do this.

This is just incorrect, it actually worked really well for a long time… when it worked as intended, a safety net for children, disabled, and elderly without means.

The problem is that instead of being a tax to fund a social program it’s become a defacto retirement program in part because companies don’t want the expense of pensions.

And as long as we are on the subject, how many private pension plans were raid over the years by companies, how many times was their straight up theft by managers.

 

[Wildabeest]

You left out the option of “turn myself into a gigilo to maintain the the population increase ponzi scheme”…. I’ll take that for $1000 Alex….

 

[Nameless Range]

It shouldn't exist because it isn't voluntary.

It isn't the government's job, nor should it be.



Charity should be done locally, privately and voluntarily.

To be clear, I responded “Don’t Know” to the poll, because though I would consider myself an expert in a few things, this isn’t one of em.

That said, no country worth its salt doesn’t take care of those in the twilight of their lives, and I believe such a function is absolutely a role of government, and like so many things, counting on volunteerism and charity never works broadly or consistently.

Not saying SS doesn’t need fixing.

 

[Desk Pop]

This is just incorrect, it actually worked really well for a long time… when it worked as intended, a safety net for children, disabled, and elderly without means.

The problem is that instead of being a tax to fund a social program it’s become a defacto retirement program in part because companies don’t want the expense of pensions.

And as long as we are on the subject, how many private pension plans were raid over the years by companies, how many times was their straight up theft by managers.

Plenty of private pension funds were defrauded. Anytime there is something of value, someone will try to steal it.

I'm in a field where I see SSI benefits taken advantage of at such a large scale that it boggles mind. I fill out SSI questionnaires on a monthly basis for people who are gaming the system. It is pretty disgusting what people will do and say about their own child (that isn't true) for "free" government money.

Why should the government be responsible for people's retirements? Why should I be required and mandated to pay into this when I'd rather do it on my own? I've run several businesses as either small LLCs or sole proprietorship and seeing money leave that at such a high rate that I'll likely never see again is sickening... especially after routinely seeing it go to people conning the system.

I see deadbeat moms lose custody of several of their children, but only fight to keep one who is on SSI (and shouldn't be). Gotta get that paycheck. I see such bullshit in my job that it is disgusting. Our government is incentivising single moms pumping out fatherless children, and when these moms find out they can get an additional paycheck through SSI, they will regardless of whether an actual disability exists.

More importantly, to me, is the principle of it. It isn't voluntary. I'm mostly libertarian and SS isn't something I think should exist. It isn't the government's job, and saying people have robbed private retirement funds isn't a compelling argument of why the government should be doing this. It just shows that some people are shitty people and will rob other people, which is exactly what many are doing now to get SSI benefits.

Charity should be done voluntarily and locally.

 

[Desk Pop]

To be clear, I responded “Don’t Know” to the poll, because though I would consider myself an expert in a few things, this isn’t one of em.

That said, no country worth its salt doesn’t take care of those in the twilight of their lives, and I believe such a function is absolutely a role of government, and like so many things, counting on volunteerism and charity never works broadly or consistently.

Not saying SS doesn’t need fixing.

That is okay. We can agree to disagree.

I don't think it is the government's job. I think a better solution is creating a culture of accountability, for one thing, and one that finds a way to take care of elderly through private, voluntary and localized means.

SS is bigger than old people's retirements as well.

 

[Desk Pop]

This is just incorrect, it actually worked really well for a long time… when it worked as intended, a safety net for children, disabled, and elderly without means.

The problem is that instead of being a tax to fund a social program it’s become a defacto retirement program in part because companies don’t want the expense of pensions.

And as long as we are on the subject, how many private pension plans were raid over the years by companies, how many times was their straight up theft by managers.

I just don't think it is unreasonable to expect people to fund their own retirements.

If companies don't want to pay pensions, then employees know that going in. Let capitalism do it's thing. They'll either draw talent through paying more, or deciding to pay less and fund a pension plan.

The way it is set up currently, people are spending their money involuntarily to fund other people's retirements. Deincentivising hard work and incentivising laziness is not a great recipe.

 

[Desk Pop]

Between you and your employer, 12.4% is put in SSI on your behalf.

For easy numbers, let’s say you average $100k salary over 40 years.

That’s $12.4k/yr. If invested in Index Funds/ETFs we can say that it will grow 8% annually.

In a 40 year career, you’d have accumulated over $3.7 Million dollars in investments.

It’s considered safe to with draw 4% annually to avoid drawing down the principle.

This would allow you to draw $151k a year and die with that $3.7 million still in your account.

I haven’t checked the SSI calculator for the same $100k income, but it’s not paying you $151k/yr and leaving you with >$4 million to give to your kids.

View attachment 320141

Yeah, but math, logic and the general principles of accountability and responsibility are not tolerated as arguments in America these days.

 

[Beignet]

Is there an option for “It could probably use some fixing and I’d like to see some returns when my time comes (not too late in life). But, we live in one of the wealthiest nations on earth and I’m doing fine, so I’m happy to pay into it so we don’t leave the old and sick destitute?”

Also, funny how those French are able to run such a program more successfully and at a lower cost than in the US with all their scary “socialisms.”

 

[Derek44]

Is there an option for “It could probably use some fixing and I’d like to see some returns when my time comes (not too late in life). But, we live in one of the wealthiest nations on earth and I’m doing fine, so I’m happy to pay into it so we don’t leave the old and sick destitute?”

Also, funny how those French are able to run such a program more successfully and at a lower cost than in the US with all their scary “socialisms.”

Zero room for compassion and empathy in these arguments. Come on now, you should be disappointed. Go stand in the corner.

It’s each man for himself around here. To hell with those that busted their ass their entire life. Let em sleep on the sidewalk

 

[Desk Pop]

Zero room for compassion and empathy in these arguments. Come on now, you should be disappointed. Go stand in the corner.

It’s each man for himself around here. To hell with those that busted their ass their entire life. Let em sleep on the sidewalk

Is the problem with Social Security the people that "busted their asses their entire life" and paid into the system?

 

[MTGomer]

It is not so simplistic.

Here’s what it looks like working a full career, retiring making $200k.

The annual family max benefit is about $72k.
For individual it’s about $41.5k.

 

[Derek44]

Is the problem with Social Security the people that "busted their asses their entire life" and paid into the system?

No, but they’re on the list of where it will be taken from. And I’m probably incorrect but I’ve had it explained to me that SS is a COMPLETELY separate program from SSI. Supplemental Security Income is more funded out of the Medicaid coffers is how it was explained to me. But I haven’t researched it. I would rather see the SSI foundation looked into for a drastic overhaul than SS. The latter I would like to see common sense viable solutions brought forth to keep it sustainable. But as was mentioned several times by others earlier, there’s no votes in actually fixing things.

 

[ismith]

Take a gander at this. We are the biggest, most powerful empire that has ever existed on the face of the earth. When it all comes tumbling down, well…………..

https://www.usdebtclock.org/

 

[mxracer317]

Is there an option for “It could probably use some fixing and I’d like to see some returns when my time comes (not too late in life). But, we live in one of the wealthiest nations on earth and I’m doing fine, so I’m happy to pay into it so we don’t leave the old and sick destitute?”

Also, funny how those French are able to run such a program more successfully and at a lower cost than in the US with all their scary “socialisms.”

You're right. Our government wastes money left and right. Especially giving it's citizens money away to other countries.

P.S. Socialism is awful. That comment comes directly from myself, an ex-Canadian who immigrated to the USA 20 years ago.

 

[westbranch]

What about Medicare? If someone makes 150k a year for 30 yrs they'll pay 130,500 into the bucket. How many hip and knee replacements should they get? When do we cut off cancer treatments?

 

[Desk Pop]

No, but they’re on the list of where it will be taken from. And I’m probably incorrect but I’ve had it explained to me that SS is a COMPLETELY separate program from SSI. Supplemental Security Income is more funded out of the Medicaid coffers is how it was explained to me. But I haven’t researched it. I would rather see the SSI foundation looked into for a drastic overhaul than SS. The latter I would like to see common sense viable solutions brought forth to keep it sustainable. But as was mentioned several times by others earlier, there’s no votes in actually fixing things.

Take a look at the math from MTGomer in this thread.

A guy who works his ass off his entire life is FAR better off financially for retirement if he had just invested the 12% he would have given to SS on his own. That's the point.

You say he is on the list of who it will be taken from. If he worked his ass off his entire life, he was taken from by the government, not the other way around.