Fixing Social Security
Wanted to get everyone's viewpoint on the Social Security issue. Here is what I know. Americans have been paying into it for YEARS and for a lot of those years, we had a surplus in the SS trust fund. Wonderful Congress (both Democrats and Republicans)decides that b/c we have a surplus, they'll just "borrow" from the fund for a whole bunch of other BS spending programs and they would "pay it back". So now the SS fund is a huge IOU pot and I feel individuals like myself, early 30's, who have been paying into it since I was 16, probably won't see the benefit base that I should be getting, if any at all.
Self employment tax aside, we pay 7.65% of our dollars into the SS system, which includes medicare. I have no problem paying a smal percentage, let's say 2%, to fulfill our promise to the elderly who are on SS now. But let me keep the lion's share of the current taxes and let me invest it on my own. I hate that people in the media and govt want to use the market right now as a reason why we shouldn't partly privatize SS when this kind of market happens a lot fewer times than up markets.
This SS thing drives me crazy. If you start adding up all the damn taxes we pay (Fed, State, Local at some places, SS), you're at close to 50% and sometimes even over. Any thoughts?
Social security is a ponzi scheme. Everyone sees the storm coming and we can’t do much about it. Politicians who discuss is seriously (aka Bush) gets demonized and are told they will take away your social security. It is the third rail of politics.To solve it we will need to tax social security benefits at lower income levels, stretch out retirement ages and adjust the cost of living adjustment to slow down the increases. Another suggestion would be to, by law, kill everyone over 80 years old. Solient green is people.
“Let me invest it on my own” is creating a disaster for 401k participants, though. It is important to keep the masses in mind when we argue these points. I think the more realistic approach is let me keep my own deposits and have them invested in US treasuries, with the ability to put up to some percentage (40-50%?) in a total stock market index fund. Only one trade allowed/year and mandatory rebalancing. Lots of govt control I know, but I think it’s the best way to keep people from destroying themselves a la 401k plans.
(Again-not us and many of our clients, but the masses).
Let’s remember that Social Security was created in the 30’s, full retirement was 65, and life expectancy was…65. It was never designed to be a retirement plan. It will be fine. They will need tio slightly extend the retirement age, slightly increase the SS tax, and slightly reduce benefits. That way, everyone can plan adequately for it, and nobody gets killed by the changes.
Social security should only be for people who are disabled. Social security as a retirement vehicle should never have been imagined.I don't mind paying for SSI or things like that. Part of being part of society. But to fund other people's retirement and then have people fund mine? Forget it. This country is about (or used to be) about self-reliance. Reduce the tax. Eliminate retirement benefits. Problem fixed.
First, reduce the abuses inherent in SSI, where 8.1 million people currently get a paycheck. Second, use the social security lock-box, instead of borrowing against it. Third, cut benefits. Fourth, increase age of eligibility. Fifth, have the ability to invest in private accounts for those that choose to.
The social security lock box idea is a david blaine gimmic. If you give the govt money, they will spend it.
[quote=henryhill]The social security lock box idea is a david blaine gimmic. If you give the govt money, they will spend it.[/quote]These are my thoughts exactly. I'm surprised that some on this forum actually recommended INCREASING the social security tax. This is not what we need as the govt has already proven that they are horrible at managing our money. For the people who say it's not supposed to be a retirement fund, we're paying at a minimum of 7.65% of our money, we should get something for that or let us keep it. I am strongly opposed to increasing the tax. I have been in line with luvindy's idea even before I posted. There needs to be some checks and balances b/c individuals can't invest for their lives but I'm more in favor of that than letting the govt invest it for us. It needs to be privatized, even at least partially because we're getting hosed.
Here is an idea for privatization.
Allow people to invest the money themselves, but REQUIRE them to go see a financial advisor. Just like practicing law without a license. Or medicine without a license.
They can take to whichever advisor they want, but they themselves are not allowed to mess with it.
Require a special license for advisors who deal with SS accounts.
I still don’t think it should ever be used as retirement. It just needs to be reduced and given to people who are REALLY disabled.
It’s an idea. I still think there should be no Social Security
We have to be real. I’ve read that half to two-thirds of American households effectively have no assets, so if you just end SS then you have mass poverty which is a political no-go and would create social anarchy.
And you can’t let people invest their SS tax themselves, because, as we see first-hand, they are just not smart enough to do it. And you can’t require them to see a financial advisor because that would be seen as a handout to the financial services industry.
Finally, since we don’t have a manufacturing sector with good-paying jobs anymore, we can’t expect people who make 30k per year working in service industries to be able to safe enough for retirement.
We just have to face the fact that the cost of having a stable society is that we have to provide a minimum standard of living for people who weren’t able to save enough to provide in their latter years. Note I say ‘minimum.’ That would mean some kind of means test or delaying retirement for some occupations.
[quote=army13A] [quote=henryhill]The social security lock box idea is a david blaine gimmic. If you give the govt money, they will spend it.[/quote]
These are my thoughts exactly. I’m surprised that some on this forum actually recommended INCREASING the social security tax. This is not what we need as the govt has already proven that they are horrible at managing our money. For the people who say it’s not supposed to be a retirement fund, we’re paying at a minimum of 7.65% of our money, we should get something for that or let us keep it. I am strongly opposed to increasing the tax.
I have been in line with luvindy’s idea even before I posted. There needs to be some checks and balances b/c individuals can’t invest for their lives but I’m more in favor of that than letting the govt invest it for us. It needs to be privatized, even at least partially because we’re getting hosed. [/quote]
You are probably referring to my post. Again, my only point is that the system was created at a time when life expectancy was about 65 years old. Few people were even expected to collect SS beyond 10 years. So if you want to fund SS retirement for life, you’re not going to get there with some pie-in-the-sky ideas about private investment accounts. How has that done the past 10 years? Markets have proved over the past 100 years that whether your investments do well or not completely depends on the generation that you retire in (secular bull vs. secular bear). That will just never fly in the real world. Hey, I’d love to do it with my own personal SS taxes (invest privately, that is), but the vast majority in this country do not have the wherewithal to do that. It’s like telling everyone that you now have to self-diagnose all of your medical ailments instead of going to the doctor. Hey, it will save all kinds of medical bills!