Should Social Security be saved?

[puzzleannie]

definitely at least until I die, then you all can do what you want with it, but having been taxed at that percent all my working life, an amount therefore not available to me for saving and investment, I want my medicare and SS. fortunately I had enough kids that are working and paying into the system, as my generation did to fund our parent's SS (although 3 of 4 of my parents and in-laws died before they could collect much SS).

[Monte RCMS]

Social Security can be converted to the Galveston Plan.

http://www.ncpa.org/pub/ba514

The Galveston Plan has been in successful use for several decades.

The "problem" is that it is not politically manipulatable.

The conversion over to the Galveston Plan could be performed with a variety of alternatives ... GP1 to GP20 ... while protecting existing recipients ... and moving younger people over on a sliding scale. Nobody gets hurt.

[wcknight]

The idea of Social Security was a good one. In practice it has become a nightmare.

Originally it was put in place a "supplementary" income for folks who needed it and lived past the 'normal' life expectantcy of age 55. Folks in the middle 20th century had a life expectancy of 57 years, so the government strategically made the retiremenat age at 60 or 62.

Theoretically most folks would not be receiving any payments. But people started to live much longer with medical advances and healthier life choice, life expenctancy rose to age 67 in the 1960's and 70's and then to age 77 and higher where it is now.

The system was never designed to pay for ALL of folks retirement income, and it was not designd for most folks to receive payments at all. People were supposed to die (on average) before payement were to be sent out.

IF the system were to be redesigned as originally intended the retirement age would be set at age 80 or 85. BUT who wants to work until they are about to collapse ? And what happens when medicine makes folks live to well over a hundred (some suggests medicine may have folks living to 150)

But should it be saved ???, yes, BUT it needs to be totally redesigned and it should definitely be a SUPPLEMENTAL income and never a sole source for anyone's retirement. Everyone should have their own IRA and other main income for retirement. It is insane to think that the govenment should support folks for life indefinitely As it exists now.. it is a joke and disaster.

[Monte RCMS]

Originally Posted by wcknight

The idea of Social Security was a good one. In practice it has become a nightmare.

Originally it was put in place a "supplementary" income for folks who needed it and lived past the 'normal' life expectantcy of age 55. Folks in the middle 20th century had a life expectancy of 57 years, so the government strategically made the retiremenat age at 60 or 62.

Theoretically most folks would not be receiving any payments. But people started to live much longer with medical advances and healthier life choice, life expenctancy rose to age 67 in the 1960's and 70's and then to age 77 and higher where it is now.

The system was never designed to pay for ALL of folks retirement income, and it was not designd for most folks to receive payments at all. People were supposed to die (on average) before payement were to be sent out.

IF the system were to be redesigned as originally intended the retirement age would be set at age 80 or 85. BUT who wants to work until they are about to collapse ? And what happens when medicine makes folks live to well over a hundred (some suggests medicine may have folks living to 150)

But should it be saved ???, yes, BUT it needs to be totally redesigned and it should definitely be a SUPPLEMENTAL income and never a sole source for anyone's retirement. Everyone should have their own IRA and other main income for retirement. It is insane to think that the govenment should support folks for life indefinitely As it exists now.. it is a joke and disaster.

Absolutely totally agree with you.

The instructions for an IRA used to be something like four pages. Now it's over 100 pages. And the limitations make it difficult or impossible for a lot of people to participate in an IRA and/or 401(k).

Which is why I keep bringing up the Galveston Plan.

The per person/ per year contributions to an IRA should be unlimited. That would allow people to REALLY maximize their contributions. And really provide their own retirement plan. And, allow open ended conversions to ROTH IRA's.

Ditto, unlimited conversions from 401(k) to an IRA or ROTH IRA.

[Trader]

Another of the original ideas behind Social Security was a one time fix for unemployment. With 25% of the potential workforce out of work, the plan was designed partly to get older workers to retire and make more jobs available for younger workers. In 1938 that made sense because jobs had more physical content and younger, stronger workers were more productive than older workers. It also dealt with a very dangerous situation where young males with nothing to do frequently turn to crime.

More than 70 years later, unemployed young men are still more likely to commit crimes, but the knowledge content of jobs is higher now. Getting experienced workers to quit working does not increase productivity today.

I am pretty sure the original proponents of Social Security would be shocked to see how the original program had grown in such an irresponsible way. Government accounting for Social Security and Medicare was based on Scarlet O'Hara: Promise the voters something better every election year, but when it comes to paying for it, "I'll think about that tomorrow."

When the very low inflation rate last year meant that there would be no increase in SS payments under existing law, Congress gave in to their most feared lobby, AARP, and sent extra checks to retirees under the cover of economic stimulus. The country borrowed even more money to be repaid by future generations in order to distribute money to other people based not on need, but only on age.

[Monte RCMS]

In addition to the Galveston Plan, there is the Chilean Plan:

http://www.investors.com/NewsAndAnal...ts-Turn-30.htm

[Catholictrain]

When I hear my co-workers or friends talk about how this program or that program shouldn't be cut etc, etc... I have to wonder if they understand how far in debt this country really is. It's like me saying to my wife, "Hey let's have a vacation this year in the south of France for a month." Sounds great my wife says... but it is not possible. Why is it not possible? BECAUSE WE DON"T HAVE THE MONEY!
All of us will have to wake up to the fact that we have all been sold down the river by Congress. We are WAY over our heads in debt and everything has to be cut way, way back.

So my opinion? I would recommend we tell everyone who has not started collecting Social Security that they will not receive it when they retire. Sorry. Then I would tell those who are on it that they are the last Americans to get this benefit. Period. Once they are gone, the ill-concieved Ponzi scheme called Social Security will be just a bad memory in the history of the United States. That's my opinion anyway.

[insideitall]

I did not know that ss was originally kept in trust funds. that's interesting.

personally, I'd be much happier without all those social programs. taking care of the unfortunate is a christian duty, not a government duty. more good is done by individual charity than by any program a government can implement, especially when the government separates itself from religion..

The instructions for an IRA used to be something like four pages. Now it's over 100 pages. And the limitations make it difficult or impossible for a lot of people to participate in an IRA and/or 401(k).

can anyone explain this? I'm not exactly sure what's meant. I've had an individual one since I was 22 and had no problem opening it..

Then I would tell those who are on it that they are the last Americans to get this benefit.

I agree completely. except good luck getting that to pass, because all the people that are slated to get screwed - because they've been paying in but won't get anything - will vote those reps/senators out of office before they can blink.

[Monte RCMS]

Originally Posted by insideitall

I did not know that ss was originally kept in trust funds. that's interesting.

personally, I'd be much happier without all those social programs. taking care of the unfortunate is a christian duty, not a government duty. more good is done by individual charity than by any program a government can implement, especially when the government separates itself from religion..



can anyone explain this? I'm not exactly sure what's meant. I've had an individual one since I was 22 and had no problem opening it..



I agree completely. except good luck getting that to pass, because all the people that are slated to get screwed - because they've been paying in but won't get anything - will vote those reps/senators out of office before they can blink.

Because of all the limitations on IRA's, many people are not permitted to have one, or to make a contribution to one.

Get the 100 page directions and read them.

Seriously, call 1-800-829-3676 or 1-800-829-1040 and ask for Pub 590 ... and READ IT!

[puzzleannie]

Originally Posted by Monte RCMS

Because of all the limitations on IRA's, many people are not permitted to have one, or to make a contribution to one.

Get the 100 page directions and read them.

Seriously, call 1-800-829-3676 or 1-800-829-1040 and ask for Pub 590 ... and READ IT!

everyone can have one, but not everyone can make tax-deductible contributions to one each year, nor is a Roth IRA suitable for everyone. If 15% of your income already goes to SS and medi it is hard to come up with another chunk for savings. I really resent making that estimated tax payment on self=employment income to cover SS which I wonder if we will ever get back.

[insideitall]

ok, I'll give this the benefit of the doubt, that some people will be told they can't open one.

what's to stop them from opening a non-ira account at a bank, in a cd or money market fund? either one of those will still give more return than what ss and its associated programs can do.. not to mention it's your money. in your hands.

compounding is amazing. say you make an initial investment of 1000. and every month, for 40 years, you put in 25 bucks. your total contributions, out of your own pocket, total 12,975. assuming a modest rate of 5%, at the end of that 40 years you'll have 45,500. that's over 32,500 bucks that was free. you've almost tripled your money by doing nothing. even if you only get 2%, you'll have over 20,000, which is 7,000 of free money.

can you imagine how much money you'd have saved if the money that came out of your check every month for ss/medi went into either the bank or the market??

my last employer offered a plan with a match. it wasn't the best match, but it was still free money. and almost no one took advantage of it. unbelievable.

people tend to forget that many people who are poor - especially once they're retired - are in the situation they're in because over the years they chose to spend their money on other things. we don't know these people's past spending habits. sure, some people get the short end of the stick - but life isn't supposed to be easy, it's not supposed to be fair, and no one should expect it to be so.

expecting those who are more well off than you to take care of you is not only selfish, it reeks of jealousy.

[Monte RCMS]

Originally Posted by insideitall

ok, I'll give this the benefit of the doubt, that some people will be told they can't open one.

what's to stop them from opening a non-ira account at a bank, in a cd or money market fund? either one of those will still give more return than what ss and its associated programs can do.. not to mention it's your money. in your hands.

compounding is amazing. say you make an initial investment of 1000. and every month, for 40 years, you put in 25 bucks. your total contributions, out of your own pocket, total 12,975. assuming a modest rate of 5%, at the end of that 40 years you'll have 45,500. that's over 32,500 bucks that was free. you've almost tripled your money by doing nothing. even if you only get 2%, you'll have over 20,000, which is 7,000 of free money.

can you imagine how much money you'd have saved if the money that came out of your check every month for ss/medi went into either the bank or the market??

my last employer offered a plan with a match. it wasn't the best match, but it was still free money. and almost no one took advantage of it. unbelievable.

people tend to forget that many people who are poor - especially once they're retired - are in the situation they're in because over the years they chose to spend their money on other things. we don't know these people's past spending habits. sure, some people get the short end of the stick - but life isn't supposed to be easy, it's not supposed to be fair, and no one should expect it to be so.

expecting those who are more well off than you to take care of you is not only selfish, it reeks of jealousy.

If it's a non-IRA account then you have to pay taxes on the interest AND if it's a non-IRA account with stocks and you balance your account doing some selling and buying based on the movements of the market [or for any other reason], then EVERY one of those transactions is a taxable event. The IRS, obligingly, even has a special form ... the D-1 ... so you can report all those transactions ... considerate, aren't they!

Whereas, if you do those rebalancings or portfolio adjustments within an IRA, then the taxes are deferred until you take the money out.

And if it's inside a Roth IRA, then the gains are not taxed at all ... you pay the taxes at conversion and then tax-free thereafter, subject to the limitations in that 100 page booklet.

Check it out.

[The Old Medic]

Not one person who lives even 15 years post retirement, has paid into Social Security and medicare even remotely what they will get out of it.

Name any other retirement plan, other than a GOVERNMENT program, that is indexed for inflation? Name other retirement programs that provide 80% and higher coverage for all medical expenses forever?

These programs were designed to have significantly more workers paying into them, than people drawing benefits from them. When Social Security began, 17 workers paid into it, for each person drawing benefits and those benefits were fixed for life). Now, it is 4 workers paying in for each person drawing benefits.

There has not been a "Social Security Trust Fund" since the early 1960's. Congress voted to spend every penny of Social Security taxes, and to issue government bonds in lieu of actually keeping the money. Government bonds are nothing but IOU's. There are no funds there at all, Social Security is being paid out of the revenue that the government collects each year (and this year, for the first time, Social Security is spending more than it is taking in).

This is NOT sustainable. All we are doing is heaping more and more debt onto our children, out grandchildren and now even on our great-grandchildren(that's how long it will take to pay off our national debt).

I draw Social Security myself. My wife has drawn it as a disabled person since 1985. We both have Medicare. I paid into Social Security for over 45 years, and by the time i reach 70, I will have received every penny I paid into Social Security, plus interest calculated at 6% per year (which is a pretty good rate of return, and a LOT higher that we actually got during most of those 45 years)

If I live to be 80, I will get back almost 5 times what I paid in (my wife has already gotten back over 10 times what she paid in). That doesn't even count Medicare (which I almost never use, but she does).

There is no way that we can continue a program like this, as it is. Something pretty drastic will have to be done, or my children will have NOTHING from Social Security but debt (thankfully, they know this and are making other arrangements).

We have become a nation of takers. The lower half of wage earners pay ZERO INCOME TAX. This means that 50% of the earners in this country are paying 100% of the Income Tax, 100% of the Luxury Tax, 100% of the Excise Taxes, 100% of the Capital Gains taxes, etc., etc, etc.

You could literally tax 100% of all of the income, from all sources, of every person making over $1,000, 000 a year, and you would not even make a dent in the national debt.

NO Social Security as we know it can not be saved. But virtually no politician will actually tell you this.

[YankeeRC]

Only if they exempt new people entering the workforce and pay back every red cent we put into it. Otherwise, I say Class Action suit!

I'll put mine in gold

[SamH]

Originally Posted by Monte RCMS

Because of all the limitations on IRA's, many people are not permitted to have one, or to make a contribution to one.

Get the 100 page directions and read them.

Seriously, call 1-800-829-3676 or 1-800-829-1040 and ask for Pub 590 ... and READ IT!

Limitations on IRA's are mainly due to high of income or one or both spouces already participate in a "qualified" plan at work.

http://www.irs.gov/retirement/partic...202517,00.html

http://www.irs.gov/retirement/partic...202516,00.html