Social Security

[Kubie]

As you get close to the age of finally retiring, its stuff like this that torques my jaws.

2004 Election Issue
This must be an issue in "04". Please! Keep it going.

SOCIAL SECURITY:
(This is worth the read. It's short and to the point.)

Perhaps we are asking the wrong questions during election years. Our
Senators and Congress men & women do not pay into Social Security and, of
course, they do not collect from it.

You see, Social Security benefits were not suitable for persons of
their rare elevation in society. They felt they should have a special plan
for themselves. So, many years ago they voted in their own benefit plan.

In more recent years, no congressperson has felt the need to change
it. After all, it is a great plan.

For all practical purposes their plan works like this: When they
retire, they continue to draw the same pay until they die, except it may
increase from time to time for cost of living adjustments. For example,
former Senator Byrd and Congressman White and their wives may expect to draw
$7,800,000.00 (that's Seven Million, Eight-Hundred Thousand Dollars), with
their wives drawing $275,000.00 during the last years of their lives. This
is calculated on an average life span for each.

Their cost for this excellent plan is $00.00. Nada. Zilch. This little
perk they voted for themselves is free to them. You and I pick up the tab
for this plan. The funds for this fine retirement plan come directly from
the General Funds-our tax dollars at work!

From our own Social Security Plan, which you and I pay (or have paid)
into-every payday until we retire (which amount is matched by our
employer) --we can expect to get an average $1,000 per month after
retirement. Or, in other words, we would have to collect our average of
$1,000. monthly benefits for 68 years and one (1) month to equal Senator
Bill Bradley's benefits!

Social Security could be very good if only one small change were made.
That change would be to jerk the Golden Fleece Retirement Plan from under
the Senators and Congressmen. Put them into the Social Security plan with
the rest of us ... then sit back and watch how fast they would fix it.

Carl

[PardeGT]

Yeah - I thought that was pretty good too. I got it in my email a few weeks back.

[avx]

Just one more thing to annoy me while I try to go to bed...

[oldbe]

They speak of "Isolation-ism" (is there such a word, spelled wrong I'm sure), if the article is true our representatives (?) have definitely isolated me. In asking them to represent me and my best interest I am not granting them the right to "unreasonable fees". I do not have their public presence or educational background, but I can manage my affairs.

[Mac Medic]

Thanks Carl, Now I'm mad.

[Redo40]

Originally posted by Kubie Social Security could be very good if only one small change were made. That change would be to jerk the Golden Fleece Retirement Plan from underthe Senators and Congressmen. Put them into the Social Security plan withthe rest of us ... then sit back and watch how fast they would fix it. Carl [/B]

I agree, this is so true!

[morriswindgate]

The thing that gets me about SS, and why it needs to be changed to have a private investment option, is that if you started working at 18 and retire at 65. With the average monthly benefit you would have to collect it for 14 years before you get back what you paid in. No intrest, just the principal. Whereas if this same amount of money had a 2.5% return you would be able to collect the same amount for 26 years and that is if it stopped growing the day you retired. Social Security is a big lie.

[Tuf]

Why don't I feel very secure about these guys looking out for MY best interests?

[doctorgonzo]

Not true at all:

http://www.snopes.com/inboxer/outrage/pensions.htm

Sure, Congress does a lot of stupid things, but it really bugs me when these falsehoods get sent around the 'net and are taken as gospel.

[Hot Rod]

That one is easy to believe though because it is something that I have come to expect from politicians.

[morriswindgate]

The thing the article did not cover is the fact that retired member of congress also get a stipend for Offices and staff. That still doesn't erase the fact that SS is a huge lie that in reality takes your money and never plans on returning anything but the principal.
I bet everyone on this forum would gladly walk into a bank, deposit money in a fund or intrest bearing account and then tell the bank manager that 40 years from now all I want is my money back and they can keep the intrest.

[doctorgonzo]

Originally posted by morriswindgate That still doesn't erase the fact that SS is a huge lie that in reality takes your money and never plans on returning anything but the principal.

Actually, no: anybody who knows anything about how Social Security works knows that it is not an investment at all. It is a transfer of payments from those of us who are working to those who are retired. There is no "personal account" for each of us; thus, there is no "principal" that is being returned and no "interest" that we are missing out on. We pay now and expect to be paid later. Whether you agree with that or not, at least define it properly.

Social Security is literally insurance. If you pay car insurance for years and never get anything back, you can't really say that you are missing out on "interest" or not even getting your "principal" back. Sure, if you took that money that you were paying in car insurance and put it in the bank, you would have more money back, but that's not the point. The point is that car insurance is mandatory because you might get in an accident and hurt someone; Social Security is insurance that is mandatory because you might get disabled or retire.

[shazam]

Hi Kubie, Iam retiered so I fel I know what I am tacking about. YOU are correct BUT here is a fact not mention to often. My wife and I have medicare and AARP health insurance. WE pay for this and it is not cheap. We pay for our ownper. drugs.I take one pill a day cost per pill 3.29.We take between us 7 different drugs. Because we make a little over ( an I mean a little) we receive no help pay our bill. THEY receive ALL med. free. This is an example of wath is going on ,last year we received a cost of living raise of 3% about 33.00. They up my S.S rates (this is per month) 18.00.AARP also raises therte rate 16.00. we are now 1.00 in the hole every month.This is been going on for the 10 years we have been retired. If you know some one retired ask them.

[morriswindgate]

I will agree with you that it is insurance, but it is an extremely poor insurance. For the average worker in the USA,for less than the amount that the worker pays each year into SS, he could get a policy from a private plan with better payments. If I retired today and got the full SS benifit it would only be 16% of my annual income.
If you invested on average 3000.00 (and during your working life this average will be much higher) in a single life annuity at 2.5% starting at age 20 until age 65 you would have $260,000. ANd if you invested that $250,000 in decent saving plan you would get $20,000 a year in intrest which is about 6000 more than my max benifit would be today from SS.
SS is nothing more than a hidden tax during your working life, the whole thing is based upon the idea that you will die before you collect to much of your own money.
WHen you look at it this way with all the other forms of taxes we are close to the highest taxed country in the world.

[shazam]

doctorgonzo. The S.S fund was started by FDR as a retirement fun..Insurance for people to have an icome when they retire. At one time it had a seppert account.I think it was during the 2 word war congress deceided to put it in the general fund and thats when it went to hell. It was meant for retireries. But good old congress started to add attachments to it. Such as disabilities,children with one parent etc. It was never ment to be for those purposses. But polititions do what ever it takes to get votes.You are also wrong on no principle no interest. They keep accounts of all monies received. The Gov. does pay interest(ha ha) on all money borrowed from that account. There is no real money. They spent it all.This is short but you will get the point. Ben Franklin once said , Any one can be a politition but to be a Statesman .

[doctorgonzo]

shazam,

I understand that the Social Security trust fund earns interest on the bonds it buys from the government (of course, when the government loans money to itself, it isn't really creating wealth at all). What I meant was that there are no individual accounts, and no principal and interest on them. If I called the SS office and asked for my Social Security account balance, they would think I was nuts.

There isn't an account somewhere that contains all the contributions I have made and the interest earned on them. Sure, they keep track, but there aren't any explicit accounts. The money taken out of my paycheck doesn't go to pay for doctorgonzo's future retirement, it goes straight to my grandparents.

[sdkfz]

Unfortunatley we are stuck with SS,

The way it was set up is as follows - collect money and pay it out immediatley to those who need $. Made sense at the time and considering the great depression was going on a even better idea.

Way it should have been - take money out - hold it till you retire. get disabled etc and pay it back with interest, force us to save cause we are bad at it.

So the whole thing is wrong and cancel it, OK now what do you tell someone just shy of retiring that you have been taking money from for decades and 'fahgetaboudit'?

The fix is- invest 1% of reciepts somehow/somewhere this year and increase it to 2% next year etc, so we can get to the way it should have been....this will get us out of the money in and money out problem...in the mean time suck up and pay for the problem created by investing the % ....

With the population demographics changing there will never be a situation like when SS came about again. I learnt long ago about how we started with an agrarian society, low tech, high birth rate, high death rate and low stable population as a result. Technology comes along and we fix the death rate problem. population rises and eventually birth rate drops as people come to realize that children are no longer an asset but a liability. (economically speaking here) so we end up with a low birth rate, low death rate and a high stable population. .....ooops get off soap box now...

[Hot Rod]

I was originally against privatizing SS but now I see it as a way to wean people off of it and into a better plan which would allow for your own accts. You get what you paid into it plus earnings or interest. The weaning off period would give people that are close to retirement still an opportunit to collect off of the "old" SS system while phasing in the new system for the younger workers.

Personally, I am not counting on my SS money and I am invested in a good 401k plan.

[doctorgonzo]

Originally posted by Hot Rod Personally, I am not counting on my SS money and I am invested in a good 401k plan.

Ditto.

The only problem is that there are people who either: a) don't know how to invest properly, or b) get royally screwed through no fault of their own (see Enron). It just wouldn't fly politically to say to these people, "You had your chance, and if you didn't save enough money for retirement, that's your own problem. Go starve." SS as much as anything else makes society more stable by providing at least some kind of minimal safety net for the elderly. Even if it doesn't provide much money, it provides the sense that people are being taken care of.

I don't remember where I read this, but I once saw that the government's job is to keep peope from starving and being homeless in large enough numbers as to be politically inconvenient. It is cynical, but it is true.

[Hot Rod]

For privatizing SS, I would not allow people to invest in only the stocks that they choose for that simple reason, not everyone knows enough or keeps up enough with stocks to invest wisely. You have your own 401k that you can mess around that way if you want. Privatize SS and then have a panel made up of several companies that handle administering pension plans and have them oversee the selection of investments in a very diversified manner and base the investment selection on age or how far away from retirement you are. There is no guarantee that you won't lose money....but being diversified you won't lose it in big chunks like the Enron deal.

[shazam]

Hi doctorgonzo. Kubie hit a soft spot with this one. So mad I could not spell. Your right. There are no seperate accounts. But there used to be .It ended when all monies where put into the general fund.If there where no add on`s and S.S. was left in original state there would be more than enough money.The G.A.O. once stated that if all money was returned to S.S. they could at least double the current payments.Something we shall never see.Also please remember people my age never heared of investing.My folks where lucky to feed the 10 of us,let alone invest. today most people do not make enough money to invest. Remember we make nothing here any more. Most people are working two jobs or both parents are working.Tough to save.I have said to much.

[Hot Rod]

Originally posted by shazam today most people do not make enough money to invest. Remember we make nothing here any more. Most people are working two jobs or both parents are working.Tough to save.

That's why I think that privatizing SS would be the way to go. They are still taking the amount of money they normally do but part of it would be invested in an area that you could get a better rate of return than what SS will provide you.

I also believe that all businesses with a certain number of employees should be required to offer pension plans to their employees. I would like to see all businesses offer them but I know it would be hard for some small businesses. Most employers will match your contribution. You don't have to set much aside and it comes out of your check before you even see it. Its the easiest way to "save." Even if it is just a little, it adds up over time and it is invested and working for you.

[Tuf]

It may be true that I don't have an account per say with the Social Security Administration but they do send me a statement every couple of years.

When I buy any other insurance I know upfront what I am buying and for the most part I am one hundred percent covered when I pay the first premium. I have s life Insurance Policy that did take some time to become fully vested(?) in.

Social Security is a beautiful idea that is so horribly implemented if it was done by the private sector someone would go to prison.