Some facts about social security that many people don't know

The issue of social security is an important one in the election debates.

Social Security cards up until the 1980s expressly stated the number and card were not to be used for identification purposes. Since nearly everyone in the United States now has a number, it became convenient to use it anyway and the message, NOT FOR IDENTIFICATION, was removed.


Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:

1.) That participation in the Program would be Completely voluntary,

No longer Voluntary


2.) That the participants would only have to pay 1% of the first $1,400 of their annual Incomes into the Program,

Now 7.65% on the first $90,000


3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year,

It's no longer tax deductible


4.) That the money the participants put into the independent 'Trust Fund' rather than into the general operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,

Under Johnson the money was moved to The General Fund and Spent


5.) That the annuity payments to the retirees would never be taxed as income.

Under Clinton & Gore up to 85% of your Social Security can be Taxed

Since many of us have paid into FICA for years and are now receiving a Social Security check every month -- and then finding that we are getting taxed on 85% of the money we paid to the Federal government to 'put away' -- you may be interested in the following:

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Q: Which Political Party took Social Security from the independent 'Trust Fund' and put it into the general fund so that Congress could spend it?

A: It was Lyndon Johnson and the democratically controlled House and Senate.

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Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?

A: The Democratic Party.

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Q: Which Political Party started taxing Social Security annuities?

A: The Democratic Party, with Al Gore casting the 'tie-breaking' deciding vote as President of the Senate, while he was Vice President of the US

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Q: Which Political Party decided to start giving annuity payments to immigrants?

AND MY FAVORITE:

A: That's right!

Jimmy Carter and the Democratic Party.
Immigrants moved into this country, and at age 65, began to receive Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!

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Then, after breaking the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away!

And the worst part about it, is that uninformed citizens believe it!
If enough people receive this, maybe they will become aware and maybe changes will take place. But it's worth a try. How many people can you send this to?

 

Don't suggest ya try to take Granny's social security away from her or ya liable to draw back a bloody nub...

Social Security Trustee: Obama's Tax Plan Could 'End Social Security as We Know It'
December 13, 2011 – A Social Security trustee says that extending the cut in the Social Security tax, as President Obama is demanding, could make the entitlement program more dependent on income tax revenue in the future, leaving it with less political protection than it enjoys now.

See also:


Hatch: Payroll Tax Extension ‘Very Dangerous’ to Social Security
December 13, 2011 – Sen. Orrin Hatch (R-Utah), top Republican on the Finance Committee, has concerns about the impact that extending the payroll tax holiday will have on Social Security, but he said the House Republican package debated Tuesday offers avenues to trim spending and spur job growth.

 

A whole compendium of anti-SS memes. It's a thing of beauty.

The SS trust fund is the most solvent, largest fund in the world, holding almost $3T in the safest security on the planet, the T-bill.

It is solvent for another 25 years if we do nothing, which in economic time is forever (we really can't predict that far into the future using any economic model). If we do nothing, it will then pay out 80% of benefits for half a century.

If we raise the ceiling so the rich pay they fair share, then SS will be solvent essentially forever.

Now, what were those ********** memes you were parroting?

 

By dint of sheer numbers, the Boomers will kill off SS. And Medicare/Medicaid as well.

 

The thing about SS that people do not understand is:
1) it pays for the disabled to survive. And to qualify you need to be just about broke. And if you get any kind of ailment or injury, the cost of medical treatment will make you broke.
2) most if not all of SS payments goes towards medical treatment and the medical industry.
3) the continued increasing cost of medical treatment will eat up social security faster than the oldtimers and retired people.
4) reason is, the small amount you get from social security is not enough to live on. And all healthy old farts have other retirement incomes they live off.
5) If you get disabled before you reach 68, and need one of those blue stickers for your parking, you will go bankrupt before you can qualify for SS due to your medical bills.

This is the reality of social security, so don't expect to retire on it. Forget the propaganda the medical industry and broadcast media talking heads preach. The climbing cost of medical treatmnt is what will destroy the social security system.

You will be at a 3rd and long with no Tim Dumbow to bail you out. In fact expect a fumble and turnover.

And another thing, this is why wealthy people don't need SS, they have insurance and a lot of money when they get disabled or retired (whichever comes first).

 

This is a belief held mainly by people who fail to recognize that the boomers basically replaced themselves, and that the generation now entering the workforce is roughly the same size as the one now leaving.

 

It's solvent in the same way that any ponzi scheme is solvent -- it relies on an ever increasing number of "suckers" at the bottom paying in on the promise of getting the money back "someday". Now, we don't have enough babies being born and the benefits have been raised several dozen times, as well as the retirement costs of having people draw on the system for 20+ years. I don't think the planet has enough suckers to keep it going.

 

Do you realize that means each worker has to support one SSI recipient?

 

Anyone who is planning for retirement on Social Security alone will likely find themselves living in a cardboard box over a steam vent.

I've developed my own retirement portfolio and I have no intention of integrating Social Security into my plans.

 

Not so. There's three generations in the workforce, not just two. There's the generation presently retiring, there's the generation that's in the middle of their professional careers, and there's the generation only recently starting. The two groups will have to support the retirees. Which they'll be able to do.

SSI benefits aren't that great, after all.

 

As poor as the SSI benifits are, someone drawing the max, would need to have a $750K in a 401k to match payment (more, with the current interest rates). Add in Medicare......

The average lifespan for someone that is 60 years old is 81, start at 65, 16 years of draw, SSI and Medicare. Assuming an average start work age is 20, so 45 years worked - with an even age distribution, less than 3:1.

Retire at 67, 3.36:1
Retire at 70, 4.54:1
Retire at 72, 5.78:1

When SSI started, retirement was 65, average lifespan, 62. I'll bet the average 65 year old in 1940 was a lot "older" than the average 72 year old of today.

 

I know a retired american doctor. He gets 2200 USD each month in social security payments. I did not believe it until I actually saw the paperwork he had. Obviously he paid a large quantity of money into the system to to begin with, but that is still a large quantity of money.

 

My wife and I get a little more than that. SS combined with our investments make life quite comfortable.

After our son died SS survivors' benefit helped our granddaughter go to college.

Most younger people are totally ignorant of what SS is and how it works. And the "news" media keeps them confused.

It's nothing like a Ponzi scheme. But very much like an insurance policy.

 

Insurance policies are invested to grow the principle, and offset inflation. SSI isn't invested (treasuries are merely Peter paying Paul).

How much did you pay in?

How much are you pulling out? The average lifespan for someone that is 60, so assume you and your wife collect until you are each 81.

 

Since social security is supposed to be an individuals retirement fund, why should we force those that can save for their own retirement to pay more into a system that they don't need?

 

You are wrong. SS over payments are invested. They are invested in interest bearing treasury notes. These notes are better than the ones anyone else can buy. They cannot decline in value.

 

Am I? Who pays that interest?

SS overpayments buy treasuries, transferring the overpayment into the pool of federal income, and spent, just like income tax.

When SSI sells the treasuries, the overpayment, plus the interest, is paid by taxes, or borrowing (kind of like paying a credit card with a credit card).

 

Why is this bad?

Since the government is going to borrow money anyway, why not from SS?

 

Why not just stop over spending? Also, cause we are now borrowing money to pay money that we have already borrowed. You don't pay a credit card with a credit card.

 

Actually the problem I have with it is that it is the same people paying those T-bills as are paying Social Security taxes.

I pay my 7% in Social Security Taxes, but they have a shortfall. Now a portion of my income tax is also spent on Social Security, so I'm actually spending 8-9% of my income for Social Security.

Meanwhile the people who are collecting that money paid in less than 7% through most of their lifetime. Even when the Social Security rate was raised to 7%, they generated a surplus. That surplus was invested in T-bills, which the government used to reduce the taxes on those same people, so their effective Social Security tax rate was actually lower.

So current taxpayers are paying a far larger percentage of their income to provide benefits to people who paid a far smaller percentage of their income. That is how this is a ponzi scheme - rather than increase the number participants, the government just keeps increasing the amount each participant must pay.

 

I'm a hell of a lot less bothered by income taxes making up the SS shortfall than I am about income taxes paying the oil depletion allowance or paying for phoney and endless war fought by $1000/day mercenaries.

At least SS does some good.

 

How does it do "good" compared to allowing people to save for their own retirement that actually gains intrest on the money you invest personally? Government programs are 1000% worse than private businesses. You think a war fought by $1000/day mercs is expensive, SS is going to cost us 100% of the tax revenue and not come close to providing everyone with a liveable wage for retirement.

 

Odds are you don't even pay income taxes, and if you do, you only pay a tiny amount, so of course it doesn't bother you - it isn't your money.

Regardless, it isn't right for the rules to keep changing at the detriment of the next group. Social Security taxes should be locked it at a lower level and benefits should be limited to a share of whatever happens to be collected.

The historical average Social Security tax rate was about 5% for the employer and employee. Lets lock the rate in at that level, lock benefits in as a share of whatever comes in and write off the "trust fund" since the current beneficiaries already got to enjoy that money.

This will either reduce the benefit or turn it back into what it was originally - insurance against outliving your life expectancy.

 

Not knowing me or anything about me that was a stupid thing to say. The fact is that now that I'm retired and no longer have any deductions I'm paying more income tax than ever before. I'm also paying income tax on the SS I receive.

Social Security isn't intended to be someones sole retirement source. But it is a great help. And after seeing my IRA take a huge hit during the Bush administration I'm glad it's funded the way it is.

You might think you'd be better off putting that money into your own directed plan. You may be right.

But very few people have the self discipline to actually keep up any savings plan.

For most folks SS is their safety net.

 

Do you acknowledge SSI isn't "invested", it is just moved around the government, all funded by the tax payer.

With more being drawn out than contributed, a Ponzi scheme.

If that isn't enough proof - what happens if we stop collecting funds? Does that impact future retirees, or retirees today?