Well, Social Security has warned us

Discussion in 'Social Security' started by Robert, Aug 8, 2016.

  1. Iriemon

    Iriemon Well-Known Member Past Donor

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    SS benefits are capped, at something like $2500 a month.

    We already have private accounts.
     
  2. Robert

    Robert Well-Known Member Past Donor

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    There are two or more major flaws in Social Security.
    I know many but will stick to two of them.
    1. People collect from the system who never put in a dime.
    2. The system is on it's last legs with no changes of law.

    A decent system is far better designed. Bush offered a solution. Democrats hated it. And he would have saved Social Security.
     
  3. Robert

    Robert Well-Known Member Past Donor

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    Greed knows no bounds. Democrats are very very greedy. They want what they never earned in the first place to flow to them.
     
  4. Robert

    Robert Well-Known Member Past Donor

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    Kode, you are no professor and i do not mind tips, but I do not write for you to grade my paper. The fact you are not a democrat does not hint you are a republican. Fact is, you also did not make a sentence. A comma after suck would be far more literate.

    I got my comments in so you add nothing for me to dig into.
     
  5. Kode

    Kode Well-Known Member

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    Always remember, a non-sentence is unintelligible. IOW a meaning cannot be reliable derived from it. I was telling you that I could not understand what you said because it was not a sentence.
     
    Last edited: Dec 9, 2017
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  6. WillReadmore

    WillReadmore Well-Known Member

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    The Bush "plan" never reached the point where there were financial specifics.

    The bottom line is that there was NO way in which a transition could have been funded.

    Think about it. Those collecting today are soaking up pretty much ALL contributions to the system. That's the way it is designed.

    So, if Bush had siphoned off HALF that revenue to give people private accounts, it would have amounted to a half trillion dollars for each year in transition. And, the transition period would have had to be many years long.


    Plus, Bush didn't want individuals to have freedom of investment. People are crap investors. Read 401k analyses - it's bad enough when people have little latitude.

    So, Bush wanted government involved in making the investments for America! And, there are significant problems with that.


    AND, like Bush you aren't answering the hard problems related to the direction you tout.
     
  7. Old Man Fred

    Old Man Fred Well-Known Member

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    Well it's a good thing we spend so much on our military, which offers those born into poverty a direct path to the middle class.

    Benefits are capped because contributions are capped. You could try to eliminate the contribution cap on Social Security, but do you really think that the Supreme Court is going to let it fly that contributors are not entitled to a fair and equitable benefit?

    Obviously, by private accounts I meant FICA contributions being invested by the individual, and not the into a ponzi scheme.
     
  8. Old Man Fred

    Old Man Fred Well-Known Member

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    No one said that transitioning Social Security would be an easy endeavor, but the longer we wait the harder it will be to make the program viable over the long term.

    I completely understand, that I as a 28 year old, get totally ****ed under this. If it happened today I'd probably be the first one who didn't have a traditional Social Security benefit, but would be forced to pay for the benefit received by everyone else. That's a sacrifice I'm willing to make.

    The pilot program is already in place, works great and is one of the few areas where government vastly outperforms the private sector, and would actually solve the problem.
     
  9. WillReadmore

    WillReadmore Well-Known Member

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    The military as vocational training? LOL!! That's not a justification for the military.

    Social Security is essentially insurance, and I'm in favor of moving it more in that direction.3
     
  10. WillReadmore

    WillReadmore Well-Known Member

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    It's viable right now. There are numerous ways to improve financing. The best choice would be to do a little of several of the methods.

    Adding trillions to our deficit is not a solution. And, that is only one of the problems of transitioning to a private model, as I pointed out.

    I don't know what you mean by "pilot program". Obviously, we have private investment options. I'd point out that 401k isn't performing well as a retirement vehicle.-
     
  11. Old Man Fred

    Old Man Fred Well-Known Member

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    Napoleon was famously quoted "an army must ultimately consist of those for which society has no use". Military spending has always been social welfare spending.

    Moving SS towards an actual, means tested benefit, is something I could get behind.

    I save a substantial portion of my income, but that won't matter if I live to 120.
     
  12. Old Man Fred

    Old Man Fred Well-Known Member

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    The Federal Thrift Savings Plan, the 401k for Federal employees, has performed remarkably well.

    It's management fees are the lowest of any investment fund in the nation, offers a wide variety of investment choices, and already has 5 million account holders.

    The transition doesn't require any deficit spending, as individual accounts would be established, and you could use a sliding scale and means testing for traditional benefits.

    Traditional SS will never truly go away, but instead of being drained by everyone, there remains a large buffer. If over your working life you save $100,000 in your private account, there's a good change(nationwide) that that money will outlive a lot of people, which would have the same impact as raising the retirement age.
     
  13. WillReadmore

    WillReadmore Well-Known Member

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    That doesn't make it social welfare spending.

    I'm not opposed to means testing, but it gets seriously sticky when it gets down to the "how to".

    Sad to say, I suspect you're safe on that living to 120 thing. However, there is a lot of variation and it is going up, with the period from effective employment to death increasing. And when people fail to plan well they end up being supported by tax payers.
     
  14. WillReadmore

    WillReadmore Well-Known Member

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    You need to be more specific and complete about your idea on transition.
     
  15. Old Man Fred

    Old Man Fred Well-Known Member

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    My support for a traditional SS model for those who live beyond life expectancy was cemented with my neighbor. She lived to 107, and was born in 1905. I don't think that it's all the sticky. Would, according to your assets, you be able to support yourself? Would using them to support yourself significantly harm your ability to support yourself in 10 years?
     
  16. WillReadmore

    WillReadmore Well-Known Member

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    This is NOT about me. I don't need SS or ANY help, regardless of HOW long I live or what dread diseases and disabilities I might obtain.

    Again, it's hard to tell from your posts exactly what changes you are proposing, or what transition features you would propose for getting there.
     
  17. Lil Mike

    Lil Mike Well-Known Member

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    I do think the TSP would make a good addition to any future reform of Social Security. Allow people to contribute a certain percentage of their paycheck, and by the time you hit retirement, it makes a nice supplement.
     
  18. Old Man Fred

    Old Man Fred Well-Known Member

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    Private accounts are established, with an option period to roll over 401(k) and traditional IRAs into the new program, using the incentive of tax exemption upon withdrawal. The minimum retirement age is increased to 65, full benefit at 70 for traditional SS.

    Increase FICA by 2% dedicated to personal accounts, for 10 years, with the option of tax deductible contributions(like a normal 401k) with tax exempt withdrawals(like a Roth), regardless of income. Personal accounts must be fully exhausted before traditional benefits are paid, with withdrawals being based upon the traditional benefit one would otherwise qualify for more or less.

    That right there is a make it or break it, because the "wealthy" are locked out of tax benefits for retirement savings in Roths, and making SS a Roth with a tax benefit means they'll pour money into it. That means that 10% of the labor force will more of less continue to pay into FICA, but self fund their benefit.

    Ten years after the first implementation, where some people have built up a reasonable account and have retired, a sliding scale begins. If benefits plus a cushion is less than benefits paid, FICA as a percentage shifts towards private accounts. 50 years down the line FICA would probably have an 80-20 split between contributions going to private accounts vs traditional benefits(including SSID).

    Basically it all depends upon using personal accounts to essentially up the "retirement" age(where one could collect traditional benefits) beyond life expectancy, without actually doing it, and giving the wealthy the option to fund their own retirement with tax advantages.
     
  19. Old Man Fred

    Old Man Fred Well-Known Member

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    I apologize. I wasn't directing those at you, but people in general in regards to means testing for Social Security.
     
    Last edited: Dec 9, 2017
  20. Old Man Fred

    Old Man Fred Well-Known Member

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    Especially with so many people working in the gig economy, it makes sense to offer traditional employer benefits through Federal programs.
     
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  21. WillReadmore

    WillReadmore Well-Known Member

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    I presume that by "tax deductible" you mean tax exempt. (Maybe I'm wrong in that.) But, there are numerous tax exempt instruments around today. So, I'm not sure why there would be money pouring in from those with wealth, especially without the wealthy getting fully compensated for their investment. In that case, I don't know how it would support other retirees.

    Also, upping FICA by 2% would gather more money, but that sounds like a forced savings account, and I'm not so sure that really survives. As we saw with 401k accounts, people see that money as theirs, and over time congress can't hold off the political pressure to make that money available to the "owner" of that money.

    I'm not too worried about this. You're making an effort. Maybe there will be a time when an idea is found that both solves the problem and is acceptable to congress and the public.

    Until then, SS really is survival-only income. Everyone needs to be saving. And, the percentage who are doing so is pathetic. The result is that we'll continue to see a lot of retirees supported by other parts of the social safety net.
     
  22. WillReadmore

    WillReadmore Well-Known Member

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    Not a deal at all - just stating where I'm coming from.

    Perhaps it's interesting that as a retiree, I wasn't collecting the SS I could get. But, I decided to start collecting, and then donating it.

    Others may be doing that, too.

    Again, I wouldn't be opposed to means testing if there were an acceptable way to do it.
     
  23. Old Man Fred

    Old Man Fred Well-Known Member

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    The increase in FICA would be dedicated to personal accounts, which isn't a tax increase, works to "end" dangerous entitlement spending, and fights "inequality".

    High income earners can't contribute to a Roth. Combining the tax deference and tax exemption of 401ks and Roths, you convince responsible people like you and I to willfully give up their traditional SS benefits, which is essentially an individual means testing. Because SS is meant to protect the least capable from bone crushing poverty, giving the well to do a tax benefit for giving up Social Security, we'll take it.
     
  24. WillReadmore

    WillReadmore Well-Known Member

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    I think you don't understand how well this nation is engineered in favor of those with money. I don't even slightly care about not having access to Roth.

    And, I think you have never met a Republican, judging from your idea that Republicans are going to start making personal donations to the government so the government can help people with it. Are you serious??

    Again, remember that people's behavior with 401k plans has been that a disturbingly large number extract their money from those accounts and pay the penalties. They see it as their money. So, if they have medical expenses (since millions aren't covered) or are out of work for a while or whatever, they take their money out. These people aren't being crazy or irresponsible - they have money and they have needs. The result is that when they finally end up unemployed, they depend on SS. If that's not there, then they depend on other safety net programs.

    Other than that I don't mean to dump on your ideas. We may need to do some of that or otherwise make creative changes. But, it will still need to include a transition plan to not having SS anymore if we decide we don't want SS anymore. At some point, you still have to cut SS and the mechanics and politics of that is an issue.
     
  25. Old Man Fred

    Old Man Fred Well-Known Member

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    The idea is that you get to deduct contributions to your personal SS account from your Federal tax liability, make withdrawals at 65 tax free, but that money must be exhausted before you collect traditional SS.

    We'd still have the traditional program, but we'd essentially add 5 years for the average worker before they're able to collect it, and with generous tax benefits encourage higher earners to opt out by contributing to their personal plan.
     

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