Social Security Discussion

[YogsVR4]

Saw a great article http://www.ntu.org/main/press.php?PressID=317 which is to long to cut and paste into here. If you have the time its a really good synopsys of what is happening to the system. You will also want to note the date it was published (1999).

[ASTAutoSales]

you know what i think is fucked up? i know a 20 year old kid that had a heart attack. goes to the doctor, they sat heart attack, dont know why. he is perfectly fine before and after. His poor ass welfare grabbin food stamp collecting parents (who he still lives with) apply for SSI for him.
The MOFO gets over $800 a month. he wont ever have to work. he gets it as long as hes alive. he pulls in cash on the side slinging weed. drives an alright car has an alright bike and lives in a shithole house but he supports his mom and dad.
So in general IM paying for this guys weed and paying for his parents to mooch.
On the other hand my wifes grandmother is physically disabled, legally disabled, doctor prescibed disabled and all that good stuff. Doc tells her apply for SSI and gives her a letter to send in. DECLINED!!
WTF???!!!

[Flatrater]

Originally Posted by ASTAutoSales

you know what i think is fucked up? i know a 20 year old kid that had a heart attack. goes to the doctor, they sat heart attack, dont know why. he is perfectly fine before and after. His poor ass welfare grabbin food stamp collecting parents (who he still lives with) apply for SSI for him.
The MOFO gets over $800 a month. he wont ever have to work. he gets it as long as hes alive. he pulls in cash on the side slinging weed. drives an alright car has an alright bike and lives in a shithole house but he supports his mom and dad.
So in general IM paying for this guys weed and paying for his parents to mooch.
On the other hand my wifes grandmother is physically disabled, legally disabled, doctor prescibed disabled and all that good stuff. Doc tells her apply for SSI and gives her a letter to send in. DECLINED!!
WTF???!!!

Hire a lawyer and fight for the SSI. My dad had to fight for it, it took 18 months be he won and got his SSI.

Yogs I worry about Social Security, the older I get the more I worry.

[DGB454]

How is this system working in England?

Edit: I don't usually like posting a democrat website but I don't like the privatization of SS.

http://democrats.senate.gov/ss/calc.html

[fredjacksonsan]

Personally, I'm not figuring Social Security into any of my retirement plans - I'm planning on getting nothing for my 12% that I've put in.

The federal gov't, rather than managing the funds they have in SS, have taken the money and spent it. The money to be returned isn't "with interest" but is rather simply the amount that was taken out. This has been going on since the 50's (I think) and is why SS isn't going to be viable.

SS was envisioned as an automatic savings for retirement. Like many good ideas, it's been ruined. I'm all for privatization. Let people decide where they would like to invest their 12%. Yes, leave the personal contribution the same but allow the person to choose traditional SS, or a choice of several mutual funds.

[DGB454]

Anyone from England in here? I heard a short piece on NPR about the problems they are having with this same sort of retirement scam they are trying to push on us.
Please fill us in on what you are seeing. I can't seem to find much on the subject.

Thanks much.

[-Josh-]

Originally Posted by fredjacksonsan

Personally, I'm not figuring Social Security into any of my retirement plans - I'm planning on getting nothing for my 12% that I've put in.

The federal gov't, rather than managing the funds they have in SS, have taken the money and spent it. The money to be returned isn't "with interest" but is rather simply the amount that was taken out. This has been going on since the 50's (I think) and is why SS isn't going to be viable.

SS was envisioned as and automatic savings for retirement. Like many good ideas, it's been ruined. I'm all for privatization. Let people decide where they would like to invest their 12%. Yes, leave the personal contribution the same but allow the person to choose traditional SS, or a choice of several mutual funds.

I was told several years ago that if you want to have at least one million dollars saved up by the time you retire, you need to start putting at least $150 a month into retirement starting at the age of 25. The only problem is, by the time i retire one million dollars wont be a whole lot, and the retirement age will be a lot higher, so i'll probably die before i retire.

[YogsVR4]

There is no scam when you get to control your own money.

Chile offered it to its citizens and its been a smashing success.

The best part of privatization is that its voluntary. You don't have to participate if you don't want. Frankly, when I pass away I want to leave what’s left of my retirement to my kids (if I have any or my nieces/nephews in the alternative) instead of never seeing a dime of the hundreds of thousands of dollars I'll pay into the system.

Its beyond me to figure out why people trust the government to manage their money more then themselves. If I could put my entire SS tax (not even the employer portion) into my own account and sacrifice the hundred grand I've already paid into the system - I'd do it.

[DGB454]

Yogs,

Take a look into Englands system. I guess there were lots of investment schemes and the like going on when it started there. With all the new investors that will be going into the market if this passes then there will also be a lot of crooked brokers itching for the money. I don't like giving my money to the government but I have to wonder if any brokerage firm is any less dishonest. "At Smith Barney we make money the old fashioned way. We steal it."

As long as the government keeps a tight reign on where the money is allowed to be put then it might be all right. I don't have a problem handling my own investments but I have been doing it for a while now. What I worry about in the guy who just signs his money over to a financial advisor because it's easier. Then when retirement time comes he figures out there isn't enough to retire on or finds out there isn't any money at all. All of the sudden we have a bunch of poor elderly people who need federal assistance. Welfare immediately comes to mind.

[tman]

Privatization is good, and should work.

I thought about another method to make SS stay alive once. Legalize marijuana, and tax it like cigarettes. You'd fund SS, but you'd have a nation of druggies, not good.

[Kurtdg19]

Originally Posted by DGB454

Yogs,

As long as the government keeps a tight reign on where the money is allowed to be put then it might be all right. I don't have a problem handling my own investments but I have been doing it for a while now. What I worry about in the guy who just signs his money over to a financial advisor because it's easier. Then when retirement time comes he figures out there isn't enough to retire on or finds out there isn't any money at all. All of the sudden we have a bunch of poor elderly people who need federal assistance. Welfare immediately comes to mind.

I would rather the government stay out of any say on where I put my money. Allowing government controlled investments would only cause a whole new world of politics to deal with. Bad idea IMO. I would trust my funds with a financial advisor anyday over the gov.

[Steel]

I just hate the fact taht right now its forced, and the fact that 45 years from now when i retire, i get back the same exact amount that i put in... which will be worth a whole lot less then. I'd rather use my money now to buy the crap i want and/or use it in interest bearing IRA's. Im 20 years old right now, and i'm gong to be working fulltime in about 4 months. The minute I do, i'm starting an IRA and all that jazz. I'm going to save like crazy until i'm aobut 35, then really REALLY enjoy my life.

[DGB454]

Here is one article about the Brits system and the one prorpsed in the US. I highlighted in blue the points of interest. The British Evasion
By Paul Krugman
The New York Times Friday 14 January 2005 We must end Social Security as we know it, the Bush administration says, to meet the fiscal burden of paying benefits to the baby boomers. But the most likely privatization scheme would actually increase the budget deficit until 2050. By then the youngest surviving baby boomer will be 86 years old. Even then, would we have a sustainable retirement system? Not bloody likely. Pardon my Britishism, but Britain's 20-year experience with privatization is a cautionary tale Americans should know about. The U.S. news media have provided readers and viewers with little information about how privatization has worked in other countries. Now my colleagues have even fewer excuses: there's an illuminating article on the British experience in "The American Prospect," by Norma Cohen, a senior corporate reporter at The Financial Times who covers pension issues. Her verdict is summed up in her title: "A Bloody Mess." Strong words, but her conclusions match those expressed more discreetly in a recent report by Britain's Pensions Commission, which warns that at least 75 percent of those with private investment accounts will not have enough savings to provide "adequate pensions." The details of British privatization differ from the likely Bush administration plan because the starting point was different. But there are basic similarities. Guaranteed benefits were cut; workers were expected to make up for these benefit cuts by earning high returns on their private accounts. The selling of privatization also bore a striking resemblance to President Bush's crisis-mongering. Britain had a retirement system that was working quite well, but conservative politicians issued grim warnings about the distant future, insisting that privatization was the only answer. The main difference from the current U.S. situation was that Britain was better prepared for the transition. Britain's system was backed by extensive assets, so the government didn't have to engage in a four-decade borrowing spree to finance the creation of private accounts. And the Thatcher government hadn't already driven the budget deep into deficit before privatization even began. Even so, it all went wrong. "Britain's experiment with substituting private savings accounts for a portion of state benefits has been a failure," Ms. Cohen writes. "A shorthand explanation for what has gone wrong is that the costs and risks of running private investment accounts outweigh the value of the returns they are likely to earn." Many Britons were sold badly designed retirement plans on false pretenses. Companies guilty of "mis-selling" were eventually forced to pay about $20 billion in compensation. Fraud aside, the fees paid to financial managers have been a major problem: "Reductions in yield resulting from providers' charges," the Pensions Commission says, "can absorb 20-30 percent of an individual's pension savings." American privatizers extol the virtues of personal choice, and often accuse skeptics of being elitists who believe that the government makes better choices than individuals. Yet when one brings up Britain's experience, their story suddenly changes: they promise to hold costs down by tightly restricting the investments individuals can make, and by carefully regulating the money managers. So much for trusting the people. Never mind; their promises aren't credible. Even if the initial legislation tightly regulated investments by private accounts, it would immediately be followed by intense lobbying to loosen the rules. This lobbying would come both from the usual ideologues and from financial companies eager for fees. In fact, the lobbying has already started: the financial services industry has contributed lavishly to next week's inaugural celebrations. Meanwhile, there is a growing consensus in Britain that privatization must be partly reversed. The Confederation of British Industry - the equivalent of the U.S. Chamber of Commerce - has called for an increase in guaranteed benefits to retirees, even if taxes have to be raised to pay for that increase. And the chief executive of Britain's National Association of Pension Funds speaks with admiration about a foreign system that "delivers efficiencies of scale that most companies would die for." The foreign country that, in the view of well-informed Britons, does it right is the United States. The system that delivers efficiencies to die for is Social Security.

[tenguzero]

It seems like the whole damn thing is spiralling out of control. The U.S. is just growing to big for the britches it currently wears. Our society is reaching a point of critical mass, and I have trouble seeing how any SS system will function properly if the current trends in EVERYTHING continue to go the way they are. The fact is, shit is just getting too damn expensive across the board, and yet our paychecks aren't rising to meet the situation head-on. I hate to say it, but I can't see how even things like IRA's and other promising programs of today will benefit the first generation facing the imminent problems with SS and retirement. Sure, these various funds seem to have good potential now, but even with interest collecting on them, you can't honestly expect it to be enough come retirement. 50 years from now (providing I'm even able to retire at 73) is a LONG way off. And look at how much inflation and debt has jumped in the last 50 years. And even if I had a million dollars saved upon retirement -- after taxes, and pay-off of any potential debt (and most of us have some in one form or another) that nest egg has already taken a hell of a hit. Now figure inflation, medication/healthcare/prescriptions (I'm old, right) food, clothing, bills, and any other necessities, divided out over at least another 20 or 30 years (imagine what age we'll be living to half a century from now) and suddenly living has become kinda tight.

Now, I'm not saying that I think this is the way it WILL be (hell there are all sorts of factors that can affect things positively as well, for instance the potential for future permanent cures for todays prescription-requiring illnesses) but I am saying that, for me right now, 50 years is a LONG way off, but when I'm 73, suddenly that 50 years will have seemed to fly by, and my concern will then be, even with all the sacrifices and investments I've done, is it really going to be enough? If current economic trends continue as they are (in housing, technology, healthcare, goods and services, etc.) I fear I may already know the answer to that.

[DGB454]

If you invest wisely and put as much as possible into a 401k plan and keep SS you have a good chance at living in comfort in your retirement years.
I personaly have an excellent retirement plan from my employer. I also put the max with company match into my 401k. I do som investing. I also will rely on SS to make up a little. If you take any one of those out of the picture then there may be a problem.
What happens to those who may end up having to rely soley on investments? The same thing that happened in England. We will have to support them.
SS is in not in the trouble the govt. wants you to believe it is in. 2 words...scare tactics.