posted on July 25, 2001 10:46:40 AM
Well, you're a baby boomer according to the line, and you're in trouble if you've been working toward a retirement that includes Social Security as part or all of your annuities for the remainder of your life.
President Bush wants to turn Social Security into Social Insecurity. He is pursuing a dangerous privatization plan that will almost
certainly cut benefits and jeopardize the retirement of millions of Americans.
President Bush's Social Security approach is just another example of his Administration putting the priorities of the special interests ahead of the concerns of working families. The Wall Street crowd, which was generous in its financial support to the Bush campaign, likes this plan. But on Main Street, this plan will mean smaller benefit checks and more anxiety for seniors and their families.
"Sixty-six years ago, under the leadership of President Franklin Roosevelt, our government made a contract with America's seniors. It was very simple: if you worked hard your whole life, your country would not abandon you in your golden years. Mr. President, do not break that contract. Do not play Russian Roulette with the retirement of millions of Americans. Do not scrap one of the most successful domestic government programs in our nation's history, one that has provided a safety net for three generations of Americans. Stop playing special interests politics and put the interests of America's working families first!" DNC Chair Terry McAuliffe said.
Yep, it's from the Democratic National Committee, but that don't make it bad. Use the links in the attached site for more information:
posted on July 25, 2001 10:30:25 PM new
The problem with SS is that it's become muddled. Is it a welfare program? Or a paid in retirement program.
Many people are afraid that they paid in to a retirement program, but due to political shenanigans, it will end up a pure welfare program. That their contributions will be stolen under the banner "they don't need it".
The clear defense against this is an account in one's name with a balance. Like a 401k at work.
It's politically difficult to steal one's account balance.
Those with thievery on their minds can see this very same political problem, and would of course seek to prevent any such account balance from ever appearing.
posted on July 26, 2001 06:01:00 AM new
Because of my lack of faith in politicians in general, while I hope a little ss is there for me in 18 years, I'm not counting on it.
The problem I see with privatizing it is that the people who invest unwisely may actually need welfare when they retire. Anytime I've had the option of a 401k or IRA, I've been very conservative in how I invested. And EVERY time, the banker involved would tell me that I was too young and should probably have more of my money in "growth" funds. Mmmmhmmm. Well, recently, lots of people's 401k's were decimated because of the stock market. And that's where I see the problem of privatization.
Everyone should have her/his own retirement plan set up. SS should only be supplemental. I guess what the Bush adm's nearsightedness doesn't see is that one way or another, seniors need to be housed/fed/medicated. You destroy SS, and you'll need bigger welfare programs. Unless of course he somehow manages to make being poor illegal - then we'll just need big senior prisons.
posted on August 19, 2001 09:16:27 AM newUmmm, roofguy, people can't get anything out of SS unless they've paid in. Heard of quarters?
There exist a lot of people who took out $100 for every $1 they put into SS, and did so as an ordinary retiree with an ordinary lifespan. Up until the mid '60s both the pay-in and pay-out were minuscule. People who retired in 1965..1980 received benefits wildly beyond what they contributed to.
There are plenty of politicians who found this just fine, and in fact took credit for the effect.
The point is not particulary that SS will come to transfer money to lifetime welfare recipients, but rather that political forces will conclude that "some people need the money more than others", and, yet again, we will end up with some receiving a pay-out far beyond their pay-in, while others have their pay-in confiscated, transferred to the others, because they "don't need it".
The mechanism seems well understood by both sides of the privitization debate, who are battling for the ownership of terms. The confiscators oppose privitization, not because it "makes confiscation harder", but because it "reduces guaranteed benefits".
posted on August 19, 2001 09:28:09 AM newThe problem I see with privatizing it is that the people who invest unwisely may actually need welfare when they retire.
Most privitization advocates have something in mind based on what Chile does today. In the Chilean model, conservatism is enforced, and several private companies compete for one's investment.
The investment funds are closely regulated, and are, by law and regulation, conservatively managed.
A worker can move funds among qualified funds.
This does not of course protect against market risk.
For what it's worth, most privitization advocates would compromise on a two segment system. One segment, possibly need based, a monthly payout guaranteed by the government. The other segment, owned by the individual but kept only in qualified investments, and only available for monthly withdrawal upon reaching the designated age.
posted on August 19, 2001 09:33:32 AM new
That's what politics is all about - taking wealth through force of arms and doing what you please with it to retain that power.
Everything else is window dressing - including going through the motions of getting popular backing or just declaring yourself boss.
posted on August 19, 2001 09:53:56 AM new
Assume you earn $30,000 per year from age 20 through age 65 (45 years) and instead of contributing to Social Insecurity, you invest the money monthly in a growth stock mutual fund earning an average of 12% per year (stock market has averaged about that for past 70 years), at age 65 you would have $4,103,210.04.
posted on August 19, 2001 10:02:21 AM new
The 12% does not account for inflation, nor the risk that the future may be different from the past.
An inflation-covering, risk-normalized return of 3% would be considered very good. 2% might be the best one can really expect. While many investments routinely return more than that, they usually do by including risk in the payout. For example, there continues to be some risk of hyper-inflation, but no fund except a pure short term money market fund has complete coverage against such.
Stock funds are the way to go, but expectations of a real 12% are unrealistic.
[ edited by roofguy on Aug 19, 2001 10:04 AM ]
posted on August 19, 2001 10:26:35 AM new
The point that many people miss out on is that the Stock Market is nothing more than legalized gambling. Period.
Anybody that advocates that our government should go gambling with our trust money is insane.
Anyone who thinks that our governement will be allowed to institute serious regulation and enforcement in this climate of telling government to "BACK OFF! on regulation is not listening.
The Postal Service used to be a model for Privativation fanatics. Now, they shut their mouths and pretend it doesn't exist. There are many functions of government that should NEVER be put into the hands of private individuals to control and manipulate. Social Security is one of them.
Social Security, when NOT RAIDED by politicians, is a strong, sturdy, and enduring institution. It does not need anything more than a permanent lockbox. The money does not belong to the government. The money belongs to those who put their hard earned dollars into the system.
1) Permanently lock away from the hands of politicans Social Security funds -- even in time of War, as these are NOT tax dollars!
2) Make the US Government pay back what it owes to Social Security with appropriate interest.
3) Leave the damned thing alone! The way it was set up was fantastic and covers all of any needs that we might ever have -- so long as the THEFT stops!
On that last point -- how dare any politician rail about people who are injured and permanently disabled from taking part in Social Secuirty, when these very same politicians turn around and steal BILLIONS OF DOLLARS AT A TIME from OUR trust? Shame on them for being so two-faced!
posted on August 19, 2001 10:53:27 AM new
Since SS for employed people is essentially a 50/50 split between payments made by the employee (withholding) and payments made by the employer, how about letting the employers payments continue as the fixed monthly benefit part of SS and have the employee invest their half in a tax-deffered way to reflect their wishes for their retirement?
Investing can seem to be a gamble at times, as was shown recently in the dotcom meltdown, but, over the long haul, a diverse portfolio of investments will nearly always do better ( I hesitate to say always but personally I believe it) than plunking our money down at the local Indian casino or Vegas craps table.
Personally, if I would have had my FICA (SET) to invest over the last 15 years, I would, even with the reverses recently in tech, have seen my net worth as double what it is now. This is not only because of better returns but also because these monies (in my case SEP and IRA monies) are includable in my net worth, unlike SS benefits, which I have no control over nor access to.
Although the option no longer exists, my father, as a state employee, chose to opt out of SS and relied entirely on his own investments and contributions to CALPERS. My mother now lives quite well on his investments and survivor benefits (he died a number of years ago) and only receives a minimal amount from SS based on her earnings (she was a stay-at-home mom).
That is an option (opting out of SS) which I wish was still available...I'd do it in a heartbeat.....
posted on August 19, 2001 11:51:55 AM new
The difference between how Social Security works now and how it would work investing it in a gambling scenario is that with the way it is set up right now, the money is protected. Sure, the politicians STEAL from it -- that's against the law for you and me, but they're ABOVE THE LAW and can LEGALLY STEAL OUR MONEY.
But Social Security isn't dubbed "the Third-Rail of Politics" for nothing! But once the money is out of the trust's control, it'll be open for scams, thieves of every stripe, those who manipulate the market to those who profit from exchanges and "doing business" -- and we won't have a clue as to what's what until its TOO LATE!
How do you destroy Social Security?
That would be UNPOPULAR and could easily ruin your political career for suggesting it.
How do you destroy Social Security, then?
Simple. You get it out of the protecting hands of the Trust and into the public sector where it can be manipulated, stolen from, and ultimately destroyed! And not one politician needs to sacrifice their career to do it!
Social Security DOES NOT belong to POLITICIANS!
Social Security DOES NOT belong to STOCK BROKERS!
Social Security DOES NOT belong to WALLSTREET!
Social Security DOES NOT belong to CORPORATIONS!
Social Security DOES NOT belong to The RICH AND POWERFUL!
Social Security belongs to US, WE THE PEOPLE who work hard and put into it!
Remember what happened when we did the same for the Savings & Loan institutiuons? Our Great-great-Grandchildren will STILL be paying off that debt!
LEAVE SOCIAL SECURITY ALONE!
sp.
[ edited by Borillar on Aug 19, 2001 12:16 PM ]
posted on August 19, 2001 12:11:13 PM new
There's no point to privatization of Social Security other than to steal it. The IRA programs available already offer people an avenue for investment gain for future security IN ADDITION TO the set SS coverage.
Remember that any change will subject the supposedy equivelant private investment gains to tax, whether it's deferred or not. That is, I believe, one the point of these schemes. Where SS investment as it stands is not taxable, any other paying system will be taxable as capital gain. The other main point is that a privatized scheme will make those funds invested available for corporate investment and private use by lenders and others who make money by lending it to others at usurious rates. Smacks of savings and loan programs, doesn't it? They want to have your money to use, and potentially lose during the entire time that the monies accrue. No one will have to answer to the individual who finds that there's nothing there after a lifetime of work. The potential for private gain in using those funds is many multiples of what would ever be paid to any working person.
Too, the SS system, even as is, depends in part for success on the truth that a large percentage of qualified recipients do not collect because they die before or within a fairly short time after their eligibility for payments begins. Why do you think that there is always a republican program to raise the retirement age? So people can continue to lead happy and productive lives? Get off it--they do it in the hope that more will die without being paid in full.
posted on August 19, 2001 12:52:27 PM new
Interestlngly, the limits of contribution to my SEP plan are roughly consistent with the amount I pay the government each year in FICA (SET)....Now, if I had even one-half of that FICA money to invest into my SEP, I'd be lot happier about giving away the other 7.5% of my income to some government agency...
From what my mother tells me, SS benefits can be taxable and, in her case, are...I believe it depends on your income.
Who really knows what kind of taxation system will exist when I retire.....is a Roth IRA a good idea? What if we go to a VAT and do away with income tax?
My strategy is to do what's best for me tax-wise in the here-and-now and attempt to maximize my returns for the future. I'll deal with how to leagally avoid more taxes at that bridge when I get to it...
BTW, has anyone gotten their rebate yet? I think I'm going to treat the wife to a nice dinner out (our anniversary is in a couple of weeks) with ours...McDondald's maybe??
posted on August 19, 2001 01:16:01 PM new
SS funds are presently invested in the most conservative investment available- US Govt securities.
I can not say that the politicians won't "steal" or refuse to pay interest on it, but the funds are now borrowed and paid interest just like Treasury notes, and the politicians are elected (well usually).
Putting the money in the stock market isn't any wiser. A 10 year economic recession will wipe a retiree out- then what ? We would also have the conumdrum of scruntinizing government actions as to how they effect the stock market. Should we enforce worker safety or evironmental standards ? No, it would effect the value of our stock portfolio. Send peace keeping troops to the Baltic ? Naw, it will effect our portfolio. Political and international issues will all be decided by how it will effect our stock portfolio.
There is no reason that individuals can't have a SS account and an individual market account. The only barrier is that there is no easy way for small investers to contribute small amounts without large commisiions and the taxes on investments should be changed to allow for less taxes on retirement investment. IRAs presently do not offer an ease of set up of market funds. Mutual funds are about it. An IRA invester should be allowed more leeway in chosing individual stocks. Mutual funds guarantee medicrity.
posted on August 19, 2001 01:26:46 PM new
Please don't get me wrong, folks. I am not against new retirement plans and voluntary investment schemes. I am against using our Social Security funds to pay for it. The Winds of fortune change and you sure as hell don't want to be at retirement age and misfortune has stolen your funds -- but you'll thank God and FDR for the tiny, but REAL amount of money that you'll receive each month from Social Security. I believe that OTHER THAN Social security, new programs for individual investment become available, allowing folks to put as much as they like into the stock market and rolling it all over tax-free until retirement age! Gambling that way is fine -- because Social Security will always be there for whom Fortune frowns upon as well as those who it smiles upon.
posted on August 19, 2001 02:14:19 PM new
There are many options open to retirement investors...in my case I have a bit of everything from government securities to tech stocks...in the business, they call it a "diversified portfolio".
Companies such as Fidelity Investments (whom I'm with) offer a wide range of investment vehicles to their IRA/SEP/Keough investors...I've been trading stocks in my retirement plans there since the early 90's...
Personally, I'm not including the possibility of SS benefits in my retirement strategy...it's one aspect that is completely outside my control and I will have no say in how much or when I receive it. I will endevour, however, to contribute as little as legally possible to a cause I have no faith in. Being a citizen in the US is about choice and responsibility, in my view, and this choice is one I bear full responsibility for....no complaints if I screw up and end up as an old man under a bridge in a cardboard box.....
posted on August 19, 2001 04:19:00 PM newBorn Between 1946 and 1964??
Yes.
Since SS for employed people is essentially a 50/50 split between payments made by the employee (withholding) and payments made by the employer
I don't agree with this, and never have. Any and all "fringe benifits", including the "50% employer" contribution to SS is earned by the employee. If it's not, they get fired very quickly. This is simply a question of sematics.
once the money is out of the trust's control, it'll be open for scams, thieves of every stripe, those who manipulate the market to those who profit from exchanges and
I agree, and the buzzards are circling waiting for this to happen. Anyone that doesn't think some smart people on Wall Street don't all ready have a plan to grab up as much of this money as they can is fooling them selves.
There's no point to privatization of Social Security other than to steal it.
It's amazing the number of people that don't see this.
posted on August 19, 2001 05:20:52 PM new
Just think. If I were to be allowed to keep the money that I earn and invest it as I choose...then I would be responible for my own welfare. I wouldn't need to worry about government malfeasance, now would I? Thieving politicians...inept bureaucracies...any of that.
What a concept. Self reliance. Definitely non-PC. Thoreau is spinning...I can feel the torque.
posted on August 19, 2001 05:40:08 PM new"Just think. If I were to be allowed to keep the money that I earn and invest it as I choose...then I would be responible for my own welfare. I wouldn't need to worry about government malfeasance, now would I? Thieving politicians...inept bureaucracies...any of that."
I keep hearing this and shake my head in wonder -- in wonder because do so many people really know so little?
FYI: Social Security is a VOLUNTARY PROGRAM!
Right. It is.
You don't want any part of it?
Fine! Go on down to your nearest Social Security branch office and stand in line. Once you are at the window, request the form to withdraw from Social Security!
That's right -- no one is pointing a gun at you to participate in Social Security!
What happens is that ALL of the money that you have put into your Social security account is given back to you -- and taxed.
If you decide to change your mind later on?
You can still sign-up for Social Security again. Realize that your account will be starting from scratch and you can't put any money into the system.
So, if you don't like participating in social Security -- GO DROP OUT!!
>>SHEESE!<<
In the meantime, the rest of will keep on bitching about saving our program!
posted on August 19, 2001 05:41:16 PM new
sadie LOL! well it may be the first place they do look
This question of whether there will be Social Security has been around longer than when the first Bush was in the White House. This arguement has been going on for quite a few years, even when the most popular President since Roosevelt, President Clinton was in office. The arguement has been going on whether there will be SS for anyone in say 2005 or 2010.
I use Fidelty investments, and my kids have a giftrust invested with American Century since 1989.
But the question is the baby boomer thing really extends to ones born up to 1964?
posted on August 19, 2001 05:43:22 PM new" ... you can't put any money into the system."
I meant, that you can't take extra money and put it into the system -- your account is built up the same way it always was - taken from your paychecks!
posted on August 19, 2001 05:45:02 PM new
The IRS would cast a jaundiced eye upon my property should I tell them I no longer wished to pay my self-employment tax. Heard of it?
posted on August 19, 2001 06:07:17 PM new
Toke, Social Security is NOT the IRS! You may withdraw YOURSELF from the program and neither you nor your employer will be required to withhold money for FICA for you ever again -- obviously. However, you can't FORCE your employees to withdraw from the program however -- that should be obvious too!
posted on August 19, 2001 06:15:14 PM new
Borillar,
Perhaps, you could provide a link to the SS rule that allows us opt out. I'm sure you checked your facts and know how to find it quickly. Maybe you have the URL book marked? Thanks a lot. We are all saved from paying that 15%.
