Social Security Reform

[kypossumdog]

Here's a link for some info on the proposed reform and what it would actually mean in dollars and cents.

https://www1.daveramsey.com/etc/cms/...contentid=3188


Give a listen to the audio clips they expand on the text.

[pcwerk]

Don't believe it! This is the biggest scam to come down the pike in a long
time. I side with AARP on this one. The only ones that think this will work
are the stock management companies like Dean Witter that will reap in billions.
Look at the new AARP Bulletin. Britain already went the privatization route and
it has been a disaster. And its related to Homesteading, since the poorer you
are in retirement the less likely you are to have your own homestead.
just my $0.02 worth,
James in Houston

[tsdave]

If people are so worried about 'losing' money in the stock market, they could buy us bonds with it instead, and risk nothing (considering that is what the rest of SS is invested in). And still gain the rest of the benefits, such as being able to pass it on, and that the government cant take it, or lower it etc ... In reality they could pick a low risk investment and still get double the rate of return.

[Darren]

"(considering that is what the rest of SS is invested in)." Not so, Dave. SS or FICA is another income tax. All the money goes into general revenue and is spent for whatever the feds need. The reason the accounting was combined years ago was to make deficits look smaller. Daniel Monihan clued everyone into that.

If you consider that the SS income tax generates a surplus beyond what is required to pay SS benefits, it becomes obvious that over the years probably billions if not trillions of excess SS taxes were spent on stuff other than SS benefits.

Soooo, if that's the case what's the problem with continuing to pay SS benefits from general revenue once the SS taxes fall short? If you've been following the news recently, about $400 billion dollars was collected in SS taxes that was not attributable to legitimate SS numbers. Guess what. That was spent too.
What's the real concern? Politicians don't really believe in pay as you go. Since we elect them based on their promises to us, they make sure the appropriate money gets spent in their state to buy votes. They're the ones that will be "short changed" in the future when they don't have an SS tax surplus to spend. They might actually have to cut back on governhment spending. SS payments will still go out every month though.

[FrankTheTank]

I'm young, so this would effect me. I have a question that i haven't seen answered yet.

Do i have to put money in it?

Another thing that puzzles me is that your actually putting money into a corporations (or US bonds) vs. giving it to an old person...you need to get that money somewhere....where?

[Quint]

---- FDR's devious black soul for ever foisting this federal ponzi scheme on the American people. The quicker it is relegated to the ash heap of history the better.

The feds should just stop lying and say the following:
It is a socialist wealth transfer scam and always has been. Everyone over the age of 50 will get their welfare check as promised but everyone younger than that is responsible for their own retirement. Yeah, you who aren't going to get the welfare check are going to have to pay for it but if you want to complain look up those up who instigated the scam.

One can only hope that once the current generation of spineless leaders die off SS will be one of many misguided federal policies to be discarded. Given the state of education and civics and history education in particular I'm not holding my breath.

[Cindy in PA]

Anyone over 55 is supposed to get the benefit promised not over 50. Younger workers have 40 or more years. Where does that leave those of us with 20 or less?? That example on the website is great, but where do you get 10.33% on anything right now without being a stock trader? They are talking safe investments like index or mutual funds etc. All scenarios of what you will earn are rosy. As long as they cut anyones benefit that takes their money out by the percentage of money they take out it is OK. Where are they gonna get the money to make up the present shortfall AND the additional from this plan?? Give me back all I paid in and I will call it even.

[mpillow]

Did you know that SS is only taxed up to $90,000 year?

So why [B]arent! wealthy (by my standards) people being taxed on their whole yearly salary? That's a no brainer!

And why aren't benefits cut to people who have a substantial retirement fund from there employers....In my opinion anyone collecting more than $50,000 a year single or $75,000 couple doesn't need any "Social Security".

I know a vet who did two tours in Vietnam who is disabled bad heart and circulation who gets a whopping $600 - 700 a month. How is this fair? My mother in law check is over $1500 a month plus everything else $$$(close to million estate) her dead Doctor husband accumulated. She doesnt need SS and someone else who served his country barely feeds himself let alone stay warm during the winter.

[jack_c-ville]

Bush's plan requires that you pay 3% of what's in 'your' account to the federal government every year. Call it whatever you want, but that is taxing social security earnings while they are being accumulated.

Also note that his plan does not in fact give you 'ownership' of 'your' account. When you reach retirement you will be required to use all the money in your account to purchase an annuity. When you die that annuity ends. Nothing is transferable to your children or other family members.

In the worst-case-scenario Social Security could need an injection of as much as $3.5 trillion over the next 75 years. Bush's 2003 Medicare bill (that nobody actually wanted) will cost us $8.1 trillion over the next 75 years according to the Medicare actuaries that he appointed. Where's the crisis now?

-Jack

[edjewcollins]

Don't just talk about it here, call you congressmen and senators! :yeeha: Or better yet vote Libertarian straight party like I did. Aren't you all sick of this Dem and Rep BS?

Ed

[3girls]

First, nothing has happened yet. Congress has yet to take up the question. The executive (the Pres) can only propose. There will be a lot of noise and many hearings over this issue.

Darren's post is so so true. Perhaps the initial thought made sense to someone, but Congress over time has made the current mess. Year after year, reforms are made and $$ put aside for the future. Year after year, Congress takes from the set-asides under the theory that the future can make it up. Bah-h-hlogna.

YOU pay into social security (a misnomer if there ever was one) with every paycheck you get unless you work for the railroad or are a Congressperson. If you die the day after you are 65, that's it--it's gone to you. The gist of the current proposals is that part of the money you are already paying in will belong to you.

You will invest in a fund that you will choose from the several offered, depending on the amount of risk you can stomach. But the most important thing proposed is that you can will it to your heirs. I would give anything to have had all my soc sec payments invested in a nice modest stock/bond fund. I currently draw just over $500, out of which comes a medicare payment. When I pay medical insurance (yes, with medicare) and car insurance, there ain't a whole lot left. The same money invested would have grown, and would now be paying me much closer to what I need. I would resist with all my being having that fund annuitized. Put rules around how much you can take out annually, but let me do it myself.

Just look at IRA's and 401 (k)'s to see where you would be. It is true that Enron and a few others went bust, but that is not the usual and some law has been written to protect against that happening again. The stock market over time, even with its ups and downs, will out perform any other investment with the possible exception of some real estate. (wish we had kept the house we bought for $18000 in San Diego in the 1950's) Many people have started quite young to put $100 per month into a modest fund for the duration of their working life. These are after tax dollars invested. If the discipline is maintained, they retire very comfortably. You say you cannot afford $100. OK, start with $10 and add to it as you can to reach your goals.

This idea of privatizing soc sec is the best idea I've seen in ages. I don't want the government to take care of me, protect me from bad meat, etc. I do want government to protect me from outside the country, and pen up the murderers inside, make some traffic rules, etc.

I used to be a CFP (certified financial planner) in the dim past.

[miller1911]

I'm 25 and as understand I will not be able to collect when I turn 67, but I have to put money into a retirement fund, but more than likely I will be taxed on that too, so what is the point?

[Quint]

The point is this. Most likely you won't ever see a dime no matter what half measures the feds come up with. The welfare lobby will simply not allow full privatization. Plan your own retirement. Invest in a 401k or whatever savings plan you wish and take responsibility for your own life and don't depend on the government for anything. It isn't fair that you and me are getting taxed for this socialist crap but we are. Just make sure that when our turn comes up to run things in this country we put people in office that will eliminate this sort of invasive government bondage. We have a lot of damage to undo.

[FrankTheTank]

DO you have to put money in? can you say...ahhh...that looks a little "murky", you know, with climatic changes coming, dollar revaluation, peakoil, et etc...i better just stick with the guaranteed benefits...

Quint: what do you propose? I'm for helping people THAT NEED IT (not trash) and against handouts for the wealthy too get wealthier while the rest of us divide up the remaining 1%...

I have a good cut...the military...who needs 10000 nuclear warheads? isnt 10 enough? 18 nuclear submarines (over 1 billion a pop to build)?

[Haggis]

I started paying in SS in 1963. I turn 55 in 18 days. I retired two years ago, but I don't really know when I'll reach the age when my SS is supposed to start; I never thought I'd get a dime back anyway.

Now "W" has come up with a new plan to save SS and make everyone rich when they reach retirement age. "You Betcha!" :no:

There is an old saying that goes something like this:
Millions and millions they give away,
Something for nothing is what they say.
Something for nothing? On this you can bet,
Nothing for nothing is what you'll get.

When the smart fox sees a free meal looking too good to be true, he looks for the trap.

[tsdave]

"(considering that is what the rest of SS is invested in)." Not so, Dave.

from http://www.ssa.gov/qa.htm

Q. Does Social Security have dedicated assets invested for my retirement?

A.Social Security is largely a "pay-as-you-go" system with today's taxpayers paying for the benefits of today's retirees. Money not needed to pay today's benefits is invested in special-issue Treasury bonds.

Q. Is there really a Social Security trust fund?

A.Yes. Presently, Social Security collects more in taxes than it pays in benefits. The excess is borrowed by the U.S. Treasury, which in turn issues special-issue Treasury bonds to Social Security. These bonds totaled $1.5 trillion at the beginning of 2004, and Social Security receives more than $80 billion annually in interest from them. However, Social Security is still basically a "pay-as-you-go" system as the $1.5 trillion is a small percent of benefit obligations.

[tsdave]

My personal opinion why democrats and socialists dislike the idea of private accounts for social security is this : When people get old in 20-30 years and see they are getting MORE from their private account and can pass it on, than from the rest of social security, which just goes poof when they die, then they will have the hide of the democracts and probably demolish the rest of social security. That is just an opinion and a very long term projection.

if you read http://www.whitehouse.gov/infocus/so...alsecurity.pdf
it states :
"Personal retirement accounts could be passed on to children and grandchildren
The money in these accounts would be available for retirement expenses. Any
unused portion could be passed on to loved ones. Permitting individuals to pass on
their personal retirement accounts to loved ones will be particularly beneficial to
widows, widowers, and other survivors. According to the non-partisan analysis by
the Social Security Administration’s Office of Retirement Policy, the ability to
inherit personal accounts provides the largest gains to widows and other survivors"

[MullersLaneFarm]

Originally Posted by miller1911

I'm 25 and as understand I will not be able to collect when I turn 67, but I have to put money into a retirement fund, but more than likely I will be taxed on that too, so what is the point?

You're far luckier than some of us. I'm 44, I've been adding to SS for 31 years already. I won't be able to retire for another 23 years. 5 years before my full retirement age, SS is suppose to run out. 54 years of paying in and I probably won't see a dime if SS stands as it.

Give me back my money and let me invest it the way I see fit.

My kids are learning about investing NOW so they will be ready to secure their future.

[tsdave]

Social Security wont 'run out'. They will either have to raise taxes to pay everything promised to you, or they will cut your benefits to match the money that does come in.

Or they will have to change something before then.

[jack_c-ville]

Originally Posted by 3girls

You will invest in a fund that you will choose from the several offered, depending on the amount of risk you can stomach. But the most important thing proposed is that you can will it to your heirs. I would give anything to have had all my soc sec payments invested in a nice modest stock/bond fund. I currently draw just over $500, out of which comes a medicare payment. When I pay medical insurance (yes, with medicare) and car insurance, there ain't a whole lot left. The same money invested would have grown, and would now be paying me much closer to what I need. I would resist with all my being having that fund annuitized. Put rules around how much you can take out annually, but let me do it myself.

No, that is NOT what is in the actual proposal. You are being misled. Read the fine print. Bush's plan requires that you use 100% of the money in your account on retirement to purchase an annuity. An annuity that is non-transferrable on death. The notion that you will be able to will your money to your children through this plan is a flat-out lie. Conservatives have had a dream-plan for social security for so long that they just assume that this is what they had always talked about. It isn't.

Plus we're talking about $2-3 TRILLION dollars of new debt just in the first 5 years alone (by the White House's own math). With anywhere from $2-7 trillion to follow over the next 40 years. The WH's worst case estimate for the cost of keeping SS as-is over the next 75 years is $3.5 trillion, adjusted for inflation. This new plan is way more expensive and risky that what we have. Where do you think that the $4-10 trillion total to fund this plan over the next 40 years is going to come from? You're a CFP, do the math. TAXES. They're going to have to jack income taxes way up in order to get the cash or pay off the debts to allow millions of people to play with it in the stock market. The money isn't just going to magically appear in the treasury. Most people's modest gains in these private accounts will be wiped out by the tax increases that create them in the first place.

This whole thing is a ridiculous shell-game. There is good reason why both Republicans and Democrats in Congress are opposed to it. Apparantly even Bush thinks that it's going nowhere, because his proposed budget doesn't provide a single red cent for it. Below, I am pasting George W. Bush's exact words to describe his social security plan (from the WH's website). You tell me how convincing it is.

-Jack


THE PRESIDENT: Because the – all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There’s a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those – changing those with personal accounts, the idea is to get what has been promised more likely to be – or closer delivered to what has been promised.

Does that make any sense to you? It’s kind of muddled. Look, there’s a series of things that cause the – like, for example, benefits are calculated based upon the increase of wages, as opposed to the increase of prices. Some have suggested that we calculate – the benefits will rise based upon inflation, as opposed to wage increases. There is a reform that would help solve the red if that were put into effect. In other words, how fast benefits grow, how fast the promised benefits grow, if those – if that growth is affected, it will help on the red.

Okay, better? I’ll keep working on it.