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You get more than you paid in, yet there is no outrage over this. I don't see any 65+ conservatives burning their Medicare cards, or returning their Social Security checks. They are more than happy to accept the money LONG PAST the point where payments would equal what they paid into the system. Why? If they don't like government spending on welfare, why are they an exception?
If you answer, it's because they are old and their inability to work is beyond their control, I would agree. I am a liberal, so I have no issue with this reasoning, and I think it applies to people beyond the old.
However, the conservative viewpoint doesn't allow such a thing. They claim that people on welfare should get jobs, and giving them welfare "creates dependency." Why is this reasoning not good for the gander as well? I could use the conservative framework and argue that ensuring people will get money from the government at the end of life "incentivizes" current able bodied workers to live irresponsibly, and not properly save for retirement for when they are no longer able to work, thus creating an enormous financial burden on current workers who must support them.
All I ask from conservatives is consistency. If you are old, you either must accept that there are people on welfare who do need it, or give up all your benefits once they equal the amount you have paid in.
Actually, there are some conservatives who do this. William F. Buckley reported that he would, in fact, draw Social Security until he was paid, with interest, every dollar he paid into the program. After receiving full remuneration, he said he would stop payment.
The government should be forced to match market rates. If you steal money from someone for 40 years, it's not enough to just give it back to them if they are still alive. They should get interest too.
Nobody who works their whole life gets back what they paid in. Not even close. That same $722,000 over 40 years in a low-growth investment would have yielded $3 million for that couple.
If that money matched the market over their lifetime, it would be over $6 million.
Exactly right. A couple of years ago I took the statement from SS that listed lifetime earnings and plugged it into a spreadsheet, showing growth over the years at various rates of returns. At 10% (low for long term stock market mutual fund returns) I would be a multi-multi millionaire had I invested the money from both I and my employer into a mutual fund instead of a money pit for congress to grab from. I could draw nearly a million dollars per year to live on instead of the $1400 per month they give me.
This crap that retired people are taking more from the fund than they paid in is just that - crap. Only if you leave out employer contributions and any reasonable rate of return at all can it be said to be even close to true.
More than likely if they are not savvy investors, which most people aren't, they would have lost it in the dynamics of the markets and all the brokers who exploit the opportunity. That's why the GOP wants to privatize social security. It's to allow brokers to take advantage of those who don't know how to invest on their own.
Commissions are made by churning. They are constantly having you buying and selling your investments. They make a commission both ways. Again, they think they are doing it in the name of trickle down economics and free market enterprise. But both of those with our regulations allows for greed and corruption. That's another part of the equation. The GOP hates regulations.
That govt. decided it was more competent to determine the value of an investment strategy, that it should require no return at all and should be available to congress to raid at will, is superior to people investing it themselves?
Hard to swallow that one, even though some people absolutely WILL lose it all from bad choices. A very low percentage if you can't take it out for 40 years, but it will happen. Still far better that we have a nation of very rich old people and a few poor than a nation living hand to mouth because congress steals their savings for pork projects.
Contrary to popular belief, social security is not an investment. It is an insurance. It has never missed a single payment in 75 years and is solvent until 2037 and then it will still be able to make 75% of its payments. It would be very simple to make it solvent for the long term by removing the cap. Right now, wages up to $113,700 each year are subject to payroll taxes for Social Security, with employees paying 6.2% of their salary and employers paying another 6.2% on their workers' behalf. If that cap were removed, it would allow high earners to pay into to it all year long. It takes high earners no time at all to reach the current cap. Therefore they don't have to pay in to is as long as people earning less than the cap. If an earner never reaches the cap, they pay into it for the full year.
Here is a link to everything you wanted to know about social security, but were afraid to ask.
No, it is not an investment, yes it is insurance. The thing is, that money set aside without investing loses value very rapidly. That's why insurance companies invest the money they take in, for example, life insurance policies. If they don't, the money becomes nearly valueless.
And that is exactly what happened to the "insurance" policy I bought for retirement. It was "invested" only in pork projects for members of congress at nearly zero returns and as a result I cannot draw any reasonable amount from it. It doesn't exist to draw from; instead congress has set the whole thing up as a ponzi scheme. Inexcusable, IMHO - had congress acted as responsible people, with a fiduciary duty to other people's money, it would never have happened. Instead it bought votes for legislators at the expense of citizens; citizens that depend on that money to retire on.
It should NOT require people to put money in to pay for someone else; requiring the rich to pay for the poor should NOT be necessary. It is, though, and solely because congress steals it for their own use instead of taking care of it.
How do you expect people to know anything about anything if we force everyone to rely on the government?
If you really want to help people, then create a government program that educates them, and provide a list of simple market indexes that people can invest in long-term.
Not all commissions are made by churning, it sounds like you fall into the group of people who don't know what they are doing. Maybe we should educate people instead of trying to coddle them. You know, treat adults like adults?
The current system is about the most stupid way to handle it. Take my money, then spend it on something else, and in 40 years you take someone else's money, spend it on something else, then go into debt to pay me. Yeah, great idea. It's a pyramid scheme.
Would you be interested in a real-life successful "private" Social Security example?
It does contradict your stated concerns, but learning is always a good thing.
In 1981 & 1982, 3 Texas counties opted out of SS and into a private plan - before Congress made it illegal to do in 1983.
Through 30 years of economic ups and downs - those retirees are currently receiving between 45% and 145% more than government SS.retirees
A lower-middle income worker making about $26,000 at retirement would get about $1,007 a month under Social Security, but $1,826 under the Alternate Plan.
• A middle-income worker making $51,200 would get about $1,540 monthly from Social Security, but $3,600 from the Alternate Plan.
• And a high-income worker who maxed out on his Social Security contribution every year would receive about $2,500 a month from Social Security compared to $5,000 to $6,000 a month from the Alternate Plan.
Of course the article doesn't mention the nefarious "churning" you speak of, so maybe they are in cahoots...
The counties have a vested interest in their employees. An investment banker earns his money by buying and selling investments. If this is such a great plan, why doesn't someone present it to their congressman?
Well, now you have me confused.
Your reference to investment bankers was to their handling of privatized SS accounts. I suppose I misunderstood your coupling of the two because when shown an opposing example you restate how investment bankers make money.
So I guess I misread your comment and you weren't really putting the two together. So, what did you mean then?
As for mentioning it to their senators... Considering the timing, (1981 & 1982 opt-ins followed by 1983 legal barrier to that choice), perhaps someone did - and seeing the possibility of either allowing the public the chance to see a better option, or losing the cash cow of mandatory contributions needed to keep the ponzi cheme that SS is - going. And of course they didn't want that now did they.
GA: I guess I didn't make myself clear. I meant to say the counties have a vested interest in their employees. Independent Investment bankers and financial advisers don't have that same vested interest as the counties.
They earn their money by receiving commissions from buying and selling investments, in other words churning. I have relatives that lost everything in a series of mutual funds trades that were churned and they thought he was working in their best interest, but he wasn't. It's easy for these guys to exploit the young and the old who don't have enough time or energy to become knowledgeable about investments.
And it's also the GOP's mantra to remove as many regulations as possible to allow free market enterprise for investment businesses. However, that always opens the door for greed and corruption. That's what created the financial meltdown, but that's another story.
Proven long term successful strategy:
Buy into a large mutual fund based on a wide spread of stocks, such as one emulating the S&P500. Buy more each month. Never take any out and never swap funds.
So where is this "churning"? It only happens when one tries to get rich quick, the antithesis of long term investing.
It is the financial consultants and advisers that do the churning. by constantly telling their clients to buy and sell different investments. The financial people make money both ways.
If you choose to turn your future over to a stranger, expect that stranger to run with it. To do with it what is in THEIR interests, not your own.
I repeat: the successful strategy is to buy into large mutual funds with low maintenance fees and let it sit. No "consultant", no "adviser" - just let it sit through good times and bad while you add to it.
Only after retirement (or possibly close to it) is any adviser needed, and if you're not smart enough to keep an eye on what they are doing you deserve to lose it all. It's your future; educate yourself to make the best of it.
It's not about me. I'm consider myself an excellent investor. It's about those who do not have the time nor the inclination to do the research and analysis and are therefore taken advantage of by predatory practices. You sound like, I got mine, now you go get yours and if you can't, then tough luck.
There is no one in this country that can't find a hundred hours over a years time to research how to work the market for long term gains. While there are a relative handful incapable of understanding the information, they are almost all on welfare or SS already.
That just leaves those too lazy to do the work - for those, maybe the term "tough luck" fits best.
I think you missed the mark on this one wilderness. A fee-only financial planner will pay knowledge and monetary performance benefits from day-1.
That is an option, yes. I was referring to whoever is used to buy the investment and administer it. Vanguard, for instance, or Koch.
If you are ignorant in the field and invest with a "handler" type of outfit it is all too possible they will churn it. More than a few have lost it all that way.
But a long term, 30/40 year investment does not really need a counseler for 30 years. One to set it up perhaps, and maybe some advice every 5-10 years, but that's all.
The counties are not the originators or managers of their Alternate SS plan. The plan was created and managed by a private company. A financial planning company. The plan is managed by financial planners - not investment bankers.
The proof of the pudding that investment bankers are not necessary, nor perhaps desirable, for private SS plan choices.
Also, not all financial planners and/or investment bankers are paid by activity commissions - you can find both that are either strictly fee-based, or fund performance based.
As you are known to frequently ask... Did you read the linked article?
ps. you are right about the cause of the financial meltdown, and your inference it was prompted by GOP actions, being another story. It also appears that we have strongly opposing views on it too. So I won't get into it here either.
It's difficult in a discussion like this to use the proper terminology. They mean different things to different people. It's like lumping Wall Street in with Bankers. I'm just saying there are people out there who are just waiting to take advantage of those who don't know the difference between debt and equity. Did you know that you can lose more than your principal in a bond mutual fund? The Net Asset Value is based on how well the fund is managed and performing, not how well any given bonds are performing.
As you must know, the higher the risk, the higher the gain. SS is a low risk insurance intended for people not to know anything about investing. I'm sure if you look at it from your personal standpoint, then it doesn't make sense. But then we get into another discussion as to the role of government and socialism versus capitalism...and I don't want to go there.
It appears we may be talking "past" one another.
I certainly did not intend to defend or even discuss Wall Street investment or fund managers, or whether they all churn for the money.
My example was a response to a comment by you that seemed to indicate you thought any SS option involving the private sector would be unacceptably risky due to the greed of these churners. Your comment gave me the impression you thought it was a choice between government controlled safety or private market sharks.
I believe the Galveston example shows otherwise.
Did I misunderstand you? Are you not of the opinion that the government is the only entity qualified to safely provide SS-type benefit payments?
Is there a reason the government's SS fund can't match the guaranteed performance numbers of the Galveston Alternate Plan managers?
Do you have any thoughts on why Congress felt the need to outlaw private SS plans - after the Galveston counties opted out?
As long as there was a government agency overlooking people investing in retirement to make sure everything was done correctly, and the government did cover people who were wiped out, this doesn't sound so bad.
There didn't/doesn't appear to be any government guarantees involved in this program.
Other than being a party to a contract - which did include a minimum interest of 3.75% - this arrangement was no different than any other contract between two parties. There were no government "backstop" guarantees against default.
As for oversight and regulation - there doesn't appear to be any government involvement that was/is different from any other business contracts.
Had congress let the cash accrue, as it was originally intended, Like Stanford and Harvard, the amount of money in SS would be plenty to pay benefits to everyone. Like all good politicians they had to use (1970's), and continue to use the "Social Security" trust fund to balance the budget.
I believe the endowments of Stanford and Harvard are enough to pay tuition for every student, but they manage their money. Low and behold they still charge 50k a year.
by Ralph Deeds4 years ago
http://www.nytimes.com/2013/03/31/opini … ef=opinionSocial Security, Present and FutureBy THE EDITORIAL BOARDPublished: March 30, 2013 6 Comments"In the fight over the federal budget deficit, Social Security...
by JaxsonRaine5 years ago
http://www.cato.org/pubs/pas/PA692.pdfThis is exactly why I hate the government forcing me to do things through them.This study looked at what private investments would have done compared to Social Security. It broke...
by SparklingJewel5 years ago
I would be interested to hear opposition to the stated "facts" in this video...Has anyone done an extensive research on the origins of Social Security?http://www.youtube.com/watch?v=V4BjLrTq … r_embedded
by N. Ramius7 years ago
I wouldn't pay in and wouldn't collect in retirement. I wish they'd let me do that.
by OLYHOOCH5 years ago
Have you noticed, your Social Security check is now referred to as a "federal benefit payment"? I'll be part of the one percent, to forward this, our government gets away with way too much in all areas of our...
by Petra Vlah5 years ago
Through our working years we all paid for Social Security and Medicare, so why are they considered entitlements when in fact we contributed our own money into the system?
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