Social Security

PW2 · Feb 2, 2005

I don't understand why the administration, as well as others, keep referring to this as a retirement system. It is an insurance system. For example, I have a disabled daughter (blind) who would qualify, if she chose to, to recieve SSDI benefits for the rest of her life because of her disability. She has contributed next to nothing to this system. Like car insurance, where if you are fortunate, you never recover anything from what you pay in premiums, this insurance could not possibly yield a competitive rate of return over other investment options. Especially if they pay people like my daughter that has never contributed to it. It seems to me like saying car insurance is a bad idea for those that do not have accidents. I'm all for personal savings plans, but I don't understand how you can talk about them at the same time as SSI? I think it is the same as saying my golden retriever does not make a very good cat. It would be true, I suupose, if she were trying to be a cat, but I think she is content being a dog.

ob · Feb 2, 2005

Re: Social Security

SS will also serve as a safety net for all of the workers in this country that were displaced in the wake of corporate layoffs and recieved a pittance of severence.Some blue collar and un-degreed retirees use it as a suppliment to a modest pension as well.

bekosh · Feb 2, 2005

Re: Social Security

There are 3 parts to the Social Security system. The SSDI, disability benefits. A Widows & Survivors benefit. And the retirement benefit. The financial problem is with the retirement portion of the system. If nothing changes there, one of three things happens: 1-System goes bankrupt because to many people are drawing on the system and not enough are paying in. 2-Tax increases on those paying in order to cover the benefits of those drawing out. 3-Cuts in the benefits of those drawing out. What it comes down to is, you need a continous growth in the number of new people entering the system in order to keep paying the benefits of those drawing from the system and the demographics of the US cannot support this indefinatly. To understand the problem with the Social Security retirement system (NOT the SSDI or Survivors portion) do a Google for "Ponzi scheme".

PW2 · Feb 2, 2005

Re: Social Security

I understand the value of it, and it of course offers a modicum of security for seniors, be they degreed or not. And if it is in a "crisis", as we are told, there are lots of ways to fix it. You could take the mythical "trust fund" and rather than invest that in simple treasury bills, you could hire money managers, like other insurance companies do, and agressively invest it to maximize returns. Or raise the retirement age. Or increase the maximum that you can pay. Or lower the benefits. Or any number of other ways to fix it. I simply do not understand how private accounts enter into the equation. If we want private accounts, it should be in a separate program somehow, and seperately funded. I am not at all against them. I just fail to see how they at all fit into the SS system

PW2 · Feb 2, 2005

Re: Social Security

So we have a retirement program all jumbled up with an insurance program. And indivual accounts are going to fix this??? How does that make any sense??

NathanY · Feb 2, 2005

Re: Social Security

I dont look a SS an insurance plan, I look at it as a tax that I am forced to pay almost at gunpoint. I would like it very much if it was an option, like car insurance, full coverage or liability. I have worked very hard to plan my future, and frankly, I dont need SS. BTW, PW2, where have you been? Hope all is well, and glad to see you back.

bekosh · Feb 2, 2005

Re: Social Security

The "crisis" is down the road aways, 30-50 years, but whatever fix is used could take decades to fully work so IMO we need to start sooner rather than later. Any or all of the things that you listed could work to keep the system solvent. IMO a mix of methods should be used. Raise the retirement age so people stay in the work force longer, raise the caps so they contribute more, allow private accounts so people are less dependent on SS & means testing so that the money in the system goes to those who need it most. As I understand the proposed private accounts, if you entered into the private accounts you would trade some or all of your future SS retirement benefits in exchange for having an account that has your name on it and is invested under your control to gain a larger return on your money. That's the theory at least.

wajajaja · Feb 2, 2005

Re: Social Security

BEWARE THE ONLY ONES TO BENEFIT BY PRIVATIZEING THE SS IS THE GUY WHW SELLS HI, THE REST WILL LOOSE! TYCO,WORLDCOM,ATT SURE THINGS HUH! ENRONN,

kenimpzoom · Feb 2, 2005

Re: Social Security

Social Security was once nessicary because many people did not save any money for when they are no longer able to work. I think many people now are educated enoguh to know they should save something. The deal is that those that are educated realize their return on investment from socialy security is terrible compared to other programs (401K). Unfortunatley, there is no way ever to end SS cause somebody will take it in the shorts. Rasing the retirement age is a bad idea, I think. We should not have to work even to 67 (as it is now). Easy solution is to cut payments. Those that didnt plan properly, tough. Even better solution is to invest SS money in good sound high yield investments. Plenty of money to go around. Ken

bekosh · Feb 2, 2005

Re: Social Security

Originally posted by wajajaja: BEWARE THE ONLY ONES TO BENEFIT BY PRIVATIZEING THE SS IS THE GUY WHW SELLS HI, THE REST WILL LOOSE! TYCO,WORLDCOM,ATT SURE THINGS HUH! ENRONN,

That is why you diversify. Private accounts would be like a 401k. You would pick from a selection of mutual funds each containing stock in dozens of companys. So even if one company in the fund goes belly up you won't be wiped out.

Kenneth Brown · Feb 2, 2005

Re: Social Security

"Easy solution is to cut payments. Those that didnt plan properly, tough." Ok, i will agree to a certain point. What about those that paid in expecting it to be there? Somefolks don't make much at all so everybit they have goes to living right now, they have no other choice.

kenimpzoom · Feb 2, 2005

Re: Social Security

KB, you get back what you paid in. And KB, I am in the exact same boat as you. Hopefully I will be able to start saving something one day, otherwise I am working till I am 90. Ken

12Footer · Feb 2, 2005

Re: Social Security

Originally posted by PW2: I don't understand why the administration, as well as others, keep referring to this as a retirement system. It is an insurance system. For example, I have a disabled daughter (blind) who would qualify, if she chose to, to recieve SSDI benefits for the rest of her life because of her disability. She has contributed next to nothing to this system. Like car insurance, where if you are fortunate, you never recover anything from what you pay in premiums, this insurance could not possibly yield a competitive rate of return over other investment options. Especially if they pay people like my daughter that has never contributed to it. It seems to me like saying car insurance is a bad idea for those that do not have accidents. I'm all for personal savings plans, but I don't understand how you can talk about them at the same time as SSI? I think it is the same as saying my golden retriever does not make a very good cat. It would be true, I suupose, if she were trying to be a cat, but I think she is content being a dog.

PW, the easy answer is, making money is far more secure than spending it. Evern a miniscule return on the money paid-into SS is a marked improvement over the current spend and spend meathods. I wish they would allow us to opt-out of any future benifits from this failed system, but noooooooooooooooo!

Kenneth Brown · Feb 2, 2005

Re: Social Security

I have a pension plan at work that will support me just fine if I live that long. My thoughts are based on people of my salary level (30,000) that don't have a pension plan. My wife doesn't have any sort of retirement so the SSI for both of us would help out a lot when it gets to that stage in life.

PW2 · Feb 2, 2005

Re: Social Security

What I still don't understand is why anyone at all still refers to this as a retirement plan, or complains that their return is not as much as if they invested it privately. Of course it isn't. How could it be? When benefits are paid to many that did not contribute to it. Nathan, how much of your private savings plan is earmarked for disabled folks? Not much, I bet. Yet a sizeable chunk of benefits are paid out of SS to widows and dependents, and the disabled. That is what an insurance plan does. It simply does not matter how anyone "sees" it. That is what it is now, and has always been. Now if you don't like this aspect of it, separate them. A social safety net for the disabled, and anyone else you care to cover (or not cover) Then have a retirement account, with a broker statement, and a cash value balance and whatever else you want to add with it... But wait, we already have one of these, and they are labeled 401k plans (Or IRAS) the only thing lacking is to force employers to offer them, and forced participation by employees. But please don't complain about SS being a bad retirement plan when it simply isn't a retirement plan in the first place, and never was by design. Now there are ways, some more controversial than others, of course, to fix this, but offering private accounts to the current system isn't one of those ways.

CalicoKid · Feb 2, 2005

Re: Social Security

Turning a portion of a SS "account" or policy into a personalized retirement fund would become a huge burden for the government. Rather than simply taxing the general population according to a few simple formulae and redistributing the sum it to an elligible population according to similarily simple equations, the proponants of privatizing social security would add all types of complexities between the give and take of the system. Instead of being managed as large groups or classes in a centralized manner, we would each need individual account management. Think doing your taxes is fun? What is now basically a zero sum model after administration costs could become a net loser for years at a time. And we'd all be required to pay in just the same regardless of whether or not there are benefits on the payout side. At least now we know our money is going where it is needed. Our economy has been teetering on the edge of oblivion for five years now with more bad news everyday and somehow its a good idea to dump in the US SSI money too? Every working and retired American's accounts would make lots of investment banking work for the fat wall street cats who make the right campaign contributions or hire the best lobbyists. Imagine what kind of fees financial anylists and investment councellors and help line systems could charge the govt. And who's to approve or disapprove of investment options? More government? Lobbyists? It'd also create so many opportunities for us to get ripped off BIG TIME. That is a huge amount of money that we are discussing handing over to investors. Yeah the big heists of the last few years stand out. But those were just practice runs. But if the soundbites "its broken, it's broken, it's broken, it's broken" are played enough then we will be swayed into paying our taxes directly to the wealthiest people in the United States.

roscoe · Feb 2, 2005

Re: Social Security

Its a political con game. Every 10 years they suddenly realize that the fund will go dry. They shout and argue for 6 months, then miracuously claim to have come up with a compromise fix, that will save ss, once and for all, till the end of time. But it doesn't fix anything, just delays the failure so that ten years later they can do it all over again. A lot of the recipients should be dropped from the benefits based on means testing. Also, the fund was NEVER properly funded and the benefits were extended to many groups without increasing the funding to keep it balanced. My grandfather paid in for some 40 years, then received back all those dollars within about 6 months. Now that was 31 years ago, and grandma is still collecting. Does that sound like a sound financial system?

12Footer · Feb 2, 2005

Re: Social Security

Originally posted by PW2: What I still don't understand is why anyone at all still refers to this as a retirement plan, or complains that their return is not as much as if they invested it privately. Of course it isn't. How could it be? When benefits are paid to many that did not contribute to it. Nathan, how much of your private savings plan is earmarked for disabled folks? Not much, I bet. Yet a sizeable chunk of benefits are paid out of SS to widows and dependents, and the disabled. That is what an insurance plan does. It simply does not matter how anyone "sees" it. That is what it is now, and has always been. Now if you don't like this aspect of it, separate them. A social safety net for the disabled, and anyone else you care to cover (or not cover) Then have a retirement account, with a broker statement, and a cash value balance and whatever else you want to add with it... But wait, we already have one of these, and they are labeled 401k plans (Or IRAS) the only thing lacking is to force employers to offer them, and forced participation by employees. But please don't complain about SS being a bad retirement plan when it simply isn't a retirement plan in the first place, and never was by design. Now there are ways, some more controversial than others, of course, to fix this, but offering private accounts to the current system isn't one of those ways.

That's correct. Your "contributions" (taken by the feds at gunpoint), pay one third of one recipient's SSI benifits!! 3 payors-to-1 payee!! Scarey! It's not a savings plan. Nobody will EVER get what they paid-in back, unless they paid nothing. Some incentive! If anyone is still werking with the illusion that they will get thier money back from the feds,much less, a RETURN, is dreaming. Consider this a warning to all you hard-werkin men and women out there in your 30's or younger, who plan on SS for your retirement....It won't help you. Get into a 401K, and max it out as best you can. Invest what ever "movie money" you have. The time to go to the movies is when you're too old to water ski anyhow. I would love to see this "security blanket" end up as shop rags.

BoatBuoy · Feb 2, 2005

Re: Social Security

Can you imagine the lobbying that will go on between the investment bankers and the White House (probably already is), with billions up for grabs. It'll make the pharmaceutical and oil lobbyists look like pikers.

Parrott_head · Feb 2, 2005

Re: Social Security

There is a staff writer for the Dallas Morning News by the name of Scott Burns who writes for the business section. He is one of my favortie financial guru types. Plain spoken, uses common sense and is somewhat humorous. Here is a link to what he has published about the Social Security mess we are in. I regret that site may require a log in, if it does let me know and I'll do a cut a paste. Scott Burns on SS Sincerely, Parrott_head

Social Security

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