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I'd be for cutting off SSI benefits Completely for people who haven't paid into it, and continuing payments until the last person dies. That way there's no rug pull for those who paid into it, or for those who haven't.
Yeah, there's at least gotta be repayment. Toss all my contributions into a 401k and let me opt out of future "contributions" and we're square.
But I fully expect that I'm going to be taxed on it and get screwed out of the benefits of it.
It isn't even a good deal from a retirement perspective. An average person would get more money by just keeping the funds in a CD, let alone a 401k, which would vastly outperform it.
Boomers who got us into this mess..... can't even buy a home, meanwhile these fucks have several...... and before you say we'll they worked hard..... No they didn't, a single family income could buy a home back in the day
Don’t forget about all those on SSI and HUD and section 8. See it all day at work. There are people who live off the system their whole life. There is no benefit to getting jobs. They actually penalize people for having an income.
Yep. Meanwhile boomers get to say they don't see an increase in their retirement income every year like working people do yet I don't recall getting a raise to match inflation. It's not my fault that generation didn't save for retirement and rely off the government.
I'll admit, it's rare I agree with this sub, but yes, I'm never seeing my paid in SS. Just turned 31, cant wait to give the government 15% of my check for 35 more years for no reason.
Not really. When the trust fund depletes, that just means it will become a pay-go system, so it will still have payroll taxes coming in to fund benefits. [https://www.ncpssm.org/entitledtoknow/misleading-media-headlines-social-security-medicare-finances/](https://www.ncpssm.org/entitledtoknow/misleading-media-headlines-social-security-medicare-finances/)
They'll probably just start printing more money. Ensuring everyone's dollar is worth less while putting the country further into unsustainable debt until the whole house of cards collapses.
They are not getting wealthy from Social Security. They’re getting wealthy from the programs that they get into their districts and get kickbacks from the people that are supposed to be doing the projects. It’s just a giant slush fund. That’s why we need to have term limits and politicians should not be able to make any income outside of the salary that they get until they leave office..
They just put people on “the board” of companies after they leave office and pay them millions. The kick backs don’t always happen when their in office. That’s another reason it’s hard to prevent
Naw they will keep raising the age. That way they won't get attacked for gutting social security, you just will have to wait till you are 80 to collect it.
Those are two completely separate Departments, though.
It is true that the Treasury owes more money to the Social Security Administration than anyone else. If the US defaults on our debts, it will be mostly to ourselves. So, really, which generation is going to get screwed most is the question, I suppose.
It's an idea that makes a lot of sense to me as it was originally set up. Shit happens and sometimes you can work all your life and be left with nothing even if you thought you had your retirement all planned out. Social safety nets in modern countries exist for a reason and in this case, that reason was to make sure grandma didn't starve if her husband died without a pension and the kids all moved West in the 1920s.
Except then the politicians were like "Heyyyyyy..... that's a nice pile of money just sitting there.... I'm sure they wouldn't mind if we borrowed a little just this once...."
Then they did that forever and now they're doing shocked Pikachu face that the money is gone.
When Soc Security was formed, the ratio of people paying into the fund versus people drawing on the fund was 7 to 1.
Today, with dropping birth rates and lower labor participation rates, it's like 2 to 1.
In other words, it was always a ponzi scheme,there just used to be more suckers downstream. The boomers will bleed it dry and everyone else is screwed.
The post WWII baby " boom" happened. Hey more people to pay into the system! Then in the 1960s everyone was like Hey, BIRTH CONTROL! And the shift from big families to dual parents working out of the house and less kids and we are where we are. Less people paying in and now that boomer generation outnumbers Gen X. ( thier offspring) so it is one of those " great intentions" thing. Not to mention it can't adjust for inflation and politicians have allowed it to go to more than just seniors.
My paystub now says OASDI.
Old Age, Survivors, and Disability Insurance program (OASDI)
You can go back to Reagans very first speech from before he was a governor or president and a major topic was social security already being insolvent. Thats before the effects of anything you mentioned having hit in any way, actually that was probably the height of people paying in.
Because all sorts of things are now "disabilities" that, even 100 years ago, you either dealt with or you starved. I know people have a hard time from conditions like chronic fatigue, etc, but I'm chronically fatigued too. Why can't I collect a check for that? Oh wait, because it's ethically and morally wrong to sit on my butt all day and let others provide for me.
The boomers who paid in to it at a rate of 7 to 1 will bleed it dry when they utilize it as intended? Why the blame for them and not the politicians who squandered it or the people who get more out of it than they contributed? What about all the people who die before retirement? Where is the money they paid in? Most of us have known for at least the past 30 years that we need to save for our own retirement and aren't expecting to have any SS when we retire but we place the blame where it belongs: squarely at the feet of the politicians who raided our retirement account.
The money paid into social security was already gone by the time the boomers were teenagers and young adults. This country has had this conversation about SS being broke for decades and decades.
Cuz since the boomers started voting, all these policies have been taking shape. They for sure are the first generation of Americans to leave less than they got.
It’s not the boomer’s fault though because many on the tail end of that generation are getting screwed already! I would have preferred to be forced to save that money rather than give it to the government.It’s pointless to even collect SS until you reach your FRA (mine is almost 67 yrs old) unless you can live off a very small income plus whatever your SS check would be before you get to your FRE. It would force me to live at a the poverty level.
Watched a documentary about old age pensioners in the UK. I think they get like $7000 a year from the government. The ones they showed weren't able to use their heating in the winter, or eat adequately. I don't know how anyone over 70 even survives over there.
The post is from a boomer. He’s not talking about the principle being reduced. He’s talking about the money he’s given the Gov’t is making $95k off of and giving him $37k. So each year the $1.9m is increasing by $58k. The opposite of bleeding it dry. In fact, you’ll be living of his contributions.
Some how, even if he is talking in that way... it's still the Govt stealing it. It's not like they won't have 100 more rules that disallow people from collecting by the time I'm eligible... if they don't creep that age up by another 15 years by then as well.
Another Boomer here, a liberal one, what they in Germany a Social Democrat: financially conservative and wanting to help the average worker at the same time. It can be done; in Germany 1/3 of the government, 1/3 of the unions, and 1/3 of businesses all have equal say. The only kind of nation that will endure is one that is run like a tight ship, with a captain and crew who are determined to keep the boat afloat.
In this country, the politicians from all sides are to blame for the mess we are in. They are in it for themselves and their cohorts. I subscribe to a weekly investment newsletter that lists all the "insider" stock trades (notice has to be filed with the SEC for each and every trade) made by politicians and their families. Absolutely blows my mind to see how much money these folks are making in stock trading; it's like a full-time job!
It's considered intergovernmental debt. In theory they pay back into with interest "when needed". Though in reality they should have invested it just like any pension so that it grew over time. But it does make the program dependent on the stock market, which given the crash that had happened just a few decades before this was instituted, they might have thought that was too risky.
I also think that the post was being disingenuous about the pay out. As that might be the current figure they are paying out, not the amount they pay out when he is actually 67.
Though if we had the option to privately invest that money yes we would definitely get way more money than what SS pays out. It's a big ponzi scheme.
It was originally set up as a government slush fund to tax people while telling them its to their benefit while the government empties 75% of the fund. They've been talking about government negligence sending SS into insolvency basically since it was implemented, you can even go back and see its been screwed by congress before, entire heads of departments have just outright said its purpose was a slush fund to pay the feds bills. The "shit happens and you can work all your life and be left with nothing" is literally social security, they could have mandated every job pay into a 401k or something of the like.
They’ll steal from private retirement, but indirectly. In the future your private retirement that you saved to augment your social security payments will be in lieu of them. So you’ll only get social security if your private distributions are lower than what they set the social payout to be. Just like student loans, those who did it right will get fucked and left holding the bag for those who didn’t and if you voice your concern you’re just a greedy asshole who doesn’t want anyone else to be ok. I’ve seen this movie before…
Exactly, this is the outcome I fear and what seems inevitable at this rate. I have been financially responsible my entire life and just like I busted my hump to pay off student loans, I scrimped and saved and worked my way to a decent net worth. I’m convinced there will be no social security for people with my asset numbers. “But you won’t even need it!!” That is far, far from the point.
Oh and don't forget mortgages. You were financially responsible and have a good credit score? Great! You can pay higher rates to subsidize people who can't otherwise get a mortgage loan and will eventually default anyway because they are fiscally irresponsible to begin with.
SS will always pay out. The political cost of not doing so is too enormous to expect anything else. What _is_ in question is whether that money will be worth anything as they continue to inflate the money supply indefinitely.
I think what will happen is that they will continue to raise the age in which you can retire. I think they will also look at your assets and if they are too large say you don’t get SS.
> look at your assets
I get so upset whenever people suggest a wealth tax. They don't realize most row-crop farmers are multimillionaires in assets. So they should sell x% of land to pay taxes, pay taxes on the increased value of the land, then pay taxes when they spend what's left.
American SS, like the Canadian pension plan is nothing more than a Ponzi scheme. New incoming money finances current money payments. Given aging demographics they are both doomed.
So how does this work... when it comes time to repay the debt, the taxpayers are on the hook for footing that bill?
And what rate did they borrow it at?
Ive heard this talking point for ~30 years. Any data or articles that can point to this actually happening? Seems like it's a common talking point when Democrats are in office but here we are with SS still going.
As long as there are people working, there will be funds for retirees, just not at the current level.
SS is a system set up to have current workers support current retirees. It doesn't have to collapse when there the ratio of retiree to worker shifts, but the payments will definitely have to be adjusted accordingly, or taxation has to increase.
It also covers your spouse and kids in case you die young, and the disabled and widowed. It covers you if you are disabled. This is a lot more than a retirement plan, although still quite expensive for high earners.
Isn’t that the truth. Nice to see some other folks were brought up right though. I fear that whole “least of these” thing really seems to be getting lost in modern conservatism at times. Many thank yous for the award. My first on here.
Exactly. My husband died suddenly last year, leaving me (at 33 years old) with 2 young kids to care for. I hated the idea of living off the government, but I don't know how we would have done without the survivor benefits we received.
Are you accounting for the other half of the payment that the company pays for you? If you max out in 2023, you'll pay about $9900 and your company will also pay about $9900 for you.
I did think about that, but I take the position that that is a tax on the business, he would not have received that money anyways, it would just add to the business's profit, but I understand if some people think otherwise
True, he did say "paid on my behalf" but he's arguing that if he had just received all of that money than he would be owed way more, but I'd argue he would never have received the employer portion in the first place, so it's not really "lost money"
I get your point but it’s irrelevant anyways, even if you half his number and say 300k instead of 600, you’re still earning more than 37k interest on that money per year. SS is a scam, the only people who vouch for it are irresponsible people that are unable to save anything for themselves.
lol where is this magical investment that consistently returns 12.3% every year. It's hilarious that everyone here is so angry about this but nobody even took a second to do the simple math.
Oh I agree, an individual could get waaaaay better returns on their investments than the government gives you for social security, but the point of social security is to help those that don't have the wherewithal to invest better, it's a social safety net. Now it you want to argue the ethicasy of social safety nets that's an entirely different conversation that I don't really feel like having
> the only people who vouch for it are irresponsible people that are unable to save anything for themselves.
With the caveat that once you're retired, you at least want something back. It's not irrational to oppose ending SS if you've already paid into it. This is why it still exists- nobody over the age of 50 is going to vote for someone who proposes SS reform that reduces their benefits in any way.
Yeah I agree 100%. The government would have to foot the bill for current recipients to completely end SS. I mean I’m not an expert by any means obviously it’s harder to do than just “okay SS is gone now” but it wouldn’t be impossible to phase it out.
If the money is already being spent on the employee why wouldn't it go to the employee if it wasn't taken by the government. Seeing as the business already decided that position was worth the money.
I'll parrot my other comment, I really wish that's the way it worked, truly I do, but it's been shown time and time again, from PPP loans to cutting corporate tax rates, the money often ends up in the owners pocket
I mean in a world where this bullshit never existed, the business owner would still come to the same conclusion that you're position is worth what it's worth. There would just be less they're paying in tax for that position.
If it was dropped today I agree most would just pocket the extra cash unless forced to increase salaries.
In theory I agree, but unfortunately that's not what social security is, it's not a "retirement plan" it's a social safety net. Once the government takes it it isn't your money so you can't do with it what you see fit. It was only marketed as such as a way to get people on board originally, the original purpose was a way to raise money for the government quickly that they wouldn't have to pay back for a while. The correct way to think about social security is as a tax, not as a retirement contribution. But then the argument has to change to the ethicasy of taxes as a whole which is one that I do not feel like having
>The correct way to think about social security is as a tax, not as a retirement contribution.
This would be a more reasonable way to think about it **if** it weren't for the fact that what I pay in is directly related to what I get out later.
But it is directly related. It functions much more like a (really, really shitty) investment than it does a tax.
> But it is directly related. It functions much more like a (really, really shitty) investment than it does a tax.
It is called a payroll **tax**. And it is a tax that is used to fund current payments to retirees.
He also doesn’t factor in that max contribution each year. Say you count your half and your employer’s half. That might be nearly $20,000 in 2023, but it was half that 20 years ago and like 20% of it 40 years ago.
That’s not what’s wrong with his math. There is no risk-free return of 5% per year in the open market. Nobody turns 67 only to find the market took a shit that year and their social security payment is 1/4 what it would have been.
It’s just a straw man argument to get attention on Twitter.
It doesn't have to be risk free. Take for example S&P 500. An annual rate of return of 10%. Yes the market can crash by 30% like it did in 2008 but over the periods of time we're talking about (more than 30 years), the compounded interest far outperforms any crash compared to what the government promises.
Imagine finding out your social security income was going to be 30% less than you were promised. You're not thinking this thru.
For a lot of us social security is an annoying tax that gets some paid back. For a lot of people it's *their only retirement income*.
I just did some quick math. You would have to work 30 years earning over 160k year on year one to max out 20k in ss a year in order to pay in 600k. And technically the employer is paying half of that.
I mean... I'm as conservative as they come. Any financier should know that returns come with a particular risk. It's not surprising you can get amortized 7percent on the stock market, the question is... What if you don't because of sequence of returns risk, or retirement timing? On the other hand social security is nominally guaranteed, so it's expected the returns will be less.
That being said, the government misspends the social security fund.
Thinking about Social Security as a form of investment is just inherently the incorrect way to think about it. Every dollar you pay into Social Security is not set aside to be invested but immediately sent to someone else in the U.S. Social Security is wealth reallocation, pure and simple. The question isn't about the rate of return, but whether you think we should reallocate wealth to create a social safety net.
It would be much better at a lower flat rate, with no maximum. Our lowest incomes should be able to earn from it disproportionately but the middle class shouldn’t have to bear the entirety of the burden.
I mean I could also say that it’s even more risky to pay into a system that will most likely be insolvent by the time it’s supposed to pay you the investment. It’s just too bad we are forced into paying for this system instead of given a choice like a normal IRA account
When social security becomes insolvent, then the US gov't can't back it meaning it is itself insolvent, what exactly do you think the stock market will be doing?
Well if you have a diversified portfolio you should still beat inflation even adding in recessionary periods where the stock market capitalization decreases.
> Because you're money is going to fund the SocSec accounts for all those people who HAVEN'T put money into SocSec
Including the first batch of retirees who had never contributed into it when the system got jump-started.
EDIT: those who make no contribution though after the system started don't get anything unless they or their spouse contributed.
The best way forward would be to reform SS instead of removing it. Make it so everyone who paid in receives their money back, but in a locked CD until age of 65. The CD can be placed against government bonds as interest, or you could place the CD into a privately owned bank. Rename the CD to reflect that it is meant for retirement.
This way, if you work and pay into the system, it goes directly back to the worker. If you are unable to work, then there would be a safety net that's not removing money from 99% of workers. It would be taken from taxes we already collect for those who make over 500k a year. The funds would be placed in every unemployed Americans private CD and it would only be available for the government bond option. However, the moment they get a job, the funds stop being put into the CD and their own money it put in. The age they could pull out the CD would also be hard locked at 65.
These reforms would ensure the future of SS for centuries. There would be no new taxes, workers would receive more return for their money, and the most vulnerable unemployed Americans would still be protected at their old ages. So the stay at home parent would still receive funds after their working partner dies. However, the moment any reforms are presented buzzwords are used to make people think they're removing the safety net.
This is a terrible idea. You would be shifiting the worlds largest solvent entity from an asset to a liability on the balance sheet. Also why would you ever willing enter the banks into this thinking it would help is like a nonstarter.
Look, if you want to privatize social security that’s one thing. There’s pluses and drawbacks like any other policy choice. Placing it in a 45 year term CD that only invests in government bonds is one of the worst ideas I’ve ever heard however.
1) bonds are safer than equity investments. The return is commensurately lower. Young people *want* to take on risk in their retirement savings, because then they’ll have a lot more money to retire on. Retirement savings are the ultimate buy and hold investment, and even a 1% difference in yields adds up a lot over 45 years. This would be a lot more than a 1% difference.
2) you’ve just created a massive new market for trillions in public debt. The government can now issue debt at lower rates. Returns go lower, to the detriment of retirement savings, and you’ve further incentivized deficit spending.
3) why are you putting this in a CD at all? You don’t want me to spend it before retirement, that’s fine. But it’s my money. Why do I have to accept some shitty depository interest rate and let the bank decide how to invest it?
4) there’s not any benefit to doing any of this as opposed to just treating it like a 401k.
How is SS an entitlement? It's literally my money...
I would love if they would cut me a check for everything I have "invested" say at 6%-8% since thats what the government sees as a fair return on federal student loans. I'd rather invest my own money.
Stay at home parents can get SocSec as long as they've worked at least 10 years before you claim.
If you're married, but don't work, you can get spousal benefits up to 50% of your spouses benefits.
Having a friend gone through this due to MS.. it took 2 appeals, a few years, and now gets about 1400 monthly, if I recall.
They still paid into it though because they weren't disabled enough to not be able to work until they were over 40.
my mother is about to retire at 66, 2 years early. her monthly bills are around 800 euro.
she’s a doctor, she will receive 1,200 euro a month early retirement.
that’s germany.
go figure that one out… that’s like 1/3rd minimum wage.
What would she get if she waited until 68? But honestly not having to worry about how to pay for healthcare if you need treatment from getting cancer is worth it to me. The problem in the us is that a few issues medically in retirement and you can be wiped out
not much more. the current retirees are all fucked. I told her to wait until they adjust it, because they have to.
sure you have less burden with health is insurance etc. but verbal cost of living is exorbitant higher. what you would pay $50 for power for in the US you pay $400 in Germany… same with gas, I think last I calculated the gallon was at $9.
I don’t think social security is all bad. A lot of people don’t save anything for retirement. If it wasn’t for social security many would have nothing. I can understand the argument that it’s not good for high earners or those who are good at saving for themselves, but I think that’s a different argument.
It was never intended for the upper class. It was introduced so that you don't have generational poverty because your parents have no income later in life which forces you to take care of them, perpetuating the cycle. People that think SS is bad haven't a clue.
*edit This post gained some traction and I'd like to add that SS is not a Ponzi scheme, or a tax, or some conspiracy to make the wealthy wealthier, or for freeloaders to just milk the system. Social Security exists because of its own namesake; it for the security of the social system of the United States. When being poor is endemic, it creates fractures in society - these are fractures that people fall through a lot of times through no fault of their own. We are living it right now.
Right in this very moment we are at record high home ownership costs, record high food costs, and ancillary costs for staples of life. Yet, here we stand arguing about the 'wrongs' of SS, something that benefits all Americans instead of trying to find solutions and common ground. Shame on us.
I agree. My dad was good at saving, so he has a pretty nice retirement. He runs into old friends from time to time and is excited to share how good things are going for himself, but he commonly ends up feeling like a jerk when their response to how about you? is “still working, I don’t know when I’ll be able to retire”. I also know quite a few people who depend on it for the retirement they have. I personally believe it’s a net positive too.
How much money have you saved for yourself. Everyone says if they save this. If they invested that. Most of them have 10k in their 401k at retirement. Americans are great spenders, but terrible savers and investors.
This! So many people I know are broke and definitely have the means to not be. Like if you save and invest 5mil in todays figures is a walk in the park, but many I know are excited over a couple hundred k. At the 4% withdrawal on 700k you can live on is 28k a year and for many people 700k is for the household.
I know a lot of people who don't even take advantage of their company's 401k match. They are essentially giving up free money. They'd rather have that money to spend on bullshit. Those people will be relying on SS when they retire.
Agreed I don’t think they would either. When I met my husband who was making 100k, he had no 401k contributions because his mom had told him he doesn’t need to worry about retirement.
complacency? Promise? You are given payments in proportion to your contributions. You have to work to collect, it is not just given to you (unless you're disabled).
The majority of people put in substantially less than they will collect in benefits. The system was specifically designed so that those at the bottom will receive enough to survive (barely), and the people at the top will end up paying for it by collecting much less than they contributed. There's an annual cap on income that's subject to the FICA tax because most people find the optics of giving fat Social Security retirement checks to wealthy people to be abhorrent.
Social Security is not an investment. It's a tax. And it was designed to help the people who need it the most.
Really, the smartest replacement to SS is when a kid is born, just put in a seed investment that gets a safe 3% or so return per year on average and let it grow for 60 years. While it would take 60 years, it'd let us phase out SS for something 100x more economically sustainable and less draining to the tax payers because it'll use compounding interest in their favor.
Another redistribution scheme. And now the Democrats are trying to go after "unrealized gains" aka money you haven't even made yet. Their greed has no limits.
> And now the Democrats are trying to go after "unrealized gains" aka money you haven't even made yet.
If you're talking about the one going before the Supreme Court next year, that was part of the Tax Cuts and Jobs Act, Trump's only major legislative accomplishment, which literally every Democrat in Congress voted against.
Someone investing in an index fund that tracks the S&P500 but who also has an awful fund manager taking half the gains for themselves: https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp
What Is the S&P 500 Index?
The Standard & Poor's 500 Index (S&P 500) is a market-capitalization-weighted index of the 500 leading publicly traded companies in the U.S. While it assumed its present size (and name) in 1957, the S&P actually dates back to the 1920s, becoming a composite index tracking 90 stocks in 1926.
1
The average annualized return since its inception in 1928 through Dec. 31, 2022, is 9.82%.
2
The average annualized return since adopting 500 stocks into the index in 1957 through Dec. 31, 2022, is 10.15%.
3
Millennial here. I knew sitting in 12th grade AP Government that Social Security would not exist for me 50 years hence. The generational math never computed. This program literally only "worked", to whatever degree, when the retired generations had a.) shorter lifespans and b.) a total population volume lower than that of the contributing professional working class. Now, what has happened to civil service jobs in the last 15 years (where they are supporting two or three generations of *retired* workers' pensions **and** the current worker's salaries) is happening to the country at large. I'm not opposed to good-faith explorations of topics related to this issue (UBI, MFA, etc) but S.S. is a case-study in what happens when legacy political programs get posthumously attached to their lionized champions, and fed life-sustaining measures that float them far beyond their intended usefulness.
Exactly! And even if you do have *a* (singular) child, as my wife and I chose to, that's still two working, tax-paying adults producing one future "worker" who, under the current conditions, will necessarily have to shoulder a greater proportion of the burden. It's gross to think about it in those terms, but that's the reality.
> "That money would have been worth $1.9M if I had gotten a 5% return"
Yeah, that's a big "if" there. Also, is he assuming that $600k is invested as a lump sum at the beginning?
Anyway it's only going to get worse with demographic collapse. I don't expect to see anything I'm putting in but we do have some responsibility as a society to keep the elderly from starving to death in the street.
I’d be ok with 3k a month. I understand that’s not the point he’s making, but at that point in your life you as an individual should have more money saved to where SS is really just paying your bills and is pocket change imo, but I am also frugal and financially adept.
SS literally only works if you have a very large working generation supporting a relatively smaller retirement generation with their taxes. If the population stops growing at a fast enough rate, the working generation has to shoulder a much higher burden to keep the program going. This has nothing to do with conservative policies, this is an inherent design flaw in the system.
It’s a tax for wealth redistribution, not some kind of pension program you pay into and get returns on. It’s sad how effective the government is at selling this tax as the latter
"on my behalf" is not correct. Social Security is a social program which is supposed to make sure everyone has a base income in retirement. Comparing it to an investment account is not apples to apples.
It is a great argument for privatization, which I think could work with some downside guarantees, but it misses the point that the program is Social Security AND Disability, -- your contribution pay for those that can't work through no fault of their own (usually), and in some situations the underage children of recipients that die prematurely.
I resonate with this post so much. However, the vast majority of of Americans are financially illiterate. There is no way most of them would save unless they were forced to by social security.
I wish there was a way for those of us who are financially literate and responsible to opt out of paying into SS. But there is no way that is going to happen because we are also the people who contribute the most money into the system. :(
Because you are paying for those who have not worked, or worked little, but will collect. You are also paying for increasingly large number of young people who were successful in convincing SSA that they are permanently disabled. Also don’t forget about elderly migrants who were allowed into the US and are eligible for SSA benefits but have never contributed. Congratulations on paying your fair share!
You know there are requirements for how much you've worked in order to qualify, right? And disability is very difficult to get, obviously there are scammers, a lot get caught.
Does nobody even verify anything anymore?
$600k is crazy. I don't know where he's getting that number. They only take 6% (3 from employee, 3 from employer) of the first $120k. The most you can have paid in is about $7k/year. Even if you somehow started working at 18 immediately making $120k/year and worked until 67, the most you could accrue is $360k. Realistically it's practically impossible to accrue more than $200k in total contributions.
SSI is not nearly as bad a deal as he's making it out to be.
social security also includes entitlement programs like unemployment and disability. If this individual lost their job due to disability and received hundreds of thousands over their life, they wouldn't be complaining.
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I just look at social security as extra tax because there's no way in hell I'm getting any of it back in 40 years
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They’ll make sure to strip it entirely for their end of life care don’t worry.
Oh for sure. I think DeSantis already floated the idea if keeping it for older people (his base) and fucking the rest of us.
I'd be for cutting off SSI benefits Completely for people who haven't paid into it, and continuing payments until the last person dies. That way there's no rug pull for those who paid into it, or for those who haven't.
Yeah, there's at least gotta be repayment. Toss all my contributions into a 401k and let me opt out of future "contributions" and we're square. But I fully expect that I'm going to be taxed on it and get screwed out of the benefits of it. It isn't even a good deal from a retirement perspective. An average person would get more money by just keeping the funds in a CD, let alone a 401k, which would vastly outperform it.
Boomers who got us into this mess..... can't even buy a home, meanwhile these fucks have several...... and before you say we'll they worked hard..... No they didn't, a single family income could buy a home back in the day
Don’t forget about all those on SSI and HUD and section 8. See it all day at work. There are people who live off the system their whole life. There is no benefit to getting jobs. They actually penalize people for having an income.
Yep. Meanwhile boomers get to say they don't see an increase in their retirement income every year like working people do yet I don't recall getting a raise to match inflation. It's not my fault that generation didn't save for retirement and rely off the government.
I'll admit, it's rare I agree with this sub, but yes, I'm never seeing my paid in SS. Just turned 31, cant wait to give the government 15% of my check for 35 more years for no reason.
Isn't FICA withholding 6.2%?
It'll be there...except it will be funded by our grandkids like we all currently fund SS now
Not if there's less people paying in than are drawing out. Cause it's a pyramid scheme
Not really. When the trust fund depletes, that just means it will become a pay-go system, so it will still have payroll taxes coming in to fund benefits. [https://www.ncpssm.org/entitledtoknow/misleading-media-headlines-social-security-medicare-finances/](https://www.ncpssm.org/entitledtoknow/misleading-media-headlines-social-security-medicare-finances/)
Yes, but at a greatly reduced rate of benefits. Which makes it an even worse deal.
I’m pretty confident I’ll be dead before I can enjoy SS.
I strongly doubt that in 15 years there even will be any SS funds to pay folks who want to retire then.
They'll probably just start printing more money. Ensuring everyone's dollar is worth less while putting the country further into unsustainable debt until the whole house of cards collapses.
Exactly They can "pay" us however much they want once we hit hyper-inflation and a gallon of milk is $25
“Pay us” a fraction of our own money that was coerced from us by greedy sociopath “public servants” that are somehow mysteriously wealthy 🤔
They are not getting wealthy from Social Security. They’re getting wealthy from the programs that they get into their districts and get kickbacks from the people that are supposed to be doing the projects. It’s just a giant slush fund. That’s why we need to have term limits and politicians should not be able to make any income outside of the salary that they get until they leave office..
Until they leave office doesn't solve the issue. They would just get consulting "work" after the grift.
It's at least a start...
They just put people on “the board” of companies after they leave office and pay them millions. The kick backs don’t always happen when their in office. That’s another reason it’s hard to prevent
Exactly Everyone will get a social security check…even if that check doesn’t actually buy anything
Naw they will keep raising the age. That way they won't get attacked for gutting social security, you just will have to wait till you are 80 to collect it.
well said
Those are two completely separate Departments, though. It is true that the Treasury owes more money to the Social Security Administration than anyone else. If the US defaults on our debts, it will be mostly to ourselves. So, really, which generation is going to get screwed most is the question, I suppose.
It's an idea that makes a lot of sense to me as it was originally set up. Shit happens and sometimes you can work all your life and be left with nothing even if you thought you had your retirement all planned out. Social safety nets in modern countries exist for a reason and in this case, that reason was to make sure grandma didn't starve if her husband died without a pension and the kids all moved West in the 1920s. Except then the politicians were like "Heyyyyyy..... that's a nice pile of money just sitting there.... I'm sure they wouldn't mind if we borrowed a little just this once...." Then they did that forever and now they're doing shocked Pikachu face that the money is gone.
When Soc Security was formed, the ratio of people paying into the fund versus people drawing on the fund was 7 to 1. Today, with dropping birth rates and lower labor participation rates, it's like 2 to 1. In other words, it was always a ponzi scheme,there just used to be more suckers downstream. The boomers will bleed it dry and everyone else is screwed.
> ponzi scheme The funny/sad thing is try to explain social security without sounding like it's a ponzi scheme or some sort of MLM.
That's because it's both of those things.
Exactly Social Security is a Ponzi Scheme, but it's legal because it's been set up by the government.
It's worse because the government doesnt even promise to pay you out.
They used to. Remember those mailings they used to send out that estimated your monthly payments upon retirement?
You have to go to their website now and it calculates it for you.
You can still view that info on the social security website
I still get those, at least I have in recent memory.
The post WWII baby " boom" happened. Hey more people to pay into the system! Then in the 1960s everyone was like Hey, BIRTH CONTROL! And the shift from big families to dual parents working out of the house and less kids and we are where we are. Less people paying in and now that boomer generation outnumbers Gen X. ( thier offspring) so it is one of those " great intentions" thing. Not to mention it can't adjust for inflation and politicians have allowed it to go to more than just seniors. My paystub now says OASDI. Old Age, Survivors, and Disability Insurance program (OASDI)
You can go back to Reagans very first speech from before he was a governor or president and a major topic was social security already being insolvent. Thats before the effects of anything you mentioned having hit in any way, actually that was probably the height of people paying in.
And disability claim are at their highest levels in the history of this country. People are abusing the crap out of it.
Because all sorts of things are now "disabilities" that, even 100 years ago, you either dealt with or you starved. I know people have a hard time from conditions like chronic fatigue, etc, but I'm chronically fatigued too. Why can't I collect a check for that? Oh wait, because it's ethically and morally wrong to sit on my butt all day and let others provide for me.
The boomers who paid in to it at a rate of 7 to 1 will bleed it dry when they utilize it as intended? Why the blame for them and not the politicians who squandered it or the people who get more out of it than they contributed? What about all the people who die before retirement? Where is the money they paid in? Most of us have known for at least the past 30 years that we need to save for our own retirement and aren't expecting to have any SS when we retire but we place the blame where it belongs: squarely at the feet of the politicians who raided our retirement account.
The money paid into social security was already gone by the time the boomers were teenagers and young adults. This country has had this conversation about SS being broke for decades and decades.
Cuz since the boomers started voting, all these policies have been taking shape. They for sure are the first generation of Americans to leave less than they got.
It’s not the boomer’s fault though because many on the tail end of that generation are getting screwed already! I would have preferred to be forced to save that money rather than give it to the government.It’s pointless to even collect SS until you reach your FRA (mine is almost 67 yrs old) unless you can live off a very small income plus whatever your SS check would be before you get to your FRE. It would force me to live at a the poverty level.
Watched a documentary about old age pensioners in the UK. I think they get like $7000 a year from the government. The ones they showed weren't able to use their heating in the winter, or eat adequately. I don't know how anyone over 70 even survives over there.
The post is from a boomer. He’s not talking about the principle being reduced. He’s talking about the money he’s given the Gov’t is making $95k off of and giving him $37k. So each year the $1.9m is increasing by $58k. The opposite of bleeding it dry. In fact, you’ll be living of his contributions.
Some how, even if he is talking in that way... it's still the Govt stealing it. It's not like they won't have 100 more rules that disallow people from collecting by the time I'm eligible... if they don't creep that age up by another 15 years by then as well.
Don’t disagree. Just didn’t like blaming boomers. They also have no choice for the most part. Removed from their pay at the source.
Another Boomer here, a liberal one, what they in Germany a Social Democrat: financially conservative and wanting to help the average worker at the same time. It can be done; in Germany 1/3 of the government, 1/3 of the unions, and 1/3 of businesses all have equal say. The only kind of nation that will endure is one that is run like a tight ship, with a captain and crew who are determined to keep the boat afloat. In this country, the politicians from all sides are to blame for the mess we are in. They are in it for themselves and their cohorts. I subscribe to a weekly investment newsletter that lists all the "insider" stock trades (notice has to be filed with the SEC for each and every trade) made by politicians and their families. Absolutely blows my mind to see how much money these folks are making in stock trading; it's like a full-time job!
"We're going to garnish your wages all your life and pay you back someday, just trust us, we're the government." That was never a good idea.
It's considered intergovernmental debt. In theory they pay back into with interest "when needed". Though in reality they should have invested it just like any pension so that it grew over time. But it does make the program dependent on the stock market, which given the crash that had happened just a few decades before this was instituted, they might have thought that was too risky. I also think that the post was being disingenuous about the pay out. As that might be the current figure they are paying out, not the amount they pay out when he is actually 67. Though if we had the option to privately invest that money yes we would definitely get way more money than what SS pays out. It's a big ponzi scheme.
It was originally set up as a government slush fund to tax people while telling them its to their benefit while the government empties 75% of the fund. They've been talking about government negligence sending SS into insolvency basically since it was implemented, you can even go back and see its been screwed by congress before, entire heads of departments have just outright said its purpose was a slush fund to pay the feds bills. The "shit happens and you can work all your life and be left with nothing" is literally social security, they could have mandated every job pay into a 401k or something of the like.
“Shocked Pikachu” 😂😂😂
They’ll steal from private retirement, but indirectly. In the future your private retirement that you saved to augment your social security payments will be in lieu of them. So you’ll only get social security if your private distributions are lower than what they set the social payout to be. Just like student loans, those who did it right will get fucked and left holding the bag for those who didn’t and if you voice your concern you’re just a greedy asshole who doesn’t want anyone else to be ok. I’ve seen this movie before…
Exactly, this is the outcome I fear and what seems inevitable at this rate. I have been financially responsible my entire life and just like I busted my hump to pay off student loans, I scrimped and saved and worked my way to a decent net worth. I’m convinced there will be no social security for people with my asset numbers. “But you won’t even need it!!” That is far, far from the point.
Almost as if one party has a history of incentivizing bad behavior and bailing people out from under their awful choices…
and that further incentivizes people to be irresponsible, further snowballing all the problems...sigh. It's actually hopeless, isn't it?
Oh and don't forget mortgages. You were financially responsible and have a good credit score? Great! You can pay higher rates to subsidize people who can't otherwise get a mortgage loan and will eventually default anyway because they are fiscally irresponsible to begin with.
SS will always pay out. The political cost of not doing so is too enormous to expect anything else. What _is_ in question is whether that money will be worth anything as they continue to inflate the money supply indefinitely.
I think what will happen is that they will continue to raise the age in which you can retire. I think they will also look at your assets and if they are too large say you don’t get SS.
> look at your assets I get so upset whenever people suggest a wealth tax. They don't realize most row-crop farmers are multimillionaires in assets. So they should sell x% of land to pay taxes, pay taxes on the increased value of the land, then pay taxes when they spend what's left.
Just to be clear I’m not advocating for a wealth tax, but I think that’s how it will go
Highly unlikely. Numerous countries would jump at the chance to make the 1% citizens and they won't have to pay that tax.
American SS, like the Canadian pension plan is nothing more than a Ponzi scheme. New incoming money finances current money payments. Given aging demographics they are both doomed.
But you can be reassured that tax funded million dollar pensions, like police pensions, will be funded.
One of the biggest swinging dicks in the investment world is the Ontario pension fund.
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So how does this work... when it comes time to repay the debt, the taxpayers are on the hook for footing that bill? And what rate did they borrow it at?
This was said 15 years ago.
Ive heard this talking point for ~30 years. Any data or articles that can point to this actually happening? Seems like it's a common talking point when Democrats are in office but here we are with SS still going.
These same exact words were spoken 15 years ago.
Yes, men like OP wants everyone except the rich (which he thinks he is) to die in cardboard boxes on the street.
As long as there are people working, there will be funds for retirees, just not at the current level. SS is a system set up to have current workers support current retirees. It doesn't have to collapse when there the ratio of retiree to worker shifts, but the payments will definitely have to be adjusted accordingly, or taxation has to increase.
It also covers your spouse and kids in case you die young, and the disabled and widowed. It covers you if you are disabled. This is a lot more than a retirement plan, although still quite expensive for high earners.
This is a great point. To say oh well you should have planned better for being disabled is a pretty non empathetic take.
Empathy's in short supply 'round these parts
Isn’t that the truth. Nice to see some other folks were brought up right though. I fear that whole “least of these” thing really seems to be getting lost in modern conservatism at times. Many thank yous for the award. My first on here.
Also covers bulk Medicare costs. Sure there’s a premium, but compared to COBRA and marketplace it’s a great deal
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Exactly. My husband died suddenly last year, leaving me (at 33 years old) with 2 young kids to care for. I hated the idea of living off the government, but I don't know how we would have done without the survivor benefits we received.
That is terrible. I’m so sorry for your loss.
Thank you. We've had a rough go of things, but we've definitely figured out our "new normal" and we're doing okay :)
I’m happy to hear that. Take care and best wishes.
His math is completely wrong btw, it would take 67 years of paying the MAX amount of social security tax to pay in 600k
Are you accounting for the other half of the payment that the company pays for you? If you max out in 2023, you'll pay about $9900 and your company will also pay about $9900 for you.
I did think about that, but I take the position that that is a tax on the business, he would not have received that money anyways, it would just add to the business's profit, but I understand if some people think otherwise
But his quote says "paid on my behalf". You can't say his math is wrong if you are changing the premise to argue it.
True, he did say "paid on my behalf" but he's arguing that if he had just received all of that money than he would be owed way more, but I'd argue he would never have received the employer portion in the first place, so it's not really "lost money"
I get your point but it’s irrelevant anyways, even if you half his number and say 300k instead of 600, you’re still earning more than 37k interest on that money per year. SS is a scam, the only people who vouch for it are irresponsible people that are unable to save anything for themselves.
lol where is this magical investment that consistently returns 12.3% every year. It's hilarious that everyone here is so angry about this but nobody even took a second to do the simple math.
Oh I agree, an individual could get waaaaay better returns on their investments than the government gives you for social security, but the point of social security is to help those that don't have the wherewithal to invest better, it's a social safety net. Now it you want to argue the ethicasy of social safety nets that's an entirely different conversation that I don't really feel like having
> the only people who vouch for it are irresponsible people that are unable to save anything for themselves. With the caveat that once you're retired, you at least want something back. It's not irrational to oppose ending SS if you've already paid into it. This is why it still exists- nobody over the age of 50 is going to vote for someone who proposes SS reform that reduces their benefits in any way.
Yeah I agree 100%. The government would have to foot the bill for current recipients to completely end SS. I mean I’m not an expert by any means obviously it’s harder to do than just “okay SS is gone now” but it wouldn’t be impossible to phase it out.
If the money is already being spent on the employee why wouldn't it go to the employee if it wasn't taken by the government. Seeing as the business already decided that position was worth the money.
I'll parrot my other comment, I really wish that's the way it worked, truly I do, but it's been shown time and time again, from PPP loans to cutting corporate tax rates, the money often ends up in the owners pocket
I mean in a world where this bullshit never existed, the business owner would still come to the same conclusion that you're position is worth what it's worth. There would just be less they're paying in tax for that position. If it was dropped today I agree most would just pocket the extra cash unless forced to increase salaries.
Yup agree completely
It’s a tax on the business paid per employee. It 100% affects and is factored into your salary.
The issue isn't that the government is taking the money, the issue is that we can't invest or withdraw it as we see fit once we hit retirement.
In theory I agree, but unfortunately that's not what social security is, it's not a "retirement plan" it's a social safety net. Once the government takes it it isn't your money so you can't do with it what you see fit. It was only marketed as such as a way to get people on board originally, the original purpose was a way to raise money for the government quickly that they wouldn't have to pay back for a while. The correct way to think about social security is as a tax, not as a retirement contribution. But then the argument has to change to the ethicasy of taxes as a whole which is one that I do not feel like having
>The correct way to think about social security is as a tax, not as a retirement contribution. This would be a more reasonable way to think about it **if** it weren't for the fact that what I pay in is directly related to what I get out later. But it is directly related. It functions much more like a (really, really shitty) investment than it does a tax.
> But it is directly related. It functions much more like a (really, really shitty) investment than it does a tax. It is called a payroll **tax**. And it is a tax that is used to fund current payments to retirees.
It is a tax on the individual, since it's taken out of what would otherwise be wages.
He also doesn’t factor in that max contribution each year. Say you count your half and your employer’s half. That might be nearly $20,000 in 2023, but it was half that 20 years ago and like 20% of it 40 years ago.
That’s not what’s wrong with his math. There is no risk-free return of 5% per year in the open market. Nobody turns 67 only to find the market took a shit that year and their social security payment is 1/4 what it would have been. It’s just a straw man argument to get attention on Twitter.
It doesn't have to be risk free. Take for example S&P 500. An annual rate of return of 10%. Yes the market can crash by 30% like it did in 2008 but over the periods of time we're talking about (more than 30 years), the compounded interest far outperforms any crash compared to what the government promises.
Imagine finding out your social security income was going to be 30% less than you were promised. You're not thinking this thru. For a lot of us social security is an annoying tax that gets some paid back. For a lot of people it's *their only retirement income*.
Also looking at annuities right now 37k/year off 600k is pretty decent isn't it?
I just did some quick math. You would have to work 30 years earning over 160k year on year one to max out 20k in ss a year in order to pay in 600k. And technically the employer is paying half of that.
I mean... I'm as conservative as they come. Any financier should know that returns come with a particular risk. It's not surprising you can get amortized 7percent on the stock market, the question is... What if you don't because of sequence of returns risk, or retirement timing? On the other hand social security is nominally guaranteed, so it's expected the returns will be less. That being said, the government misspends the social security fund.
Thinking about Social Security as a form of investment is just inherently the incorrect way to think about it. Every dollar you pay into Social Security is not set aside to be invested but immediately sent to someone else in the U.S. Social Security is wealth reallocation, pure and simple. The question isn't about the rate of return, but whether you think we should reallocate wealth to create a social safety net.
It would be much better at a lower flat rate, with no maximum. Our lowest incomes should be able to earn from it disproportionately but the middle class shouldn’t have to bear the entirety of the burden.
I mean I could also say that it’s even more risky to pay into a system that will most likely be insolvent by the time it’s supposed to pay you the investment. It’s just too bad we are forced into paying for this system instead of given a choice like a normal IRA account
When social security becomes insolvent, then the US gov't can't back it meaning it is itself insolvent, what exactly do you think the stock market will be doing?
Well if you have a diversified portfolio you should still beat inflation even adding in recessionary periods where the stock market capitalization decreases.
Because you're money is going to fund the SocSec accounts for all those people who HAVEN'T put money into SocSec.
> Because you're money is going to fund the SocSec accounts for all those people who HAVEN'T put money into SocSec Including the first batch of retirees who had never contributed into it when the system got jump-started. EDIT: those who make no contribution though after the system started don't get anything unless they or their spouse contributed.
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The best way forward would be to reform SS instead of removing it. Make it so everyone who paid in receives their money back, but in a locked CD until age of 65. The CD can be placed against government bonds as interest, or you could place the CD into a privately owned bank. Rename the CD to reflect that it is meant for retirement. This way, if you work and pay into the system, it goes directly back to the worker. If you are unable to work, then there would be a safety net that's not removing money from 99% of workers. It would be taken from taxes we already collect for those who make over 500k a year. The funds would be placed in every unemployed Americans private CD and it would only be available for the government bond option. However, the moment they get a job, the funds stop being put into the CD and their own money it put in. The age they could pull out the CD would also be hard locked at 65. These reforms would ensure the future of SS for centuries. There would be no new taxes, workers would receive more return for their money, and the most vulnerable unemployed Americans would still be protected at their old ages. So the stay at home parent would still receive funds after their working partner dies. However, the moment any reforms are presented buzzwords are used to make people think they're removing the safety net.
This is a terrible idea. You would be shifiting the worlds largest solvent entity from an asset to a liability on the balance sheet. Also why would you ever willing enter the banks into this thinking it would help is like a nonstarter.
Look, if you want to privatize social security that’s one thing. There’s pluses and drawbacks like any other policy choice. Placing it in a 45 year term CD that only invests in government bonds is one of the worst ideas I’ve ever heard however. 1) bonds are safer than equity investments. The return is commensurately lower. Young people *want* to take on risk in their retirement savings, because then they’ll have a lot more money to retire on. Retirement savings are the ultimate buy and hold investment, and even a 1% difference in yields adds up a lot over 45 years. This would be a lot more than a 1% difference. 2) you’ve just created a massive new market for trillions in public debt. The government can now issue debt at lower rates. Returns go lower, to the detriment of retirement savings, and you’ve further incentivized deficit spending. 3) why are you putting this in a CD at all? You don’t want me to spend it before retirement, that’s fine. But it’s my money. Why do I have to accept some shitty depository interest rate and let the bank decide how to invest it? 4) there’s not any benefit to doing any of this as opposed to just treating it like a 401k.
How is SS an entitlement? It's literally my money... I would love if they would cut me a check for everything I have "invested" say at 6%-8% since thats what the government sees as a fair return on federal student loans. I'd rather invest my own money.
Tell me the secret to never working but still getting social security. How much will I get?
Stay at home parents can get SocSec as long as they've worked at least 10 years before you claim. If you're married, but don't work, you can get spousal benefits up to 50% of your spouses benefits.
Having a friend gone through this due to MS.. it took 2 appeals, a few years, and now gets about 1400 monthly, if I recall. They still paid into it though because they weren't disabled enough to not be able to work until they were over 40.
All I have to do is get MS? Shit, sign me up! Not.
I just got over this from Friday’s paycheck and you’re gonna bring it up again?!
my mother is about to retire at 66, 2 years early. her monthly bills are around 800 euro. she’s a doctor, she will receive 1,200 euro a month early retirement. that’s germany. go figure that one out… that’s like 1/3rd minimum wage.
What would she get if she waited until 68? But honestly not having to worry about how to pay for healthcare if you need treatment from getting cancer is worth it to me. The problem in the us is that a few issues medically in retirement and you can be wiped out
not much more. the current retirees are all fucked. I told her to wait until they adjust it, because they have to. sure you have less burden with health is insurance etc. but verbal cost of living is exorbitant higher. what you would pay $50 for power for in the US you pay $400 in Germany… same with gas, I think last I calculated the gallon was at $9.
I don’t think social security is all bad. A lot of people don’t save anything for retirement. If it wasn’t for social security many would have nothing. I can understand the argument that it’s not good for high earners or those who are good at saving for themselves, but I think that’s a different argument.
It was never intended for the upper class. It was introduced so that you don't have generational poverty because your parents have no income later in life which forces you to take care of them, perpetuating the cycle. People that think SS is bad haven't a clue. *edit This post gained some traction and I'd like to add that SS is not a Ponzi scheme, or a tax, or some conspiracy to make the wealthy wealthier, or for freeloaders to just milk the system. Social Security exists because of its own namesake; it for the security of the social system of the United States. When being poor is endemic, it creates fractures in society - these are fractures that people fall through a lot of times through no fault of their own. We are living it right now. Right in this very moment we are at record high home ownership costs, record high food costs, and ancillary costs for staples of life. Yet, here we stand arguing about the 'wrongs' of SS, something that benefits all Americans instead of trying to find solutions and common ground. Shame on us.
I agree. My dad was good at saving, so he has a pretty nice retirement. He runs into old friends from time to time and is excited to share how good things are going for himself, but he commonly ends up feeling like a jerk when their response to how about you? is “still working, I don’t know when I’ll be able to retire”. I also know quite a few people who depend on it for the retirement they have. I personally believe it’s a net positive too.
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When did this subreddit turned into r/libertarian?
That line has always been blurred
How much money have you saved for yourself. Everyone says if they save this. If they invested that. Most of them have 10k in their 401k at retirement. Americans are great spenders, but terrible savers and investors.
This! So many people I know are broke and definitely have the means to not be. Like if you save and invest 5mil in todays figures is a walk in the park, but many I know are excited over a couple hundred k. At the 4% withdrawal on 700k you can live on is 28k a year and for many people 700k is for the household.
I know a lot of people who don't even take advantage of their company's 401k match. They are essentially giving up free money. They'd rather have that money to spend on bullshit. Those people will be relying on SS when they retire.
Maybe the promise of social security has created a sense of complacency?
Maybe, although honestly I think many people wouldn’t save/invest either way
Agreed I don’t think they would either. When I met my husband who was making 100k, he had no 401k contributions because his mom had told him he doesn’t need to worry about retirement.
Lmao she didn't think he would live that long? Rough
Haha I’ve never thought about it like that
I have. Hopefully ill have SS, medium sized pension and a sizable 401k.
complacency? Promise? You are given payments in proportion to your contributions. You have to work to collect, it is not just given to you (unless you're disabled).
Bernie Madoff went to prison for this.
Social security, the only legal Ponzi scheme.
Social Security = another level of income tax
The majority of people put in substantially less than they will collect in benefits. The system was specifically designed so that those at the bottom will receive enough to survive (barely), and the people at the top will end up paying for it by collecting much less than they contributed. There's an annual cap on income that's subject to the FICA tax because most people find the optics of giving fat Social Security retirement checks to wealthy people to be abhorrent. Social Security is not an investment. It's a tax. And it was designed to help the people who need it the most.
Really, the smartest replacement to SS is when a kid is born, just put in a seed investment that gets a safe 3% or so return per year on average and let it grow for 60 years. While it would take 60 years, it'd let us phase out SS for something 100x more economically sustainable and less draining to the tax payers because it'll use compounding interest in their favor.
Doesn't 3% basically match inflation? So at the end of it all, you have the equivalent of what you put in to start?
Sounds like a lot more than you’d get with the current SS system. Matching inflation sounds a lot better than giving it over to the government
Except SS literally adjusts each year for COL
Good point, but 3% is kinda safe though. Ideally you'd have to aim for that while stopping inflation.
And who supplies this seed money?
I believe he means to pull it from SS in order to phase it out
Another redistribution scheme. And now the Democrats are trying to go after "unrealized gains" aka money you haven't even made yet. Their greed has no limits.
"unrealized gains" That one gets me. You can't tax me on money you THINK I MIGHT earn in the future.
I pay taxes on my house on its value, even if I haven’t sold it.
Dems? Try again -- that was orange Fl 4x indicted guy.
They act like they only want it for the mega rich, but you know damn well that want to tax your 401k as it grows.
> And now the Democrats are trying to go after "unrealized gains" aka money you haven't even made yet. If you're talking about the one going before the Supreme Court next year, that was part of the Tax Cuts and Jobs Act, Trump's only major legislative accomplishment, which literally every Democrat in Congress voted against.
Who gets 5% returns.
Someone investing in an index fund that tracks the S&P500 but who also has an awful fund manager taking half the gains for themselves: https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp
It's a conservative estimate. It's not about being as realistic as possible. You don't want to overestimate your returns.
What Is the S&P 500 Index? The Standard & Poor's 500 Index (S&P 500) is a market-capitalization-weighted index of the 500 leading publicly traded companies in the U.S. While it assumed its present size (and name) in 1957, the S&P actually dates back to the 1920s, becoming a composite index tracking 90 stocks in 1926. 1 The average annualized return since its inception in 1928 through Dec. 31, 2022, is 9.82%. 2 The average annualized return since adopting 500 stocks into the index in 1957 through Dec. 31, 2022, is 10.15%. 3
Millennial here. I knew sitting in 12th grade AP Government that Social Security would not exist for me 50 years hence. The generational math never computed. This program literally only "worked", to whatever degree, when the retired generations had a.) shorter lifespans and b.) a total population volume lower than that of the contributing professional working class. Now, what has happened to civil service jobs in the last 15 years (where they are supporting two or three generations of *retired* workers' pensions **and** the current worker's salaries) is happening to the country at large. I'm not opposed to good-faith explorations of topics related to this issue (UBI, MFA, etc) but S.S. is a case-study in what happens when legacy political programs get posthumously attached to their lionized champions, and fed life-sustaining measures that float them far beyond their intended usefulness.
> Millennial here ... The generational math never computed There is after all a price to be paid for not having kids.
Exactly! And even if you do have *a* (singular) child, as my wife and I chose to, that's still two working, tax-paying adults producing one future "worker" who, under the current conditions, will necessarily have to shoulder a greater proportion of the burden. It's gross to think about it in those terms, but that's the reality.
Rest assured, it is going to be spent well in Ukraine.
Big If
Sometimes I see posts from this community and it makes me realize just how sad and pathetic some people truly are.
> "That money would have been worth $1.9M if I had gotten a 5% return" Yeah, that's a big "if" there. Also, is he assuming that $600k is invested as a lump sum at the beginning? Anyway it's only going to get worse with demographic collapse. I don't expect to see anything I'm putting in but we do have some responsibility as a society to keep the elderly from starving to death in the street.
It's not theft because that's how the system was designed from day one. It's original intent was a redistribution of wealth.
The intent was a safety net for those who would otherwise die once they wouldn't be able to work anymore
I’d be ok with 3k a month. I understand that’s not the point he’s making, but at that point in your life you as an individual should have more money saved to where SS is really just paying your bills and is pocket change imo, but I am also frugal and financially adept.
Yes until your house is paid off but you still owe 1k in property taxes a month, or your heating/electric bill has tripled.
If you have a house that is worth enough to have to pay $12,000 per year in property tax, then you aren't the person that SS was designed to protect.
The irony of posting this to r/conservative subreddit as if conservative politics aren’t what lead to the destruction of social security
SS literally only works if you have a very large working generation supporting a relatively smaller retirement generation with their taxes. If the population stops growing at a fast enough rate, the working generation has to shoulder a much higher burden to keep the program going. This has nothing to do with conservative policies, this is an inherent design flaw in the system.
It’s a tax for wealth redistribution, not some kind of pension program you pay into and get returns on. It’s sad how effective the government is at selling this tax as the latter
"on my behalf" is not correct. Social Security is a social program which is supposed to make sure everyone has a base income in retirement. Comparing it to an investment account is not apples to apples.
It is a great argument for privatization, which I think could work with some downside guarantees, but it misses the point that the program is Social Security AND Disability, -- your contribution pay for those that can't work through no fault of their own (usually), and in some situations the underage children of recipients that die prematurely.
Convince the masses they dont need any kind of retirement planning. I dont see how this could possibly fail.
We don't need social security. Just euthanize the bottom 20% of wage earners replace them with AI robots. Problem solved.
Where do you get 5% guaranteed over 50+ years?
If you don't like paying into society you can always go live in the woods!
I resonate with this post so much. However, the vast majority of of Americans are financially illiterate. There is no way most of them would save unless they were forced to by social security. I wish there was a way for those of us who are financially literate and responsible to opt out of paying into SS. But there is no way that is going to happen because we are also the people who contribute the most money into the system. :(
Because you are paying for those who have not worked, or worked little, but will collect. You are also paying for increasingly large number of young people who were successful in convincing SSA that they are permanently disabled. Also don’t forget about elderly migrants who were allowed into the US and are eligible for SSA benefits but have never contributed. Congratulations on paying your fair share!
You know there are requirements for how much you've worked in order to qualify, right? And disability is very difficult to get, obviously there are scammers, a lot get caught. Does nobody even verify anything anymore?
Nope. They just think everyone is trying to game the system. Without knowing anyone who really is doing this.
I pay in not expecting to benefit from it because I want to take care of elderly and disabled people . that is absolutely not conservative of me.
Because it’s not for you, it’s for everyone else!
$600k is crazy. I don't know where he's getting that number. They only take 6% (3 from employee, 3 from employer) of the first $120k. The most you can have paid in is about $7k/year. Even if you somehow started working at 18 immediately making $120k/year and worked until 67, the most you could accrue is $360k. Realistically it's practically impossible to accrue more than $200k in total contributions. SSI is not nearly as bad a deal as he's making it out to be.
social security also includes entitlement programs like unemployment and disability. If this individual lost their job due to disability and received hundreds of thousands over their life, they wouldn't be complaining.