What will happen to Social Security? Possible preview...

techweenie · techweenie's Garage

Social Security Formula Weighed

Bush Plan to Cut Promised Benefits

By Jonathan Weisman and Mike Allen
Washington Post Staff Writers
Tuesday, January 4, 2005; Page A01

The Bush administration has signaled that it will propose changing the formula that sets initial Social Security benefit levels, cutting promised benefits by nearly a third in the coming decades, according to several Republicans close to the White House.

Under the proposal, the first-year benefits for retirees would be calculated using inflation rates rather than the rise in wages over a worker's lifetime. Because wages tend to rise considerably faster than inflation, the new formula would stunt the growth of benefits, slowly at first but more quickly by the middle of the century. The White House hopes that some, if not all, of those benefit cuts would be made up by gains in newly created personal investment accounts that would harness returns on stocks and bonds.

Entire story:

http://www.washingtonpost.com/wp-dyn/articles/A45726-2005Jan3.html?nav=rss_politics

Moses · 01-03-2005, 06:57 PM

What will happen to Social Security?

Needs Testing

I will never see a dime. Social Security will become a welfare plan for the underemployed retired.

mikester · 01-03-2005, 07:03 PM

Social Security was not intended upon inception to be a retirement program for the masses - it was intended to help those who needed it most like the disabled and the elderly who truely needed it. Most of us really should be planning for our retirement so that WE DON'T need social security benefits at all.

Isn't that obvious to anyone else? Sheesh...and I'm considered a liberal on this board.

Moses · 01-03-2005, 07:35 PM

Quote:

Originally posted by mikester
... it was intended to help those who needed it most like the disabled and the elderly who truely needed it...

No. Benefits for the disabled and elderly all became part of the program much later. The Social Security TRUST was intended as a source of retirement income for ALL workers who have contributed to the TRUST fund.

There is no "needs test" for SS benefits. Never has been. If and when they apply needs testing to the Social Security TRUST, a fundamental tenet of the program will have been breached. Imagine if they apply a "needs test" to your 401K. Maybe the government will feel they can do more of thier "good work" with a part of your 401K savings because there are so many others who have less than you do. Get the general idea?

red-beard · red-beard's Garage

The "problem" with Social Security came about when the payments were indexed to workers wages. Before this, congress had to vote, sometimes yearly, on increasing the benefit. At the time the indexing was done, this tying SS to wages was better than tying it to inflation, since wages weren't keeping up with inflation...

Wages are now increasing faster than inflation...

The reality is...Social Security was a Ponzai (pyramid) scheme and it has now finally come undone. Something has to be done to fix it. President Bush will fix it by moving to a style Chilean system.

Kahuna · 01-04-2005, 02:57 AM

The big problem with ss began when Nixon comingeld the ss monies with the general funds. Our fearless leaders have been spending it ever since to buy votes for themselves.

red-beard · red-beard's Garage

That happened under Johnson

RoninLB · 01-04-2005, 04:52 AM

The Big prob sith SS happened when people started living longer than anticipated. Politicans are scared to fix it. I don't think it'll get tweaked now, but the door will have been opened. I bet Bush will package tax reform and SS for political purposes.

red-beard · red-beard's Garage

Damn those people living longer! Some one, start passing the smokes, beer and donuts around.

red ufo · 01-04-2005, 06:05 AM

LOL Bush isn't even on his 2nd term and he is already shafting everyone on illegals and SS.

Hey if you don't want it send it to me. The monkey will make sure that next time a Enron wants to shaft your 401k they plunder your SS too!

Name a company the Bush brothers haven't run into the ground? They have ruined every financial business venture they ever tried. Might as well have Michael Jackson as his economical advisor.

From a guy who lied about 911, wmd, ubl people trust him with your retirement?

He cut your life span down with stell cem research and now will make sure your broke and unhealthy someday.

Superman · 01-04-2005, 06:45 AM

He'll attempt to reform SS, and fail. Gosh, I about busted a gut this morning, pouring coffee when a radio announcer appeared to maintain a straight face while reporting that Mr. Bush has told Congress he hopes for their cooperation in doing "big things." Big Things? Well I guess that's almost like a two-syllable word. Pretty catchy phrase. "Big Things." I nearly spilled the coffee pot.

So anyway, he'll try and fail. And hopefully, folks will notice the raping that's about to occur.

Last night I was chatting with someone who was in CA while electric power deregulation was being touted by the industry players who were hoping to make the money. Ultimately, it passed, was tried, and bilked millions of people out of billions if not trillions of dollars. The arguments against it were, of course, correct. But complex. What the voters ultimately concluded because they did not want to think about the consequences, was that deregulation will bring "competition" and "free market" forces.

Guys, water and electricity are utilities. And we already own (we the taxpayer built) the means of production and transmission and distribution. So, its a proposal to buy our electricity from us, and then turn around and sell it back to us at a profit.

Didn't mean to hijack this thread, but some things are so simple that I'm usually frustrated and disappointed at how dense some folks are. SS reform falls into this category. I'm not stupid or naive. Are you?

RallyJon · 01-04-2005, 06:46 AM

The solution is so easy. As people live longer on average, adjust the earliest age you can get benefits to match. Retiring at 65 is appropriate when you've worked in a steel mill or coal mine your whole life and can't work a day past 65. Nowadays, people have much cushier jobs and can work well past 65.

Gotta go--there is a horde of selfish AARP activists outside waiting to lynch me.

lendaddy · 01-04-2005, 07:39 AM

All we want is the ability to put our SS money into a 401K type account where we will actually earn some interest. Hell they do have guaranteed accounts in there for those who fear risk. Last I heard we were getting .01xx % return on our SS "donations" I'll take 3.5% guaranteed anyday! The argument that Wall Street will make money on this is pointless. Ofcourse they will just because of the volume increase, big whoop. You don't want a better and effective retirement plan out of spite that others will also prosper? What kind of logic is that.

Be real, the dems don't want this because it will remove their "slush spending fund". Also it is ideologically opposed to their "let Government take care of you" agenda.

All that aside I really don't see how you can argue that Bush's plan will not lead to better and larger retirement funds for those involved. Now wasn't that the whole point in the first place?

Kahuna · 01-04-2005, 09:10 AM

Quote:

All we want is the ability to put our SS money into a 401K type account where we will actually earn some interest.

isn't that caalled a Roth IRA or a 401k or a 403b or something like that

lendaddy · 01-04-2005, 09:13 AM

Quote:

Originally posted by Kahuna
isn't that caalled a Roth IRA or a 401k or a 403b or something like that

Exactly, only the limits will be raised and your money will go there INSTEAD of to the Government "SSI trust fund" for you.

Moses · 01-04-2005, 09:31 AM

Quote:

Originally posted by lendaddy
Exactly, only the limits will be raised and your money will go there INSTEAD of to the Government "SSI trust fund" for you.

Lendaddy, one of the problems with a 401K plan is that, like Social Security you are partnered with the Federal Government. Since they have provided the tax deferrment on your 401K plan, they can also revoke it at any time. It has already been discussed, but never made it out of committee. Can you imagine if the Feds decide that anyone with a net worth of more than X dollars is no longer "entitled" to the tax benefits of the 401K plan they funded for twenty years?

Think it can't happen? Wait until the entitlements have doubled and the economy tanks a bit.

P.S. I know it's frustrating, but don't go grabbing for smokes!

red ufo · 01-04-2005, 10:09 AM

LOL,

A guy who couldn't find oil in Texas and went broke is going to fix SS.

lendaddy · 01-04-2005, 10:47 AM

Quote:

Originally posted by Moses
Lendaddy, one of the problems with a 401K plan is that, like Social Security you are partnered with the Federal Government. Since they have provided the tax deferrment on your 401K plan, they can also revoke it at any time. It has already been discussed, but never made it out of committee. Can you imagine if the Feds decide that anyone with a net worth of more than X dollars is no longer "entitled" to the tax benefits of the 401K plan they funded for twenty years?

Think it can't happen? Wait until the entitlements have doubled and the economy tanks a bit.

P.S. I know it's frustrating, but don't go grabbing for smokes!

Moses, I see what you're saying but the government will always have the ability to tax us and our retirement funds regarless of how they are structured. I like my idea because it gets their filthy friggin mitts off my money right away via a proven program.

No smokey for me, been too long now

tabs · 01-04-2005, 11:05 AM

It's all very simple...take your SS contribution and figure the compounded interest (use the interest rate from 30 year T Bills) from a working liftime of contributiions and see what you come up with....and at the end you have something to leave your heirs...

Now figure out how much SS is going to give you...

You will find that your own account far out performs the governments.....

The government can not afford to give up the revenue it gets from the SS fund...the only time this will change is when the government has a negative cash flow....then it will say so sorry...

I believe that if you put a dime into the system...you should be able to get the benfits due you....you PAID for them....so you should get them...no ands ifs or butts....

Moses · 01-04-2005, 11:17 AM

Quote:

Originally posted by lendaddy
Moses, I see what you're saying but the government will always have the ability to tax us and our retirement funds regarless of how they are structured. I like my idea because it gets their filthy friggin mitts off my money right away via a proven program.

I agree. I have a 401K myself. The fact that taking my money away from me was even discussed in Washington makes me nuts. Whoever proposed that deserves a first class ass-whippin'.

The only safe money is after tax private investment, but I suspect they'll find a way to get thier mitts on that too.