Did not know not all pay into SS.

[stevepaa]

gajindabe

I think by concerted effort we could get the age limit raised, and we could tighten elegibility and some means testing..

I could support those as well as eliminating the CAP, and applying SS tax to unearned income.

[Moneyguy1]

Legion..

Read carefully..the zero sum was in reference to the short time frame. Surprised with your advanced investment acumen, you didn't catch that. And, creating wealth is not as straightforward as you might think. If a piece of real estate increases in price by 100% (ognore inflation for this example), has the owner's actual wealth increased since all othe properties in the immediate area have probebly gone up by similar percentages? Sure, the owner can refinance, substituting cash for equity. If the owner uses the cash to buy "toys", then over time, net worth goes down. If the owner invests, then he or she hopes that the investment earns enough to offset the additional expense of interest and principal payments. If not, once again, net worth goes down. And, if the real estste market turns down, and the mortgage exceeds the property value, what then? Like I said before, investment is a crapshoot.

I really do hope that your fortune maintains itself well into the future. Unfortunately, for many it will not, due to poor decisions or unfortunate events beyond their control. For these less fortunate, there has to be a solution, and whatever it is, it will ultimately come from those of us who have been more fortunate, either through luck or hard work.

BTW...I am certain you are aware of this, but you are approaching the age where more and more of your accumulated wealth should be put in less and less volatile investments.

Develop some positive feelings for those who are the victims of circumstances. One day you could be counted among them

[legion]

Originally posted by mikester
Would you have those that fail even with an attempt just go homeless?

Simplistically...yes. I think that risk exists for a reason and should not be removed. The risk of failure is what makes success great. The chance of success is what makes failure palatable. The first thing that I learned out of college is that results count, not effort.

My own father is essentially homeless right now--completely because of his own failures. He ran out of money because of his business failures; he became homeless because of his personal failures. Aside from being a total jerk, he stole/coerced me out of about $20,000. He has taken more from other family members. I recently found out that my family essentially lived off of this stolen money while I was growing up. I refuse to let him come live with me unless I get to set some ground rules...and he flat out refuses to have any conditions put on him. I haven't even gotten to mention to him what the conditions would be, he refuses just based on the principle that there would be any conditions. He knows the conditions that I would insist on would be designed to prevent him from pillaging my finances (thus being homeless myself).

As such, it would be a great risk to my and my wife's future to take in my father (financial stress, emotional stress) and at this point I'm not willing to take that risk.

[Moneyguy1]

Legion..

You live too far east for your outlook..

Buy sme acreage in Montana, stock up on ammo and weaponry (especially land mines), make certain you have no disabilities that might require medical assistance, plant crops, build a few bunkers and wait for the ultimate collapse of society. It will happen.

There is nothing wrong with libertarian POVs, except in the extreme they are unrealistic. Who will build your rifles? (dependence upon an outside source) as an example. Society is so intermeshed and complex that no individual can be totally self sufficient. It ain't a perfect system, but if we could simply take the "politics" out of politics, it might be an affordable system.

Our viewpoints are both on the same side of center, they just differ in degree.

[legion]

Originally posted by Moneyguy1
Legion..

You live too far east for your outlook..

Okay...that made me laugh.

Let me sum up my philosophy briefly. I am 26. Rather than pay in to Social Security, I would prefer to have the opportunity to take that money and invest it myself for my own future. If I am successful, I expect a gin martini at my beach-front bungalo promptly at noon when I retire. If I fail miserably, I expect to be punching out for my break at Micky D's around noon while my friends are comfortably retired. I don't expect anyone else to take care of me. As such, I don't like the idea of being forced to take care of other people. I think it should be voluntary.

I understand that most people are probably more compassionate than me. If I was appointed benevolent-dictator-of-the-world-for-life, people would fulfill this need solely through charitable giving.

On an aside, believe it or not, I stopped voting Libertarian because I felt their vision scales back the government too much.

[CamB]

Investing is NOT any "zero sum game"!!! Investing is about business and the creation of wealth. I could go into a long explanation, but don't have time right now (and am extremely surprised that you could achieve advanced degrees and not understand this).

I know Bob answered this, but I wanna add to it. I think to some extent it holds in the long term.

If the long term return of the market is 7% (which it is, I think, in the US), then if somone is earning significantly over this ... someone else has to be losing. It's not quite that simple (due to the increase in total capitalisation has new companies become part of the sharemarket), but it is at least somewhat true.

I think the big problem with your SS system is one faced in different guises around the world, and I don't think it has been adequately addressed here:

a) people retire (lets call it 65)
b) not all people choose to (or are successful in) saving for this point in time
c) society chooses to provide a safety net for these people

and... the problem

d) there are now (and in the future, forecast to be) many, many more retirees.

Tinkering with SS, inventing other methods, encouraging SERIOUS savings - none of this hides the fact that sooner or later there are going to be less workers and more calling on the safety net. The more generous this net is (in NZ we simply provide a benefit to those over 65 based on about 60% of the average wage, I think - no real strings attached. It is somewhat generous), the bigger the future problem.

Not sure what the solution is though!

[gaijindabe]

Originally posted by stevepaa
gajindabe

I think by concerted effort we could get the age limit raised, and we could tighten elegibility and some means testing..

I could support those as well as eliminating the CAP, and applying SS tax to unearned income.

We should - but Bush as already taken those retired and near retirement off the table.. Dont discount the politics in this. These old timers have one focus and they vote. We aint taking nuthing from them.

The basic justification for SS - it that it is indeed a "retirement plan". Just one run by the feds. To change the CAP and SS to unearned income just makes it a tax and a redistribution plan. Lots and lots of folks dont like that, me included.

It can function - we just need make it realistic. I like the investment part of plans proposed - government IOUs are not the most efficent use of capitol..

[CamB]

Originally posted by legion
If I fail miserably, I expect to be punching out for my break at Micky D's around noon while my friends are comfortably retired. I don't expect anyone else to take care of me. As such, I don't like the idea of being forced to take care of other people. I think it should be voluntary.

You're being too optimistic!

What if you fell ill - while working at Micky D's - and hadn't been able to afford health insurance?

[Moneyguy1]

Loved it..

Ya gotta ask the question...

What is the difference between the gumment forcibly collecting money through SS and other taxes or forcing charitable contributions?

Seems as if they are darn close to the same thing!!

PS the story of your dad does a lot to explain things. Wish things were different......

[legion]

I don't have all the answers. This is just where I stand today. Maybe my opinions will change as time goes on? When I was younger, I was libertarian to the point of anarchy...I didn't believe there should be a government.

Now, I said charitable contributions should be voluntary...it's just in my dictator-for-life scenario, that would be the only method allowed! : )

I've got to go home (at work). Thank you for the discussion. I always enjoy having my arguments intelligently challenged. I'll be thinking this one over for a while (weeks...months...years). Who knows? Maybe I'll emerge with a new position?

[stevepaa]

GAIJINDABE
(I need to learn how to copy a post in block)
(We should - but Bush as already taken those retired and near retirement off the table.. Dont discount the politics in this. These old timers have one focus and they vote. We aint taking nuthing from them.)

I am one of them and am offering up changes.

[Superman]

I asked and was told to push the QUOTE button in the lower right corner of someone's post. It works.

here, I am seeing more of the Neanderthal notion of "Let them eat cake" or "Fend for themselves, the gubmint should not be in the business of promoting irresponsibility." I understand and agree with some of this emotion, but the folks who think 'fend for themselves' is a viable option (or excuse for being greedy) are either young or not smart or both. Mercifully, I see here mostly mature folks who (even in spite of conservative leanings) recognize that taking care of the most unfortunate in our society is both a moral and a practical imperative. And again, if you don't understand the truth in what I just said then come back in twenty years and we can talk.

It seems fairly clear that with a few judicious tweeks, the current system is not going to become insolvent. And yet, there is still this strong Republican push for "privatization." Have you guys heard of the Republican party's reputation for being the party of Big Business? Any idea where that might be coming from?

And finally, if we achieve the goal that practically, morally and politically we will be forced to achieve (the retirement security of society's least fortunate), and if we still want the government to administer an investment portfolio service for individual Americans (one has to wonder why we would do this with the first goal already achieved, and also why we would task the gubmint with administration), then fine. But the current idiocy is this talk of diverting funds from an already (reportedly) insolvent gubmint program toward corporations, as a way of "saving" it. seems to me this would make it even more insolvent. So, our current "administration" seems clearly to be doing what got us into trouble in the first place. Raiding.

[Moneyguy1]

SUpe..

That's the crux of the problem!!

Less money in= less available to go out. Sounds about right for a government that likes to run on credit.

I am getting suspicious that this whole thing is like three card monte..diverting attention from other more pressing things...

[turbo6bar]

tabs is laughing his arse all the way to the bank right now. As far as I know, long-term and some short-term capital gains are also exempt from SS taxes. Rental income is also exempt (yea! for landlords).

If social security is a safety net, so be it. However, if we don't consider privatization for individuals could not the government offer the collected funds for private investment? I'd love a plan where I could access government funds at a modest short-term rate of say 6-8%. I obtain money for my investments and the government nets more return for its constituents.

moneyguy1, you're the first/only investment pessimist financial planner I've seen.
jurgen

[Moneyguy1]

Turbo6:

Card carrying pessimist and proud of it!!

Put it this way..Pessimists are very happy since their expectations are so low, they are usually pleasently surprised!!

Actually, being pessimistic re: investment is just another way of saying conservative and cautious.

[stevepaa]

I was just thinking how ironic it is that I am the one offering to raise the cap, raise the age, put ss tax on nonearned income, all of which would directly affect me, and I am in the group exempted from Bush's plan.

And then Gaijindabe is worried about what us old folks would say. I suspect the old folks who might be against what I have considered are Bush supporters. I was going to say Republican, but I am a registered Republican.

So I see the same group against more taxes in the young and old.

But just perhaps, since many of us just now exempted were raised in the glory days of self service to our nation, you might find that more of us are willing to give up some of our benefits so that our children will enjoy the same.

[asphaltgambler]

SS is not intended for those who would like to retire sipping martinis and snorting blow off a hooker's a$$ for the rest of their lives. I have my 401k for that thank you. [/B]

Holy s--t!!! You just peed on my retirement scenario