Did not know not all pay into SS.

[stevepaa]

Always learning. Went looking on web for informatin on Social Security to understand the whole issue better. I found a site that says that only wage earners pay into the system. People who live off interest from trust funds do not pay into the system. It is entirely conceivable to me that someone whio has lived off a trust fund his entire live may exhaust those funds and become a drain on the society.

So why don't we change the system to have everyone participate?

And the other issue I don not understand is why is there a CAP. When I explained this to my daughter in her 20's she thought that it was unreasonable that there was a cap at all. I tend to agree with her. And yes , I am above the CAP.

Can someone provide a historical perspective via a good website on this subject? thanks

[asphaltgambler]

The only basic explaination would be that a working-contributing persons' income can be easily monitored/ taxed by the Gov. Trust funds (and the like) being tax shelters would be much more difficult to monitor. Since there are so many different types of 'trusts' each would have to be treated on a case-by-case basis. Too time/resource consuming.

[stevepaa]

I think it could be easily done. Afterall, we all list the interest and dividends we get on our 1040 form. They do the same and then pay income taxes. There would just be an additional tax added to them.

[Moses]

Originally posted by stevepaa

So why don't we change the system to have everyone participate?

Why not change the system so that no one participates? I'm completely serious. SSI is just a Federal safety net for those who could not save adequately for retirement. It is a terribly inefficient tax. Your own elected members of congress do not contribute to SSI. Why should you?

Let the Feds provide a safety net out of the general fund. They should not compel us to participate in the SSI disaster.

[stevepaa]

Well, it has never been a disaster and is not now.
It is a very efficient sysem. Hardly anything goes into administration.

"for those who could not save adequately" very naive, things happen in life that are beyond your control, SS is an insurance policy for society that enables people to subsist if they should find themselves in unfortunate circumstances.

Congress does pay into SS. see http://www.sscommonsense.org/page30.html

A safety net from general funds would probably be like a sine curve. Now that would be a disaster.

[Superman]

Moses, I respect no one's posts more than yours so I can only imagine you do understand that ".....provide a safety net out of the General Fund" does not mean that it's free. So when you suggest an alternative source of "safety net" payments to individuals, you've probably left an important question out there, which is "Where is the money going to come from?"

[RallyJon]

I believe that we should strictly segregate welfare transfer payments from retirement savings. Of course we need a safety net for the least fortunate. But pretending that contributors are somehow saving for retirement is an exaggeration.

We need two systems: welfare for old poor people and tax subsidised retirement investment accounts for the rest of us.

[Superman]

True, Steve. Again, I appreciate your comments. Yes, $h!t happens. Unexpectedly. But also, there are people out there whose earnings leave them little practical opportunity to amass a retirement portfolio. And I'm not talking about a Bahama retirement. I'm talking about folks whose earnings are less than my pathetic tax payments. Folks whose jobs pay a number of dollars per hour that is a single digit, and who have kids. And medical expenses but no insurance. It's easy to say "He/She should have saved," but imagine looking at an income that resembles my monthly gasoline bill. Everybody wants to identify with the typical, simple, undeducated, salt-of-the-Earth waitress whose family has been democrat but who voted for Dubya.....but how may folks really do understand what it's like to have two jobs because that's what it takes to both eat and live indoors, and always worrying that a medical problem will happen to one of your kids.

Frankly, I don't expect Sally Waitress to save for retirement, in every instance.

[Moses]

Originally posted by Superman
Moses, I respect no one's posts more than yours so I can only imagine you do understand that ".....provide a safety net out of the General Fund" does not mean that it's free. So when you suggest an alternative source of "safety net" payments to individuals, you've probably left an important question out there, which is "Where is the money going to come from?"

I'm not suggesting that making SSI optional will or should decrease the overall tax burden. Not at all. What I'm getting at is the fact that a significant portion of the population still views SSI as a "retirement fund". As an investment vehicle, it is a train wreck. I would rather encourage private savings and provide Federal support to the poor and disabled who are in need. I disapprove of compulsory "investment" in SSI because it is not really an investment. It is a tax. Let's call it that and move on.

[RallyJon]

Great article on Slate about SS and retirement age: http://www.slate.com/id/2113883/

Cliffs Notes: the retirement age should be 70, not 65.

[Moses]

Originally posted by Superman


Frankly, I don't expect Sally Waitress to save for retirement, in every instance.

Then why not have compulsory savings? Require worker to set aside the money they now pay SSI in an investment of their choice? Lots of private investment means stable, low interest rates and enhances government revenue.

[stevepaa]

I think we have both now. SS is an insurance policy for poor old people, and people should save as best they can, but some do live off of SS and it really is putting something aside now for your retirement. And we have IRAs, which are tax subsidized right now.

It is there now, we just need to tweek the criteria in SS a tiny bit so that in 2050 SS will still be able to provide 100% benefits.

[Bill Verburg]

Finally someone that sees

I think we have both now. SS is an insurance policy for poor old people, and people should save as best they can, but some do live off of SS and it really is putting something aside now for your retirement. And we have IRAs, which are tax subsidized right now.

I hope our elected officials see the truth in that.

I would just add that it's not just for the poor. There are many middle class seniors that scrimped and saved all their lives but for one reason or another couldn't manage to put enough aside. The market has not been kind to investors the past 5 yrs either. Imagine having to depend on it if you had just retired in '99, yes, good diversification and planning would ameliorate the damage, but most people seem to have enough trouble balancing a check book let alone planning for retirement.

The old 3 legged stool analogy of preparing for retirement was the best, but corporations have decided to shorten or remove one leg and GW(& co) apparantly want to shorten another.

[stevepaa]

rallyjon
thanks for that web address

Yes I could see moving the age to 70. I am 56 this year and do not feel old. The only drawback is that most companies have economic pressure to get rid of the older, higher paid employee. So raising the age to 70 might mean that people still work until 70 and therby limit job opportunities for new hires. Conversely , if they retire at 65 and can't get SS payments until 70, they may go work at McDonalds, again the young lose out on job opportunities. I think that is why a change in age needs to be done over a long time period.

I also could see eliminating the CAP and aslo apply the SS tax to all income sources besides eaqrned wages.

[mikester]

I wonder why anyone who advocates the privatization of SS never recalls that the market has at time drastic ups and downs. The corporations as a whole can not be trusted with societies welfare because that isn't their job - their job is profit pure and simple granted if they do well their stock should as well but that isn't always the case. Sometimes they lie and when they are caught (Enron) and the stock crashes all of those who had their 401ks and such invested loose. I know I took a heavy beating on my 401k during the dot.com bubble burst.

Social Security is social responsibility. As Americans - United we stand. Things do need to be done to ensure some program exists if not Ss then something with the same goals.

[Moses]

Originally posted by mikester
I wonder why anyone who advocates the privatization of SS never recalls that the market has at time drastic ups and downs. The corporations as a whole can not be trusted with societies welfare because that isn't their job - their job is profit pure and simple granted if they do well their stock should as well but that isn't always the case. Sometimes they lie and when they are caught (Enron) and the stock crashes all of those who had their 401ks and such invested loose. I know I took a heavy beating on my 401k during the dot.com bubble burst.

Social Security is social responsibility. As Americans - United we stand.

I understand your concern, but I'll bet that if you compare a similar investment in regular FDIC insured passbook savings for any 20 year interval since SSI was created, SSI loses in a big way.

As a vehicle for creating wealth, SSI is a dog. I suspect folks would be better off if the government required them to put their SSI contributions in a mattress.

[s_wilwerding]

In answering the original post, no, not everyone does pay into Social Security. I don't - I work for UP, and we pay into railroad retirement, which thanks to a very smart governing board who made some wise investment decisions, is flush with cash.

I agree with what has been said about SS, though. They need to decide whether they want it to be welfare for the elderly or a forced annuity from the government. It should be one or the other, and if they want both, they need to separate them out.

[bryanthompson]

The poorest and most helpless (I said helpless, not damn lazy asses) will be taken care of, regardless of the system we use. We're a compassionate country, and whether it is charity, government social welfare programs, or even *gasp* religious organizations (like the Masons), these people will be taken care of some how.

I would prefer to handle my own money and my own retirement. I don't like the fact that the government doesn't trust me with my own money. There's enough redistribution as it is, SSI is a big fat loser for any ambitious person who wants more for themselves and their future generations.

[cstreit]

Why not put Congress on SS instead of their own Gov't subsidized plan.

THEN it would get fixed.

[competentone]

Originally posted by stevepaa
Well, it [Social Security] has never been a disaster and is not now.
It is a very efficient sysem. Hardly anything goes into administration.

What are you smoking?!

The Social Security administration itself admits it cannot be sustained as it is currently structured -- they've been predicting its collapse for years; its problems are not something new.

Social Security is a Ponzi scheme; the money from new "investors" is used to pay the "benefits" to the earlier contributors.

If anyone tried to set up a group retirement investment plan modeled after SS, they would be arrested for fraud!

SS isn't even about "retirement" anymore; the dead-weight (and growing) part of the scheme involves young people using lawyers who send them to doctors so they can get a "diagnosis" for a qualified "mental disorder" and collect disability payments through SS!

I say: Let me out! I'll plan for my own retirement and deal with risks for real disability on my own.