Social Security

[tabs]

How does Social Security equate to be an entitlement program? If you check your paycheck stubs you will find an amount withdrawn from it everytime (I know there is a max). You have paid for your Social Security benfit by a lifetime of taxes on your labour. Now some Boo Hoo will say that you withdraw far more than one ever puts in. Not if you figure a 5% to 8% compounded interest rate for 45 years or so of work. Not only that after you croak you leave money for your heirs. That is why I always thought a Privatization of SS was a good thing. The money is yours and not the governments. Now the Libs will say who is going to save the stupid from themselves or from being ripped off? The thing that the LIbs don't understand is that not everybody can be saved, yet they keep on putting the burden on the hard working to help support the frivilous ones who live for today and don't care about tommorow. It has gotten to the point that there aren't very many savers due to the safety net that the Libs are so intent on providing.

[frogger]

I want my contributions back, preferably with interest. I don't need no stinkin' program.

[Porsche-O-Phile]

Originally Posted by frogger

I want my contributions back, preferably with interest. I don't need no stinkin' program.

+1

If they offered that as an option tomorrow, I'd definitely take all mine out. Even if I had to pay tax on it.

I'd rather have $0.70 on the dollar today than possibly (probably) $0.00 on the dollar at age 65.

[tabs]

Hank Paulson mad a great point the other night on the C Rose program. The Chinese have such a high savings rate because they don't have a social safety net, they are on their own. So if they need money for an illness it comes outa pocket,and a SS system, without a pocketfull of Yuan its a basket in the river for you.

[Dueller]

Until fairly recently, the amount withheld (based on the FICA rate and the annual max contribution) was fairly small. E.g., a person who retired at age 65 15 or twenty years ago would draw out dollar for dollar all their contributions in less than 24 months. With the increased FICA max and tax rates, it is not so for the current retiree...takes them around 5 years to draw out their contributions. And that number is going up rapidly.

I think part of the problem with privatization was that it failed to allow a younger worker to garner sufficient coverage early on to protect himself/his family from destitution in the event of a catastrophic injury/disability. Of course the argument can be made as originally designed, SS was just to cover old age or widows. In any event it was never intended to be a comprehensive coverage but rather a floor to build on.

SS will never go away...there are too many people vested in the program and to0 many politicians on both sides of the aisle that view it as a sacred cow.

[Hugh R]

I got my SS statement a few months ago in the mail. It details mine, and my employers (make no mistake they are both my contributions) since 1970, collectively $181,xxx have been paid in. I did an excel spread sheet for each year assuming 3% (passbook) interest rate. Today, I would have, compounded annually only, not daily, $238,xxx. Oh, and if you did 10% return, it jumps to over $560K.

If I retire at age 66, they Feds will pay me $2,210/month. Lets see, $238,xxx/$2,210= about 108 months, or about 9 years to just get back my monies with a lousey 3% yield. Not including the interest I would have been earning during those additional nine years. What's the chance of my living to 66 plus nine years=75; according to the gubmit, for the year I was born less than 50%. And this is Today! When you consider I've got another 10 years to work at least you can double the amount and roughly double the number of years for a bull***** return on investment to about 18 years, at which point I should, statistically speaking, be dead.

Such a sweet deal, for the gubmit. Tax me, call it a retirement plan, pay me nothing in interest and bet 50:50 that I'll never see it all, and don't leave a dime to my heirs.

Oh, and if I retire at age 62 they'll give me $1607, at 66 $2,210 and at 70 $2964/month. If you guess you'll live to be 80, you actually make out better retiring at 66 than 70 in terms of uninflation adjusted dollars.

[legion]

Heck, I'd give up every dollar I put in just to earn the right to never contribute again.

And I shred the SS statements without looking at them. They're not worth the paper they are printed on for me (under 30).

[onewhippedpuppy]

Agreed. They'd be doing me a favor to just stop taking my damn money, because God knows I won't get a dime of it (38 years ago).

[gatotom]

social security.......all I can say when I get it in 6 more yrs is that I hope it will pay my boat payment.

We should be so lucky to get what our government retired people get, I believe its 70% of your last 3 highest yrs wages. Now thats a retirement system.

[Hugh R]

Gatotom

Yeah, and in many cases, that includes the calcs for all time including overtime. I know a number of police and fire who did lots of OT last three years and collected something like 110% of their real base pay prior to retirement. In Burbank, CA police and fire and pension out at 50 with 20 years service, nice. I must be the fool, cause its certainly not them.

[Dueller]

Originally Posted by gatotom

social security.......all I can say when I get it in 6 more yrs is that I hope it will pay my boat payment.

We should be so lucky to get what our government retired people get, I believe its 70% of your last 3 highest yrs wages. Now thats a retirement system.

Actually the federal employee retirement system was revamped about 20 years ago...not nearly the deal now it was then. Of course many folks were grandfathered in. Even in the original FERS they used high 5 years and it was dependent on years of service: i.e., 35% w/25 years at age 55; 40% w/25 years at age 60; 50% w/30 years art age 65, etc. Very convoluted formulas. Plus it was all taxeable.

[Tobra]

Hugh, unless you have always been self employed, you kick down 7.65% and your employer kicks in the same, unless it went up again, did not look at my 2008 book as it just came in the mail today. How is it a mistake to say the 7.65% your employer kicks in is not their money and if so, how do I get out of paying my end for my employees?

Tabs, I see it more as a government run pyramid scam, rather than an entitlement program.

It will be collapsing under its own weight soon

[gatotom]

Hugh R, no you are not the fool, I am.....been self employed most of my life.

Dueller, is this the same system for senators, etc. and military personal. My youngest son is at USNA and I thought that after 20 yrs service he gets 70% and if he does 30 yrs its 90%

[Hugh R]

Originally Posted by Tobra

Hugh, unless you have always been self employed, you kick down 7.65% and your employer kicks in the same,

Not in reality, that's the myth that the SS Admin wants you to buy into. The cost of employing you is the market clearing priice, including what your employer must pay for the employers social security tax. hence, your really paying the employers share as well.

[tabs]

Thank LBJ for robbing the SS system...the Great Society....he was the one that started putting SS funds in the General Fund and leaving an IOU for futher generations to pay.

LBJ has been touted as the GREAT LIBERAL Equalizer...the helper of the downtrodden...well it seems that he trodded on more people than he helped..OH I get it he helped himself and his friend....Yep your right the Great Liberal equalizer.

[on2wheels52]

I'm going to start drawing at 62 (seven years) if that option is still available. Seems like leaving money on the table to wait to 65 or later.
Jim

[Dueller]

Originally Posted by tabs

Thank LBJ for robbing the SS system...the Great Society....he was the one that started putting SS funds in the General Fund and leaving an IOU for futher generations to pay.

LBJ has been touted as the GREAT LIBERAL Equalizer...the helper of the downtrodden...well it seems that he trodded on more people than he helped..OH I get it he helped himself and his friend....Yep your right the Great Liberal equalizer.

Agreed, Tabs...but what about all that followed him? Are they totally blameless for not rectifying the problem?

[Hugh R]

Actually, if you look at 62 verus 66 or 70 and you add in the value of interest of the money, meaning say you took it and put it immediately in a 3% passbook savings account verus waiting each 4 or 8 more years to get money, the 62 options makes much more financial sense. Unfortunately 65/66 is the nut for me with my employer in terms of years of vesting.

[tabs]

Originally Posted by Dueller

Agreed, Tabs...but what about all that followed him? Are they totally blameless for not rectifying the problem?

When has a new administration ever reversed a former admins policy? Income taxes in 1913 etc.

[Dueller]

Originally Posted by on2wheels52

I'm going to start drawing at 62 (seven years) if that option is still available. Seems like leaving money on the table to wait to 65 or later.
Jim

Hate to break it to you but the the "full" retirement age has been going up And to draw at 62 you'll take a bigger hit (25% reduction versus the previous 20% reduction). I think your retirement age for "full" unreduced benefits is now 66 not 65.

Here's a chart that explains it:

http://www.ssa.gov/retire2/agereduction.htm