Medicare Administrative costs are very low compared to their counterparts in the private sector. Fraud is a bigger issue with Medicare than Administrative Costs. I remember reading in the Business Journal a few years back where the local head of Blue Cross Blue Shield was holding up Medicare's Administrative costs as a goal for them to reach.
Actually, Medicare requires three times the paperwork of private coverage insurance, and everything signed goes to different administrators and departments for processing, sorry, but you lose on that, it's not that private insurance is exactly efficient from an administration standpoint either, but that comes from government compliance rather than strictly internals.
Only a minority of seniors earn enough to actually pay any significant taxes on their Social Security benefits.
You're not getting this are you? They did what they were required to do for the programs, they followed the law, every other argument is irrelevent, and benefits are taxed, whether they have enough in benefits or not.
Do the math. You have a median household income in the United States of 48k a year. Do away with Social Security and Medicare, and lets say that typical household saves 10% of their income for their retirement at an average annual return of 8% over the course of their working years (say for 40 years). Saving an average of 10% of your income for retirement considering all the other expenses a typical household will encounter over the course of their working lives is pretty optimistic, but just the same lets say they can do that. Considering you would no longer be paying fica taxes, you ought to be able to put aside 10% of your income for retirement.
Good, you made a point that I was holding back, in a roundabout sort of way, we are already overtaxed and the purchasing power of the U.S. dollar is diminished because of government overregulation and this makes someone's 48k a year "just enough" to live in most areas, and insufficient in others, so the idea from the party causing this problem is another entitlement that will require more money than currently used, thus will need to be funded by more tax, therefore people will then have less than 10% to save for retirement by your same math, since salaries don't automatically adjust, end even then they would lose MORE money in income tax.
If they retire at 65, then by the time they reach retirement age they are going to have around 1.2 million dollars in their retirement savings. That's a lot of money, but inflation will be working against you for 40 years, so buying power will be less.
There are ways other than lump sum payouts to keep accumulating retirement money.
When you take into account average inflation, you will be looking at around 750k of purchasing power. Still a pretty good chunk of money the problem is you got to stretch that out for you and your wife until you die, preferably at least in your early 80s.
If the representatives in washington would do something about their problematic regulations and entitlement programs then that 1.2m could have the effect of more buying power, but that would be too hard for most people politically.