View Poll Results: How Do You FIx Social Security?

Voters
24. You may not vote on this poll
  • Raise FICA tax to 14.6 %

    2 8.33%
  • Raise elegebility age

    6 25.00%
  • Eliminate or raise earning cap

    7 29.17%
  • Reduce payments to wealthy retirees

    9 37.50%
  • Adjust COLA system to reduce annual raises

    1 4.17%
  • Other, please specify

    8 33.33%
  • Eleminiate Social Security entirely

    8 33.33%
Multiple Choice Poll.
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Thread: Fixing Social Security

  1. #11
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    Re: Fixing Social Security

    I hawk, I hawk, I continue to hawk.


    ....Allow workers to opt into a partially privatized system, where of their 7.65% FICA expenditures, 5% goes into a private TSP-style account; and the Employers match follow the same. the remaining 2.65% (or, when you count the match, 5.3%) will go straight into SS, but it will be revenue for which SS will never see a liability. the cost for opting out is that part of your pay continues to go to pay for others, but the upside is that you get a combined total of 10% of your annual income going into a retirement account that belongs to you, and grows tax-free. Social Securities' revenues will instantly drop, but nowhere near as severely as their liabilities. To ensure solvency in the adjustment period (and to make it politically palatable); lift the cap. We can lift the cap on only the worker (and not the employer) if we want to encourage job-creation; or lift it on both if we need the revenue to ensure solvency, or if that's the only way to get the thing passed; here is room for compromise wiggling. Higher paid workers will see more of their money leave in the form of taxes, but those making less than $604,000 will get back even more in the form of ownership of personalized accounts (assuming the employer cap isn't lifted, and that's not figuring for the added benefit of those accounts growing tax-free), and so they will be willing to make the trade. Perhaps another compromise point would be to raise the cap to $604K. Poorer workers can either spend their lifetime building far more wealth than they ever would have seen under Social Security if they are younger, or keep the guaranteed program benefits if they are older.

    ta-da! the American people and the Government are left better off.

    how much better off?

    welllll, let's do a quick example:

    Joe graduates High School and goes to work, making 25,000 a year. Not anyone's idea of incredible pay, but there you are. Joe gets' a 2% raise every year to account for his increasing talent, experience, etc. The 10% of his income goes into a mix of funds that matches the S&P 500 Combined Annualized Growth average since 1982: 7.98% (after you account for inflation). If Joe retires nice and early at 62; his retirement fund will be worth $1,030,110, and if placed into an annuity / conservative account that generates a 5% annual return, his monthly benefit will be $4,292. That would be slightly less than his last monthly paycheck of $4,979; but still quite livable. If Joe works until he's 65, his monthly benefit will climb above his monthly income to $5,473; and if he decides (as most of us probably will) to delay retirement to 68, he's looking at a monthly retirement check of $6,966.

    And remember, Joe isn't exactly one of society's higher paid workers.

    But he also had the advantage of time. Let's say instead Joe went to two years of college, and got an associates before entering the workforce to earn that 25,000; and let's say that instead of 2%, Joe turns out not to learn new skills that well, and his annual raise above inflation is actually 0.5%. We're stacking the deck a little against ole Joe, but he still seems to come out okay; his monthly benefit at age 62 is $3,050; at age 65 it's $3,875; and at age 68 it's $4,915. It's worth noting that under this model, the most Joe ever made was $31,672 in a given year; and that his monthly retirement benefits at age 65 represents a $1,200 monthly pay increase over his monthly income. Even if Joe retires early at 62 he will have more in income off of his account than he would from working; and the longer he chooses to keep working, the greater, obviously, his return is.

    AND ALL THIS WITHOUT COSTING OLE JOE A SINGLE RED CENT. since the money was cash he was losing to taxes in the first place, his take-home pay wasn't reduced one iota; but because we partially privatized social security, Low Income Worker Joe can retire a millionaire.

    OR, if he didn't want the 'risk' of the marketplace, he could have chosen to stay with regular social (in)security. average monthly payout: about $1,100 dollars. or, roughly 1/3rd of what Joe made in our worse case scenario at age 65.


    BUT WAIT!!! WHAT IF THE MARKET TANKS!!!

    Markets recover. If the market tanks right as Joe was planning on retiring, he can work for an extra year while it rights itself, or simply choose to draw less from the account in order to leave more in there to ride the upswing. OR, if Joe makes the worst decision possible, at the worst time possible and withdraws all of his money while the market is at the low point on the trough (say, a 40% drop, similar to what we just saw), to purchase a 5% annuity... then his monthly income in our worse-case scenario at age 65 will still be more than twice what he could have expected from Social Security....


    points worth noting is that you may still have to slowly raise the retirement age to 67 as this takes effect.

  2. #12
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    Re: Fixing Social Security

    Quote Originally Posted by cpwill View Post
    I hawk, I hawk, I continue to hawk.


    ....Allow workers to opt into a partially privatized system, where of their 7.65% FICA expenditures, 5% goes into a private TSP-style account; and the Employers match follow the same. the remaining 2.65% (or, when you count the match, 5.3%) will go straight into SS, but it will be revenue for which SS will never see a liability. the cost for opting out is that part of your pay continues to go to pay for others, but the upside is that you get a combined total of 10% of your annual income going into a retirement account that belongs to you, and grows tax-free. Social Securities' revenues will instantly drop, but nowhere near as severely as their liabilities. To ensure solvency in the adjustment period (and to make it politically palatable); lift the cap. We can lift the cap on only the worker (and not the employer) if we want to encourage job-creation; or lift it on both if we need the revenue to ensure solvency, or if that's the only way to get the thing passed; here is room for compromise wiggling. Higher paid workers will see more of their money leave in the form of taxes, but those making less than $604,000 will get back even more in the form of ownership of personalized accounts (assuming the employer cap isn't lifted, and that's not figuring for the added benefit of those accounts growing tax-free), and so they will be willing to make the trade. Perhaps another compromise point would be to raise the cap to $604K. Poorer workers can either spend their lifetime building far more wealth than they ever would have seen under Social Security if they are younger, or keep the guaranteed program benefits if they are older.

    ta-da! the American people and the Government are left better off.

    how much better off?

    welllll, let's do a quick example:

    Joe graduates High School and goes to work, making 25,000 a year. Not anyone's idea of incredible pay, but there you are. Joe gets' a 2% raise every year to account for his increasing talent, experience, etc. The 10% of his income goes into a mix of funds that matches the S&P 500 Combined Annualized Growth average since 1982: 7.98% (after you account for inflation). If Joe retires nice and early at 62; his retirement fund will be worth $1,030,110, and if placed into an annuity / conservative account that generates a 5% annual return, his monthly benefit will be $4,292. That would be slightly less than his last monthly paycheck of $4,979; but still quite livable. If Joe works until he's 65, his monthly benefit will climb above his monthly income to $5,473; and if he decides (as most of us probably will) to delay retirement to 68, he's looking at a monthly retirement check of $6,966.

    And remember, Joe isn't exactly one of society's higher paid workers.

    But he also had the advantage of time. Let's say instead Joe went to two years of college, and got an associates before entering the workforce to earn that 25,000; and let's say that instead of 2%, Joe turns out not to learn new skills that well, and his annual raise above inflation is actually 0.5%. We're stacking the deck a little against ole Joe, but he still seems to come out okay; his monthly benefit at age 62 is $3,050; at age 65 it's $3,875; and at age 68 it's $4,915. It's worth noting that under this model, the most Joe ever made was $31,672 in a given year; and that his monthly retirement benefits at age 65 represents a $1,200 monthly pay increase over his monthly income. Even if Joe retires early at 62 he will have more in income off of his account than he would from working; and the longer he chooses to keep working, the greater, obviously, his return is.

    AND ALL THIS WITHOUT COSTING OLE JOE A SINGLE RED CENT. since the money was cash he was losing to taxes in the first place, his take-home pay wasn't reduced one iota; but because we partially privatized social security, Low Income Worker Joe can retire a millionaire.

    OR, if he didn't want the 'risk' of the marketplace, he could have chosen to stay with regular social (in)security. average monthly payout: about $1,100 dollars. or, roughly 1/3rd of what Joe made in our worse case scenario at age 65.


    BUT WAIT!!! WHAT IF THE MARKET TANKS!!!

    Markets recover. If the market tanks right as Joe was planning on retiring, he can work for an extra year while it rights itself, or simply choose to draw less from the account in order to leave more in there to ride the upswing. OR, if Joe makes the worst decision possible, at the worst time possible and withdraws all of his money while the market is at the low point on the trough (say, a 40% drop, similar to what we just saw), to purchase a 5% annuity... then his monthly income in our worse-case scenario at age 65 will still be more than twice what he could have expected from Social Security....


    points worth noting is that you may still have to slowly raise the retirement age to 67 as this takes effect.

    Ask the thousands upon thousands of Worldcom and Enron employees what they think about your hawk and 401ks ...they thought they were SAFE and SECURE because they had 401ks they paid into...68 yr old people that were already retired LOST IT ALL....I dont trust CEOs or corporations ONE fricken iota to protect my money. They will steal it first chance they get. Just like they stole my fathers pension and his will ...screw them...the market is manipulated by the rich for the rich

  3. #13
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    Re: Fixing Social Security

    Quote Originally Posted by lpast View Post
    Ask the thousands upon thousands of Worldcom and Enron employees what they think about your hawk and 401ks ...they thought they were SAFE and SECURE because they had 401ks they paid into...68 yr old people that were already retired LOST IT ALL....I dont trust CEOs or corporations ONE fricken iota to protect my money. They will steal it first chance they get. Just like they stole my fathers pension and his will ...screw them...the market is manipulated by the rich for the rich
    had those worldcom and enron employees (who were the victims of crime not the market) had these accounts, they would have been in a much better position. the loss of their 401(k)s would not have gutted their retirement - and they still would have been able to retire financially independent. if anything, they demonstrate the need for this switch.

  4. #14
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    Re: Fixing Social Security

    Quote Originally Posted by Cephus View Post
    The whole point has been that the money that each individual puts in, they get back out at the end. …
    Wrong. Your comments demonstrate you actually don't understand Social Security. It's not a savings plan. It's an insurance program. Again, the program doesn't run into shortfalls for a quarter century and even then it's able to pay the overwhelming majority of its obligations. Slight modifications will assure its solvency for many decades to come.
    “Real environmentalists live in cities, and they visit what's left of the wilderness as gently and respectfully as possible.” — Donna Moulton, letter to the editor, Tucson Weekly, published on August 23, 2001

  5. #15
    Bring us a shrubbery!
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    Re: Fixing Social Security

    Quote Originally Posted by Temporal View Post
    That defeats the entire purpose of social security, or insurance in general. If you only get out of it what you put in then there is no point in having insurance at all. Social security distributes the risk over the entire group so that no one person is bearing the entire burden. Without these safety nets people would either have to save huge amounts of their money to have protection from bad days and thus aren't spending; or they would have no savings at all and their productivity would be destroyed when bad days come. Both situations are harmful to our nation, which is the whole reason why social security exists in the first place. Oh, but I forgot, it's socialism and that's bad.

    I agree with other sentiments in this thread... social security in of itself is not a failed system, but it's one whose resources have been diverted for arbitrary purposes by both parties and their pet projects. And now that the economy is wrecked because of things that have nothing to do with social spending, it makes it that much easier to attack this safety net - ESPECIALLY because people need it now more than ever.

    It never occurs to people to go after the plutocratic thugs that got us in this mess in the first place. There are a few select bank accounts we could drain as punishment in order to take care of a lot of our bills. But because those people are the de facto law writers, it is much easier to just go after the middle and especially the lower classes.
    Who do you want to "punish"?
    "Hmmm...Can't decide if I want to watch "Four Houses" or give myself an Icy Hot pee hole enema..." - Blake Shelton


  6. #16
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    Re: Fixing Social Security

    Quote Originally Posted by Chappy View Post
    Wrong. Your comments demonstrate you actually don't understand Social Security. It's not a savings plan. It's an insurance program. Again, the program doesn't run into shortfalls for a quarter century and even then it's able to pay the overwhelming majority of its obligations. Slight modifications will assure its solvency for many decades to come.
    Twenty-five years is not a long time. In 25 years my dad will be of retirement age. My stepmom will have been of age for 4 years. I will be 20 years from retirement. We don't have any proposals, intentions, or suggestions for ANY modifications to the program (even "slight) coming from the legislature. Anytime somebody mentions it we get hyperbolic attack adds trying to scare seniors into thinking we're going to kick 'em out on their asses right now, today, in favor of a new system. Your rose-colored classes are a little smudged, I think.
    "Hmmm...Can't decide if I want to watch "Four Houses" or give myself an Icy Hot pee hole enema..." - Blake Shelton


  7. #17
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    Re: Fixing Social Security

    Raising the retirement age and means based testing are the best solutions. Modern medical technology has increased life expectancy which requires longer payouts, but also makes it more viable to work at an advanced age.

  8. #18
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    Re: Fixing Social Security

    A ponzi scheme should not be fixed, it should be dismantled.
    My family is more important than my party.
    -Zell Miller

  9. #19
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    Re: Fixing Social Security

    Quote Originally Posted by Cephus View Post
    You can't fix it, the only way to fix it is to go back in time and stop politicians from raiding it to pay for their other pet projects. It's doomed to failure at this point, there simply aren't enough people paying into the system to pay for the people who are coming of retirement age.

    But then again, social security was never intended as a means to pay for retirement, it's a supplement, nothing more. Anyone trying to live off social security is an idiot.
    or had been working poor their entire lives. everybody CAN'T make great wages.

    Originally Posted by johnny_rebson:

    These are the same liberals who forgot how Iraq attacked us on 9/11.


  10. #20
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    Re: Fixing Social Security

    Quote Originally Posted by rathi View Post
    Raising the retirement age and means based testing are the best solutions. Modern medical technology has increased life expectancy which requires longer payouts, but also makes it more viable to work at an advanced age.
    i disagree. i think we should eliminate the cap on earnings and raise the actual tax, at least back to where it was. we should also means test for SS recipients, on a progressive scale.

    Originally Posted by johnny_rebson:

    These are the same liberals who forgot how Iraq attacked us on 9/11.


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