social security : what will happen, now that trump won ?

will republicans try to privatize it, like bush in 2004, cut it, or what ? thanks
will republic
ans try to privatize it, like bush in 2004, or what ? thanks

qmuddy1 said:

will republicans try to privatize it, like bush in 2004, cut it, or what ? thanks
will republic
ans try to privatize it, like bush in 2004, or what ? thanks

Click to expand...

I do not recall if Trump spoke about fixing SS, but it does need fixing.
The numbers are there for it to be fixed through some sort of privatization,
but the plane would need to be carefully designed.
Imagine, if a person put 15% of every dollar they ever earned in an interest baring account.
The person works for 40 years, how much would be there, even at minimum wage and 1% interest?

I could see a base of say 100% of what it is, the an additional amount structured like an annuity that would be managed investments, based on standard age adjusted retirement mixes.

I'd also like to a "reevaluation law" so all those who went on SS disability, after their unemployment ran out can be "healed" and rejoin the workforce.

longview said:

I do not recall if Trump spoke about fixing SS, but it does need fixing.
The numbers are there for it to be fixed through some sort of privatization,
but the plane would need to be carefully designed.
Imagine, if a person put 15% of every dollar they ever earned in an interest baring account.
The person works for 40 years, how much would be there, even at minimum wage and 1% interest?

Click to expand...

We should have phased out SS long ago and be replaced by a system of tax free savings and a small negative tax or low guaranteed minimum income. It is much more difficult now than it would have been 10 or 20 years age, but it will become more and more difficult as demographics unfold.

longview said:

I do not recall if Trump spoke about fixing SS, but it does need fixing.
The numbers are there for it to be fixed through some sort of privatization,
but the plane would need to be carefully designed.
Imagine, if a person put 15% of every dollar they ever earned in an interest baring account.
The person works for 40 years, how much would be there, even at minimum wage and 1% interest?

Click to expand...

Most people that will really need SS cannot afford to put 15% away and they are barely getting by with what they have now. Yeah I'm sure that guy making min wage barely able to make enough money is going to be able to dish out an additional 13% of his income for this plan. :roll:

And for those that say, "Well get another job". Most jobs that people making min wage can get is retail. Retail is not a morning, afternoon, or evening type thing it is a "Here's the shifts we need you to work" and that is not very constant on the timing. To coordinate two retail jobs for some is impossible (especially ones that rely on public transportation) unless they either know their supervisor/manager personally or have an agreement. It's not cut and dry for those folks and this certainly isn't helping solve their problems.

Praxas said:

Most people that will really need SS cannot afford to put 15% away and they are barely getting by with what they have now. Yeah I'm sure that guy making min wage barely able to make enough money is going to be able to dish out an additional 13% of his income for this plan. :roll:

And for those that say, "Well get another job". Most jobs that people making min wage can get is retail. Retail is not a morning, afternoon, or evening type thing it is a "Here's the shifts we need you to work" and that is not very constant on the timing. To coordinate two retail jobs for some is impossible (especially ones that rely on public transportation) unless they either know their supervisor/manager personally or have an agreement. It's not cut and dry for those folks and this certainly isn't helping solve their problems.

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We do not ask people to contribute to SS, and they would not do so if we did, I was speaking of the 15% that is going to SS anyway.

Here's the conundrum:
No doubt, if people were to put 15% of their earnings into a diversified stock portfolio, they'd have more than enough to live on after 40 years of working, far more than they have by putting a similar amount into Social Security.

However, should the young people begin doing so, the retirees who have already put their 15% into SS would have nothing to draw on.

So, the question becomes: How do we privatize SS while honoring the commitment made to the people who started working and paying into the system 40 or more years ago?

Any ideas on that one?

longview said:

I do not recall if Trump spoke about fixing SS, but it does need fixing.

Click to expand...

He said he had no intention of fixing it. It’s a popular position among those who can’t or who refuse to do math.

The numbers are there for it to be fixed through some sort of privatization,
but the plane would need to be carefully designed.

Click to expand...

It would be pretty expensive, and require a combination of benefit cuts / tax hikes / spending increases.

[url=http://www.debatepolitics.com/polls/85770-social-security-fix-38.html?highlight=visbek#post1065305758]I did the math on one such program a while back[/url].

BLUF: it spikes the debt, but we come back to net zero and start running a surplus after 26 years. After 34 years, Social Security is returning an average of about $560 Billion to the government every year, and income grows to the point where we can begin to reduce other forms of taxation.

Imagine, if a person put 15% of every dollar they ever earned in an interest baring account.
The person works for 40 years, how much would be there, even at minimum wage and 1% interest?

Click to expand...

A person making minimum wage, working 40 hours a week, their entire working life (18 to 67), with 15% going to their account, and a 1% rate of return, would end up with $145,815.72 at retirement.

If they made [url=http://www.moneychimp.com/features/market_cagr.htm]the average return sine 1980[/url] (adjusted for inflation) of 8.13%, they would have $1,358,014.29, giving them (at 5% withdrawal) a retirement income of $67,900.

If they matched the performance of the worst-performing cohort in the post-war era (4.92%), they would have ended up with $461,503 and an annual income of $23, 076 – a 53% raise from their annual working income in retirement.

cpwill said:

He said he had no intention of fixing it. It’s a popular position among those who can’t or who refuse to do math.




It would be pretty expensive, and require a combination of benefit cuts / tax hikes / spending increases.

[url=http://www.debatepolitics.com/polls/85770-social-security-fix-38.html?highlight=visbek#post1065305758]I did the math on one such program a while back[/url].

BLUF: it spikes the debt, but we come back to net zero and start running a surplus after 26 years. After 34 years, Social Security is returning an average of about $560 Billion to the government every year, and income grows to the point where we can begin to reduce other forms of taxation.




A person making minimum wage, working 40 hours a week, their entire working life (18 to 67), with 15% going to their account, and a 1% rate of return, would end up with $145,815.72 at retirement.

If they made [url=http://www.moneychimp.com/features/market_cagr.htm]the average return sine 1980[/url] (adjusted for inflation) of 8.13%, they would have $1,358,014.29, giving them (at 5% withdrawal) a retirement income of $67,900.

If they matched the performance of the worst-performing cohort in the post-war era (4.92%), they would have ended up with $461,503 and an annual income of $23, 076 – a 53% raise from their annual working income in retirement.

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A person making minimum wage makes 7.25 * 40 * 52 = $15,080 ($290 a week or $840 a month)

15% is expecting the person to have a monthly income of $651.5 or a weekly income of $246.5 a week.


(Note though that minimum wage should be an entry position and someone willing to work wouldn't be making that from 18-67 years of age.)


>>>>

Dittohead not! said:

Here's the conundrum:
No doubt, if people were to put 15% of their earnings into a diversified stock portfolio, they'd have more than enough to live on after 40 years of working, far more than they have by putting a similar amount into Social Security.

However, should the young people begin doing so, the retirees who have already put their 15% into SS would have nothing to draw on.

So, the question becomes: How do we privatize SS while honoring the commitment made to the people who started working and paying into the system 40 or more years ago?

Any ideas on that one?

Click to expand...

It is easy first you take the several trillion dollars that is supposedly put aside from surpluses and invest this money. Then you take the current tax on SS and increase it until you can pay those on SS a decent retirement amount while still having a small surplus. You add that surplus every year to the trillions already invested and pretty soon you own the entire fortune 500, the Dow, and the New York stock exchange. Social security will be the major share holders of all the major companies in the world and the dividends alone will be enough for every American to retire in comfortably.

Dittohead not! said:

Here's the conundrum:
No doubt, if people were to put 15% of their earnings into a diversified stock portfolio, they'd have more than enough to live on after 40 years of working, far more than they have by putting a similar amount into Social Security.

However, should the young people begin doing so, the retirees who have already put their 15% into SS would have nothing to draw on.

So, the question becomes: How do we privatize SS while honoring the commitment made to the people who started working and paying into the system 40 or more years ago?

Any ideas on that one?

Click to expand...

I hawk, I hawk, I continue to hawk.


Honoring the commitment we made? Generationally speaking, Boomers made that commitment to themselves. While I am all in favor of helping out low-income retirees and ensuring (unlike our current program - which sucks) that none actually fall into poverty, I don't see why I am morally obligated to come up with the funds to cover a bounced check that my parents wrote to themselves (this is one of the many reasons why a pay-go system for retirees is deeply problematic).








Anywho, /Rant.


More seriously, we are going to have to reduce benefits to higher income earners, increase taxes, and they will probably "raise the retirement age" (which is not a good solution, as it disadvantages manual laborers and advantages white collar higher-income types). Since nothing has more time to make themselves politically problematic than an upper-middle class senior citizen who has been told his government money train might get reduced, we will probably have to do this via slowing the rates of growth, rather than actual cuts (and even then, boomers are not going to take that well.... sorry, sorry, I said /rant, I know). The downside of which is, that puts more pressure on tax-increases, especially if we try to bump the lower-income seniors up to actually keep them out of poverty.

JoeTheEconomist said:

[insert smart things which I occasionally disagree with, but which at least are always well thought out and well-sourced]

Click to expand...

Joe, do you happen to know where we could find a calculator figuring what happens if we monkey around a bit with growth rates, bend points, and percentages? Like, if I wanted to reduce the growth rate to chained CPI for the top 50% and reduce the percentage past the third bend point from 15% to 10%, where can I get some rough numbers on how that would impact?

WorldWatcher said:

A person making minimum wage makes 7.25 * 40 * 52 = $15,080 ($290 a week or $840 a month)

15% is expecting the person to have a monthly income of $651.5 or a weekly income of $246.5 a week.


(Note though that minimum wage should be an entry position and someone willing to work wouldn't be making that from 18-67 years of age.)


>>>>

Click to expand...

Someone making minimum wage is already losing 15.3% to FICA (2.9 of which is Medicare). Shifting the OASI taxes to savings/investment accounts would involve a take-home pay cut not of 15%, but of 2.6%. So they would see a reduction in take-home pay of $7.54 a week, or $30.16 a month.

PIPEWRENCH said:

It is easy first you take the several trillion dollars that is supposedly put aside from surpluses and invest this money. Then you take the current tax on SS and increase it until you can pay those on SS a decent retirement amount while still having a small surplus. You add that surplus every year to the trillions already invested and pretty soon you own the entire fortune 500, the Dow, and the New York stock exchange. Social security will be the major share holders of all the major companies in the world and the dividends alone will be enough for every American to retire in comfortably.

Click to expand...

LOL! Great idea. Start with the trillions that have already been spent.....

cpwill said:

I hawk, I hawk, I continue to hawk.


Honoring the commitment we made? Generationally speaking, Boomers made that commitment to themselves. While I am all in favor of helping out low-income retirees and ensuring (unlike our current program - which sucks) that none actually fall into poverty, I don't see why I am morally obligated to come up with the funds to cover a bounced check that my parents wrote to themselves (this is one of the many reasons why a pay-go system for retirees is deeply problematic).

Anywho, /Rant.


More seriously, we are going to have to reduce benefits to higher income earners, increase taxes, and they will probably "raise the retirement age" (which is not a good solution, as it disadvantages manual laborers and advantages white collar higher-income types). Since nothing has more time to make themselves politically problematic than an upper-middle class senior citizen who has been told his government money train might get reduced, we will probably have to do this via slowing the rates of growth, rather than actual cuts (and even then, boomers are not going to take that well.... sorry, sorry, I said /rant, I know). The downside of which is, that puts more pressure on tax-increases, especially if we try to bump the lower-income seniors up to actually keep them out of poverty.






Joe, do you happen to know where we could find a calculator figuring what happens if we monkey around a bit with growth rates, bend points, and percentages? Like, if I wanted to reduce the growth rate to chained CPI for the top 50% and reduce the percentage past the third bend point from 15% to 10%, where can I get some rough numbers on how that would impact?

Click to expand...

So, your plan is to stiff the people who were forced to put aside a hefty chunk of their income for decades? Nice!

Raising taxes? That's a poor option as it would put less money into the pockets of lower and middle classes, and lead to less consumption, putting a damper on the economy, and leading to less revenue.

Raising the retirement age could be an option, but that may have to be done anyway. People are living longer after all. Problem is, employers want younger employees in general. Try finding a job at 70, unless, of course, you're running for president. Age doesn't seem to be a factor there.

Dittohead not! said:

LOL! Great idea. Start with the trillions that have already been spent.....

Click to expand...

Oh. Everyone believes the money is safe in the bank earning interest. :lamo:lamo:

Ask all the people opposed to investing the money into something such as gold, silver, and shares of stock. Only the rich and powerful invest their money in those things because they enjoy losing all their money. Surely no person in their right mind would invest their retirement money.:roll::roll:

qmuddy1 said:

will republicans try to privatize it, like bush in 2004, cut it, or what ? thanks
will republic
ans try to privatize it, like bush in 2004, or what ? thanks

Click to expand...

I have an article pending right now. The gist of it is that the GOP will pursue the status quo. The idea that jobs will fix the system is misguided beyond words. Growth may deal with some of the problems, but it is growth 50 years out where the money comes from. Privatization is dead. It might cost as much as $30 trillion. There just aren't many other options.

cpwill said:

I hawk, I hawk, I continue to hawk.


Honoring the commitment we made? Generationally speaking, Boomers made that commitment to themselves. While I am all in favor of helping out low-income retirees and ensuring (unlike our current program - which sucks) that none actually fall into poverty, I don't see why I am morally obligated to come up with the funds to cover a bounced check that my parents wrote to themselves (this is one of the many reasons why a pay-go system for retirees is deeply problematic).

Anywho, /Rant.


More seriously, we are going to have to reduce benefits to higher income earners, increase taxes, and they will probably "raise the retirement age" (which is not a good solution, as it disadvantages manual laborers and advantages white collar higher-income types). Since nothing has more time to make themselves politically problematic than an upper-middle class senior citizen who has been told his government money train might get reduced, we will probably have to do this via slowing the rates of growth, rather than actual cuts (and even then, boomers are not going to take that well.... sorry, sorry, I said /rant, I know). The downside of which is, that puts more pressure on tax-increases, especially if we try to bump the lower-income seniors up to actually keep them out of poverty.






Joe, do you happen to know where we could find a calculator figuring what happens if we monkey around a bit with growth rates, bend points, and percentages? Like, if I wanted to reduce the growth rate to chained CPI for the top 50% and reduce the percentage past the third bend point from 15% to 10%, where can I get some rough numbers on how that would impact?

Click to expand...

The SSA provides estimates on the solvency projection :

https://www.ssa.gov/oact/solvency/provisions/

Be careful of the "and". This estimates are specifically exclusive, and you can't add the solutions together because of interaction between policy options. If we raise retirement age and change the CPI, the estimate on the value of changing the CPI assumes that you are paying benefits at the normal retirement age. Not sure if that makes sense.

Typically you see the initial benefit level reduced by changing the index from average wages to to some measure of inflation. Average wages tend to move faster than inflation. The Chain-CPI normally comes in with the COLA, which is the annual adjustment to the initial benefit level.

If you have any questions please feel free.

longview said:

I do not recall if Trump spoke about fixing SS, but it does need fixing.
The numbers are there for it to be fixed through some sort of privatization,
but the plane would need to be carefully designed.
Imagine, if a person put 15% of every dollar they ever earned in an interest baring account.
The person works for 40 years, how much would be there, even at minimum wage and 1% interest?

Click to expand...

Privatization is dead. It is mathematically impossible. It is a bad idea in 2005. Now the system is cashflow negative.

Payroll taxes have been 15.3% since 1990, or 25 years. Of that amount, 2.9% goes to Medicare for health expenses and 2.1% goes to Disability. So it is only 10.3% that goes to your retirement program.

JoeTheEconomist said:

The SSA provides estimates on the solvency projection :

https://www.ssa.gov/oact/solvency/provisions/

Be careful of the "and". This estimates are specifically exclusive, and you can't add the solutions together because of interaction between policy options. If we raise retirement age and change the CPI, the estimate on the value of changing the CPI assumes that you are paying benefits at the normal retirement age. Not sure if that makes sense.

Typically you see the initial benefit level reduced by changing the index from average wages to to some measure of inflation. Average wages tend to move faster than inflation. The Chain-CPI normally comes in with the COLA, which is the annual adjustment to the initial benefit level.

If you have any questions please feel free.

Click to expand...

I'm sorry - but that's obviously a lie. Bernie Sanders was very clear that wages were flat or falling relative to inflation, so......

Dittohead not! said:

So, your plan is to stiff the people who were forced to put aside a hefty chunk of their income for decades? Nice!

Raising taxes? That's a poor option as it would put less money into the pockets of lower and middle classes, and lead to less consumption, putting a damper on the economy, and leading to less revenue.

Raising the retirement age could be an option, but that may have to be done anyway. People are living longer after all. Problem is, employers want younger employees in general. Try finding a job at 70, unless, of course, you're running for president. Age doesn't seem to be a factor there.

Click to expand...

This is a piece that I wrote on changing the retirement age : Why the age for Social Security benefits doesn’t need to go up to 70 - MarketWatch

The gist of the piece is that people aren't really living longer. Much of the increase has occurred at a time in our lives when we are contributing to the system rather than collecting from it. Feel free to tell me where it is wrong.

Dittohead not! said:

So, your plan is to stiff the people who were forced to put aside a hefty chunk of their income for decades? Nice!

Click to expand...

No, my plan is to reduce the growth rates for upper income earners. I'd like to "stiff" them, but that's probably impossible.

Though that's an interesting definition of "stiff". In what other world are your children responsible for you bouncing a check, and stiffing you if they don't pony up?

Raising taxes? That's a poor option as it would put less money into the pockets of lower and middle classes, and lead to less consumption, putting a damper on the economy, and leading to less revenue.

Click to expand...

Yup. Too bad, eh? Sure wish we'd been more responsible, but :shrug: here we are.

Raising the retirement age could be an option, but that may have to be done anyway. People are living longer after all. Problem is, employers want younger employees in general. Try finding a job at 70, unless, of course, you're running for president. Age doesn't seem to be a factor there.

Click to expand...

That's not a bad jobs program, and, apparently, anyone can do it.




But I like the Boomer plan. We should increase spending without increasing taxing or borrowing. Magic. We're gonna use magic.

I doubt Trump has any idea of what he wants to do, this is not a high priority for him. But Ryan wants to do some things, none of which I am sure to like, and Trump wants to give Ryan some of what he wants so.....ya, this could end up not so great I am afraid.

cpwill said:

I'm sorry - but that's obviously a lie. Bernie Sanders was very clear that wages were flat or falling relative to inflation, so......

Click to expand...

I can see your but people do ask that question a lot. I am not sure where the Bernie(s) of the world get their wage data. If you look at the maximum tax limit, it was set in 1983 to $35,700. The CPI-adjusted value for that in 2016 would be $86,6xx. Instead next year the max will be 127,200.

Typically I see minimum wage as the baseline. Magically they proponents choose 1968 as the start. The reason is that Congress set the minimum wage in 1968 to the highest level ever attained by a huge margin.

Dittohead not! said:

Here's the conundrum:
No doubt, if people were to put 15% of their earnings into a diversified stock portfolio, they'd have more than enough to live on after 40 years of working, far more than they have by putting a similar amount into Social Security.

However, should the young people begin doing so, the retirees who have already put their 15% into SS would have nothing to draw on.

So, the question becomes: How do we privatize SS while honoring the commitment made to the people who started working and paying into the system 40 or more years ago?

Any ideas on that one?

Click to expand...

It can't be done mathematically. The cost might reach $30 trillion. But... you can't use 15% because it covers things unrelated to retirement. The OAS side of SS gets 10.3%.

cpwill said:

No, my plan is to reduce the growth rates for upper income earners. I'd like to "stiff" them, but that's probably impossible.

Though that's an interesting definition of "stiff". In what other world are your children responsible for you bouncing a check, and stiffing you if they don't pony up?



Yup. Too bad, eh? Sure wish we'd been more responsible, but :shrug: here we are.



That's not a bad jobs program, and, apparently, anyone can do it.




But I like the Boomer plan. We should increase spending without increasing taxing or borrowing. Magic. We're gonna use magic.

Click to expand...

I would be careful of using snapshots of today to project SS trajectory. I think our experts have seriously misjudged where it is going. When you hear a statistic like 1/3 of seniors get 90 percent of their income from SS, the data is aggregated by age over 65. The Baby Boomers are statistically weighting that aggregation down in age. Over time the future distribution of age will be very different, and not surprisingly dependence upon SS rises with age. It basically doubles. As the boomers age, the distribution of age in these statistics will normalize.