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Is Social Security Currently A Good Thing?

Is Social Security A Good Thing

  • Yes

    Votes: 31 73.8%

  • No

    Votes: 6 14.3%

  • Other

    Votes: 5 11.9%
  • Total voters
    42
If you are a broke senior...I would think so.

Otherwise...probably not.
 
Pozessed said:
I am curious of what everyone thinks about the current overall function and integrity of the social security program in the USA.
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I think Social Security as a personal "retirement account" is a good thing. For many in the labor-class, SS is the only sure path to financial security they have. Yes, if you've worked full-time for most of your adult life your employer will contribute a portion of your pay into a retirement account of some sort, i.e., 401k, IRA, annuity (pension), but in most cases these accounts are owned by their employer and the employee has very little say as to how the account is managed. So, if there is significant market volatility, the employee typically takes the biggest loss. Of course, the employer is taking the biggest risk, but the point here is there is little assurance of a safety net for the employee to protect him/her against such big financial loses.

Social Security, because it's not tied to the markets, provides a sense of long-term financial stability and security as the laborer reaches retirement. However, the sustainability of that security is constantly threatened by Congress borrowing from the Social Security Trust Fund and not providing a Cost of Living Allowance on a regular basis as a hedge against inflation. But as a retirement account for the labor-class, Social Security is a good product. I do, however, think it's wrong to tax Social Security benefits as income. After all, it's money that's already been earned. Just because the government implemented the program as a retirement account for the labor-class doesn't mean that money is being re-allocated towards another investment vehicle, i.e., a "tax deferred" Roth IRA. My view is the tax on Social Security income is "double-taxation".
 
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Pozessed said:
I am curious of what everyone thinks about the current overall function and integrity of the social security program in the USA.
Click to expand...

Excellent concept. Horrible execution. It has evolved into exactly what FDR opposed.
 
Objective Voice said:
I think Social Security as a personal "retirement account" is a good thing. For many in the labor-class, SS is the only sure path to financial security they have. Yes, if you've worked full-time for most of your adult life your employer will contribute a portion of your pay into a retirement account of some sort, i.e., 401k, IRA, annuity (pension), but in most cases these accounts are owned by their employer and the employee has very little say as to how the account is managed. So, if there is significant market volatility, the employee typically takes the biggest loss. Of course, the employer is taking the biggest risk, but the point here is there is little assurance of a safety net for the employee to protect him/her against such big financial loses.

Social Security, because it's not tied to the markets, provides a sense of long-term financial stability and security as the laborer reaches retirement. However, the sustainability of that security is constantly threatened by Congress borrowing from the Social Security Trust Fund and not providing a Cost of Living Allowance on a regular basis as a hedge against inflation. But as a retirement account for the labor-class, Social Security is a good product. I do, however, think it's wrong to tax Social Security benefits as income. After all, it's money that's already been earned. Just because the government implemented the program as a retirement account for the labor-class doesn't mean that money is being re-allocated towards another investment vehicle, i.e., a "tax deferred" Roth IRA. My view is the tax on Social Security income is "double-taxation".
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Is a not a retirement account in concept. It is supposed to be insurance which is an expense with which you manage risk - the high-cost of living beyond the ability to work. Congress has borrowed very little from the program. What it has borrowed was replaced with direct GF subsidies. The vast majority of the surplus today is interest and interest on the interest. That doesn't threaten SS. The interest earned is what makes the program solvent today. Historically, the taxation of benefits was created as a means-test to clawback the over payment of benefits. It has evolved into something else entirely now.
 
Spartacus FPV said:
I know I'll never collect, so let me opt out.
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If anyone could opt-out, everyone would. The system has a financial hole such that you will collect something. But that something is vastly less than you contributed. This doesn't alleviate poverty. It transfers it from generation to generation.
 
Astonished said:
Yes, it's insurance, we pay into it. It doesn't come from the budget. It's our money put aside for when we retire. It prevents a lot of old folks from living in the streets, which is what was happening before social security and what will happen again if the $&@*ing Republicans destroy it like they are trying to destroy everything good about the govt.
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Social Security is now pay-as-you-go system, and has been almost entirely since the day it was enacted. That means that 'your' money goes to pay for the benefits of existing retirees. Since 2010, the system hasn't put a penny aside for when anyone younger than 62 retires.
 
Astonished said:
Yes, it's insurance, we pay into it. It doesn't come from the budget. It's our money put aside for when we retire. It prevents a lot of old folks from living in the streets, which is what was happening before social security and what will happen again if the $&@*ing Republicans destroy it like they are trying to destroy everything good about the govt.
Click to expand...

It was supposed to be insurance at first, and then became a freaking retirement plan as it was expanded. Frankly I don't consider it the best investment of money. Right now we have no choice but to pay into it, and I'm too far along to do something else even if allowed. It's antiquated, and I think needs a huge upgrade. I think the safety net should be more of a mandate to invest a minimum amount (e.g., 5%) into a retirement plan of your own (e.g., IRA).
 
JoeTheEconomist said:
Social Security is now pay-as-you-go system, and has been almost entirely since the day it was enacted. That means that 'your' money goes to pay for the benefits of existing retirees. Since 2010, the system hasn't put a penny aside for when anyone younger than 62 retires.
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The problem with what you say is in 1940 the payout Ratio of Covered Workers to Beneficiaries was 160-1, 1950 that dropped to 16.5-1 and 2000 it dropped even further to 3.4-1 and the latest figures in 2013 it was 2.8-1.

That means less than three workers are contributing for every person who is retired or about to retire as compared to 1950's 16.5. Of course my and your money now pays a goodly share.

The answer is raise the full retirement age up faster (67 now) and don't pay SS to people who make a certain retirement income. I would say 100K would be a good starting point to look at.
 
American said:
It was supposed to be insurance at first, and then became a freaking retirement plan as it was expanded. Frankly I don't consider it the best investment of money. Right now we have no choice but to pay into it, and I'm too far along to do something else even if allowed. It's antiquated, and I think needs a huge upgrade. I think the safety net should be more of a mandate to invest a minimum amount (e.g., 5%) into a retirement plan of your own (e.g., IRA).
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I agree...there are too many fingers in the SS pot that the system was not originally designed to cover.
 
antiquity said:
The problem with what you say is in 1940 the payout Ratio of Covered Workers to Beneficiaries was 160-1, 1950 that dropped to 16.5-1 and 2000 it dropped even further to 3.4-1 and the latest figures in 2013 it was 2.8-1.

That means less than three workers are contributing for every person who is retired or about to retire as compared to 1950's 16.5. Of course my and your money now pays a goodly share.

The answer is raise the full retirement age up faster (67 now) and don't pay SS to people who make a certain retirement income. I would say 100K would be a good starting point to look at.
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And, not have a cap on how much of your income goes to SS.
 
joG said:
It is, what we have and what most Americans plan their retirements around. So it is not so much a question of its being a good thing. The question should be how to structure its replacement by an economically more sustainable system without doing the citizens too much damage by correcting the historical system.
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A few things:
1) Remove or move the cap up, and lower the percentage deducted if possible.
2) Shift it out of the General Fund as quickly as possible, making it an independent set-aside.
3) Possibly raise the age for benefits, subject to adjustment downward for people with health problems that prevent them from working.

it's not like the system won't work.

No, you should NOT necessarily expect to take out all of the money you put in. That's not how it works.

I've been hitting the max deduction for a couple of decades. I haven't calculated what I would need to get back to cover what I put in, but the confidence of knowing the amount stipulated on my statement will be there is an important part of my retirement plan. We have put away a good deal of money for retirement, but that extra check is an important part of the picture. If I expected to die before age 75, I wouldn't care.

I get that the extremely wealthy who don't need it don't like the system.
 
antiquity said:
The answer is raise the full retirement age up faster (67 now) and don't pay SS to people who make a certain retirement income. I would say 100K would be a good starting point to look at.
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The problem is that means testing makes it "socialism".
 
American said:
It was supposed to be insurance at first, and then became a freaking retirement plan as it was expanded. Frankly I don't consider it the best investment of money. Right now we have no choice but to pay into it, and I'm too far along to do something else even if allowed. It's antiquated, and I think needs a huge upgrade. I think the safety net should be more of a mandate to invest a minimum amount (e.g., 5%) into a retirement plan of your own (e.g., IRA).
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I could buy into that idea. But I'm with you, I've sunk A LOT of money into it. If it's to be phased out, it needs to happen fairly.
 
antiquity said:
Explain? Too me it just fine tuning and making the money payout last longer.
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It's not socialism to me, necessarily, and I don't have a problem with the idea as you stated it. I do think those on the right would object to it as socialism because it means that the folks that make the most and likely contribute the most are cut out of collecting anything because of their income. There are also a myriad of ways to adjust/hide "income", and those would need to be addressed.
 
antiquity said:
The problem with what you say is in 1940 the payout Ratio of Covered Workers to Beneficiaries was 160-1, 1950 that dropped to 16.5-1 and 2000 it dropped even further to 3.4-1 and the latest figures in 2013 it was 2.8-1.

That means less than three workers are contributing for every person who is retired or about to retire as compared to 1950's 16.5. Of course my and your money now pays a goodly share.

The answer is raise the full retirement age up faster (67 now) and don't pay SS to people who make a certain retirement income. I would say 100K would be a good starting point to look at.
Click to expand...

The problem with what you say is that in 1983 the system was within months of insolvency despite having a worker to retiree ratio of 3.5 to 1. It was likewise near insolvency in 1977. It was near insolvency in the 1950s with worker to retiree ratios of more than 10 to 1. Since 1983 with a worker to retiree ratio of 3.5 to 1 the system built a $2.8 trillion surplus. Maybe just maybe, the worker to retiree ratio does not tell us as much as we think it does.

Raising the retirement age of people who aren't living longer in retirement is no more sensible than cutting the benefits of people who are left-handed. Yes, it make bring the system into balance, but it does not address the core problems of the system.
 
JoeTheEconomist said:
The problem with what you say is that in 1983 the system was within months of insolvency despite having a worker to retiree ratio of 3.5 to 1. It was likewise near insolvency in 1977. It was near insolvency in the 1950s with worker to retiree ratios of more than 10 to 1. Since 1983 with a worker to retiree ratio of 3.5 to 1 the system built a $2.8 trillion surplus. Maybe just maybe, the worker to retiree ratio does not tell us as much as we think it does.

Raising the retirement age of people who aren't living longer in retirement is no more sensible than cutting the benefits of people who are left-handed. Yes, it make bring the system into balance, but it does not address the core problems of the system.
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You may be overlooking the fact that SS covers more than just retirement benefits. Thus more non-retirement money is flowing out now then in those years. For instance: SSD and SSI to name two of many.
 
Astonished said:
Yes, it's insurance, we pay into it. It doesn't come from the budget. It's our money put aside for when we retire. It prevents a lot of old folks from living in the streets, which is what was happening before social security and what will happen again if the $&@*ing Republicans destroy it like they are trying to destroy everything good about the govt.
Click to expand...

By definition it is a Ponzi scheme that isn't run well. The republicans SHOULD destroy it and replace it with something more financially viable. The idea of social security is one thing. The actual practice has been a mixed bag of cluster ****.


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antiquity said:
You may be overlooking the fact that SS covers more than just retirement benefits. Thus more non-retirement money is flowing out now then in those years. For instance: SSD and SSI to name two of many.
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You are overlooking the fact that SSD is financed out of a separate revenue stream. The 12.4% of wages is divided into two separate streams, 10.3 for retirement and 2.1 for DI. SSI is paid for by the general fund. So no there is no non-retirement money flowing out of Social Security OAS program. Since 1950, the cost of the program is as much as 20 fold, so on a 1950 worker to retiree basis we would have closer to 60 to 1. Again, you are ignore the obvious the ratio doesn't explain the crisis forming in SS. It is a number that is meant to get voters to accept the consequences.
 
blackjack50 said:
By definition it is a Ponzi scheme that isn't run well. The republicans SHOULD destroy it and replace it with something more financially viable. The idea of social security is one thing. The actual practice has been a mixed bag of cluster ****.


Sent from my iPhone using Tapatalk
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It's absolutely not a ponzi scheme. It's money paid in and then paid out like a pension. We've been paying into it all our lives. Our parents paid into it so their parents could retire with dignity. Then we paid in so our parents could also do so. Now it's our turn and if the idiot Republicans don't allow the next gen to pay into it, then yes it will go bust.

There's plenty of money if the republicans would stop trying to steal it.
 
American said:
It was supposed to be insurance at first, and then became a freaking retirement plan as it was expanded. Frankly I don't consider it the best investment of money. Right now we have no choice but to pay into it, and I'm too far along to do something else even if allowed. It's antiquated, and I think needs a huge upgrade. I think the safety net should be more of a mandate to invest a minimum amount (e.g., 5%) into a retirement plan of your own (e.g., IRA).
Click to expand...

I think the cap should be lifted so all Americans pay the same percentage.

Problem solved.
 
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