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Shoud Social Security be Phased Out & Replaced With Private Investments

How About Privatizing Social Security

  • Yes

    Votes: 20 21.3%

  • No

    Votes: 70 74.5%

  • Maybe

    Votes: 4 4.3%
  • Total voters
    94
  • Poll closed .
LesGovt said:
Would you be in favor of an investment plan that would be phased in over the next 20 to 50 years, where at the end no money would go to the Federal Government? You could invest in mutual funds or Certificate of Deposits on a weekly basis of 12% of your income with 6% coming from your paycheck and 6% coming from your employer. You could not touch the money under the same basic terms as Social Security.
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No, this idiotic idea fails to grasp the single most important part of Social Security. It's the Security part. Social Security exists specificaly to eliminate any risk from the portfolio to guarentee we never end up in a situation where elderly people cannot afford the basic necessities of life because we know if they do it would be cruel and inhumane for us not to provide it for them. All Mutal funds and private investments carry risk, that's why they pay higher interest rates. There is always a chance that if everyone is dependent on private investments an economic catastrophe could whipe out those investments and leave people with nothing at a time, when they do not have the physical or mental ability to fend for themselves and that is unacceptable.
 
LesGovt said:
Would you be in favor of an investment plan that would be phased in over the next 20 to 50 years, where at the end no money would go to the Federal Government? You could invest in mutual funds or Certificate of Deposits on a weekly basis of 12% of your income with 6% coming from your paycheck and 6% coming from your employer. You could not touch the money under the same basic terms as Social Security.
Click to expand...

No. The government still basically has control of your money, except now they're putting it in an even less trust-worthy institution.
 
SouthernDemocrat said:
If you invested in mutual funds starting in 1992, then you sure did lose money in your investments for periods of time. Particularly in 2000-2001 and in 2008. However, if you did not retire in 2001, then you would have made the money back again after a few years. The same is true in 2008. The problem is had you had to retire in 2001 or 2002, or 2008 or 2009, then you certainly would have been left with less money in your 401k / IRA than you planned to have. This is why it is important to start investing in a 401k or IRA at a very young age.

Also, if you are investing in mutual funds, unless they are foreign investment funds, you are investing in Wall Street.
Click to expand...

Wrong. I retired in 2009. When you invest on a regular basis, when the market drops you purchase more shares of the funds. When the price of the shares rise, the value of your shares goes up more than they would have if they had remained level or if there had been a steady, but small increase. Please allow me to show everyone how dollar cost averaging works:

MonthAmt investedPrice per Share# Shares Purchased
Jan$100 $10 10
Feb$100 $9 11.11111
Mar$100 $9 11.11111
Apr$100 $8 12.5
May$100 $8 12.5
Jun$100 $8 12.5
Jul$100 $8 12.5
Aug$100 $7 14.28571
Sep$100 $8 12.5
Oct$100 $8 12.5
Nov$100 $8 12.5
Dec$100 $9 11.1111
$1,200 $9 145.11903
$1,306.07

Had I been able to invest from the age of 16 to 47, I would have a great deal more money than I currently have. Why is that? Because Social Security is normally outpaced by the mutual fund industry. Also, as you build up money in the funds, compounding takes over and the funds grow even faster. Now, one of the places I put money was in an account that guaranteed 7% per year.

As for investing, when one invests in mutual funds, the investment is in companies, utilities, etc. One does not necessarily own any part of Goldman Sachs, Fidelity, or any other company. You might own Heinz, Ford Motor Company, Exxon, and a myriad of other companies.
 
SmokeAndMirrors said:
No. The government still basically has control of your money, except now they're putting it in an even less trust-worthy institution.
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Under this program, the government might only say that you have to put in a minimum of 6%, and they might say that you cannot invest directly in Exxon or Apple. And, you cannot take out your money until at least the age of 62. Besides that, I don't see how they control your money. Social Security is not a very trust-worthy program. The mutual fund market is far more reliable.
 
MrWonka said:
No, this idiotic idea fails to grasp the single most important part of Social Security. It's the Security part. Social Security exists specificaly to eliminate any risk from the portfolio to guarentee we never end up in a situation where elderly people cannot afford the basic necessities of life because we know if they do it would be cruel and inhumane for us not to provide it for them. All Mutal funds and private investments carry risk, that's why they pay higher interest rates. There is always a chance that if everyone is dependent on private investments an economic catastrophe could whipe out those investments and leave people with nothing at a time, when they do not have the physical or mental ability to fend for themselves and that is unacceptable.
Click to expand...

You are wrong about Social Security covering the needs of the elderly. I have worked at a food pantry and many of our clients were women whose husband died and they are left with little from Social Security. If the mutual fund industry collapses, so will the Federal Government. Mutual Funds have always out-produced Social Security for the past 87 years, so long as you left the money in for the long-term.
 
It's should,not shoud.And it's not going to happen.

Wait and see.
 
chuckiechan said:
It depends on where they money is invested. California floated that idea, but the problem was the state would not exempt itself from investing some of the money in worthless state bonds, thus padding the budget with the money.

Governments cannot be trusted with you money. Ever.

I would be open to say 15% as an optional contribution, but you might as well use a private IRA and avoid all the political wrangling.
Click to expand...

Mutual Funds and CDs and not California state bonds.
 
jonny5 said:
No, just phase it out. Individuals are responsible for their own retirement, not any govt.
Click to expand...

I would be happy to agree with that; however, look at the poll results. Some detest the idea of you being responsible for your own life.
 
LesGovt said:
If the mutual fund industry collapses, so will the Federal Government.
Click to expand...

Garbage nonsense. The Federal government has survived multiple economic disasters that have ravaged the stock market.
 
SouthernDemocrat said:
What prevents you from doing that now anyway? I invest 15% of my income in my 401k.
Click to expand...

I did. Think about how much you could have if that amount were 27% and had been doing at least 12% from age 16 until you were 30 or 40 and you spend no more than you do today.
 
MrWonka said:
Garbage nonsense. The Federal government has survived multiple economic disasters that have ravaged the stock market.
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Garbage nonsense. The mutual fund industry has survived multiple economic disasters and so have the long-term investors. Please stop with the Chicken Little concept.
 
SouthernDemocrat said:
Yeah well good luck with that one because here in the real world, the reality that we all actually live in, the government would indeed bail them out and we would all pay for that.
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We arent talking about the real world, though. We're talking about trying something different.
 
LesGovt said:
I would be happy to agree with that; however, look at the poll results. Some detest the idea of you being responsible for your own life.
Click to expand...

Of course, most of the country is socialist. Thats no surprise.
 
MrWonka said:
No, this idiotic idea fails to grasp the single most important part of Social Security. It's the Security part. Social Security exists specificaly to eliminate any risk from the portfolio to guarentee we never end up in a situation where elderly people cannot afford the basic necessities of life because we know if they do it would be cruel and inhumane for us not to provide it for them. All Mutal funds and private investments carry risk, that's why they pay higher interest rates. There is always a chance that if everyone is dependent on private investments an economic catastrophe could whipe out those investments and leave people with nothing at a time, when they do not have the physical or mental ability to fend for themselves and that is unacceptable.
Click to expand...

Its acceptable to me. Im perfectly willing to take care of myself, maybe even my family, and neighbors. I have no interest in taking care others needs outside that close association. And I never gave the power to any govt to force me to. However, I will not stop you from voluntarily giving away your paycheck to help those in need. Have at it.
 
jonny5 said:
Of course, most of the country is socialist. Thats no surprise.
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I agree that many are socialist, or at least statists.
 
jonny5 said:
Its acceptable to me. Im perfectly willing to take care of myself, maybe even my family, and neighbors. I have no interest in taking care others needs outside that close association. And I never gave the power to any govt to force me to. However, I will not stop you from voluntarily giving away your paycheck to help those in need. Have at it.
Click to expand...

We gladly give money to a food bank as well as our time. I just had another poll asking about private charity and the same suspects prefer government doling out money instead of helping people become independent and self-sufficient. I agree that it is far more heartfelt when you give or serve your community where you can actually see the people and see their joy when you assist them. Throwing money at them from a faceless government through my taxes is unfulfilling and often detrimental.

My wife worked in HR for many years for a company. When pay raises were due, a few of the employees would come to her and ask that they do not get the raise as it would interfere with their government "benefits." That is a sad state of affairs. The idea should be to help people get out of poverty and not to have them wish to stay in poverty.
 
LesGovt said:
Wrong. I retired in 2009. When you invest on a regular basis, when the market drops you purchase more shares of the funds. When the price of the shares rise, the value of your shares goes up more than they would have if they had remained level or if there had been a steady, but small increase. Please allow me to show everyone how dollar cost averaging works:

MonthAmt investedPrice per Share# Shares Purchased
Jan$100 $10 10
Feb$100 $9 11.11111
Mar$100 $9 11.11111
Apr$100 $8 12.5
May$100 $8 12.5
Jun$100 $8 12.5
Jul$100 $8 12.5
Aug$100 $7 14.28571
Sep$100 $8 12.5
Oct$100 $8 12.5
Nov$100 $8 12.5
Dec$100 $9 11.1111
$1,200 $9 145.11903
$1,306.07

Had I been able to invest from the age of 16 to 47, I would have a great deal more money than I currently have. Why is that? Because Social Security is normally outpaced by the mutual fund industry. Also, as you build up money in the funds, compounding takes over and the funds grow even faster. Now, one of the places I put money was in an account that guaranteed 7% per year.

As for investing, when one invests in mutual funds, the investment is in companies, utilities, etc. One does not necessarily own any part of Goldman Sachs, Fidelity, or any other company. You might own Heinz, Ford Motor Company, Exxon, and a myriad of other companies.
Click to expand...

Yes, I understand the concept of dollar cost averaging. When the market is down you are buying more shares. However, if you have to retire when the market is down, then you are indeed retiring with a less than optimal amount of money in your retirement investment accounts. For example, it would be much better to have retired in 1999 than it would have been in 2001. This is why financial advisers recommend that you start to move more of your investments into safe low yield investments like money markets as you approach retirement.

Another point, virtually all of my retirement investments are in index funds. Despite them being unmanaged funds, I am still "investing in Wall Street". There is nothing wrong with that, but lets call a spade a spade here.
 
jonny5 said:
We arent talking about the real world, though. We're talking about trying something different.
Click to expand...

Something different that would never happen in the real world.
 
LesGovt said:
Would you be in favor of an investment plan that would be phased in over the next 20 to 50 years, where at the end no money would go to the Federal Government? You could invest in mutual funds or Certificate of Deposits on a weekly basis of 12% of your income with 6% coming from your paycheck and 6% coming from your employer. You could not touch the money under the same basic terms as Social Security.
Click to expand...

No this is equally as bad as an idea as welfare being charity based.
 
SouthernDemocrat said:
Yes, I understand the concept of dollar cost averaging. When the market is down you are buying more shares. However, if you have to retire when the market is down, then you are indeed retiring with a less than optimal amount of money in your retirement investment accounts. For example, it would be much better to have retired in 1999 than it would have been in 2001. This is why financial advisers recommend that you start to move more of your investments into safe low yield investments like money markets as you approach retirement.

Another point, virtually all of my retirement investments are in index funds. Despite them being unmanaged funds, I am still "investing in Wall Street". There is nothing wrong with that, but lets call a spade a spade here.
Click to expand...

If you invest for the long-term while setting aside a rainy day fund, a downward bounce will have minimal consequences as it is short-term. I still have my money in funds. I have access to changing the funds. They are currently set for growth and they have grown. My income now has a base and cannot be reduced. I have funds thru 3 different companies. One of the funds is a set of funds and I can take money from those funds and use them for trips or whatever we want. None of this would be true if I depended on Social Security and far too many don't realize that Social Security is not all that great in its payouts. That is why earlier I stated that the U.S. needs more education on finance and finance management.
 
AGENT J said:
No this is equally as bad as an idea as welfare being charity based.
Click to expand...

It's a free world. You can have bad ideas, if you wish.
 
LesGovt said:
It's a free world. You can have bad ideas, if you wish.
Click to expand...

Very true, so far you have had at least two. I know I have had my share of them. A couple in the form of ex girlfriends
 
LesGovt said:
I would be happy to agree with that; however, look at the poll results. Some detest the idea of you being responsible for your own life.
Click to expand...

Mostly idiots on the left, for whom responsibility is a bad word.
 
AGENT J said:
Very true, so far you have had at least two. I know I have had my share of them. A couple in the form of ex girlfriends
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Sorry that you had bad experiences with girlfriends. I learned from those mistakes and now my wife and I are nearing 49 years of bliss. You say my ideas are bad. They aren't, but again freedom allows you to speak your mind.
 
I would support a hybrid system. A system where, like the OP said, 12% was invested but the investment plan would be required to be diversified.
 
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