87% of Americans Want Politicians To Do Something Before Social Security Runs Out of Money

[jonny5]

Of course what they want is the rich to pay for it. No surprise. Meanwhile, had I put the money they take from me for my lousy benefit if a live to 65, I could have near a million dollars in my retirement account. Its time to privatize SS. I pay about $800 a month in SS. Average return on that in a mutual fund would be 7 million dollars.

Its time to privatize SS

87% of Americans want politicians to do something before Social Security runs out of money

Entitlement reform has long been considered a third rail in American politics, but that perspective might be changing.

reason.com

 

[tshade]

Of course what they want is the rich to pay for it. No surprise. Meanwhile, had I put the money they take from me for my lousy benefit if a live to 65, I could have near a million dollars in my retirement account. Its time to privatize SS. I pay about $800 a month in SS. Average return on that in a mutual fund would be 7 million dollars.

Its time to privatize SS

Bull---that's what many people say. The reality is that you, and most people would be a wreck at retirement. This nation's living standard is largely due to SS, and many other entitlements out there. Life has few guarentees, especially in the private sector. Everyone thinks they are savy investors, until they ain't. You health, and many other factors can change in the blink of an eye. How many businesses would go under without SS ??

 

[WorldWatcher]

Its time to privatize SS

Under the current pay-go system SS revenues are paying for todays SS payments.

And your plan for this is what?

#1 How do you pay current and future payments to those in SS is privatized and revenue ends but benefits do not?

#2 What is your transition plan to move from the current model to privatization in terms of transition ages? Specifically "new workers just entering the the system", "middle age workers who have paid into SS for 10-15 years", and "older workers 50+ who will not have time for compound interest to make a big difference".

WW

 

[gdgyva]

Only way it would work is if it couldnt be manipulated
So your money goes into a standard S&P 500 ETF which average around .15% expense per year
It collects the dividends, and reinvests them automatically
The money cant be touched until you reach 62 minimum (same as now)
Doesnt matter about ebbs and flows of the market as over time, historically it is a 7-10% growth per year

And the .15% expense can be halved because of the volume this would put into the market.....and that difference can be used to track the individual accounts on an annual basis where you would get a report emailed to you

I would do this for anyone younger than 30....
That way they have time to make sure their accounts will have enough to hold them over
Over 30....we continue with same programs until all are DEAD

 

[Peter]

The UK is and has been raising the retirement age for pensions for this reason.
The financial projections go out to 50 or even 75 years from now so they know the problems on the horizon and we need to take steps to avoid them now as it'll be vastly cheaper than waiting.

I'm 48 and expect my retirement age to be pushed back a few times before I get to retirement age.

This shouldn't be a political issue as we have no idea who's going to be in power in the future.

 

[jonny5]

Under the current pay-go system SS revenues are paying for todays SS payments.

And your plan for this is what?

#1 How do you pay current and future payments to those in SS is privatized and revenue ends but benefits do not?

#2 What is your transition plan to move from the current model to privatization in terms of transition ages? Specifically "new workers just entering the the system", "middle age workers who have paid into SS for 10-15 years", and "older workers 50+ who will not have time for compound interest to make a big difference".

WW

Its not hard. You pay out current owed benefits from general taxes till its done. Under 65 can do what they want with their earnings. I would take my benefit and put it in my IRA.

 

[jonny5]

The UK is and has been raising the retirement age for pensions for this reason.
The financial projections go out to 50 or even 75 years from now so they know the problems on the horizon and we need to take steps to avoid them now as it'll be vastly cheaper than waiting.

I'm 48 and expect my retirement age to be pushed back a few times before I get to retirement age.

This shouldn't be a political issue as we have no idea who's going to be in power in the future.

You can do whatever you want in the UK. In the US, the govt doesnt have the authority to spend on old age insurance, nor are they any good at it. They are costing me millions. Simply putting my payroll tax into my IRA would 10x my benefit.

 

[WorldWatcher]

Its not hard. You pay out current owed benefits from general taxes till its done. Under 65 can do what they want with their earnings.

So that is the double wammy:

#1 No Revenue

#2 Maintain Spending for a 20-40 years for current retires.

#3 Does "do what they want with their earnings" mean remain in Social Security since older working American's won't have time to build the reserves you claim you could have? What is the lower cutoff for this choice? That will take #2 out to probably 50-70 years.

I would take my benefit and put it in my IRA.

Not if you are wealthy as you say. (You said you pay $800 per month in SS, that means earning in excess of the $160,000 earnings cap.)

A single person making >$78,000 can't make a deposition in an IRA (>$129,000 for married filing jointly).

WW

 

[jonny5]

So that is the double wammy:

#1 No Revenue

#2 Maintain Spending for a 20-40 years for current retires.

#3 Does "do what they want with their earnings" mean remain in Social Security since older working American's won't have time to build the reserves you claim you could have? What is the lower cutoff for this choice? That will take #2 out to probably 50-70 years.



Not if you are wealthy as you say. (You said you pay $800 per month in SS, that means earning in excess of the $160,000 earnings cap.)

A single person making >$78,000 can't make a deposition in an IRA (>$129,000 for married filing jointly).

WW

There is plenty of revenue from general taxes. But yeah, we spend 900bn a year declining until everyones paid back. Older working americans would get their benefit back too. For example if you are 30 or 50, whatever benefit you would get if you retired today, you would get today. Which you could then do with as you want. For say, 20 years. As I said, there are plenty of options and variants to phase this out.

$800 a month means about 60k. $400 from me, $400 from my employer. 15% of every dollar I make is taxed. And that includes medicare which I also wouldnt need if I put that in an investment.

 

[WorldWatcher]

There is plenty of revenue from general taxes. But yeah, we spend 900bn a year declining until everyones paid back. Older working americans would get their benefit back too. For example if you are 30 or 50, whatever benefit you would get if you retired today, you would get today. Which you could then do with as you want. For say, 20 years. As I said, there are plenty of options and variants to phase this out.

So the government is going to cut me a check for $700,000 for my social security in a couple of years. Then we call it even.

In 2020 there were about 6,000,000 new SS recipients. So let's say their benefits aren't as high as mine. The current average is $1700 a month. That's $20,400 per year. That's $408,000 per person for the 20 years worth.

That is $2,448,000,000,000 to pay off JUST ONE YEARS worth of new recipients. Yes that is $2.448 TRILLION dollars.

Now add all the years populations that have paid in and have to be paid off.

Ya, just pay people 20 years of benefits can call it even isn't really a well thought out option.

$800 a month means about 60k. $400 from me, $400 from my employer. 15% of every dollar I make is taxed. And that includes medicare which I also wouldnt need if I put that in an investment.

FICA is 7.65%, your employers taxes are separate from yours.

WW

 

[Absentglare]

Its not hard. You pay out current owed benefits from general taxes till its done. Under 65 can do what they want with their earnings. I would take my benefit and put it in my IRA.

That is absolutely ****ing insane. So everyone 20-65 have their benefits disappear. Current benefits are a massive burden on the debt. And new generations will all get absolutely ****ing obliterated on retirement.

Well done, it’s hard to imagine a bigger disaster.

 

[Helix]

I want politicians to raise the contribution ceiling. I don't support letting Republicans ruin the program through "privatization," though.

 

[WorldWatcher]

That is absolutely ****ing insane. So everyone 20-65 have their benefits disappear. Current benefits are a massive burden on the debt. And new generations will all get absolutely ****ing obliterated on retirement.

Well done, it’s hard to imagine a bigger disaster.

$2.448 Trillion just to pay off one year of SS recipients. That doesn't include paying off those that are already receiving it, nor paying out the working population what they paid in (plus interest) as a "seed" for this new private program.

WW

 

[mrjurrs]

Of course what they want is the rich to pay for it. No surprise. Meanwhile, had I put the money they take from me for my lousy benefit if a live to 65, I could have near a million dollars in my retirement account. Its time to privatize SS. I pay about $800 a month in SS. Average return on that in a mutual fund would be 7 million dollars.

Its time to privatize SS

View attachment 67475935

87% of Americans want politicians to do something before Social Security runs out of money

Entitlement reform has long been considered a third rail in American politics, but that perspective might be changing.

reason.com

First, how many Americans would have saved that money for retirement? Not many I'd guess.
The first fix I'd look for is removal of the clawbacks SS puts in place for people who earned SS benefits but then work for the government in a second career. Teachers for example.

 

[WorldWatcher]

First, how many Americans would have saved that money for retirement? Not many I'd guess.
The first fix I'd look for is removal of the clawbacks SS puts in place for people who earned SS benefits but then work for the government in a second career. Teachers for example.

Don't understand what you are talking about here with "clawbacks"?

Seems like your trying to say the government workers don't earn SS.

WW

 

[mrjurrs]

Don't understand what you are talking about here with "clawbacks"?

Seems like your trying to say the government workers don't earn SS.

WW

Windfall Elimination Provision and Government Pension Offsets.
Different states have different rules, but in CA both of those reduce my SS benefit because I no longer contribute to SS as a teacher in CA.

 

[Peacenik]

Of course what they want is the rich to pay for it. No surprise. Meanwhile, had I put the money they take from me for my lousy benefit if a live to 65, I could have near a million dollars in my retirement account. Its time to privatize SS. I pay about $800 a month in SS. Average return on that in a mutual fund would be 7 million dollars.

Its time to privatize SS

View attachment 67475935

87% of Americans want politicians to do something before Social Security runs out of money

Entitlement reform has long been considered a third rail in American politics, but that perspective might be changing.

reason.com

If only the rich paid into SS at the same rate as paycheck-workers the problem would be completely solved. But no. The rich have a special exemption. Their contributions are capped. Everyone else pays a percentage of their earnings, but not the rich. Total rich-favored tax policy there. That cap needs to be removed.

Senator Elizabeth Warren says if that cap is removed it makes SS solvent and it could provide another $200 per month for all recipients. That sounds like the perfect solution.

Also, we should allow far more legal immigration. Get more young workers busy being productive in the USA, contributing to SS, paying taxes, creating demand and jobs, increasing the GDP. It is so logical it defies common sense to not do it. Immigration built America. Immigration will make America greater.

Problem solved very easily.

Oh, but it makes sense, so Republicans oppose it. Pawns of the rich. Republicans oppose anything that makes the rich lose their freebies and pay their fair share.

 

[WorldWatcher]

Windfall Elimination Provision and Government Pension Offsets.
Different states have different rules, but in CA both of those reduce my SS benefit because I no longer contribute to SS as a teacher in CA.

https://www.ssa.gov/pubs/EN-05-10045.pdf

https://www.ssa.gov/pubs/EN-05-10007.pdf

Ah...

Both those have to do with calculations based on periods (your or your spouse) being in non-SS jobs.

My wife and I have always worked in SS eligible jobs.

I guess what threw me is that in my state teachers pay into SS as part of their retirement program.

WW

 

[Peacenik]

Only way it would work is if it couldnt be manipulated
So your money goes into a standard S&P 500 ETF which average around .15% expense per year
It collects the dividends, and reinvests them automatically
The money cant be touched until you reach 62 minimum (same as now)
Doesnt matter about ebbs and flows of the market as over time, historically it is a 7-10% growth per year

And the .15% expense can be halved because of the volume this would put into the market.....and that difference can be used to track the individual accounts on an annual basis where you would get a report emailed to you

I would do this for anyone younger than 30....
That way they have time to make sure their accounts will have enough to hold them over
Over 30....we continue with same programs until all are DEAD

Anybody who has ever done any investing is warned: Investing involves risk.

There is no risk with SS. That is why the returns are lower. It's secure.

It's a basic concept of investing. A greater return always involves greater risk.

Anyone who wishes to invest at greater risk is completely free to do so. Simply save up whatever is left after normal deductions and expenses and invest it how ever one likes. No, young workers are not getting out of paying into Social Security. That is what pays for the current recipients to have food and shelter.

 

[Peacenik]

Its not hard. You pay out current owed benefits from general taxes till its done. Under 65 can do what they want with their earnings. I would take my benefit and put it in my IRA.

Banks can and do fail. Retirement is secure with the federal government. The federal government is what bails out failed banks anyway. With the federal government, everyone's retirement is secure. A bailed out failed bank would not end up paying all the investors everything they lose.

Here is the basic dynamic which cannot be circumvented:

Greater return involves greater risk.

Social Security is about as low as risk gets. That security is favorable over greater risk. The returns are adequate for thrifty recipients who had ample contributions during their working lives and paid for a home before retirement. It is a good system. We are keeping it.

 

[jonny5]

So the government is going to cut me a check for $700,000 for my social security in a couple of years. Then we call it even.

In 2020 there were about 6,000,000 new SS recipients. So let's say their benefits aren't as high as mine. The current average is $1700 a month. That's $20,400 per year. That's $408,000 per person for the 20 years worth.

That is $2,448,000,000,000 to pay off JUST ONE YEARS worth of new recipients. Yes that is $2.448 TRILLION dollars.

Now add all the years populations that have paid in and have to be paid off.

Ya, just pay people 20 years of benefits can call it even isn't really a well thought out option.




FICA is 7.65%, your employers taxes are separate from yours.

WW

No, the govt would pay you x$ a month as if you retired, for 20 years. Someone who just enrolled might get $1 (or maybe a lump sum of $20 to make it simple). Someone paying in their entire life would get $1700 a month. We're already paying in a trillion and paying out a trillion so its 1 or 10 trillion out, yeah, thats the cost of this massive failure. Im willing to pay it to get off this train.

My employer pays taxes from my labor, so its not seperate. They sell my labor, pay me, take 7.65% direct, and 7.65% indirect and give it to SS. Its mine. I am generating $800 a month in taxes to SS. If I put that in a diversified investment I would have millions to retire on, insead of $1700 a month.

 

[WorldWatcher]

No, the govt would pay you x$ a month as if you retired, for 20 years. Someone who just enrolled might get $1 (or maybe a lump sum of $20 to make it simple). Someone paying in their entire life would get $1700 a month. We're already paying in a trillion and paying out a trillion so its 1 or 10 trillion out, yeah, thats the cost of this massive failure. Im willing to pay it to get off this train.

So some people are paid an $X Benefit amount for 20 years of benefits.

Younger workers do not qualify for the benefit payout. So they get their money back right?

• Do they get everything they paid in?
• Is there interest based on market values so they get more than they contributed but interest in the growth would apply?
• Since you make the claim your employers contribution (below) is your contribution based on your labor and are not separate. Do people that get the payout based on contributions get a payout based on their labor (employer + employee) or only based on their deductions (employee only)?

What will be the age cutoffs between be between:

• We'll payout based o 20 years of benefits, vs.
• We'll payout based on contributions?

WW

My employer pays taxes from my labor, so its not seperate. They sell my labor, pay me, take 7.65% direct, and 7.65% indirect and give it to SS. Its mine. I am generating $800 a month in taxes to SS. If I put that in a diversified investment I would have millions to retire on, insead of $1700 a month.

 

[jonny5]

So some people are paid an $X Benefit amount for 20 years of benefits.

Younger workers do not qualify for the benefit payout. So they get their money back right?

• Do they get everything they paid in?
• Is there interest based on market values so they get more than they contributed but interest in the growth would apply?
• Since you make the claim your employers contribution (below) is your contribution based on your labor and are not separate. Do people that get the payout based on contributions get a payout based on their labor (employer + employee) or only based on their deductions (employee only)?

What will be the age cutoffs between be between:

• We'll payout based o 20 years of benefits, vs.
• We'll payout based on contributions?

WW

Yes. No. The former. Either. Do you want me to write a bill? The math doesnt really change the need to figure out how to get it done. There are many plans out there that are acceptable. I would be fine with simply opting out. Dont even pay me back what I put in. Just stop taxing me, and then do what you want with people still enrolled.

The Bush Plan To Reform Social Security: Case Studies from the Heritage PRA Calculator

In February, President George W. Bush released his plan to reform Social Security with Personal Retirement Accounts (PRAs). In the months since, there has been great discussion and debate over how the Bush plan would affect individuals.

www.heritage.org

 

[WorldWatcher]

Yes. No. The former. Either. Do you want me to write a bill? The math doesnt really change the need to figure out how to get it done. There are many plans out there that are acceptable. I would be fine with simply opting out. Dont even pay me back what I put in. Just stop taxing me, and then do what you want with people still enrolled.

The Bush Plan To Reform Social Security: Case Studies from the Heritage PRA Calculator

In February, President George W. Bush released his plan to reform Social Security with Personal Retirement Accounts (PRAs). In the months since, there has been great discussion and debate over how the Bush plan would affect individuals.

www.heritage.org

Well yes I do want you to think it out.

Social Security isn't going to be solved by bumper sticker mentality that puts platitudes over people. So ya, I expect if you are going to put forth an OP that says end SS and take it private, that you will of thought about timeline, different age groups, how it's to be accomplished, and the costs involved.

Things need to be done for social security, we agree. But the math **IS** important because you payout existing recipients and refund to existing working isn't feasible.

WW

 

[iguanaman]

You can do whatever you want in the UK. In the US, the govt doesnt have the authority to spend on old age insurance, nor are they any good at it. They are costing me millions. Simply putting my payroll tax into my IRA would 10x my benefit.

LOL You must make enough that you don't need SS. That is why we need to means test benefits. That and removing the cap will go a long way to making it solvent again. We don't need to give SS to the wealthy.