What Would You Be Willing to Do to Save SS?

[Anonymous]

I wish there were an opt-out. I know that's not feasible with how the system was designed, but I'm 29 and I have no faith in the solvency of the system when I'm ready to claim in 40 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Point of clarification:

The Social Security Trust Fund is invested in U. S. Treasury Bonds, the same thing that investors treat as the world's safest investment.


http://www.cbpp.org/research/social-security/policy-basics-understanding-the-social-security-trust-funds

This. If you don't trust government bonds, then you should dump all your savings bonds and any mutual funds that contain government bonds.

Like marketable government bonds, the bonds held by Social Security are legally backed by "the full faith and credit of the US government." This means that Congress would have to pass a special law to reverse this, so that Treasury would no longer redeem Treasury bonds held by Social Security when mature or presented. The chances of Congresspeople doing this to their senior constituents are zero. I'd add that this would also spook international financial markets and the US' many overseas creditors, but the geniuses in Congresses don't seem to care about that. So I'll stick to the point that they're all beholden to their senior constituents, who vote.

Or, we could just elect Donald Trump, and he'll renegotiate the debt on the money we owe ourselves, so that we can all poke ourselves in the ass when we retire.

[Anonymous]

Anonymous wrote:I wish there were an opt-out. I know that's not feasible with how the system was designed, but I'm 29 and I have no faith in the solvency of the system when I'm ready to claim in 40 years.

Don't worry, if Social Security disappears, it means something much worse than a retirement crisis has hit the country.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"That's unlike a pyramid scheme, because in a pyramid scheme, there is no set of assumptions that will allow it to work forever. "

Uhhh, yeah. Hello! It's thus the very definition of a pyramid scheme.

Hello yourself. If you set payments in equal to payments out, a pyramid scheme only works when both are zero. If it's an insurance scheme, as social security is, then all you have to do is count payments in and set benefits to be no greater than that. That's how Metropolitan Life Insurance company has been in business since 1868.

You can call it whatever you want. Insurance, tax, lollipops.

Bernie Madoff (madoff madeoff!) did the same thing and is now in jail.

You should look at the social security trustee reports sometime. It's not in the state you think it is.

I highly doubt you understood the Trustees' Report, if you even read it. PP is right that Social Security can pay full benefits until 2034, and after that 75% of benefits just from continuing incoming FICA taxes. The Trustees' Report makes this very clear in the first few pages.

It's insurance because you only get it when you need it. You don't get disability benefits if you're not disabled and your heirs don't get survivor benefits if you outlive them or they are older than 18. The retirement piece is insurance against being unable to work because of old age--various tests reduce the benefit if you're still working.

PPs are also correct that fairly small changes are necessary to return to a cash flow balance. That's not a Ponzi scheme by any definition. You need to stop listening to Fox News, they lie.

[Anonymous]

Anonymous wrote:Number two is a no-brainer. Yes, I like the bump up in my paycheck at the end of the year, but if I'm making that much already, I won't miss it that much either if I keep paying my FICA.

Agree.

[Anonymous]

Kill it and make it optional

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Point of clarification:

The Social Security Trust Fund is invested in U. S. Treasury Bonds, the same thing that investors treat as the world's safest investment.


http://www.cbpp.org/research/social-security/policy-basics-understanding-the-social-security-trust-funds

This. If you don't trust government bonds, then you should dump all your savings bonds and any mutual funds that contain government bonds.

Like marketable government bonds, the bonds held by Social Security are legally backed by "the full faith and credit of the US government." This means that Congress would have to pass a special law to reverse this, so that Treasury would no longer redeem Treasury bonds held by Social Security when mature or presented. The chances of Congresspeople doing this to their senior constituents are zero. I'd add that this would also spook international financial markets and the US' many overseas creditors, but the geniuses in Congresses don't seem to care about that. So I'll stick to the point that they're all beholden to their senior constituents, who vote.

Or, we could just elect Donald Trump, and he'll renegotiate the debt on the money we owe ourselves, so that we can all poke ourselves in the ass when we retire.

Trump can't renegotiate the terms of already-issued Treasury debt; Congress would have to do it. There are laws that would need to be modified. (I used to work at Treasury.) Effectively, Congress would have to repudiate existing debt--something international markets would go berserk about, causing the dollar and our own debt markets to crash and burn. Markets tend to be very unforgiving about these sorts of shenanigans, see the travails of third world countries' economies (and Greece) as they renegotiate their debt if you have any doubts. That way, workers and retirees alike would be poking themselves in the ass.

[Anonymous]

Anonymous wrote:SS, in its current form, is projected to run dry by 2034. (And while some people are talking about increasing benefits, it's obvious we need to cut.) From what I understand, a couple of minor "tweaks" can save the program. What would you be willing to sacrifice? I would vote for three changes:

1) Gradually increase the full retirement age to 68. ?There should be no change for people within 10 years of retirement, but for others, we could add a month every year until we get to 68. When SS was introduced, people barely lived 5 years past retirement age (on average), and now we have people claiming for 20 to 30 years.

2) Increase the cap on the amount people pay the SS tax.

3) Lower the benefits for people in the uppermost brackets - in retirement - by about 25%. My parents have a retirement income of about $150k - no pensions, just responsible lifelong savings and investments - and they tell me they wouldn't miss a SS cut of a few hundred dollars a month.

Opinions?

I like 1 and 2, as long as we can figure out how to shield all the line workers and waitresses so they don't have to do physical labor until they are 72. Maybe protecting low earners from the benefit cuts, which would catch a lot of labor jobs and also address the issue of low earners having shorter lives, which someone above mentioned. (I work on retirement security although not Social Security specifically, and I have a feeling I know some of you, because you seem very informed!)

The third one sounds good, but it doesn't actually raise much money. Not enough to make a serious dent in the financing issue. So I don't think it's worth the political fallout from reducing returns to the highest earners, making Social Security a welfare program as some of you have said. Anyway, we know that programs for the poor always get cut and chipped away, so I wouldn't want to go that route.

[Anonymous]

Anonymous wrote:Kill it and make it optional

Yeah. I hate that it provides retirement security to my nanny and housekeepers.

[Anonymous]

Actually, Trump can do anything he wants to. He has a pen and a phone!

Are you eluding to separation of powers? Does that still exist? Only when convenient for your argument.

President Obama stole close to a trillion from medicare and realocated it to Obamacare. He also wiped out the bondholders right to first dibs on GM to payoff unions.

This president enforces half the laws he likes and ignores the other half.

See, we're really not a law and order society anymore. Trump can renegotiate anything he wants. Donkeys set the precedent over the last 8 years. Now live by them.

[Anonymous]

Anonymous wrote:Kill it and make it optional

Making it optional would be a disaster because so many people would opt out, fail to save anything for retirement - I believe I read that half the people 50+ have less than $10,000 saved - and when retirement came about, then what? Are we going to let those people starve? 0f course not! They'd get some form of welfare (in lieu of SS they opted out of). But what about the people who DID participate in the program - and with less in their paychecks had to forgo a new car....expensive vacation....larger house, etc......how is that fair? Or what about people who DID opt out, but knowing they had no SS, saved on their own? Not fair to them, either. With an opt-out option, there's no incentive to save for retirement, knowing there will be a safety net there regardless.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Kill it and make it optional

Making it optional would be a disaster because so many people would opt out, fail to save anything for retirement - I believe I read that half the people 50+ have less than $10,000 saved - and when retirement came about, then what? Are we going to let those people starve? 0f course not! They'd get some form of welfare (in lieu of SS they opted out of). But what about the people who DID participate in the program - and with less in their paychecks had to forgo a new car....expensive vacation....larger house, etc......how is that fair? Or what about people who DID opt out, but knowing they had no SS, saved on their own? Not fair to them, either. With an opt-out option, there's no incentive to save for retirement, knowing there will be a safety net there regardless.

If you do 401k you should opt out

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Kill it and make it optional

Making it optional would be a disaster because so many people would opt out, fail to save anything for retirement - I believe I read that half the people 50+ have less than $10,000 saved - and when retirement came about, then what? Are we going to let those people starve? 0f course not! They'd get some form of welfare (in lieu of SS they opted out of). But what about the people who DID participate in the program - and with less in their paychecks had to forgo a new car....expensive vacation....larger house, etc......how is that fair? Or what about people who DID opt out, but knowing they had no SS, saved on their own? Not fair to them, either. With an opt-out option, there's no incentive to save for retirement, knowing there will be a safety net there regardless.

If you do 401k you should opt out

PP. That would work. But you'd have to show proof.....say, when you file your taxes, you submit forms showing your contributions. If they equal at least 6% of your earned income (not gross since one doesn't pay FICA on investment income), you can opt out of SS for the following year. I'd go for that.

[Anonymous]

Anonymous wrote:Actually, Trump can do anything he wants to. He has a pen and a phone!

Are you eluding to separation of powers? Does that still exist? Only when convenient for your argument.

President Obama stole close to a trillion from medicare and realocated it to Obamacare. He also wiped out the bondholders right to first dibs on GM to payoff unions.

This president enforces half the laws he likes and ignores the other half.

See, we're really not a law and order society anymore. Trump can renegotiate anything he wants. Donkeys set the precedent over the last 8 years. Now live by them.

Is this a joke? You're seriously asking if separation of powers still exists? Obama got Obamacare because CONGRESS voted for it. Going around Congress' laws by stealing money and/or reallocating it is a good way to get yourself impeached ... by Congress. And we both know that if the current Congress had enough on Obama they would be trying to impeach him. But they don't.

How can you not know these basic things?

Also it's "alluding".

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Kill it and make it optional

Making it optional would be a disaster because so many people would opt out, fail to save anything for retirement - I believe I read that half the people 50+ have less than $10,000 saved - and when retirement came about, then what? Are we going to let those people starve? 0f course not! They'd get some form of welfare (in lieu of SS they opted out of). But what about the people who DID participate in the program - and with less in their paychecks had to forgo a new car....expensive vacation....larger house, etc......how is that fair? Or what about people who DID opt out, but knowing they had no SS, saved on their own? Not fair to them, either. With an opt-out option, there's no incentive to save for retirement, knowing there will be a safety net there regardless.

If you do 401k you should opt out

PP. That would work. But you'd have to show proof.....say, when you file your taxes, you submit forms showing your contributions. If they equal at least 6% of your earned income (not gross since one doesn't pay FICA on investment income), you can opt out of SS for the following year. I'd go for that.

The employer + employee contribution totals 12%. 6% isn't enough to build a secure retirement--some sources say 15%, others say even more.

You'd also still have the problem of low-income people contributing to to a system that's insolvent after all the high-income people pulled out.