Reply to Republicans in congress say big cuts coming to Social Security, Medicaid, Medicare.

Forum Index » Political Discussion

Reply to "Republicans in congress say big cuts coming to Social Security, Medicaid, Medicare. "

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous]It might be a stretch to call it a Ponzi scheme, but it does have similarities, namely that it relies upon funds from the current workforce to pay for the retirees receiving SS income. 
This is a problem because it relies upon an ever-increasing workforce and GDP, and that is not sustainable or desirable.

The math is pretty bad. Between my employer and I, we are putting in 12.4% of my salary up to the cap. If I were to invest that same amount into a broad index fund (set and forget) with the plan to eventually withdraw from that when I retire, I would come out way ahead compared to what I will draw in SS benefits. SS is a bad deal.

As far as raising the cap goes, how fair would that be without raising the benefit amount for those who contributed higher amounts? It wouldn’t be fair. And if we did also increase the benefit amounts to those people, then it wouldn’t solve the problem either. So I say let’s not increase the cap.

Part of my solution would be that over a years-long period, we transition/ramp from FICA deductions to self funded retirement. Give everyone something like TSP, but the (eventual) 12.4 percent should be locked up into age based index funds that cannot be accessed via loans or withdrawals, and must be paid out at retirement via monthly payments not lump sums that someone might do something stupid with. If you want to have a lump sum available, you save for that separately.

Doing so would create a temporary (though years long) gap in funding that unfortunately would have to be paid for by increasing retirement age, small reductions in SS benefits, a VAT, spending cuts, or ideally a combination of these means in order not to place the burden disproportionately on any one group. It will be painful, but less so, and eventually the problem will be solved.[/quote]

This is a terrible idea because the whole point is that people don't save for retirement for a variety of reasons and we, as a society, because of what happened in the Great Depression, have decided there should be a social safety net.[/quote]

Sorry I might not have explained it well. Everyone would still participate and be eligible for benefits, but the goal is that eventually rather than 12.4% going to FICA, it would be going into a personal investment account that is eventually annuitized or paid out as RMDs or whatever. As long as you continue to work and earn, you will get a benefit. If someone does not work or earn, then do they earn benefits under the current system?[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics