Reply to What Would You Be Willing to Do to Save SS?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Kill it and make it optional[/quote]
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.

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If you do 401k you should opt out[/quote]
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. [/quote]

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.[/quote]
PP here. Well, I was figuring that the employer would still be contributing its half to SS, so the employee just has to put 6% (his half that he previously had put to SS) to a 401k. That's the minimum requirement. But true....many people contribute to a 401k in addition to SS, so to end up with the same retirement security, those people would have to contribute an amount equal to both "legs." For example, I'm contributing 6% to SS (forced of of course) along with 10% to a 401k. So I'd want to contribute 16% if I opted out of my half of SS. But that extra 10% would be optional, since the 401k contributions are optional.

Didn't consider that the opt-out would weaken the program for the lower income people who would remain. That's a problem.....[/quote]

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