socail security

[billfan63]

I know that anyone 55 or older will not be effected by the new proposal but how about the 50 to 55 year olds? The way I see it is I can remain staus quo and not be guarenteed the money I worked most my life for, or invest in a private account

with only a small time frame to recoup or exceed the money I'll be losing, which probably means investing in high risk, high yield options.

Doesn't sound too inviting,,,,, I know social not socail

[Alaska Darin]

I know that anyone 55 or older will not be effected by the new proposal but how about the 50 to 55 year olds? The way I see it is I can remain staus quo and not be guarenteed the money I worked most my life for, or invest in a private account

with only a small time frame to recoup or exceed the money I'll be losing, which probably means investing in high risk, high yield options.

Doesn't sound too inviting,,,,,  I know social not socail

228838[/snapback]

There won't be any high risk/high yield options available and you're not going to be able to invest a very high percentage of what you're paying in anyway. Plus, you have the option of not doing anything and remaining under the current "system."

[Wacka]

From what I have heard, the amount put into this plan would be less than one percent of what you now have taken out. Besides, the current levels will be the minimum return.

[Tux of Borg]

I'm 27 and know I'll never see a dime of social security. My step-dad use to work for the IRS, and has told me stories about people becoming monks, just so that they wouldn't have to pay SS tax.

[DC Tom]

From what I have heard, the amount put into this plan would be  less than  one percent of what you now have taken out. Besides, the current levels will be the minimum return.

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I've heard so many things, I don't believe any of it anymore. Basically, even though it's an issue that can be reduced to hard, ambiguous numbers for once, all the analysis of the plan seems to be reduced to one of two positions: it's good, because Bush is good; and it's bad, because Bush is bad. Or even stupider: Social Security is doomed because Bush is good, or Social Security is just fine because Bush is bad.

 

I'm convinced at this point that we need to devote at least three-quarters of the federal budget to social programs...because the American public has clearly hit the point where it's collectively and individually too !@#$ing stupid to take care of itself if it reduces every issue to whether or not you personally like or dislike a functionally illiterate reformed alcoholic.

[billfan63]

There won't be any high risk/high yield options available and you're not going to be able to invest a very high percentage of what you're paying in anyway.  Plus, you have the option of not doing anything and remaining under the current "system."

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The option of not doing anything and remaining under the current "system" does not guarantee the same benifit as current retiree's or people born before 1950. In other words a cut of the benefit. Without High yield or the ability to invest high percentage of your saving the small term saver, i.e. the over fifty crowd will never regain their lose's under the system.

[erynthered]

I've heard so many things, I don't believe any of it anymore.  Basically, even though it's an issue that can be reduced to hard, ambiguous numbers for once, all the analysis of the plan seems to be reduced to one of two positions: it's good, because Bush is good; and it's bad, because Bush is bad.  Or even stupider: Social Security is doomed because Bush is good, or Social Security is just fine because Bush is bad. 

 

I'm convinced at this point that we need to devote at least three-quarters of the federal budget to social programs...because the American public has clearly hit the point where it's collectively and individually too !@#$ing stupid to take care of itself if it reduces every issue to whether or not you personally like or dislike a functionally illiterate reformed alcoholic.

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You know when you put things like that, people are going to start to think you should be in politics. You're giving them to much info.

 

 

 

The "Whats on TV tonight" crowd will kill you though Tom.

 

 

 

 

I know you're not running for office................jk

[Alaska Darin]

The option of not doing anything and remaining under the current "system" does not guarantee the same benifit as current retiree's or people born before 1950. In other words a cut of the benefit. Without High yield or the ability to invest high percentage of your saving the small term saver, i.e. the over fifty crowd will never regain their lose's under the system.

228945[/snapback]

There's nothing written in stone and ANYONE who depends on the government for their well being gets EXACTLY what they deserve.

[billfan63]

There's nothing written in stone and ANYONE who depends on the government for their well being gets EXACTLY what they deserve.

228965[/snapback]

Depending on the gov't is expecting a fair payout of the money one puts into

social security every paycheck?

[The Warden]

Depending on the gov't is expecting a fair payout of the money one puts into

social security every paycheck?

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Best stop and think about what big government does with your sales tax revenue

 

Then think about your SSI

[Alaska Darin]

Depending on the gov't is expecting a fair payout of the money one puts into

social security every paycheck?

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Go look up the definition of "Ponzi Scheme". They all fail eventually.

 

If you start saving about $80 a month when you're 18 years old at a 10% rate of return, you'd have a MILLION DOLLARS when you were 65. $80 a month.

[IUBillsFan]

Depending on the gov't is expecting a fair payout of the money one puts into

social security every paycheck?

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Take a little time and read what they do/did in Chile that's seems to be a good model to follow.

[JimBob2232]

I cant understand why people are against the privitazation of social security. (Notice i did not say bush's plan...but the concept of privitazation itself). It HAS to be that bush is bad and therefore his plan is bad, becaues the options are

 

1) Continue the current system and let social security kill itself off

2) Privitize social security and guarentee everyone they will be cared for in old age.

3) Get rid of social security alltogether.

 

Option 2 is THE ONLY ONE that makes sense. The problem is 2 fold however. First, the democrats cant have a solution to this problem because it is THEIR issue, so they will fight it so they can use it as a campaign platform. Though this will be harder to do now that they are on record saying bush is LYING about the problem. Secondly, it will cost ALOT of money to implement and will take a long period of time to properly phase in. Its not a quick fix, and it will cost money, but the long term ramifications of not privatizing social security FAR outweigh the risk of doing nothing.

[KRC]

I cant understand why people are against the privitazation of social security.  (Notice i did not say bush's plan...but the concept of privitazation itself).  It HAS to be that bush is bad and therefore his plan is bad, becaues the options are

 

1) Continue the current system and let social security kill itself off

2) Privitize social security and guarentee everyone they will be cared for in old age.

3) Get rid of social security alltogether.

 

Option 2 is THE ONLY ONE that makes sense.  The problem is 2 fold however.  First, the democrats cant have a solution to this problem because it is THEIR issue, so they will fight it so they can use it as a campaign platform.  Though this will be harder to do now that they are on record saying bush is LYING about the problem.  Secondly, it will cost ALOT of money to implement and will take a long period of time to properly phase in.  Its not a quick fix, and it will cost money, but the long term ramifications of not privatizing social security  FAR outweigh the risk of doing nothing.

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The argument being used is that people are too stupid to manage their money and will probably blow it. Therefore, you need to let the government blow it for you since they have become experts at it. No sense in letting amateurs blow it, when you have professionals that can do it for you.

[JimBob2232]

The argument being used is that people are too stupid to manage their money and will probably blow it. Therefore, you need to let the government blow it for you since they have become experts at it. No sense in letting amateurs blow it, when you have professionals that can do it for you.

 

Yeah...i dont get it. For all the money you are paying in SS Taxes today, you will get ZERO back when you retire (if you are younger). Now if you put that money in a private account, in an ABSOLUTE WORST CASE scenario, you get 0. Of course, if you get zero it will be because america as we know it no longer exists.

 

The real annual rate of return on your social security taxes is NEGATIVE. So even if you put your money in a money market account getting you 1% annual, you make more money than you are now. There is NO downside here, other than the cost to implement, which is not an excuse.

[JimBob2232]

BTW KRC, how many votes did you get?

[Thamus]

Yeah...i dont get it.  For all the money you are paying in SS Taxes today,  you will get ZERO back when you retire (if you are younger).  Now if you put that money in a private account, in an ABSOLUTE WORST CASE scenario, you get 0.  Of course, if you get zero it will be because america as we know it no longer exists.

 

The real annual rate of return on your social security taxes is NEGATIVE.  So even if you put your money in a money market account getting you 1% annual, you make more money than you are now.  There is NO downside here, other than the cost to implement, which is not an excuse.

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I agree to some point. In the worst case scenario is that you get ZERO in return in each situation. Where did the money go that you put in? The money that you lost?

 

Under the current system, it goes to finance others, older people in the system? Just as in a "Ponzi scheme", the early ones in benefit. Who are those early ones?

 

Now under the privatization plan, the worst case scenario is that you lose the money that you put in the market, it evaporates away? Somebody always has the ability to gain on your loss? Who is that?

 

Which is better?

 

Can somebody explain or tell me why my thoughts or misgivings are faulty?

 

Is it that some are so bitter at the government for mismanaging the money (expanding what SS was originally intended for, using the funds for other purposes, etc...), that they would rather see (worst case scenario) the money "evaporate" within the market before they give it to the earlier ones under the current system?

 

Does it boil down to the question: "I lost but, at least I controlled my fate, I have nobody else to blame?"

 

There will always be losers, who will be the ones that make money off the losers?

 

Look at how much money was lost after an act like 911? Is there a way to secure it against such fluctuation?

 

?

[JimBob2232]

The government is not going to let you invest your money in any way you see fit. You will not be able to buy individual companies stock (like enron or worldcom or even GE or Citigroup). The allowed places you can put your money will be some of the safest places you can invest. Lower risk generally means lower rewards, but it is acceptable here because even the lower rewards of a government bond fund are far superior to the negative rate you currently make on your social security money. About the riskiest allowed investment I expect to see in a privitazation plan would be the wilshire 5000, which would be akin to the top 5000 companies in the us. Enron was a part of wilshire, but when it crashed, it hardly made a dent because it was just 1/5000th of the fund.

 

The concern here should not be what happens if it goes to zero, because it wont. And suppose it does, it doesnt mean a whole lot because america will not be america anymore. If the wilshire 5000 goes to zero, that means that no companies in america are making money, and everyone is unemployed and america will fall apart, and social security will go with it. The way i see it, as long as you can get a zero rate of return on your social security investment, your ahead of what is going on today.

[Alaska Darin]

Look at how much money was lost after an act like 911?  Is there a way to secure it against such fluctuation?

229439[/snapback]

There are distinct rules to investing to protect yourself against risk. As you get closer to retirement you divest your risk from the stock market and move it to safer investments. There are already blended mutual funds setup to handle this for people. An example it T.Rowe Price's Retirement 2030 and 2040 Funds. As time goes on, the fund manager sells off stocks and buys safer securities like bonds. When 2030 or 2040 rolls around, the fund will hold no more than 20% individual stocks.

 

The key is to remember that SSI is only one component of retirement savings. There are a variety of other methods available to people to save for their golden years. This includes 401K, traditional, Roth, and SEP IRAs, 403Bs, etc. Even without these programs, and individual could save a significant amount of money just by investing in nothing more than an index fund like Vanguard 500 Index.

 

Also, people should carry an adequate amount of Life Insurance.

 

Since 1926, the return of income on common stock investment is about 10.3%. After factoring inflation, that means the average investor took home about a 7% return - doubling his money every 10 years or so. Not too bad and taking advantage of strategies like "Dollar Cost Averaging" and "Buy and Hold", most people will end up with healthy returns over any 10+ year period. The key is patience and willingness not to panic.

 

With the amount of money I've already paid into SSI, I could stop investing now and the average market returns of the past 80 years would assure me of being a millionaire at age 65. It doesn't take a genius to know that a 3% return on a million dollars is $30k per year or $2500 a month before taxes. Not bad and I'm still wouldn't be touching the principle.

[GG]

Since 1926, the return of income on common stock investment is about 10.3%.  After factoring inflation, that means the average investor took home about a 7% return - doubling his money every 10 years or so.  Not too bad and taking advantage of strategies like "Dollar Cost Averaging" and "Buy and Hold", most people will end up with healthy returns over any 10+ year period.  The key is patience and willingness not to panic.

 

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In all fairness, estimates on stock growth should be tempered if SS funds are diverted into the stock market, because the market will have to absorb all that liquidity. Mathematics alone will dictate that you'll have too much money chasing the sparse returns.

 

The upside of course, is that with more market liquidity, you may have more patience with some ideas that wouldn't have been funded otherwise.