Should Social Security Raise Its Retirement Age

[3waycross]

This is wrong on so many levels but no one in the gov't seems to care or police the abuse. A few years ago I took a guy pig hunting and we must have walked five hard miles hunting. The next week I see him at a function in the school gymnasium and he is hobbling with a cane. I ask him what the cane was all about and he told me he was handicapped and couldn't walk without it. :shock:

Apparently he was also retarded!

 

[Caustic Burno]

They should privatize it and let people worry about their own money and no one elses. In the top three points you can see why the govt would strongly oppose it. Im not for taking any benefits away from people who have put in for all these years. Changing the rules at the end is not fair to them. I am for letting people have a privatized option or a govt option.

The benefits of privatizing Social Security are:
■Your money stays your money. You are putting money aside for your use. You don't pay someone else's benefits with the hope and promise that someone will come along later to pay your benefits.
■Unused funds can be inherited. Right now you could pay into Social Security your entire working life and die before you ever receive benefits. Or you die after only receiving a small benefit. If Social Security was privatized the money you set aside could be passed on.
■The government can't reduce or withdraw your benefits. You would own your account. As it stands now you have no right to Social Security benefits. The government can change the rules at any time. If it were privatized you would not be at the mercy of the government to allow you to have your money.

Funding Private Accounts

The average wage in the US in 2009 was about $41,000. A person earning this amount would contribute just under $98 per week to Social Security. (Half as payroll deductions, half as employer match).

Now not all of Social Security payments are paid out as retirement payments. Disabled workers and survivors of deceased workers also receive benefits. Disability and life insurance would cover these needs and can be purchased fairly cheaply for most people. But for simplicity we will leave these benefits in the current system. About 66% of benefit payments pay retirement benefits and 34% pay everything else. We will use that same break down the example.

Using these same percentages Joe Average earning $41,000 would sock away $53 per week into his own personal Social Security retirement account. (The other $27 would fund the current disability and survivor benefits of Social Security. Or, if the whole thing were privatized that $27 per week could be used to purchase life and disability insurance.)

Now the tricky part. How much would that leave Joe Average in retirement? That's tough to say since he isn't likely to graduate from school, get a job earning $41,000, and make that amount for his entire life until he retires. He will most likely get a job earning less than that, then get raises and promotions along the way. But since we don't know the specifics we will do the less than perfect thing and say that he made $41,000 for his whole life. We will say he started working at 22 and will retire at 65. We will also say that Joe Average would like his retirement savings to last him until he is 95.

The 4.2% employee contribution is reduced for 2011 from 6.2%. If we use the "normal" 6.2% contribution and move the beginning working age to 25, we get almost the same results below. Just sayin'.

We will run two scenerios. One with "reasonable" numbers and then one very conservative numbers.

The "Reasonable" Scenerio

$53 per week invested at 8% interest for 43 years yields him $1,029,237. Once he is in retirement he decides to take less risk and moves his entire balance to safer investments. He earns 4% while retired.

Joe Average would be able to withdraw $4,913 a month for his entire 30 year retirement. That is $3,574 per month more than the estimated $1,339 Social Security payment he would receive. (To estimate benefits I used the birthday of May 1, 1980. Earnings of $41,000. Retirement in May 2045. And Today's Dollars)

The "Conservative" Scenerio

The opponents of privatizing Social Security argue that the average person can't get good returns from the stock market. They liken it to gambling. I disagree with this. Over the last 40 years the stock market has seen a gain of 11.2%. Will the stock market go up 11.2% over the next 40 years? Only time will tell. So let's play into the opponents view that it's not possible for Joe Average to get even reasonable gains of 8%.

So let's say that Joe Conservative invested $53 per week and earned 6% for 43 years. He would have $557,178. At age 65 he takes all his money and puts it into a savings account earning 2% at a local bank.

With $557,178 earning 2% per year Joe Average could withdraw $2,059 a month and his money would last him 30 years. This is $720 more than the estimated $1,339 he would receive from Social Security.

What about taxes, you ask? In the conservative example, if Joe Average were paying his regular income tax rate (using 2011 tax brackets) he would owe a total of $3,281 a year if he had no deductions, or $273 per month. This is still above what he would be receiving from Social Security. In the reasonable example, Joe Average would owe$10,864 or $905 per month. Again, he would still be better off than under the current Social Security system. However since Social Security payments receive tax breaks I would like to think they still would under a privatized system. But who knows?

http://moneytalkscoaching.com/2011/05/a ... -security/

I don't know where you came up with 41,000 a year as average wages, I was making better than that in 1980 as a hand.
You would starve to death retiring on a million in savings today.
There is nothing totally safe when it comes to investing. Retirement is more than saying I have enough today its about asking do I have enough for the next 20 years to cover inflation.
The safest is CD's paying maybe a couple percent on a million would earn you 20 grand a year. You would have to go on food stamps.
Again we would have to raise taxes to support that program.
Now you would have to put the money in several different banks so it could be covered by government insurance.
Wait isn't that what SS is doing is insuring.
The big problem most Americans can spend big but can't save worth a dam.
I am not so sure SS isn't cheaper than what our taxes would be to take of all the Americans that didn't save for retirement.
Each prisoner in the state today Brute cost around 40,000 to take care of multiply that out for a bunch of sick elderly that can't work.
Too many Americans are like the grasshopper and not the ant.

 

[Caustic Burno]

I believe it is an entitlement when you can get social security to pay you for your fibromyalgia, your "depression", your kids ADD and all the other stuff that is sucking the system dry. Its ridiculous. If all these people are as sick as they say they are then maybe we ought to start being humane and start putting them down then I bet the numbers claiming "disabled" would go down dramatically.

Just take the foreign aide money and put it back in the pot that the vermin in DC stole from would go a long way in plugging the hole.
I would much rather an American get it than some idiot overseas that hates our guts and is using it to buy weapons to kill Americans with.

 

[Commercialfarmer]

I believe it is an entitlement when you can get social security to pay you for your fibromyalgia, your "depression", your kids ADD and all the other stuff that is sucking the system dry. Its ridiculous. If all these people are as sick as they say they are then maybe we ought to start being humane and start putting them down then I bet the numbers claiming "disabled" would go down dramatically.

Just take the foreign aide money and put it back in the pot that the vermin in DC stole from would go a long way in plugging the hole.
I would much rather an American get it than some idiot overseas that hates our guts and is using it to buy weapons to kill Americans with.

Is there really a lot of difference between the ones inside the border that are worthless and hate hard work and success vs the ones outside? I think we are just breeding our own enemies at the moment and raising them on welfare.

SS is just another way to rob the worker of his wages. I I would have no problem if it was solvent and people had a choice to use it or not. I agree, money should stay home till it's been made whole, and then money should stay home till the debt is covered, and then it should just stay home.

 

[Caustic Burno]

I believe it is an entitlement when you can get social security to pay you for your fibromyalgia, your "depression", your kids ADD and all the other stuff that is sucking the system dry. Its ridiculous. If all these people are as sick as they say they are then maybe we ought to start being humane and start putting them down then I bet the numbers claiming "disabled" would go down dramatically.

Just take the foreign aide money and put it back in the pot that the vermin in DC stole from would go a long way in plugging the hole.
I would much rather an American get it than some idiot overseas that hates our guts and is using it to buy weapons to kill Americans with.

Is there really a lot of difference between the ones inside the border that are worthless and hate hard work and success vs the ones outside? I think we are just breeding our own enemies at the moment and raising them on welfare.

SS is just another way to rob the worker of his wages. I I would have no problem if it was solvent and people had a choice to use it or not. I agree, money should stay home till it's been made whole, and then money should stay home till the debt is covered, and then it should just stay home.

You are talking several different things here Welfare, SSI and Social Security.
Social Security has never been the problem .
It was put in as a supplement to the elderly, orphans and widows.
The problem goes back to what 3 way was talking earlier about with LBJ's Great Society and all of those problems robbing from the SS funds to pay for them.

 

[Commercialfarmer]

I think we're on the same page CB. The problem is ss is robbed and abused. Because I think every gov program will be, I think workers should have an option to use it, or a private retirement option.

More broadly, I think we are feeding the lazy and growing our own domestic terrorists that believe they are born being owed. Separate programs, but tied into your statement of funding those that hate us.

 

[TexasBred]

I think we're on the same page CB. The problem is ss is robbed and abused. Because I think every gov program will be, I think workers should have an option to use it, or a private retirement option.

More broadly, I think we are feeding the lazy and growing our own domestic terrorists that believe they are born being owed. Separate programs, but tied into your statement of funding those that hate us.

Absolutely. I realize a lot more actual retirees are drawing social security but also those who actually work should be paying in 50 times what we paid in when we were in our 20's due to the larger incomes, higher FICA rates and higher base salary taxed. Instead of growing it simply gives gov't more money to play with then blame the disappearance on the actual retirees.

 

[3waycross]

I think we're on the same page CB. The problem is ss is robbed and abused. Because I think every gov program will be, I think workers should have an option to use it, or a private retirement option.

More broadly, I think we are feeding the lazy and growing our own domestic terrorists that believe they are born being owed. Separate programs, but tied into your statement of funding those that hate us.

Absolutely. I realize a lot more actual retirees are drawing social security but also those who actually work should be paying in 50 times what we paid in when we were in our 20's due to the larger incomes, higher FICA rates and higher base salary taxed. Instead of growing it simply gives gov't more money to play with then blame the disappearance on the actual retirees.

I remember being able to hit the SS cap some years and not pay SS from anywhere in the second or 3rd week of Dec. Now they just raised the cap so that i will never see that again

 

[Anonymous]

This is wrong on so many levels but no one in the gov't seems to care or police the abuse. A few years ago I took a guy pig hunting and we must have walked five hard miles hunting. The next week I see him at a function in the school gymnasium and he is hobbling with a cane. I ask him what the cane was all about and he told me he was handicapped and couldn't walk without it. :shock:

Apparently he was also retarded!

There's got to be more to that story

 

[john250]

This is wrong on so many levels but no one in the gov't seems to care or police the abuse. A few years ago I took a guy pig hunting and we must have walked five hard miles hunting. The next week I see him at a function in the school gymnasium and he is hobbling with a cane. I ask him what the cane was all about and he told me he was handicapped and couldn't walk without it. :shock:

Apparently he was also retarded!

There's got to be more to that story

There is always more to a Jogeephus story. Maybe during the 2nd intermission he'll serve us all ribs.