The Future of Social Security

[Duffer]

Originally Posted by Werewolf

I fully expect to be penalized for saving for retirement by receiving a bigger proportional cut in Social Security benefits than to the people who were irresponsible with their money.

Well, if you are an actuary, you are the 1% that will be expected to pay the biggest share. Wear your exceptional status with pride, I say.
If that comes from your savings, well, you get the money from those who have it, so deal with it.

[Eimon Gnome]

Originally Posted by Werewolf

I fully expect to be penalized for saving for retirement by receiving a bigger proportional cut in Social Security benefits than to the people who were irresponsible with their money.

You'll be penalized - but it will have nothing to do with Social Security. It will be the tax code that does it to you.

You'll save for retirment under a tax regime based on income. Then you'll spend those savings in a tax regime based on consumption. Hit you on the way in, then hit you on the way out.

That will be the knockout punch.

[echo]

Originally Posted by Werewolf

I fully expect to be penalized for saving for retirement by receiving a bigger proportional cut in Social Security benefits than to the people who were irresponsible with their money.

I think this is a reasonable expectation.

[Mr. B]

Originally Posted by MountainHawk

30 years ago the country wasn't buried in debt of around 100% of GDP (due to the greed of the people of your generation, who refused to pay the taxes for the things they spent), it was more like 35%. Anyway, I've started researching the possibility of having any and all benefits from SS retirement portion being put into a trust for my kids and (future) grandkids. I have no desire to steal money from the young who are just starting out in workforce to support spending for myself. It could reimburse them any SS taxes they pay. My own personal opt out, if you like.

Well, as Bruce has pointed out, it could be made pretty functional with a few appropriate changes.

I'm taking his word for it, since he was on hand when SS made the changes necessary for my fears of 30 years ago to be extirpated.

[DanielSong39]

Social Security was secured for now thanks in part to government policies that allowed National debt to go from 35% of GDP to 100% GDP. It will be secure 30 years from now as long as National debt goes from 100% GDP to 165% GDP.

Debt is good as long as you can pass the buck to the next generation and you're dead by the time it has to be paid back.

[Wigmeister General]

Social Security is doomed. Get over it.

[campbell]

I think it's plenty fair that Boomers aren't going to get the Social Security or Medicare benefits that prior, more fecund and shorter-lived, generations got.

[Salzmann]

Originally Posted by DanielSong39

Let's just make the Social Security program voluntary. The people who complain about the program don't have to pay taxes and will get nothing in return. The people who sing its praises will pay taxes and get whatever's in the pool.

I wish. First of all, the people who opt out will include a large number of people who can do better saving the money on their own because of SS's progressive benefit structure (lower-income earners get a higher % of average wages in their benefits). Thus, the transfer of $$ from the high earners to the low earners is impossible. There will also be a lareg segment who won't or cannot save but will opt out anyway. They'll reach old age with no money and wonder why "the government" doesn't help them and, because it's politically unpalatable (and not nice) to let masses of needy people die, funds will be found to support them. SS, at least, is some forced savings.

It occurred to me that you may have been facetious and you know all this. But believe me, I wish I could opt out! Getting all my contributions (and employers' contributions) back starting with the withholdings from the week I delivered telephone books when I was 17 would be nice, too.

[campbell]

The "contributions" are just federal tax. Doesn't matter what label was slapped on it.

Social Security was never "savings". You don't own any assets as a result. You may or may not get money back, but the federal government owes you nothing in exchange for these taxes.

[Salzmann]

Originally Posted by campbell

The "contributions" are just federal tax. Doesn't matter what label was slapped on it.

I know that and you know that but my dear paternal grandparents went to their graves convinced that their SS payments were coming out of a little bank account in Washington, DC with their names on it. It didn't help that for years, the payroll deduction was labeled "F.I.C.A.", or "Federal Insurance Contributions Act".

That facade kinda crumpled when there were threats that SS payments would stop if the debt ceiling wasn't raised last August. If SS is adequately funded by payroll taxes, why was there anxiety about makiing the payments? You can either claim that it's adequately funded or admit that if an insurer funded annuities this way it would be put out of business by regulators.