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Milkman

Social Security has been controversial for a as long as I can remember.

This is a serious and relevant issue. Just look at your paycheck. Then read about what state Social Security is not only in now, but will be in, in the future.

I started this thread because of the energetic discussions going on in the "Aids" thread in Issues.

SS is real: we are forced to pay into it.

Many of my family members (even my mother) receive it, now.

SS is heading toward insolvency as Greenspan and Bernanke frequently remind us in their public statements.

As Surasak noted, out of a 40 hour week, 6 hours go into Social security. This is 15%.

Taxes on SS will be going up. Just do the math.

Tens of millions of baby boomers are now entering the rolls of SS.

So.....

What should be done?

Personally, I don't think I should pay into it, because at 37, I'll likely lose money on it if you look at average life expectancy, the amount paid it, the age I receive it (67), and this age will be raised.

No thanks, I'll pass.

How about you? What do you think?

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Wallace

Not sure about the US when it comes to SS. In the UK, it's probably similar, but National Insurance covers a state pension, health treatment, and unemployment and other benefits.

If you opt for private pensions and private health, then you do get a reduction on your NI contributions, but you can't opt out altogether. And why should you? NI and SS contributions are needed to fund the EXISTING obligations, not future ones. If you expect benefits in the future, then you will expect the rest of the population to pay a portion of their wage to a central fund to do that. How else could a government provide benefits that legislation says they are bound to do?

It angers me when people opt for private health and pensions and then complain when they say they don't see why they should pay anything to the government. It's easy to say that when you're working and healthy.
But what happens if you lose your job, the company you work for goes bust, or squanders its pension fund on high-earning CEOS (Enron, Maxwell, for example)? Of course, then people expect the government to help out, don't they? But if they don't want to contribute, then they should be left out to dry, in my opinion.

What happens if you get run over? In the UK emergency health treatment is free of charge. You could be in intensive care for hours, require life-support or other expensive medical treatment. That's why you should pay NI.

Again, the US may be different, but the argument for the UK, to me, is very clear.

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raycarey

SS as we know it today is at death's door.

IMO within 5 years there will be means testing, the age to qualify for benefits will be increased, and (perhaps in more than 10 years) those benefits will significantly decrease.

someone on the national stage is eventually going to have to make this clear to the american public.

MM we're about the same age, and when i was a teenager i distinctly remember hearing that our generation would not see the same benefits as our grandparents.

there are too many americans who are living too long.

man with no head

I can't imagine why anyone would think it's fair that I or any other person should spend 15% of our working hours paying income directly to someone else who just happens to be in a position to collect now. What are we going to get out of the deal?

This isn't about taxes going into a general fund that benefits all. This is something which benefits only a select few.

You might as well just let the government take 15% of my land and let some squatter live on it. It's the same principle.

Talk about robbing Peter to pay Paul.

Absolutely and positively eliminate it completely.

lom

^ Well, then don't use any service of that society which they built for you !

And, they have lent money to the government during their active working years with a promise to get them back with interest later on.
Should they be punished now ?

Boon Mee

I've got no problems with it as it's going to be there for me. Been paying into it since I was 16 so I'll do OK.

Milkman

Boon "welfare" Mee:

We need to make a change to the system that is fair.

Boon Mee

I LOVE this forum!

Perhaps you neglected to absorb the part about me working since I was sixteen and now on the wrong side of 50? Figure if I make it to 85 or so I might recoup the money I've put into it - touch wood...

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Milkman

Thank you for reinforcing my point.

The fact that you are rolling the dice about your own personal "life expectancy" is one of the many examples of why this is a broken, socialist system, that needs to be abolished.

Boon Mee

If I could have put that money I've paid into an alternative savings vehicle when I started out, I would have but it was, and still is the 'law of the land'. Unfortunately, SS has become so huge, it entails a lot more than retirement distributions.

Milkman

And this is exactly why it has to change.


Thanks again for reinforcing my point.

Boon Mee

No problem, but whenever the change comes, it's going to be painful for those ~40 and under.

Milkman

There won't be any changes because of the politics involved.

The SSA will keep trudging along. They'll just increase the taxes to cover the costs, and incrementally raise the age of eligibility for certain cohorts (generations).

Someone noted Means Testing, and I think this will be applied more stringently, also.

floorpotato

If the 15% deducted for Social Security was put into individual retirement accounts of U.S. Treasury bonds, a lot fewer of the elderly would be pushed into poverty in the coming decades. Currently, Social Security is a regressive tax (income over $97,000 a year is not taxed) for a welfare system that is insufficient for the elderly and abused by many of those drawing disability checks under the SSI program. The Republican suggestion of individual stock accounts is risky and intended to give their brokerage house buddies billions in management fees. Besides, the stock market has shown that it can decline for 10-20 years at a time. That is not security. Converting Social Security into individual U.S. Treasury bond accounts might also give Americans a very real stake in their own currency so that maybe they wouldn't tolerate government waste. Plus, it's fair. People would keep their hard-earned money and even pass it on through inheritance.

Frankenstein

Hedging is the way forward if you're young - some money should be invested at high risk, other at medium risk, and some at low risk.

attaboy

From what I remember of Bush's pitch to the American people, the options of investment would be the same as those offered to federal employees under their retirement program. The options are very conservative. You couldn't act like a day trader. But yeah the management fees would generate millions for brokerage firms involved.

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raycarey

^^^

good post floorpotato.

bkkstoneman

Milkman...I paid into social security at the maximum rate every year for 49 years...and I always griped about it and how I would never get my money back...Well, I am now drawing my SS benefits that I earned and paid for over the past 49 years..And I expect to get my full benefits for the rest of my life...And if you feel that SS taxes should be eliminated and the majority votes for that, I am sure that could happen...but I guarantee that your income taxes will see a significant increase to offset you canceled SS payments...On behalf of all the deserving SS recipients on this list, I say "Thank You and please keep working..

man with no head