Here’s another explanation.
But that’s only part of the benefit of social security. There are other benefits, such as not being able to outlive your benefit, disability benefits, and survivor benefits. I’m all for making a financial comparison, but if you stop once you get to dollars saved by age 60, all you have is garbage.
Actually, you can outlive SS just by it tanking and they cannot pay you. You can get disability insurance and survivor benefits as well. few people die at an early age, that’s why life insurance is so cheap. A $1 million dollar fixed annuity would provide much better life benefits than SS ever could. You can run the numbers all day long and I’ll always come out better without SS. If it were that good, then all of the investment houses would be run that way. It’s a Ponzi scheme, sorry to say. But, at this time, we don’t get a choice.
To H200h, then why do they keep reducing the benefits and run out of money if it’s such a good “Investment?” We are being paid with the money that is coming in from the younger workers, which by the way is shrinking. Before too long the effective SS tax is going to be 25% just trying to keep up. The numbers don’t add up. If it were such a good and safe deal, would you put more of your money into it? And, if it’s so good, then tell me why government agencies and Teachers don’t participate in SS.
Then do it. Don’t just say “I’d have $x at age 60, and therefore SS is worse.” I agree with you that SS is a bad deal, and I’d prefer to opt out of it. But it bothers me when people on “my side” make the weakest arguments.
This is news to me. I paid into SS when I was a federal employee. My wife and the school district pay in to SS for her.
I guess my response was too general. The law allows certain government employees to be exempt from SS, and some state Teacher plans. And, it’s been a while since she was a government teacher. Things could have changed. I do remember she and many of the elected officials didn’t participate in SS, but the employer still had to make its contribution to whatever plan they did have. I believe many still have the option to be in or not, but I admit I do not know specifically. I do remember back in the 80s I think SS was once again going broke and they made some sweeping changes to it to keep it going, like making SS taxable. Maybe they forced it on government workers to get more participation knowing the Baby Boomer crowd was coming soon and it was definitely going under.
WEP and GPO offsets limit the amount of Social Security that can be paid to those receiving a pension from a job that did not pay into Social Security. This is a change that was made in the '80s. Many public service jobs do not pay into social security, and that tends to include teachers, firemen, police officers, etc. Federally there are two different retirement programs: one that paid in, one that did not. I have two friends who are retired teachers from different states. One paid in, the other did not. Even though the one whose teaching salary did not pay in, she has had other jobs that did pay in, and in addition would otherwise have a survivor benefit from her late husband, but the combination of WEP and GPO ptevent her from receiving anything.
But, had she saved what she would have had to put into the system, and the employer was still obligated to contribute even if it was a different system, My point is she would have more money at retirement than with SS. The disability and longevity aspects are easily replaceable with cheap insurance and with better benefits. one could easily have way over $1-2 million by saving and investing 15% of your earnings each year. That’s my point. I’d rather have had the money than the SS benefit. Just as you mentioned above, it is the government that screwed up her retirement, not her. I would rather have the choice.
I worked for the state of Massachusetts from 1976 until 2006. Did not pay into SS, but paid 7% each week into the Retirement system for Mass.
Ya oughta be doing that regardless of SS. And the problem with your reasoning is that everyone doesn’t think, save or save the same way. You can prove that to yourself by googling up “what percentage of US retirees have SS as their sole source of income?”
Very interesting! Similar to what my wife had. The Teachers’ Retirement system actually grew from investment. Add in her 7+% and it grew a pretty nice nest egg . . . had she stayed. She left to teach in private schools for less pay and benefits, bc she wanted to teach and not just indoctrinate her students in government schools. Some of the mess became intolerable for her.
Why should that be my problem? There are plenty of things lazy, unproductive people do, why should the others pay the freight? They can make good choices also. Are you happy with the government making people with good credit pay more for those who have Bad credit, or are you happy to let me, who paid off all of my family’s school loans, pay for others who made bad choices? And, I’m not rich or wealthy and never will be at this rate. I just don’t see any of this as a good incentive to be a good productive citizen. It leads to a deadbeat society, and that’s exactly what they want. A citizenry that is dependent on the Government, a Nanny State.
Many people sadly have low-paying jobs. They are neither lazy nor unproductive. They don’t earn enough to “save for retirement”.
As for “good credit” or “bad credit” – credit scores are very questionable. A person who reliably pays their rent in full and on time do NOT get a boost in credit, but a homeowner or credit card owner does. A job loss or medical crisis can result in “bad credit”. I wouldn’t judge people by their “credit”.
You are very harsh in lumping people into negative categories and judging them as a whole. You want compassion for yourself but have none for people on the lower end of the socio-economic scale - even though the game is rigged against them. You sound very unhappy and angry, but the people you are judging so harshly aren’t responsible for that. Maybe you watch too much of a certain “news” channel…
Because it’s the law.
But that’s the point, why make laws that punish people for being good productive citizens. How would you feel if the government forced you to give to a particular charity or fund something you don’t believe in?
As to the low paying jobs issue, of course they have the money. I wasn’t talking about extra money, just the 15% we pay now to SS. Even people with low paying jobs, as you say, pay that now. My point is that they, we all, would be better off if we could take that and invest it. Putting all of that money into a system that is broke and broken, doesn’t make sense. Based on that, shouldn’t we just give all of our money to the government and let them give it back according to our need? Some feel that way, I know. I know people who would prefer the government to take care of them so they don’t have to be responsible. I just don’t see that as being productive. I’m not impugning anyone. Just stating facts.
It’s because we live in a democratic republic. That’s the way it is, and for 81 years I’ve loved it and to this moment I still do.
It’s messy, it’s cumbersome, it’s slow, it’s inefficient, it’s expensive, it’s frustrating, it’s always unfair to someone and it’s your responsibility to help make it better.
Got any ideas?
In your search I suggest you do not use examples from countries like, China, Russia, Iran, Israel, UK, Turkey, Saudi Arabia, Sudan, Myanmar, Philippines, Mexico, Columbia, etc… etc.
I understand, but it is just as democratic to dissolve a bad system if the people wanted it. I’m not sure how democratic it was when it was pushed on us, but I do understand why. It was also, democratic to keep women from voting, but thankfully that was abolished. Our Democratic Republic has made a lot of bad laws, and most have been abolished. Just being democratic doesn’t make it a good thing. Politicians benefit the most from these systems. In Washington, the more money you control the more power you acquire. Most people don’t know the truth about these social systems that have been thrust on us. It’s very difficult to get the truth these days. I’m not sure where you are going with that list of countries, but only one listed is a democracy. But, those are good examples of what happens when there is not a working democracy.
By “good” and “productive” you mean “high-paid”, right?
People in low-wage jobs are often hard-working and productive good citizens.
Why aren’t you channeling your anger towards the employers/corporations who keep wages low? That’s how it’s rigged – corporations make the laws that move the responsibility for wages, benefits, etc onto the government or the individual, while they dodge taxes and take no responsibility even though they are major beneficiaries of government money and policy.
You have a lot of anger. But why are you directing it at people who have no power, rather than at the people/corporations who do have power?
The Social Security Act was passed overwhelmingly in the House on April 19, 1935 by a vote of 372 yeas, 33 nays, 2 present, and 25 not voting. It was passed in the Senate on June 19, 1935 by a vote of 77 yeas, 6 nays, and 12 not voting. I’d say that was pretty democratic. (source)
That problem was made much worse on January 21, 2010 by our judicial system via a ruling by the Supreme Court allowing unlimited corporate campaign donations. That ruling made bestowed Constitutional First Amendment rights upon corporate political contributors and equated unlimited monetary campaign donations to US citizen’s free speech. (source)
Not really, but it takes a little effort and attention to your sources.
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