Comments on: Predicting the Future: Will People In Their Twenties Today Collect Social Security In Retirement? And How Should That Answer Change Our Plans?

By: Dawn

Dawn — Sat, 08 Dec 2007 12:40:15 +0000

I am 23. It isn’t so much that I am depending on living off my social security money when I retire…

The real issue is that I pay 15% of my hard earned money to go to “people who need it” that I don’t even know. Which would be fine….IF…I could expect the same in return. I could really use every penny at this moment. The only thing that makes giving the 15% bareable, is the faith that I will “get it back” in some way or form. I work my *** off going to school full time and working full time. There are times when I run out of food before pay day. How is it justifiable to STEAL 15%, if you don’t plan to give it back in some way.

I have so many issues with the government it isn’t even funny. I was never really interested with what was going on in Congress and the Senate, until I felt the personal impact they had on me! When I graduated (all smiles) and went out into the world, I learned the cold, hard, truth…

No on is looking out for me! I am female. A lot of the females that are my age have kids, live off free housing and food stamps. Don’t work. Don’t try. They are content to live their lives like that. I didn’t put myself in the position to get knocked up by some low life before I could afford to…so I’m being punished. I refuse to apply for food stamps. Not because I don’t think that I deserve them or could use them. I most definitely could…I don’t apply because I’m sickened by all the people I have seen (with my own eyes) who do.

I don’t want to be DEPENDENT on the government. You CAN’T be. In ANY way. Don’t count on getting social security benefits in 40 years, I don’t believe they will be there. If someone does come up with an idea to secure our financial future in some way…please get your idea out there. I would so support someone with a solid idea! If we leave it up to the “stiffs” in the government, we’re screwed!

By: Tanya

Tanya — Wed, 17 Oct 2007 14:44:36 +0000

What is the real problem with the system? Is it that the government can’t control the number of workers paying in (birth rate), the number of beneficiaries (death rate) the amount of taxes collected or the spending of Trust Fund monies?
How can we ever expect to solve this if we can’t clearly agree on the real problem? I don’t know how the worker taking home $25,000 a year could save the amount of money needed to opt out of the system.

By: Jane

Jane — Mon, 17 Sep 2007 18:06:16 +0000

As someone who makes just over the cap. I don’t pay SS for the last 3 or so paychecks of the year. Leave my cap alone. The cap has also risen every year the last three years it is now a little more than $96K.

By: maxconfus

maxconfus — Mon, 17 Sep 2007 13:43:24 +0000

Not sure if ss will be around in the future or not but I do know some people from the late 70′s who opted out of paying ss because they thought it would not be around and are living today to regret that decision.

By: eROCK

eROCK — Mon, 17 Sep 2007 10:38:58 +0000

@ Susan

Thanks for proving my point :-)

SS has to be around to some degree to fund people on disability and unemployment. However, we should be able to choose what’s done with the money.

@ Andrew

You’ve laid out the reasons why I’d like to remove most of the SS system! Redistribution of wealth is something horrible and it needs to be ended.

I appreciate seeing the numbers, surprising. People need to become accountable for their own retirement and the best way to do that is to not spoon feed those who don’t save on their own.

By: lorax

lorax — Sun, 16 Sep 2007 17:13:53 +0000

Think of SS as a variable annuity, varying at the rate of salaries. Add in the disability insurance. Compare it to a private plan of the same type. Then come back and tell me how bad it is. (Hint, it’s not what many think!)

By: guinness416

guinness416 — Sun, 16 Sep 2007 13:46:21 +0000

Y’all can have the decade plus’s worth of social security I and husband paid in if it makes you feel better, we won’t be using it where we’ve moved to.

By: Susan

Susan — Sun, 16 Sep 2007 13:42:03 +0000

Liz, in regards to your quote:

“All wealthy governments finance some sort of safety net for the poor, old, and disabled”

I agree for the poor and disabled, but not necessarily the old. Poor and old together, yes. Poor and well off, no. There is no need for us to be reducing our salaries by 15.3% to provide even more to the rich or even well off just because they happen to be old. If we were to only use social security for the old poor and the disabled, the deduction from our salaries would only be 2.1%. The main problem with social security is that we are not only financing the old poor, and the disabled, but also the old rich and disabled rich. Heck, just looking at the responses on this topic, most of the people here admit that they would be fine without social security.

By: Liz

Liz — Sun, 16 Sep 2007 12:24:25 +0000

I don’t know. I’ve always thought that social security is there as part of a societal safety net. I have a hard time imagining that it will be eliminated. In fact, I think it will only be eliminated were America to experience a total decline. All wealthy governments finance some sort of safety net for the poor, old, and disabled. I think that is good, which reflects my political slant.

I think that it is unrealistic for anyone at age 30 to think that they can make solid predictions for their retirement. Basing it on social security or not, basing it on projected stock market returns, on stopping working, on being in the same relationship, etc. The fact is, that forty years from now we will all be in a totally different situation than we are now, personally, economically (100 years ago Britain was where the US is now), and politically (you never know what political changes will happen over time). That being said, I do think that it is important to save for retirement, and a good idea to take advantage of tax breaks to do so. You can do the exact planning when retirement gets a little closer.

By: Brian

Brian — Sun, 16 Sep 2007 06:09:30 +0000

Some excellent points and I agree with you, that it is best to NOT count on Social Security in your planning for retirement. Even if it’s still viable at a lesser benefit rate, who really knows how the inevitable shortfall will be made up(by lowered benefits AND means testing???). Better to be safe and if you get to collect it, great. If you don’t need the money, then donate it to charity.

By: Andrew Stevens

Andrew Stevens — Sat, 15 Sep 2007 20:29:37 +0000

There was a typo in my earlier post. 1970-1979 should read 9.6% to 12.26%. Social Security tax rates have never gone down.

By: Andrew Stevens

Andrew Stevens — Sat, 15 Sep 2007 20:11:10 +0000

I’m not even remotely a socialist, but I’m with dong on this. I have no objection to Social Security if we call it what it is – a welfare program. What bothers me about Social Security is that it was sold to the public (and still is) as a retirement program and it’s not. Some people have made absolutely fabulous returns on their “investments” (pretty much everyone up to and including the people retiring now, so long as they draw at least five or so years of payments – keep in mind that Social Security taxes used to be a much smaller percentage of income) and some people make really abysmal returns (those who die young and most people who have had the majority of their working years since payroll taxes were jacked up). The other thing that bothers me about it is that it’s a transfer payment from the poorest segment of our society (the young) to the wealthiest segment of our society (the old). If Social Security is a welfare program (and it is), then shouldn’t we means-test it and toss the rich old geezers out of the system? Moreover, as a welfare program, it’s funded in a really regressive manner. Due to income caps on Social Security, the rich contribute a much smaller percentage of their income to the fund than do the poor. Since they cap benefits, this would make sense if it’s a retirement program, but it clearly isn’t.

By the way, let me include some data to show why people believe that Social Security is a great deal (because they’re looking at people who are drawing it or have drawn it in the past) and some people believe it’s a lousy deal (because they’re looking at people who are paying into it now). Here are the payroll tax rates from 1937-present:

1937-1949: 2%
1950-1959: went from 3% to 5%
1960-1969: went from 6% to 9.6%
1970-1979: went from 9% to 12.26%
1980-1989: went from 12.26% to 15.02%
1990-present: stayed level at 15.3%

If you were paying in 2% (or even 0%, since old folks who paid in for only a year or two were still eligible to collect back when the program was founded), Social Security is a truly marvelous deal. If you’re paying in 15.3%, Social Security is a really terrible deal.

By: dong

dong — Sat, 15 Sep 2007 17:13:14 +0000

I’m with the others. Social security is not an investment, and I don’t really have huge problem with that. It is a pyramid scheme and I’m ok with that. It’s pyramid scheme built on historically what’s been a pyramid population distribution. It’s really not much different than having children help out the parents in old age except on national scale. Most of the problem with social security have nothing to do with government spending per se as much as the fact that the population distributions have changed since the program was first established. This is always a risk even if every generation funds it’s own retirement through investing. Business investments face the same risks that come with changing demographics, just not as directly.

I’m fine with idea of not getting social security because I probably won’t need it. I’m also fine with paying taxes to ensure the elderly today get benefits. But I’m probably a bit more of socialist then many other commentators here.

This is not to say the social security system doesn’t need fixing. It’s program by it’s nature needs constant review, and that’s where the government has failed – not addressing the issue.

By: BantyRed

BantyRed — Sat, 15 Sep 2007 13:30:37 +0000

The SS reform proposal of 2005 seems pretty reasonable to me:

Increase benefits more slowly (index to prices rather than wages)
Optional private accounts (up to 1/3 of contributions)
55 and older remain under current system

By: Susan

Susan — Sat, 15 Sep 2007 13:12:14 +0000

eRock, I did a quick calculation and you are right that the results are surprising. If you were to invest the 15.3% that social security takes out of your salary in an 8% account for 40 years, with 4% withdrawals after retirement, you’d be able to withdraw about 15 times your working salary. With current social security withdrawals, you only get back around 0.25 times your salary. So by saving on your own, you’d get back 60 times what social security pays you.

By: Laura

Laura — Sat, 15 Sep 2007 12:54:58 +0000

As of right now, I’m not counting SS into my retirement plans. I hope that some solution is made to keep it solvent. I like Ed’s idea about taking the cap off. That would at least increase income for the program.
If my husband and I get SS, then that would be fantastic, but to be on the safe side, we’ll not count that just yet.

By: eROCK

eROCK — Sat, 15 Sep 2007 12:09:58 +0000

@ Peter

Appreciate the name calling. Can you show us the difference between investing versus allowing the gov’t to hold our money for us?

Assume an average return of 8% and do the math, take inflation into account and post your results.

I think after you do the math you’ll be surprised at the results.

@ Dave

I don’t have time to post all the details, but certain ‘stops’ would need to be placed and SS would be phased out in stages … this way the suffering is minimal.

By: Michael

Michael — Sat, 15 Sep 2007 12:06:35 +0000

Legally, the federal government does not owe the trust fund debts to individual SS recipients. It owes money to the Social Security Administration. According to SSA’s Web site, the trust fund now has over two trillion dollars of debt in it. Congress borrows any surplus SSA takes in payroll taxes. If anything will happen in the near future, Congress will raise payroll taxes or lower benefits…so they can keep the surpluses rolling in. That way, they can keep borrowing money. As soon as the surpluses permanently dry up, I expect Congress to weep crocodile tears and declare Social Security bankrupt. Technically, it would not be bankrupt, because Congress owes SSA all of that money. But it probably will be spun that SSA owes SS recipients far more than it can ever pay.

By: plonkee

plonkee — Sat, 15 Sep 2007 10:28:11 +0000

I’m assuming that at some point with all these programmes its going to be exclusively that the current workers pay for the current retirees. Given that I am in a relatively small age group, and by the time I retire, the baby boomers will be dead I reckon there’s a good chance that I’ll get some government money.

By: Susan

Susan — Sat, 15 Sep 2007 10:02:57 +0000

Brad,

Good point, but that is not the main purpose of Social Security. According to the SS website, about 3% of the benifits are paid out for the purposes of disability. The other 97% is simply a very old age (67+) forced partial retirement plan that many people would opt out of if given the chance. If the goal is to take care of the handicapped, we could get rid of social security and set up a seperate fund for handicapped people which would take 0.459% (3% of the current 15.3% out of our salaries) and distribute to only the disabled. Heck, even if we set it up to take care of BOTH the disabled and the poor, the deduction would be 2.1%, not 15.3%. The problem with social security now is that if forces everyone who would be fine on thier own without it to participate in a forced retirement plan for everybody. I have no problem paying for poor and handicapped people, but don’t force me to pay into something for myself and other people who are well off.