Social Security yet again!

[Kidlicious]

I just don't think many people have the capability to invest like you do.

[Ming]

Maybe... maybe not. The point made earlier that the average person doesn't beat the indexes is probably accurate... But from my perspective, if I took all the money I've put into SS, and invested it in a similar fashion, I would REALLY be well off... and the cost of private medical insurance after retirement would be something I could afford, and I would have better health care than what will be provided by the government... and then when I die, I could pass the money on to my children or my wife if she survives me. Beats the hell out of the miserable little checks I will get from SS...

[Bosh]

OK... even if you believe the arguments that SS will stay solvent with no changes (and the arguments are strong in that direction), the pay out at the end still sucks. If it's all you have, you will be living at the poverty level. OH JOY... be still my beating heart

Right, but we're stuck in a nasty situation where in order to change how Social Security works (which may or may not in itself be a good thing) we have a to spend a MASSIVE amount of money to pay current retirees the money that is being diverted into private accounts or what not. That kind of massive glut of US debt isn't going to be pretty.

[Dinner]

Originally posted by DinoDoc
There are only about two ways he could do it without doing the evil act of letting people have control over thier money. Neither of them are politically popular with the soon to retire Baby Boomers. Cut benefits or raise the retirement age.

Anyway: Empowering workers: The privatisation of social security in Chile

Pick up this week's issue of Businessweek. It has an excellent front page piece on the state of Social Security and the conclusions it reached using Congression Budget Office figures was that SS was safe at least until 2052 though likely 2070 was the more likely event since the CBO uses conservative growth figures. So with no changes we can expect the system to be safe for at least another half century.

They also wrote about smple changes which would save the system without privatizing it including: !) Raising the amount of income subject to the SS tax. Currently anything over $90,000 per year doesn't get taxed by SS but if that was changed to $140,000 then the system would be solvient at least to 2100. 2) Index retirement age to expected life spans or let retirees opt to retire earlier for less money or hold out longer for more money. 3) Simply spending out of the General Fund will cost 1/2 -1/3 the cost of privatization.

Those are just a few facts from this weeks Businessweek.

[GePap]

Originally posted by Ming
OK... even if you believe the arguments that SS will stay solvent with no changes (and the arguments are strong in that direction), the pay out at the end still sucks. If it's all you have, you will be living at the poverty level. OH JOY... be still my beating heart

Actually, IF that is all you have at the end, obviously without SS you most likely would have had nothing at all, so in the end, you are better off thanks to SS than without it. Which is realy the point.

Since I started work, I've been contributing to a retirement fund. I've put in less money each year than I get taxed for SS. When I retire, that money will actually fund my retirement. The checks I get from SS will be chump change

Good for you-and it would be great if every single person did this. BUt they won't, so SS provides a basic cushion that helps avoid extreme poverty amongst the elderly.

So its great and all Ming that you plan to be well of, but that has 0 to do with the discussion at hand, which is how to secure a program so that those that either don;t have anything to put in a retirement account, or will spend it all throught life supporting our consumption economy will not be without anything at the end of their working years.

[GePap]

I like how publication after publication is taking the privitizers to task, but I still fear that democrats will surrender to the "ownership society" rhetoric and embark on some fooolish ideology that might cost of trillions.

[Dinner]

Originally posted by Ming
Since I started work, I've been contributing to a retirement fund. I've put in less money each year than I get taxed for SS. When I retire, that money will actually fund my retirement. The checks I get from SS will be chump change

Ming, this is a risk to reward type situation. There is no risk to Social Security and it is the one part of retirement which EVERYONE is guaranteed to have. Guarantees like that in life are rare. True, maybe someone could make more with higher risk investments but then some people would win and some people would lose and we’d spend boat loads of money and still have many losers. As little as social security provides it is something which everyone rich or poor, smart or dumb, leftist or rightist is absolutely assured.

[Rufus T. Firefly]

Originally posted by Ming
It's been 27 years so far and many more to go before I get to the age before SS would start paying off, and compound interest is a wonderful thing. By the time I retire, I'll have more than enough capital to live off reasonable interest rates

So doubt all you want... my retirement will be comfortable.

Just curious, Ming: does your retirement fund involve matching funds from your employer?

And does anyone know if the Bushie privatization plan involves madatory matches from the employer?

[Dinner]

Oh, yeah the Businessweek article also spoke about means testing so that we don't end up sending checks to millionares. That is another simple change which would result in a solvent system for a LOOOOOOONG time to come.

[Rufus T. Firefly]

Originally posted by Oerdin
Oh, yeah the Businessweek article also spoke about means testing so that we don't end sending checks to millionares. That is another simple change which would result in a solvent system for a LOOOOOOONG time to come.

Means testing is the way to go, at least on SS (Medicare is another question). Like Ming, I'm not going to need my SS checks at all, and I think it's actually appalling that I'll be getting them.

[Dinner]

Originally posted by GePap
I like how publication after publication is taking the privitizers to task, but I still fear that democrats will surrender to the "ownership society" rhetoric and embark on some fooolish ideology that might cost of trillions.

Businessweek seemed to be doubters Bush could force through his privatization scheme. Apparently, Democrats aren't playing ball and the Republicans don't want to jump off the cliff unless they have the cover of this being bipartisan. Other wise when the deficits explode (as planned by the privatizers) then Democrats can blame Republicans. Also deficit hawks in the Republican party refuse to alow more spend since Bush has already run up the biggest deficit in the history of the world while the anti-tax Republicans are refusing to increase taxes to cover the truly massive costs of destroying Social Security.

If you can't borrow and you can't increase taxes the only option is to cut, but, Bush and the Republicans don't want to cut popular programs because then they'll get slaughtered in the next election. Ergo Bush isn't likely to get his plan approved.

[Ted Striker]

I agree, I don't think he is going to be able to push it though.

[Kidlicious]

Let's just thank God that the average American is against his plan, and just hope that is enough to stop it.

[DanS]

Let me be the first to point out that Bush came out with a plan that is as I described earlier in the thread. Bush actually mentioned the Thrift Savings Plan in his State of the Union. The plan is to force higher allocations to bonds, which are very low risk, as people grow older.

Really, this is a rock solid way of going about things. It takes into account all of the things that we have learned over the past couple of decades with regard to investing and pensions.

[Bosh]

Originally posted by DanS
Let me be the first to point out that Bush came out with a plan that is as I described earlier in the thread. Bush actually mentioned the Thrift Savings Plan in his State of the Union. The plan is to force higher allocations to bonds, which are very low risk, as people grow older.

Really, this is a rock solid way of going about things. It takes into account all of the things that we have learned over the past couple of decades with regard to investing and pensions.

That's all very nice in theory but how the hell do you pay for SS payments at buy the bonds at the same time without running up an insane debt?