# Changes to Social Security



## smitty77 (Feb 3, 2005)

Assuming the president is right and Social Security will be bankrupt in 2042 under the current unchanged system, I was wondering what all of you think about president Bush's proposal for setting up personal investment accounts.

Personally I'm so sick of all of these politicians pretending that it's no big deal, the system isn't in trouble, Social Security should be a sure thing, yadda yadda yadda.  I'll be 65 in the magic year of 2042.  If the Bush is right, it won't be a sure thing for me.

Smitty


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## thetrailboss (Feb 3, 2005)

(Sigh).  Can I vote, "I have no idea?"  I don't know who or what to believe and even with my background in political science I can't get my arms around the topic.   :-? 

It seems as if Bush and his cronies are using the, "we'll scare the he&% out of them  :uzi:  and then they will follow along with anything that we say."   :dunce:  Scare tactics are not a good way to run a country IMHO.


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## hammer (Feb 3, 2005)

thetrailboss said:
			
		

> It seems as if Bush and his cronies are using the, "we'll scare the he&% out of them  :uzi:  and then they will follow along with anything that we say."   :dunce:  Scare tactics are not a good way to run a country IMHO.


That approach worked with Iraq, why not Social Security too?

That's alright...maybe after a few more years of this the American people will finally see that re-electing Bush wasn't such a great idea after all.  At this point I'd rather see Bush as a lame duck president -- would be better for the country overall.

I'm not sure about the Social Security proposal, but given Bush's past handling of domestic issues I just don't trust it.

(end of rant)


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## Greg (Feb 3, 2005)

I'm in favor of privatizing at least a portion of your SS contributions. I've seen figures that Social Security's rate of return (adjusted for inflation) is a bit over a measly 1%. Regardless of the urgency of the system going bankrupt or not, I'm sure I could do better than that between now and when I'm elegible to receive benefits...


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## smitty77 (Feb 3, 2005)

thetrailboss said:
			
		

> It seems as if Bush and his cronies are using the, "we'll scare the he&% out of them  :uzi:



I left the uzi in there because I've always liked that icon, just never had a chance to use it.    

The only problem is I'm not so sure that he's wrong.  Aren't they increasing the age at which you begin to draw from the system?  I've had a couple of retirement planners advising me that there is a real possibility that it won't be available to me when I retire, and if it is I may not be able to access it until I'm 75.  I've been planning my retirement assuming it won't be around, so I should be okay either way.

I'm just tired of politicians saying that "retirement roulette" is not good for Americans.  How do they know what's good for me?  What is not good for me is subsidizing a failing system for 40 years that won't benefit me when it's my turn to draw from it.  That money would be better off in my own hands.


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## noreaster (Feb 3, 2005)

55 and over your safe.  Guarantee no change.   For the 54 and under group were r screwed.   The 50 to 54 group and their childrent that may be supporting them are going to be really screwed.   This group could see a 10,  20, 30, or even 40 percent drop in SS benefits.     I have never seen the country so polarized before this SS issue.    Now the SS isue will make the country even more polarized.   Gezz what ever happen to try to help each other out in time of need and  we  treat each otther with respect rather than try to be  so mean to each other.   Sorry your 54  years old you got to take a BIG cut in SS.  Your 55 your ok no cut for you. .


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## hammer (Feb 3, 2005)

smitty77 said:
			
		

> The only problem is I'm not so sure that he's wrong.  Aren't they increasing the age at which you begin to draw from the system?  I've had a couple of retirement planners advising me that there is a real possibility that it won't be available to me when I retire, and if it is I may not be able to access it until I'm 75.  I've been planning my retirement assuming it won't be around, so I should be okay either way.
> 
> I'm just tired of politicians saying that "retirement roulette" is not good for Americans.  How do they know what's good for me?  What is not good for me is subsidizing a failing system for 40 years that won't benefit me when it's my turn to draw from it.  That money would be better off in my own hands.



The problem that I see is that, if any money is taken away from the current system to fund individual accounts, how will they pay the current benefits?  I highly doubt that the government can get away with any cuts in existing benefits, so where will the money come from?


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## Stephen (Feb 3, 2005)

I'd be happy if they said : "Mr. Dunhom, we've taken your money for 17 years. You're not going to get anything, so, tell you what. If you agree not to take any benefits from us, we'll cut you loose from the SS system." Then I can take that money and invest it in my own account.

I'm utterly convinvced that I can manage my money better than the government ever can. Not to mention, should I pass on, my family will get the money, whereas with SS teh govt DEPENDS on me dying young so they can give the money to someone else.

A government program that benefits from citizen's deaths is NEVER a good idea. Period.

-Stephen


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## thetrailboss (Feb 3, 2005)

smitty77 said:
			
		

> thetrailboss said:
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Yes, I could not resist either!!!   :wink:


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## Greg (Feb 3, 2005)

Stephen said:
			
		

> Not to mention, should I pass on, my family will get the money, whereas with SS teh govt DEPENDS on me dying young so they can give the money to someone else.
> 
> A government program that benefits from citizen's deaths is NEVER a good idea. Period.


Yeah, really. It's *my *money, after all. I would like to have an option to give it to a beneficiary...


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## hammer (Feb 3, 2005)

Greg said:
			
		

> Yeah, really. It's *my *money, after all. I would like to have an option to give it to a beneficiary...


Unfortunately, with Social Security, it's not *our* money that is going into an account to pay for *our* benefits...it's a Government program to provide a "safety net" of benefits (and then some), and it's funded by an *income tax*.

Yep, I'd rather have some of the Social Security taxes I pay come back to me for investing and keeping.  I just think that, unless existing benefits can be cut, diverting a portion of my Social Security tax to a private account will just make the overall Social Security tax rate higher, and it won't get me any more in the end than what I can currently do by just increasing my 401k and IRA contributions.


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## Greg (Feb 3, 2005)

hammer said:
			
		

> Greg said:
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I didn't mean literally. I understand basically how the SS system works. My point was, like you said, it would be nice if at least a percentage of the SS deduction was available for you to invest. I see your point though about the challenge with funding current benefit recipients.


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## smitty77 (Feb 3, 2005)

Greg said:
			
		

> I'm in favor of privatizing at least a portion of your SS contributions. I've seen figures that Social Security's rate of return (adjusted for inflation) is a bit over a measly 1%. Regardless of the urgency of the system going bankrupt or not, I'm sure I could do better than that between now and when I'm elegible to receive benefits...



You sure could.  Even my most conservative holdings returned about 4% over the last  5 years.  I don't know how to make changes without someone seeing cuts, but changes will need to be made.  Most of the baby-boomer generation hasn't reached retirement yet, and we're living longer than ever.  I've heard one of the bigest mistakes people make in retirement planning is in considering the actual length of retirement.  If it were me, I would rather see a cut in *future* benefits when I'm 55 (and have the ability to work a little longer to make up the shortfall) than see cuts in *current* benefits when I'm 85 or 95 and left without means to heat my home or feed myself.  However, I have time on my side right now, and I may feel different if I were 10 years from freedom -- er, retirement


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## hammer (Feb 3, 2005)

Greg said:
			
		

> I didn't mean literally. I understand basically how the SS system works. My point was, like you said, it would be nice if at least a percentage of the SS deduction was available for you to invest. I see your point though about the challenge with funding current benefit recipients.


I didn't mean to snap back on this point, and I apologize if the reply came across as condescending in any way.

It just seems that a lot of people who would want to have some of their Social Security taxes diverted to private accounts truly believe that Social Security is some kind of "investment" account that they are supposed to get a return on when they retire.  And, IMO, it's those people that the Bush administration is trying to appeal to.


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## Greg (Feb 3, 2005)

hammer said:
			
		

> I didn't mean to snap back on this point, and I apologize if the reply came across as condescending in any way.


No offense taken at all and no need to apologize. I understand you were trying to make a point.


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## riverc0il (Feb 3, 2005)

personally, i believe the SS program is out dated and useless.  i think it should be scraped all together.  i will be surprised if i don't end up investing way more into SS than i will ever get back in return.  it was a great program when it was launched; however, we've reached a point in time it's useless.

why privatize SS?  just let me put the money into my 401k instead?  it's the same thing without the government's involvement.  i'm not a libraterian or anything and actually lean socialist...  but also believe the less government involvement the better.

it makes no sense privatizing SS.  just eliminate the program and let people diversify their own investments as they like.


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## thetrailboss (Feb 4, 2005)

uphillklimber said:
			
		

> I like the idea of taking care of my own retirement funds, and would definately do a better job than the government. The problem, as I see it is that if everyone was required to take care of their own retiremnt, without strict guidlines, is that there are too many who live for today, and put nothing aside for tomorrow. Guess what happens when they get old and have no money. They go to Washington and cry to the bleeding hearts, who will of course shower them with innumerable entitlements. And you know how they will fund these entitlements? With my hard earned money.
> 
> I don't believe that any one should starve to death in America. But when we give them so much of my money that they can afford to buy all kinds of beer, cigarettes and lottery tickets :angry:  that's just too much. Yeah, I'm working on some low income projects again, and I can't believe I am doing it again. These folks get so much money and entitlement benefits that they don't have to work, yet there is always a butt in their mouth!!!! Cut their benefits til they find a way to work and earn some of that cash!!!!
> 
> ...



Yes, this is my reservation with just cutting the system and going private.  Regrettably, there are people who just can't plan or understand what is going on and though some may say, "not your problem, trailboss," at the end of the day when they can't afford anything, I'll end up paying for them in HIGHER taxes or other costs.  

Ms. Trailboss and I are both real young, but we have been saving what we can for retirement/other things.


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## ctenidae (Feb 4, 2005)

Biggest problem I see with privatizing SS is where the money goes. There's already so much money in the stock market, and mutual funds have so much influence on the market, that pouring that much more money in will only cause more problems. There's a finite amount of profit available- more money chasing after tha same profit dilutes everyone's returns. Yes, you could get a better return on your own, but not if 250 million other people are trying to, too.
The best cure for SS, I think, is to clean it up, then lock it up. Clear out as much waste as possible (a good step, no matter what) then lock the money away. The SS trust fund has been a slush fund forever, with the gov't dipping into it whenever they want. What BushCo doesn't say is that it'll be bankrupt in 40 years (maybe) if current practices continue (deficit spending partially funded by SS funds, among other things). If the gov't needs to use the cash for funding (aside from the whole unbalanced budget problem) then put the money paid in into 30 year bonds (yes, bring them back) so the gov't has access to the cash, but the payout is locked up for SS.
Uphillclimber's very right- people can't be counted on to plan ahead themselves, hence the need for SS in the first place. People can, however, be counted on to abuse whatever system's in place. With those two givens, you need a system that's as difficult to abuse as possible. Unfortunately, gov'ts in general are really bad at doing that.


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## thetrailboss (Feb 4, 2005)

ctenidae said:
			
		

> Uphillclimber's very right- people can't be counted on to plan ahead themselves, hence the need for SS in the first place. People can, however, be counted on to abuse whatever system's in place. With those two givens, you need a system that's as difficult to abuse as possible. Unfortunately, gov'ts in general are really bad at doing that.



You've done a great job summing it up...I agree!   :wink:


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## hammer (Feb 4, 2005)

Does anyone know of any good sites with info on the specifics of the proposed plan?

As much as I think making this type of change is a bad idea, I'm certainly not that principled about it.  If I'm given the option to put some $$ aside, I'd do so if it would make sense financially.


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## ctenidae (Feb 4, 2005)

Hammer-
There aren't any, yet. Bush's detailed plan was only handed out to journalists a couple of days ago, and whitehouse.gov isn't even posting it. Your best bet is to read a handful of teh newspaer articles out about it (please be sure to balance Fox with, say, the NYT. I went through a couple of websites that are obvious GOP schills (www.socialsecurityreform.org, for one glaring example) adn it appears they're already gearing up the "You're either with us or against us" machine- This quote kills me: 
Those who favor making changes to the current Social Security retirement program are united in their support for the following principles: 

1) Permit workers to invest a portion of their Social Security payroll tax (FICA contributions) in individually owned and directed personal retirement accounts. 

2) Oppose payroll tax increases. 

3) Guarantee a "safety net" (minimum government benefit) for all retirees. 

4) Preserve benefits for current retirees and near retirees. 

So, if you oppose private accounts, you're clearly for bankrupting America's future, right?


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## hammer (Feb 4, 2005)

ctenidae said:
			
		

> So, if you oppose private accounts, you're clearly for bankrupting America's future, right?


I don't know about anyone else, but I don't oppose private accounts at all.  I already have several, they're just called IRA and 401k accounts.  

It just seems that all of the principles behind the proposal just don't add up.  Divert incoming funds to private accounts, don't increase payroll taxes, preserve benefits...sounds like "voodoo" Social Security to me.


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## ctenidae (Feb 4, 2005)

That's why the fine print in Bush's plan cuts benefits over time...


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## hammer (Feb 4, 2005)

ctenidae said:
			
		

> That's why the fine print in Bush's plan cuts benefits over time...


Yep, and diverting funds from current payroll taxes to private accounts will just make that worse, most likely to the point where the "safety net" that is promised will have so many holes that they'll have to raise payroll taxes eventually.

I'm an engineer and not an economist, so maybe I don't know what I'm talking about...


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## smitty77 (Feb 7, 2005)

uphillklimber said:
			
		

> These folks get so much money and entitlement benefits that they don't have to work, yet there is always a butt in their mouth!!!! Cut their benefits til they find a way to work and earn some of that cash!!!


Don't get me started on this one.  It's a shame that those who really need the help are (usually) too proud to accept the help and work their arse off trying to make it on their own, while the rest of the lazy bums in this country abuse the system.

I think all of this banter has raised more questions than it answered.  Uphillklimber is right, some people cannot plan for their own future.  So, how about bigger tax incentives for those who can and do plan for their future?  Something like being able to claim another dependent if you sack away X percent of your salary every year.  Or possibly allowing retirees that have a substantial nest egg the option of deferring SS benefits, and give them a lower tax rate on funds drawn from their personal IRA?

Just some thoughts.
Smitty


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## Max (Feb 7, 2005)

And for those who think a 401-K plan is 100% safe, I could tell you a horror story from personal experience that you would not believe.  Personally, I think the government should totally get out of the retirement business.


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## ctenidae (Feb 7, 2005)

Get through the normal forum garbage, and  this  is actually a pretty good discussion on thepros and cons of SS privitization. Just read carefuly to balance out the NeoCons (tm)  with the Whining Liberals (tm). Some of the people actually do know what they're talking about.[/url]


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## ctenidae (Feb 9, 2005)

When I ran a restaurant (several moons ago), one of my bartenders ran into a problem- she has a son, and was living with ehr boyfriend of several years, engaged, etc, who also had a son. She took her son to the airport to go stay at his grandparents for the summer. When she got back to the house, her "boyfriend" had moved out, lock, stock, and barrel. She was all of a sudden stuck with bills far beyond her means. We did what we could at the restaurant, extra shifts, etc, She went to the Welfare office, just needing a hand untilshe could get out of the lease, move into a more affordable place, get back on track. They denied her. One woman, with a job and a kid from a previous marriage, needed a helping hand for a very short while. I thought that was who welfare and such was for.
The happy ending to the story is the kitchen crew consisted of some rather burly sorts, none of whom took kindly to anyone screwing with one of their girls.
The moral of the story- take care of yourself, because the gov't is not there to help when you really need it. At retirement or otherwise.


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## Stephen (Feb 9, 2005)

Government is not the solution to the problem. I'll aways remember Reagan's line about the scariest thing someone could hear is "We're from the governement, and we're here to help."

-Stephen


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## bigbog (Feb 13, 2005)

*SS revamping.......*

There's another angle that isn't listed in the poll....  Congress has years to do one thing they _sometimes_ do well...and it's the one thing the Administration cannot do AT ALL  :roll: .....and that is DESIGN a strategy based on known facts, not on scare tactics...that WILL Work.   If our fearless leader cares so much about the average workingman in THIS country, why does the plan have to be finalized within the confines of this Administration's lifespan?.... :roll:
The kegboy isn't into procrastination...(I like that!), but he's too comfortable at creating stories (aka..."lying"..) for his own benefit, at the expense of society.  The idea that taking the tax cut away from the wealthiest 3% is a tax increase....._makes one want to throw up...._


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