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Country Discussion Topics
To add your comments to this topic, click on one of the 'Reply' links below.

Maybe time to privatise social securty
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kraigWY    Posted 02-15-2004 at 11:03:09       [Reply]  [No Email]
Before you shoot me, let me explain. What if we took the money paid into social security and buy US Government bonds. Take your print out you get from SS and put it on a spread sheet with lets say, 4%. See what your SS checks would be compaired to what your getting or gonna get. If government bonds arnt secure then neither is SS or anything else. My retirement was managed by the retiries who owned it. I paid more into SS then I did my retirement system, SS wont come close to paying the taxes on my pension.


Sam#3    Posted 02-15-2004 at 18:30:10       [Reply]  [Send Email]
Below is the reply I just made to Ana's earlier post.
The System is just as secure as government bonds. They're both backed by the same revenue, The American taxpayer.

__A few years ago I made a presentation for a college class on Socialistic Insincerity.
In preparation I read the SS Act of 1935. Everyone should do that at least once in their lives.
I also spent several hours in the library reading the opinions of several authors on the general subject. The consensus of all the writers was that SS is a pay as you go welfare system. As long as there are taxpayers there will be an appropriation by Congress. None can afford to lose the Ďseniorísí vote.
I just completed my 2003 tax report and Iím happy(?) to report I paid three months of my own SS benefits.--


GregWis    Posted 02-15-2004 at 18:13:37       [Reply]  [No Email]
Yes and we could let Arthur Anderson run it, take 30% off the top for the execs and find out it all is gone in 10 years and the govt will have to bail it out. (Which it has to do anyway when the baby boomers retire).


GregWis    Posted 02-15-2004 at 18:08:34       [Reply]  [No Email]
Yes and we could let Arthur Anderson run it, take 30% off the top for the execs and find out it all is gone in 10 years and the govt will have to bail it out. (Which it has to do anyway when the baby boomers retire).


GregWis    Posted 02-15-2004 at 18:03:32       [Reply]  [No Email]
Yes and we could let Arthur Anderson run it, take 30% off the top for the execs and find out it all is gone in 10 years and the govt will have to bail it out. (Which it has to do anyway when the baby boomers retire).


deadcarp    Posted 02-15-2004 at 14:37:23       [Reply]  [No Email]
you don't understand - unlike a retirement fund that actually has funds in it and an account number, there is no pool of money waiting for us to retire. ss money is handled on an annual basis. at the start of that fiscal period, all numbers start at zero. we spend what they collected this year from whoever donated, just like real life. :)


Jet9N    Posted 02-15-2004 at 14:34:21       [Reply]  [No Email]
There are a couple of things that have not been
addressed here.
1. During the overlap (the time that those that
would start the privatized program would divert
part of their SS tax to the private fund there
would be that much less coming into the Fed SS
fund to pay those presently getting benefits)
would accelerate SS shortfall.
2. Don't forget other benefits: Disability coverage
and survivor benefits ( I have 3 grandkids getting
this benefit, they were 3year old twins and a 6
year old at my son's passing.) There would not have
been much in his private fund when he got cancer at 29.

It's a shame the founders of SS did not forsee
that the demographics of worker to retiree ratio
would change or they would have had the good sense
to put money into escrow.

I agree in principle, but have not figgered out out
how to solve these problems.

JMHO

Jet


they knew    Posted 02-15-2004 at 14:58:25       [Reply]  [No Email]
that the normal lifespan when SS was started, 1935 I think, was 65 or less. So, in the long run they figured it would help the govt not the worker. One of Roosevelts crafy ideas. Also, think the ratio is less than 3 to 1 now. Demos robbed it for 40 years, it is part of the general fund
REt


steve19438    Posted 02-15-2004 at 14:21:19       [Reply]  [Send Email]
when SS started there was 42 paying in for each withdrawer.


gar    Posted 02-15-2004 at 13:54:13       [Reply]  [Send Email]
At the rate they are going they will just raise the tax rate on ssi to 100% and then it will just keep the money rolling over. It's rediculus to have to pay tax on ssi income.


Jon(WI)    Posted 02-15-2004 at 13:53:09       [Reply]  [No Email]
That would be a good start. Only problem is that it would not start. The SS Account is used to fund other governmental agencies and actually no funds in it exist. What is paid out in SS to those receiving it is actually a pay back of what was/is owed it. Thus why would our great congress want to deplete this cash cow that we pay in to every payday and have less to spend. What needs to be done is keep in the so called "locked box" at a higher interest rate like what you are proposing. Getting it there is another matter.


Irv    Posted 02-15-2004 at 12:47:27       [Reply]  [Send Email]
I sure have paid a lot more into my retirement than SS. And I think SS is .0751% * a max of $80,000 = 5,640? I am guessing, but I think that the max SS is approx. $1800 / mo. This is $21,000 per year. To generate $21,000 per year @ 4% would requre approx. $525,000. I don't have an amortization table handy, but I think this would require in excess of $300,000 worth of saving on my part. Or $10,000 per year for 30 years. The thing that really funds this is that your employer has to pay .0751% too. All in all I think I am getting a good deal. I am estimating the amounts, but I think I am pretty close. Irv


bill b va    Posted 02-15-2004 at 13:42:51       [Reply]  [No Email]

you forgot the intrest you would be making on the $10,000 per year for 30 years .


Irv    Posted 02-15-2004 at 19:17:48       [Reply]  [Send Email]
Thats what I meant when I said I estimated the amounts. To generate 21,000 @ 4% you need $525,000 - I guessed at $300,000 you would need to contribute to get to 525,000 in 30 years. According to the "rule of 72" @ 4% money would take 18 years to double.


Dieselrider    Posted 02-15-2004 at 13:12:44       [Reply]  [No Email]
For those collecting ss you are getting a good deal but, for future generations it's not going to be a good deal. I forget the numbers when ss first started but, there were alot of people paying into the system for each one drawing on it. Now there is like 6-8 for each one drawing. Thanks to people living longer, among other factors, the number in another 20 years is two people paying in for every one drawing out. I'm no mathmatician but even the most casual observer can look at that and know there is a real problem. The fact that there is no money in the system because it gets spent each year on other projects, as someone else said, doesn't paint a rosey picture either. If it were to survive longer than the next 10 or so years the tax rate for ss is going to have to be raised. Some have said it will need to be about 80% of wages just to cover the ss system itself and that's not covering medicare which is another whole mess that will need dealing with.

A person draws out all the money he/she ever payed into ss in the first two years that they are collecting benifits.

One other thing, bussiness don't really pay taxes. So that 7.5% the govt. collects from bussinesses gets tacked right on to the prices they charge for their products and services and passed on to the end user, usually the consumer.
If you up their % to the point they can't compete with other companies, like the ones accross the pond, they will be forced to shut the doors and thus compound the problem all the more.


Jon(WI)    Posted 02-15-2004 at 13:58:01       [Reply]  [No Email]
Maybe that's why we need more illegal Mexicans legitimized and recorded, to pay our social security. Also, don't forget business expenses which are tax deductible.


Dieselrider    Posted 02-15-2004 at 14:10:06       [Reply]  [No Email]
I was thinking more of the 15 million or so babies that we've murdered through abortion over the last 25 years.


Jon(WI)    Posted 02-15-2004 at 14:21:00       [Reply]  [No Email]
Boy, that really hit home. Any woman that would do that would turn out to be abusive anyway, so maybe it evens out. hope not!!


Irv    Posted 02-15-2004 at 13:30:44       [Reply]  [No Email]
I think the payout period is going to be considerably longer for somebody like me. I will be working for quite a few years yet, I hope! I am also no math whiz. The country is going to have to make some choices on this stuff in the future. One thing that is already happenneing is that the age for drawing SS is increasing. For many workers it is going to be 70. And it may very well be increased from there. And people are working longer now too. Especially since the last stock market crash. I personally know several people who have had to return to the wokforce. I find it kind of sad that a person has to work into thier 70's because thier employer (like Enron) has screwed them. And I think there is something wrong with a society that allows that to happen. Irv


Dieselrider    Posted 02-15-2004 at 14:07:09       [Reply]  [No Email]
I agree with you that it is sad to have to work into your later years but, keep in mind that before ss came along there wasn't such a thing as retirement as we know it now. It might be that just a few generations actually get to experience it. I won't be one of them unless some things really change in the future.


big fred    Posted 02-15-2004 at 12:58:19       [Reply]  [No Email]
You just think your employer is paying that other .0751 into it. He is carrying it as a cost of employing you, just like your salary and benefits. When it comes right down to it, it's you that pays it, he just writes the check.


Irv    Posted 02-15-2004 at 13:12:35       [Reply]  [Send Email]
That is true. But it is something that the government requires. My employer does not have a choice, and if they did I am under no illusions as to what choice they would make. All in all the SS program gives the little guy a pretty good return. Especially at 4%. The comparison is pretty bad. I have not seen a analysis that realistically ran the numbers. I only see people make philisophical criticism. But look at the numbers! It would be impossible to find an investment that paid that well, and at NO risk. I have maxed out my 401 every year. I have conservative funds. And I am glad SS is there.


If a frog had wings    Posted 02-15-2004 at 12:55:10       [Reply]  [Send Email]
That is what I should have labled my other post. LOL. Irv


Darryl - MO    Posted 02-15-2004 at 12:35:48       [Reply]  [No Email]
Hi Kraig,

I'm not knowledgeable enough to have a real strong opinion on privatising SS but yes, the gov't. does have a real talent for messing things (and programs) up. I've read somewhere that Social Security wouldn't be in a 'crisis' if the fund weren't being raided by our elected representatives to pay for other programs. Perhaps the solution would be to somehow make the Social Security fund 'off-limits' to the pilfering of the polititians.


big fred    Posted 02-15-2004 at 12:56:09       [Reply]  [No Email]
It was off limits for the first few decades. Then during the LBJ administration, the gummint realized it could raid SS to pay for the Great Society programs and there was nothing we could do about it.


ret    Posted 02-15-2004 at 11:56:25       [Reply]  [No Email]
if your SS won't pay your taxes on your pension, you sure are a lot better off than most of us. With that kind of money, why are you even worrying about it?
REt


kraigWY    Posted 02-15-2004 at 14:50:29       [Reply]  [No Email]
I am thinking about the people who don't have a retirement system. If they can invest the money in gov bonds they would be making closer to $2500 the the $600


that is    Posted 02-15-2004 at 15:14:39       [Reply]  [No Email]
not a sure thing either, to make $2000 a month would require more money that most people can ever think of a return on their money. I am far from being a mathmatician, We were talking about taxes on pensions, how many people pay $10,000 tax?
REt


bob ny    Posted 02-15-2004 at 11:16:24       [Reply]  [No Email]
i agree that ss needs upgrading but what happens to those of us that are alreading collecting when i was working i paid for those that were already retired who is to pay for my retirement
the money i paid is all used up if the now workers don't pay into the fund where does the money come from you have to leave the money you invest set to collect dividens you can't use it


kraigWY    Posted 02-15-2004 at 11:27:45       [Reply]  [No Email]
True this would only work for the future reciepents, government screwed it up and they are gonna have to eat the cost (via tax dollars) of payments to those they have made contracts with. But if we start now, the money taken in will help if invested in the bonds. A better deal then we have now.


bob ny    Posted 02-15-2004 at 11:57:51       [Reply]  [No Email]
by they you mean taxpayers.that idea ought to raise blood pressure you will be paying twice as much. taxes and your investments, its a mess and a solution is going to be expensive no matter what it is its like medical ins


bill b va    Posted 02-15-2004 at 14:09:36       [Reply]  [No Email]

and then there is all of those people collcting that never paid in ......there is another thing that is never mentioned and that is all of the people paying in all of that money for years and dying before they could collect a dime . that has to amount to billions a year. if that money went into a different retirement their family could benifit instead of the dead beats.


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