We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
Count me in with those who believe Social Security is a Ponzi scheme. After all, many Ponzis start with a surplus and garner interest, but over time the payouts exceed incoming revenues. All Ponzis are based on paying dividends to "investors" out of active money incoming from new "investors". But even Ponzis don't pay out additional money to people who petition for someone else's funds. If they did, I presume they would lower one person's payout to cover the person making the petition.
I'm not sure how long Social Security can last. A friend of mine who is dyed-in-the-wool liberal/progressive believes the upper range limit for SocSec payments should be eliminated and it should be handled the same way as an income tax. That is probably the first step that will be taken. Soak the Rich. This will extend the scheme for a few more years. Then they will undoubtedly implement means-testing, which will extend it a bit longer. At some point, all the financial engineering will fail. Until then, keep kicking the can down the road.
If they make it look income dependent, then they'll run into problems doing means testing.
The real problem is people treat it as their retirement, instead of a minimum retirement income to insure against total wipeout. So they don't save for a decent retirement.
In any case, eventually taxes across the board will have to be raise to pay the "trust fund".
We haven't seen the backlash against the raising of the retirement age. That's still a few years off. People are fixated on the 65 number but by we are actually in the period that creeps up. For the next few years, the full retirement age is 66. Of course, it only creeps to 67 for those born after 1960.
I don't have a problem with the retirement age going up. We are living longer, so why not work longer?
Well, that's a loaded question. Just got off the phone with a 57 year old friend of mine who is still looking for a job. Every time he walks into an interview, he says the faces go stone cold and it's "thanks but no thanks".
I told him even at my age, been there, done that. But I want to work until I'm older if I can. I enjoy it.
Former co-worker of mine is 77 and still consulting. Nobody would hire him today, obviously, so he decided to go it alone. Of course, he's got an 18 year old son about to go to college....
I don't expect to see a penny of the money I put into the system.
Why not means testing for 401K's?
Soc Security is a retirement benefit, an investment for which I paid my dough. I am due back money from my retirement account regardless of my "means." Same true for 401K. If the gov't does means testing for soc sec, why can't it do so for 401K or ira?
BUt, treat it like income and tax it? Makes sense, just like most retirement accounts, except for Roth where you pay taxes upfront.
What he meant by taxing it was that there is a limit on how much you pay. You reach a certain income level (I think it's $104,000 this year) and once you hit that level, they stop taking it out of your paycheck. You only pay in a set amount each year when you earn that much.
I think 65% of the people collecting SocSec pay nothing on it. The remainder have holdings or income at a level where they do have to pay.
I don't agree with income taxes. But if you have them, then all income should be taxable.
yes, means testing is coming. It's common in Europe after all.
Take the Netherlands, you're not going to get any social security if you own more than 2500 Euros in assets (bank accounts, investments, house, car, jewelry, basically anything that can be monetised if you were to auction it off or sell it has to go except some clothes).
If you end up on social security after working for 40 years and your employer goes bankrupt, leaving you unable to find another job because you're too old, doesn't matter.
SS could continue forever with a simple change: 1. Everyone gets paid an amount which reflects what they paid into SS. That is if you paid in twice as much over your lifetime then the next guy did your monthly payout would be exactly twice what the other guys is. 2. Set the payout based on the pari-mutuel system where no more can be paid out then is taken in. While that means you could get $1000 this month and $900 next month at least the SS couldn't go brke and would continue to provide income to the retired who paid into the system for 48 years.
Social Security is the debt the working generation(s) owe to the retired generation(s). It is not an investment. The money you pay in is no longer your money.
The biggest problem with the current system is that the people demanding the program be saved for the next 75 years are actually saying surpluses should be generated that Congress can use now.
Those surpluses during the years almost all Boomers were working gave Congress license to get involved in all sorts of things. If Congress did not have that money rolling in, it would have had to figure out how to tax for the programs and this would have slowed the momentum.
The money was shipped back to states and local governments weakening local participation. "We got a grant to hire a cop. We're hiring a cop. We did not get a grant to hire a teacher, maybe next year."
We are not going to end the system, but please do not generate any more surpluses.
I think saving social security is the main reason for amnesty. It gives a whole new flood of money and kick the can down the road.
I used to do taxes for ppl and was shocked at one ladies' response to her 401k. She had changed jobs and was happy to cash out her 401k cause that was "her money". It didn't even seem to phase her that she paid a huge withdrawal tax. She said she bought herself a car.
It is a myth that SS is not means tested. If you have sufficient other income, you do not get the entire benefit you are "entitled" to. The means testing is done by the IRS when you file your 1040: there is a worksheet that you use to determine how much of your benefit you will receive.