borrowing from Social Security

hmm. SS taxes me at 12.4% of income for 45 years compounded annually, then pays me ("about 33 to 40 percent of a worker’s average wage from the year prior to retirement"😉 for around 12 years (til i croak at average age 77 or so).

given that i'm starting out in life at a low wage, even so, is that a good deal?


http://www.freedomworks.org/publications/is-social-security-a-good-deal-for-retirees

Max Pappas
FreedomWorks
Jul 30, 2003
Is Social Security a Good Deal for Retirees?
...

Had an average-earning 65 year old today been allowed to own the Social Security taxes he paid over his lifetime in a personal account, earning just 7 percent per year (a 75/25 stock/bond portfolio would have returned about 10 percent over his working years), he would have $188,573. Continuing to earning just 7 percent, this would provide $1,000/month and grow to $197,553 over his expected 16 years of retirement. It would continue to grow, while providing $1,000/month to his kids once he passes away, for his grandchildren, and so on. Instead, he gets $895 per month from the government until he dies and is left with nothing to pass on.

It is regrettable that today’s seniors were required to spend their working lives contributing to a system that does not allow for the accumulation of wealth. They are stuck in that system for the remainder of their years, but their children don’t have to be. While today’s retirees cannot pass on the accumulated wealth they would have had, they can use the power they wield in the ballot box to make such an opportunity possible for their kids by supporting personal retirement accounts.

...

Originally posted by zeeblebot
hmm. SS taxes me at 12.4% of income for 45 years compounded annually, then pays me ("about 33 to 40 percent of a worker’s average wage from the year prior to retirement"😉 for around 12 years (til i croak at average age 77 or so).

given that i'm starting out in life at a low wage, even so, is that a good deal?


http://www.freedomworks.org/publicatio ...[text shortened]... uch an opportunity possible for their kids by supporting personal retirement accounts.

...

...

Personal retirement accounts would ensure both a more secure and more prosperous retirement for the children of today’s retirees. Michael Tanner and Peter Ferrara of the Cato Institute have calculated that a married couple, both earning an average income, would accumulate $1,776,634 by the time they retired if they started working and saving today, and earned a conservative 6 percent annual return. The average return for a portfolio with 75 percent stock and 25 percent bonds from 1872-2000 is 6.32 percent. Continuing at 6 percent, this would provide $106,599 in earnings per year forever. With Social Security this couple would get $36,436 per year as long as they were both alive, $20,715 per year after one died, and nothing once they have both passed.

...

i guess not. (it's not a good deal.)

Two observations about Social Security in general:

1) It is an enormous Ponzi scheme, and is running out of contributors as more and more people work as "independent contractors," and therefore the system must, of necessity, go "bust."

2) What ever happened to FDR's announcement that it would be "voluntary?" (Oh, and it was also supposed to be "tax-exempt" until the Democrat-controlled congress changed that. I'm not a Republican either, but it seems a violation of trust to compel the American worker into contributing to a "retirement system" not of his choosing and then tax him on its payback. Let's hear it for the US Constitution and the liberty that it originally espoused!

Originally posted by whodey
When the legislation was passed, what was the median age when people died? Now compare that to the age that people could collect.

Median age had nothing to do with it. Duhhhh

Originally posted by zeeblebot
It is regrettable that today’s seniors were required to spend their working lives contributing to a system that does not allow for the accumulation of wealth. They are stuck in that system for the remainder of their years, but their children don’t have to be. While today’s retirees cannot pass on the accumulated wealth they would have had, they can use the po ...[text shortened]... e such an opportunity possible for their kids by supporting personal retirement accounts.

...[/b]

First Big Brother steals the retirement from those who have worked all their lives through the social security ponzi scheme and now they are robbing future generations via increasing debt. So after they get done screwing both current generations and future generations, who is left to steal from? :'(

Originally posted by bill718
Median age had nothing to do with it. Duhhhh

If it had nothing to do with it, why then did they set it at that age?

Originally posted by GMForsythe
Two observations about Social Security in general:

1) It is an enormous Ponzi scheme, and is running out of contributors as more and more people work as "independent contractors," and therefore the system must, of necessity, go "bust."

2) What ever happened to FDR's announcement that it would be "voluntary?" (Oh, and it was also supposed to be "tax- ...[text shortened]... Let's hear it for the US Constitution and the liberty that it originally espoused!

The Supreme Court originally and correctly struck down many of FDR"s programs like Social Security as being unconsstitutional. Then after FDR's court packing scheme they had a change of heart.

Originally posted by zeeblebot
...

Personal retirement accounts would ensure both a more secure and more prosperous retirement for the children of today’s retirees. Michael Tanner and Peter Ferrara of the Cato Institute have calculated that a married couple, both earning an average income, would accumulate $1,776,634 by the time they retired if they started working and saving today, ...[text shortened]... ere both alive, $20,715 per year after one died, and nothing once they have both passed.

...

Social Security is not , and never was, an individual savings/retirement scheme (nor a retirement enrichment scheme); it is a social retirement insurance scheme. The kind of argument being made here could be made against any group insurance scheme—by contrasting it to what it is not intended to be to begin with.

I pay health insurance premiums every month; I pay in—and have for years paid in—far more than I draw out, because I am healthy. Meanwhile, my premiums increase because others in the same insurance group (insurance “society” ) have not been as healthy (and because the insurance company wants to maintain their healthy “loss ratio” ). When I die, no one else in my family can draw benefits from the premiums I have paid in; nor can I transfer benefit payments to someone else while I am alive. (Of course, in this case, I am not anxious to receive benefit payouts from what I paid in.)

On the other hand, I don’t have to worry about whether I have saved enough for long enough, or whether the market has crashed, if I need to be admitted to the hospital. There is always—always, always—a positive correlation between risk and return (and your examples seem to ignore that, as well as cyclical fluctuations that may coincide unfortunately with retirement).

Now, the health insurance example is not an exact analogy by any means—but anyone can argue against any group insurance program because it is not an individual savings/payout plan. But that is like arguing against a pickup truck because it is not a Lexus.

Of course, Merrill-Lynch/Bank of America, and Goldman-Sachs, etc. would love to get all that money going through their machines (did your example account for fees and commissions?)—and, after all, who would not trust them with our retirement savings? Oh wait, the government will bail them out, right? Social Security might go bankrupt, but Lehman Brothers--never!

Originally posted by GMForsythe
Two observations about Social Security in general:

1) It is an enormous Ponzi scheme, and is running out of contributors as more and more people work as "independent contractors," and therefore the system must, of necessity, go "bust."

2) What ever happened to FDR's announcement that it would be "voluntary?" (Oh, and it was also supposed to be "tax- ...[text shortened]... Let's hear it for the US Constitution and the liberty that it originally espoused!

Wouldn't there have to be someone using pension funds for private gains for it to qualify as a Ponzi scheme? What does that even mean in this context?

Originally posted by zeeblebot
hmm. SS taxes me at 12.4% of income for 45 years compounded annually, then pays me ("about 33 to 40 percent of a worker’s average wage from the year prior to retirement"😉 for around 12 years (til i croak at average age 77 or so).

given that i'm starting out in life at a low wage, even so, is that a good deal?


http://www.freedomworks.org/publicatio ...[text shortened]... uch an opportunity possible for their kids by supporting personal retirement accounts.

...

Had an average-earning 65 year old today been allowed to own the Social Security taxes he paid over his lifetime in a personal account, earning just 7 percent per year (a 75/25 stock/bond portfolio would have returned about 10 percent over his working years), he would have $188,573.

And what if he didn't earn 10% a year? - or 7% a year? -- what if he invested in lots of internet stocks in 1999 just before Nasdaq crashed? -- what if he had entrusted his nest egg to Bernie Madoff?