"The demise of social security"

[jimthesailor]

It seems like every article I read talks to planning for "the demise of social security". Everyone talks like this is a done deal when in fact we have the ability to "fix" the problem using either an increase of the income ceiling at which you no longer pay ss tax or a "slight" increase in the tax itself.

There are many other ways we can be more creative and prop up the fund if we use are heads. It's the old saying "if you say something often enough it will become the truth". I for one don't buy it. The "baby boomers" who are "going to break the bank" are a very large voting block and should write their elected officials and demand this be addressed now while it's less painful and not in the 11th hour when all the drama queens and politicians trying to increase their polls can make a embarrassment out of it.

Increasing the retirement age might sound appropriate for people who sit at a desk in front of a computer all day (no offense) but people who work hard physically can not keep it up into there 70's.

We spend more on our defense budget , roughly 10 time more the next closest industrialized nation. Let's quit the discussion about the "demise" and start seeing articles about insuring the future of this vital program.

The "three legged stool of retirement" used to be social security, company pension, and personal savings. Company pensions are a thing of the past, and if social security is diminished that will put the burden of retirement on the individual. Gee those words are familiar. Tell me what you think.

 

[Butterfly]

What we need to do, and soon, is raise the cap on social security taxable income, or eliminate it altogether. There is no reason not to do it -- it certainly would not be a burden on the wealthy, although I'm sure they would scream their heads off. Large employers would probably scream, too, because employers must pay half of the employee's social security tax liability.

As you say, raising the retirement age is really not workable, particularly for those who do physical labor or those whose jobs require a high degree of health, eyesight, etc.

 

[oldman]

I think most Americans of any age believe that the SS tax rate ceiling should be raised. This has been an ongoing debate for some time. There really is no other workable plan that would be fair to the majority. Raising the age limit is not workable for the reasons stated. I was a commercial airline pilot for 34 years. There is a tremendous amount of stress associated with this job and although I did my dream job and would have not wanted to do anything else, at 62, I was ready to step aside, even though I could have continued by FAA rules until 65. When I was offered the "early out incentive package", I did not hesitate to grab it.

Those that do laborious work are probably more than willing to go out at 62. I have friends that are not professionals. Some are tool and die makers and I have one friend that works for UPS and is 66 and still driving. He complains all the time about his job and how it effects his body and so on, but won't walk away from the money, even though he has a nice pension plan and 401(k)waiting for him. He keeps telling us that when he retires he will make more money being retired than he does working, so figure that one out.

 

[jimthesailor]

Thanks "oldman" for your reply. I used to know a few pilots and air traffic controllers and the stress was a well documented topic of conversation. Congrats on being able to get out at 62 with your sanity in tack. Boy the story about your friend that is still driving for UPS at 66 certainly resonated with me. Sometimes I feel I am like your friend and can't walk away from the industry I've been involved with for almost 40 years. I'm a little concerned that my original thread has only gotten two responses. If this is any indication of the number of people who believe SS is a critical program and we should begin an action plan to write our elected officials and demand it's solvency for years to come I feel that inaction will result in the people who want to carve up one of the remaining legs of the stool to do so at will. Anyone who is reading this pls chime in with your feeling on this topic. Thanks again "oldman" spread the word.........

 

[Josiah]

I don't know what sources you're reading, but Social Security isn't going away and I doubt that cost of living adjusted benefits will be lowered or the retirement age raised. Instead the cap on social security taxable income will be raised. I think if the Republicans try to privatize it again they will not find a lot of support throughout the country.

 

[Lon]

Irrespective of what ever happens or is done with Social Security I would like to see the government provide tax incentives to tax payers that encourage & promote personal thrift/savings/investment.

 

[QuickSilver]

Irrespective of what ever happens or is done with Social Security I would like to see the government provide tax incentives to tax payers that encourage & promote personal thrift/savings/investment.

That would be great for those making enough money to be able to save and invest. BUT.. what about the folks that are living from paycheck to paycheck now and can barely make ends meet? How about young families trying to raise kids? If you give them the money in their check that would have gone to FICA.. do you REALLY think they will save it or invest it? OR is the more likely scenario that they would buy the kids shoes or clothes that perhaps they were putting off., or put the money toward some other necessity.. like maybe medical bills. So what happens to these people when they get ready to retire. Tell the.. hey.. tough.. you didn't invest so now starve?


Another thing that bugs the hell out of me about privatizing SS. WHY give our money to the bankers on Wall Street? Why let them play with it and perhaps gamble it away? They would never be held accountable for the loses... but the average guy hoping to retire certainly would. His retirement nest egg would be gone.. and the fat bankers would be bailed out by more taxpayer money... BAD BAD..idea, this privatization.. We will be back to the days when 90% of the elderly lived in poverty, or did without healthcare..

 

[Lon]

Quicksilver said: That would be great for those making enough money to be able to save and invest. BUT.. what about the folks that are living from paycheck to paycheck now and can barely make ends meet? How about young families trying to raise kids? If you give them the money in their check that would have gone to FICA.. do you REALLY think they will save it or invest it? OR is the more likely scenario that they would buy the kids shoes or clothes that perhaps they were putting off., or put the money toward some other necessity.. like maybe medical bills. So what happens to these people when they get ready to retire. Tell the.. hey.. tough.. you didn't invest so now starve?

I don't buy that one bit. Saving is a habit and everyone, no matter what they earn needs to save, and the earlier they learn that habit the better. Living from paycheck to paycheck is only necessary for people that can't learn to budget and handle money.

 

[QuickSilver]

Quicksilver said: That would be great for those making enough money to be able to save and invest. BUT.. what about the folks that are living from paycheck to paycheck now and can barely make ends meet? How about young families trying to raise kids? If you give them the money in their check that would have gone to FICA.. do you REALLY think they will save it or invest it? OR is the more likely scenario that they would buy the kids shoes or clothes that perhaps they were putting off., or put the money toward some other necessity.. like maybe medical bills. So what happens to these people when they get ready to retire. Tell the.. hey.. tough.. you didn't invest so now starve?

I don't buy that one bit. Saving is a habit and everyone, no matter what they earn needs to save, and the earlier they learn that habit the better. Living from paycheck to paycheck is only necessary for people that can't learn to budget and handle money.

What a crock... and pretty sanctimonious I may add.. Obviously you have been very fortunate. BUT.. you didn't answer my question.. if a senior was not able to save and invest.. what happens to them? Let them die?

 

[Don M.]

Irrespective of what ever happens or is done with Social Security I would like to see the government provide tax incentives to tax payers that encourage & promote personal thrift/savings/investment.

The IRA/401K program is the Best thing our government has done for people in the past 50 years. I just wish it had been around when I first started working. Sure, it was a bit of a hit to the monthly income the first 2 or 3 months, but we quickly adjusted our spending to compensate for the money being withheld. Now, with some careful monitoring of the mutual funds, it is a Godsend. Company pensions are a rarity, and public pensions are coming under increased stress. SS can be maintained with some minor adjustments....but If that's all a person has to count on, they have to watch every penny.

Social Security Does have One thing going for it....Millions of people who count on that money every month. Now, if they will just get out and vote Against anyone who wants to ruin that program, perhaps it will still be around for several more decades.

 

[QuickSilver]

See... now I think 401Ks were another giveaway to Banks and Wall Street. Before that Corporations used pensions as a benefit for employees. Then regular pensions were eliminated and replaced with 401Ks with minimal fund matching on the part of the employer. This took all the risk of market fluctuation from the employer and placed it squarely on the retiree. So they really didn't do their employees any big favors by doing away with pensions and using 401ks instead.

 

[AZ Jim]

Quicksilver said: That would be great for those making enough money to be able to save and invest. BUT.. what about the folks that are living from paycheck to paycheck now and can barely make ends meet? How about young families trying to raise kids? If you give them the money in their check that would have gone to FICA.. do you REALLY think they will save it or invest it? OR is the more likely scenario that they would buy the kids shoes or clothes that perhaps they were putting off., or put the money toward some other necessity.. like maybe medical bills. So what happens to these people when they get ready to retire. Tell the.. hey.. tough.. you didn't invest so now starve?

LON, You may not "buy that" but it is a fact. Many here have literally used every dime they had to exist. That is without a major calamity in their lives, how about those who HAVE such a money sucking situation? How about those who took food off their tables to buy insurance only to develop a cancer in the family the treatment having eaten up the maximum benefit. It is easy for the fat cats to sit back and pontificate about the others but the fact is many in this country cannot save and pay their bills, buy their food, pay their rent and transportation costs. The easy thing for the "haves" to keep a low profile in a country where we're not all "haves" is to not criticize the "have nots". I don't want everyone to suffer as many do just to feel superior.

 

[Underock1]

Quicksilver said: That would be great for those making enough money to be able to save and invest. BUT.. what about the folks that are living from paycheck to paycheck now and can barely make ends meet? How about young families trying to raise kids? If you give them the money in their check that would have gone to FICA.. do you REALLY think they will save it or invest it? OR is the more likely scenario that they would buy the kids shoes or clothes that perhaps they were putting off., or put the money toward some other necessity.. like maybe medical bills. So what happens to these people when they get ready to retire. Tell the.. hey.. tough.. you didn't invest so now starve?

I don't buy that one bit. Saving is a habit and everyone, no matter what they earn needs to save, and the earlier they learn that habit the better. Living from paycheck to paycheck is only necessary for people that can't learn to budget and handle money.

Lon, We agree on many things, but not on this. We worked and saved our way out of poverty.We lived in a rent controlled, vermin infested two and a half room apartment for thirteen years. No vacations. Raised two happy kids in the process. Eventually bought our paid up house in the suburbs. We lived from paycheck to paycheck for many years, living on the thin edge of disaster.
I tell you true; the major part of our success was just plain dumb luck. I lost my job several times along the way with dim prospects. I was just extremely fortunate to find new ones. A health problem at any time would have meant the end of everything. You can't save in any meaningful way unless you have money left to save. Putting aside 1.98 once a month is not going to do it.

 

[Lon]

What a crock... and pretty sanctimonious I may add.. Obviously you have been very fortunate. BUT.. you didn't answer my question.. if a senior was not able to save and invest.. what happens to them? Let them die?

You are assuming, as you appear to do with many of your posts, that I am sanctimonious as well as fortunate, and lady, you haven't got a clue about me. I believe in personal responsibility and good habits. I also believe that that people that are genuinely in need should be helped. I don't believe or want t the government to have the ultimate responsibility to provide for irresponsible people to live in the same manner as those that have lived responsible lives.

 

[Underock1]

LON, You may not "buy that" but it is a fact. Many here have literally used every dime they had to exist. That is without a major calamity in their lives, how about those who HAVE such a money sucking situation? How about those who took food off their tables to buy insurance only to develop a cancer in the family the treatment having eaten up the maximum benefit. It is easy for the fat cats to sit back and pontificate about the others but the fact is many in this country cannot save and pay their bills, buy their food, pay their rent and transportation costs. The easy thing for the "haves" to keep a low profile in a country where we're not all "haves" is to not criticize the "have nots". I don't want everyone to suffer as many do just to feel superior.

:thumbsup1:

 

[QuickSilver]

Prior to SS 35% of seniors lived in poverty. That is down to under 10%.. Medicare has eliminated the concern that one major illness will wipe out a life savings and drive someone into poverty after working and saving all their lives.. and SOME think it's a fine idea to eliminate it or privatize it?

 

[Underock1]

You are assuming, as you appear to do with many of your posts, that I am sanctimonious as well as fortunate, and lady, you haven't got a clue about me. I believe in personal responsibility and good habits. I also believe that that people that are genuinely in need should be helped. I don't believe or want t the government to have the ultimate responsibility to provide for irresponsible people to live in the same manner as those that have lived responsible lives.

With all due respect, Lon, the reason you believe in personal responsibility and good habits is because you were raised that way. Be thankful for the circumstances you were born into. Others have been born into slightly different ones.

 

[QuickSilver]

Lon, We agree on many things, but not on this. We worked and saved our way out of poverty.We lived in a rent controlled, vermin infested two and a half room apartment for thirteen years. No vacations. Raised two happy kids in the process. Eventually bought our paid up house in the suburbs. We lived from paycheck to paycheck for many years, living on the thin edge of disaster.
I tell you true; the major part of our success was just plain dumb luck. I lost my job several times along the way with dim prospects. I was just extremely fortunate to find new ones. A health problem at any time would have meant the end of everything. You can't save in any meaningful way unless you have money left to save. Putting aside 1.98 once a month is not going to do it.

:thumbsup1:

 

[QuickSilver]

With all due respect, Lon, the reason you believe in personal responsibility and good habits is because you were raised that way. Be thankful for the circumstances you were born into. Others have been born into slightly different ones.

And many folks think that they hit a triple when in actuality they were born on first base..

 

[Don M.]

See... now I think 401Ks were another giveaway to Banks and Wall Street.

Au Contraire. 401K's are the Best way for a person to try to build some retirement security...IF they are wise enough to take advantage of these programs. Sure Wall Street is Evil...But it is the Only game in town. Bank accounts sure aren't doing anyone any good. Corporations are in it to make money, and if a person invests Wisely in those corporations, they will get their small slice of the pie. Insofar as companies managing a retirement portfolio...No company investment counselor has a bigger interest in My retirement funding than I do...I would far rather manage my own finances than to have some Financial Adviser taking charge...whose primary interest is "Churning" those funds so as to increase his fees.

Sure, there are some at the very bottom of the wage ladder who need every penny they make, but most working people in their younger years can easily find a few dollars a week to put towards their own retirement. Setting some money aside in a 401K certainly makes more sense than spending $150 a month on a stupid cell phone so they can "text" endlessly on Facebook.

 

[AZ Jim]

As one example of someone's personal life interfering with their ability to save, how about the working man who in addition to providing for his immediate family sends $150 per month to an aged mother. He COULD save that money, but chooses to exercise his "personal responsibility" by taking care of his Mom. His bother matched his gift and for years it helped their Mom survive in her little mobile home until she passed. THAT is personal responsibility without a selfish motive.

 

[QuickSilver]

See... now I think 401Ks were another giveaway to Banks and Wall Street.

Au Contraire. 401K's are the Best way for a person to try to build some retirement security...IF they are wise enough to take advantage of these programs. Sure Wall Street is Evil...But it is the Only game in town. Bank accounts sure aren't doing anyone any good. Corporations are in it to make money, and if a person invests Wisely in those corporations, they will get their small slice of the pie. Insofar as companies managing a retirement portfolio...No company investment counselor has a bigger interest in My retirement funding than I do...I would far rather manage my own finances than to have some Financial Adviser taking charge...whose primary interest is "Churning" those funds so as to increase his fees.

Sure, there are some at the very bottom of the wage ladder who need every penny they make, but most working people in their younger years can easily find a few dollars a week to put towards their own retirement. Setting some money aside in a 401K certainly makes more sense than spending $150 a month on a stupid cell phone so they can "text" endlessly on Facebook.

Pensions were better... I have three of them from assorted employers before 401Ks took over. Think about it. With pensions, employers had the obligation to meet the payments no matter what the market did. With 401Ks... employers MAY provide matching dollars up to a small amount.. mine matches only up to 3% of my contribution.. BUT.. I take ALL the risk due to market fluctuation. How much money did your lose in 2009 with the crash? I lost a bundle.. but fortunately made it back... whose to say we won't have another crash? That's what I mean about 401Ks being better for the employer than the employee.

 

[QuickSilver]

As one example of someone's personal life interfering with their ability to save, how about the working man who in addition to providing for his immediate family sends $150 per month to an aged mother. He COULD save that money, but chooses to exercise his "personal responsibility" by taking care of his Mom. His bother matched his gift and for years it helped their Mom survive in her little mobile home until she passed. THAT is personal responsibility without a selfish motive.

Jim... it's always easy to blame the other person for their misfortunes. It's like blaming the woman for being raped. Let's face it.. it's easy to sit up on ones high horse and chastise people for their circumstances.

 

[AZ Jim]

Jim... it's always easy to blame the other person for their misfortunes. It's like blaming the woman for being raped. Let's face it.. it's easy to sit up on ones high horse and chastise people for their circumstances.

Yep, the view is different from the castle.

 

[Don M.]

Pensions were better... I have three of them from assorted employers before 401Ks took over. Think about it. With pensions, employers had the obligation to meet the payments no matter what the market did. With 401Ks... employers MAY provide matching dollars up to a small amount.. mine matches only up to 3% of my contribution.. BUT.. I take ALL the risk due to market fluctuation. How much money did your lose in 2009 with the crash? I lost a bundle.. but fortunately made it back... whose to say we won't have another crash? That's what I mean about 401Ks being better for the employer than the employee.

Pensions are certainly a good thing. One of the primary reasons why I took an early retirement was because the company was going to do away with Defined Pension plans...so I retired early enough to lock mine in. On their last annual report, they have 75 billion set aside to meet the obligations of those of us who got out in time. If I remember correctly, the company matched up to 6% of our gross in our 401K's...which was enough to build a nice "cushion".
The markets certainly go Up and Down....that is Why it is important for the individual to Pay Attention. When the banks were loaning billions to anyone with a pulse, during the housing bubble, it became pretty obvious that this could not continue. I got out of the Dow/S&P/NASDAQ in early 2007, and sat in the money markets for about 18 months....until the Bust was pretty much over. As a consequence, my losses were minimal, and today, after pulling monthly checks out for over 13 years, I have about the same as when I started....basically nearly $300K of "free money" during that time.

the one's that amaze me are those who held good jobs during their working careers, and outside of the equity in their houses, their net worth is only $75K, or less. Those people obviously failed to think about their futures.

Here's a good article and chart that shows why so many people absolutely need Social Security in order to live. Those in "Green" are living on the edge.

http://www.fool.com/investing/gener...e-americans-net-worth-by-age-heres-where.aspx