Email: Social Security Name Change

[LadyEagle]

Email I received:

REMEMBER, MEMBERS OF CONGRESS DO NOT PARTICIPATE IN THE SOCIAL SECURITY BENEFIT PLAN.



Subject: Social Security Name Change
It's always good to be reminded that it isn't just the legislative folks in Illinois who have behaved like scoundrels their entire careers ...... but I digress ......
Subject: Social Security Name Change

IN NOVEMBER ...........................................think!

Pay attention to your next Social Security income, whether you get a check or an electronic deposit....note what it is now called...see below..SOCIAL SECURITY NOW CALLED 'FEDERAL BENEFIT PAYMENT'/ENTITLEMENT!

Have you noticed, your Social Security check is now referred to as a "Federal Benefit Payment"? I'll be part of the one percent to forward this. I am forwarding it because it touches a nerve in me, and I hope it will in you. Please keep passing it on until everyone in our country has read it.

The government is now referring to our Social Security checks as a “Federal Benefit Payment.” This is not a benefit – its earned income! Not only did we all contribute to Social Security, but our employers did too. It totaled 15% of our income before taxes. If you averaged $30K per year over your working life, that's close to $180,000 invested in Social Security.

If you calculate the future value of your monthly investment in social security ($375/month, including both your and your employer’s contributions) at a meager 1% interest rate compounded monthly, after 40 years of working you'd have more than $1.3+ million dollars saved! This is your personal investment.

Upon retirement, if you took out only 3% per year, you'd receive $39,318 per year, or $3,277 per month.

That’s almost three times more than today’s average Social Security benefit of $1,230 per month, according to the Social Security Administration (Google it - it’s a fact). And your retirement fund would last more than 33 years (until you're 98 if you retire at age 65)! I can only imagine how much better most average-income people could live in retirement if our government had just invested our money in low-risk interest-earning accounts.

Instead, the folks in Washington pulled off a bigger Ponzi scheme than Bernie Madoff ever did. They took our money and used it elsewhere. They “forgot” that it was OUR money they were taking. They didn’t have a referendum to ask us if we wanted to lend the money to them. And they didn’t pay interest on the debt they assumed. And recently, they’ve told us that the money won’t support us for very much longer.
But is it our fault they misused our investments?

And now, to add insult to injury, they’re calling it a “benefit,” as if we never worked to earn every penny of it. Just because they “borrowed” the money, doesn't mean that our investments were a charity!
Let’s take a stand. We have earned our right to Social Security and Medicare! Demand that our legislators bring some sense into our government – Find a way to keep Social Security and Medicare going, for the sake of that 92% of our population who need it.
Then call it what it is: Our Earned Retirement Income.
99% of people won't forward this. Will you?

Looked it up - here's an article:

From Social Security to Federal Benefit


In the parlance of Orwellian newspeak words often mean the opposite of their seeming intent. The Internal Revenue Service is anything but a service. Now we have yet another government inspired contradiction. Social Security has been transformed into the “Federal Benefits Payment.” One might well ask how an insurance arrangement in which the recipient makes payments throughout his working existence is regarded as a “benefit.” Whatever happened to “earned income”?

At the moment employees pay fifteen percent of their income before taxes to the Social Security agency. If one assumes a $30K payment per year and an employer’s contribution of $375 per month at a modest one percent rate compounded over a 40 year work experience the total would be $1.3 million. In this scenario, you can assume withdrawal of 3 percent a year or $39,318 or $3,277 a month or roughly three times the present average Social Security “benefit”. Moreover, using the more generous number the individual fund would last 33 years or until a 65 year old retiree is 98 years old.

Why then is the system bankrupt? Why aren’t payouts more generous? The answer in simple terms is that the government uses your money elsewhere. Social Security is not secure, is not really a benefit and, if there were any truth in advertising it should be described as a Ponzi scheme in which money “in” pays for money “out” without regard to the consequences of a deficit.

Where does this money go? Since this appears to be a pot of unexpended and reliably available funds, the Congress uses it for everything from highways to helicopters. Unfortunately the money is not in a locked box so expenditures are often predicated on an anticipated source of S.S. payments. The money is often accounted for before it has been received. Close to 40 percent of the accumulated debt in the U.S. (now at $15.9 trillion) can be attributed to the S.S. shortfall.

Rest here:

http://www.aim.org/guest-column/from-social-security-to-federal-benefit/


Thoughts?

 

[Baptist Believer]

Snopes: The Percentage Cited in the E-Mail is Inaccurate

 

[InTheLight]

Members of Congress DO pay into social security.

Social Security has traditionally been a 6.2% contribution from employee and 6.2% from employer, or a total of 12.4%. So saying it's been 15% per year is incorrect.

In the past two years it has been 4.2% from employee and 6.2% from employer. It is set to go back up to 6.2% for employees on Jan. 1st.

(Medicare is 1.45% for employees and 1.45% for employers.)

The calculation on the lump sum amount one would have after 40 years investing $750 per month is grossly wrong. At 1% interest you would not have $1.3 Million saved after forty years. Instead you would have $428,884.

So, no, I will not be forwarding grossly erroneous information.

FWIW, I dislike the term "federal benefit payment".

 

[LadyEagle]

What is the purpose of changing the name?????

Don't know about the mathematics, are you sure, ITL? ???? Your figure doesn't seem right to me, either. Can someone explain in more detail? Thanks.

 

[menageriekeeper]

No name change LE. My SS check came in (direct deposit) titled SSA....Soc Sec... with a bunch of letters and numbers and such that identify me as me. Came in Wednesday, so the email is incorrect in saying the name was changing in Nov. Remind me next month and I'll check on it again for you.

 

[InTheLight]

What is the purpose of changing the name?????

Don't know about the mathematics, are you sure, ITL? ????

I put it in a spreadsheet, so yeah, I'm pretty sure it's correct.

Your figure doesn't seem right to me, either. Can someone explain in more detail? Thanks.

Quick and dirty calculation.

$750 a month X 12 months = $9,000 a year.

Simple interest on $9,000 at 1% = $90 a year.

Multiply $9,000 X 40 years = $360,000. $360,000 is the total amount of principal deposited. If simple interest on this amount you would make $3,600 interest in the last year at 1% interest rate. Yes, over 40 years you would have compounding interest working for you, but just for grins, suppose you made $3,600 interest for every year? That would be $144,000 interest over 40 years. Add that to the principal amount of $360,000 and you'd have $504,000, well short of $1.3 million.

Now, does it seem correct that with $360,000 in principal invested over 40 years at a measly 1% interest would grow to over $1.3 million?

 

[billwald]

Social Security IS a universal welfare program which has no guaranteed benefits as an insurance program nor promised benefits as does an investment program. SS money is NOT invested but goes directly into the Treasury by a one step flim-flam and is spent for current budget needs as the law has always required.

Second, SS discussions seem to always ignore the survivor benefits.

 

[billwald]

>The calculation on the lump sum amount one would have after 40 years investing $750 per month is grossly wrong. At 1% interest you would not have $1.3 Million saved after forty years. Instead you would have $428,884

The point should be that if SS did not exist 90% of American workers woud not invest as much as $750/month and 80% would not invest as much as $75/month.

http://www.mdmproofing.com/iym/weblog/2011/02/harris-27-of-americans-have-no-personal-savings/

Harris: 27% of Americans Have No Personal Savings


http://globalpublicsquare.blogs.cnn.com/2012/02/16/why-america-spends-while-the-world-saves/


Why Americans don't save
Amar C. Bakshi: U.S. household saving rates peaked in the 1980s at around 11 percent, and by 2005, they had plummeted to near zero. How did America go from a nation of savers to a nation of consumers?

Sheldon Garon: Well, in fact, before World War II we weren’t a nation of great savers. We were a nation of OK savers. Those who did save, saved a lot. But as late as 1910, most Americans didn’t have a savings account. Unlike Europeans and Japanese, they lacked access to savings institutions that would accept very small deposits—such as savings banks and postal savings banks.
But then in the two World Wars, and particularly in World War II, the federal government intervened to encourage ordinary people to save in ways the Europeans and Japanese were doing at the time.

The U.S. government undertook two innovations. First, it introduced U.S. savings bonds right before World War II, and they became very popular and very accessible during and after the war. So that was one of the ways people saved and became good savers in America.

And the other way was the Federal Deposit Insurance Corporation, introduced in 1934, which guaranteed the deposits of small savers in most American banks. So during the Great Depression and after World War II for several decades, we saved at pretty good rates - between about 7 and 11 percent, from 1946 to the 1980s.

Then in the 1980s, Americans stopped being good savers - at first slowly and then very rapidly in the 1990s, particularly as housing and consumer credit became available to Americans in amounts unlike anything seen in the rest of the First World.

First, the credit card industry was deregulated as the result of a 1978 Supreme Court decision. Now able to impose any interest rate they pleased on unpaid balances, credit card firms aggressively expanded their customer base beyond the affluent to target middle and lower income households. By the 1990s, most Americans held not one but several credit cards, and more than half of those cardholders carried unpaid balances.

Second, home equity loans—which had heretofore scarcely existed—exploded. This occurred after the 1986 tax reform made home equity loans one of the few types of credit in which interest remained tax-deductible.
From the 1990s to 2005, homeowners borrowed more and more against their equity as home prices skyrocketed. Americans essentially stopped saving. Why save when you could borrow so easily?
This reliance on easy money came to a crashing halt when housing prices collapsed in 2008.

Why the Great Recession didn't change American behavior

Amar C. Bakshi: U.S. household savings increased after the shock of ’08, but then it dipped again. If the financial crisis of ’08 didn’t get us to save more, what will?

Sheldon Garon: Yes, that’s a very good question. Initially after the 2008 financial crisis and housing meltdown, there were all sorts of media stories that said that Americans were returning to frugality or adopting a new frugality and that savings rates would go above 10 percent.
And, indeed, briefly, for a couple of years after the 2008 crisis, Americans actually increased their savings compared to where they’d been. Personal savings rates went up to about 5 to 6 percent.

But in recent months, the savings rate has trended downward, falling below 4 percent (in December, it rose a bit to 4 percent). Those are not very impressive savings rates.

It is interesting that the crisis didn’t really get Americans - ordinary Americans - to start saving again, partly because so many Americans are now trapped in debt. While more affluent Americans were able to increase their savings rate easily, those in the middle and lower income strata have made efforts to reduce debt, but they are so indebted and have so little savings that it’s been difficult for them to significantly increase saving.

 

[Salty]

Social Security IS a universal welfare program which has no guaranteed benefits as an insurance program nor promised benefits as does an investment program. SS money is NOT invested but goes directly into the Treasury by a one step flim-flam and is spent for current budget needs as the law has always required.

Second, SS discussions seem to always ignore the survivor benefits.

In essence Social Security is an insurance program - but it would be term life -
The difference between SS and Welfare is that recipients (for the most part) DO contribute to the program - where with welfare many do NOT contribute anything.

good point on survivor benefits

 

[billwald]

If anyone wants a quick lession in insurance principles

https://docs.google.com/viewer?url=http://www.cambridgecollege.co.uk/coursesattachments/INSMOD1.pdf

jump to p. 11. I don't know a quick way of copying a PDF



Particularly "Legal Position" on P. 17. A worker does not have a legally binding Social Security contract because Congress can change the rules at any time.

 

[Oldtimer]

Social Security IS a universal welfare program which has no guaranteed benefits as an insurance program nor promised benefits as does an investment program. SS money is NOT invested but goes directly into the Treasury by a one step flim-flam and is spent for current budget needs as the law has always required.

Second, SS discussions seem to always ignore the survivor benefits.

Regardless of the "stuff" (polite word replaced what was previously typed) associated with Social Security system, I'm tired of my SS check being called welfare.

In today's society the word "welfare" signifies getting something for nothing. For 40+ years I was taxed with every paycheck for Social Security and Medicare. I did not have the choice to invest those dollars elsewhere.

Investments that would have returned a higher yield, as was proved by the ROI for the monies that I was able to invest elsewhere. (Errors noted above do not change that fact.) Throughout my working years I was opposed to the SS system, wanting to have more self-determination with regards to my future. Now, that I have to partly rely on this system, I'm getting "welfare - something for nothing".

During those times that I worked as a contractor, I paid both the employee and the employer rates. I paid the TAXES demanded by the government! Had to or would have suffered the consequences.

I am, also, tired of being lumped in with the deadbeats and others who've learned how to play the system. I personally know a number of them who live in my area.

This rant over. On to the next one.

I went to the source of the report on savings.

Methodology

This Harris Poll was conducted online within the United States between November 8 to 15, 2010 among 2,151 adults (aged 18 and over). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents' propensity to be online.

All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words "margin of error" as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.

Respondents for this survey were selected from among those who have agreed to participate in Harris Interactive surveys. The data have been weighted to reflect the composition of the adult population. Because the sample is based on those who agreed to participate in the Harris Interactive panel, no estimates of theoretical sampling error can be calculated. http://www.prnewswire.com/news-rele...al-or-retirement-savings-rises-115088839.html

Emphasis added. I'll let the emphasis speak for itself regarding the poll.

It's interesting that this wasn't presented from the positive standpoint. That 73% have personal savings. Also, put more emphasis that 33% of those reporting no savings are in the 18-33 age group. That includes students still in school and young families just getting started.

I know that we were broke, or near to being broke, during our early years of marriage. I'm pretty sure that's normal for most young families. Generally, they have their lifetimes to build bank accounts and other resources for their retirement years. It is a dis-service to include them in headlines that say:

Number of Americans Reporting No Personal or Retirement Savings Rises

I noticed they don't show the change between the years by age group. Which group changed the most? Could it be that most of "rise" came with the 18-33 group? Could it be that the change for those over 33 would reflect a decline? Especially with the on-going uncertainty about the economy and the possibility of a double dip recession or worse.

The purpose of this analysis:
To continue creating more governmental "help the poor" programs a basis for a growing need has to be established and maintained. To continue to build the premise that government bears the responsibility, itself, rather than individuals being personally responsible for their lives from cradle to grave.

Building the "entitled" society who will accept whatever the government demands, as long as they can feed at the public trough.

For 40+ years the government took away some my personal accountability and responsibility via their SS taxation in order to try to make me more dependent on them. :BangHead:

It's time for me to get off this sore spot and more to something more productive, something that will give glory to God, for the rest of this day. :godisgood:

 

[billwald]

OT:Thanks for the reply.

I know about and occasionaly practice lying with statistics. On the other hand, I believe reports that claim the number of old people living below the poverty line would double if not for their SS benefit. I personally know several old persons who would be in deep trouble if not for SS which is why I support the concept of SS even though I an not qualified and The Wife (only) gets the minimum amount.

The other use of SS that FDR had in mind was that the SS money would go directly into the US Treasury and could be spent for relief programs - one example of why SS as an investment fund is pure fiction.

I am a couple of years short of my 10 years of wages under SS. When Reagan had a law passed that prevented me from collecting 40% (?) of potential SS benefits I decided it wasn't worth the extra jobs to get qualified.

I am unhappy the that the country stole my benefit but NOT unhappy that I paid in for 6 or whatever years. I was making minimum wage half that time and the total amount was not much. Why? Because it is a good program for everyone else and we are all in this, together.

 

[LadyEagle]

Oldtimer, I really liked your rant. I'm angry about the way Congress has stolen our SS money from us to pay for their wars and balance their budgets. It infuriates me when the jerks in Congress talk about SS like it is welfare, which it is not. I'm with you, OT.

 

[billwald]

Why do you all keep beating up on yourselves and worrying about the wrong things? Read the SS legislation for yourself. The law REQUIRES that all SS funds in excess of cuttent needs be exchanged for Treasury bonds and the cash deposited in the Treasury. The SS Administration is the only one who still gets a hard copy of a Treasury note. Don't know about savings bonds.

 

[Oldtimer]

Bill, I've known for years that SS payments were NOT kept in a locked box. Know that the monies extracted under penality for non-compliance were not invested with the intent of securing/growing the "nest-egg" for future generations of old folks.

Knowing what's behind the curtain doesn't change anything. As an American, law abiding citizen -- tax paying citizen -- working citizen -- voting citizen -- what other options did I have?

BTW, I'm angry about the situation.

I don't "worry" about it, as there's not much that I can do to change anything. If there's any worry, it's for my great nieces and nephews, if our Lord lets this continue through their lifetimes.

 

[LadyEagle]

Why do you all keep beating up on yourselves and worrying about the wrong things? Read the SS legislation for yourself. The law REQUIRES that all SS funds in excess of cuttent needs be exchanged for Treasury bonds and the cash deposited in the Treasury. The SS Administration is the only one who still gets a hard copy of a Treasury note. Don't know about savings bonds.

And the Treasury Bonds are worth what???? Backed by what??? Fiat currency???