social security

Let's do some arithmetic!

Let's suppose you start working at age 25 and continue for 40 years until age 65. To make it simple let's say you make $50,000 per year average over those years and you save 15% per year - $750.00 per month - which you invest for conservative return of 5% per year. At age 65 you'd have $1,144,515 ready to spend for your retirement. If you then just started living off that investment with no further addition, for say 20 years, you could have $2,785 per month!

If you'd made an average of $100,000 per year the value would increase to twice as much. If you invested wisely you could earn more than 5% per year on at least part of it and have considerably more. Of course, if you didn't save you wouldn't have it or it you risked a lot and lost it you won't have it. If you wanted to blow it you could. If you wanted to give it to your children, your grandchildren, or your church you could.

It would be your money - the product your own labor. You'd be responsible for earning it, saving it, investing it, and spending it.

Now let's look at the Social Security option! You get to pay 15% per month on what you make for those 40 years. Yes, I know the employer sends in half of it but that's just a way to hide the real cost to. It's just another 7.5% you don't get directly. That's why I used 15% in the first example. At the end of the 40 years you have nothing in the bank for this wonderful "investment" and, in fact, you're out the $1,144,515 that you could have otherwise accumulated.

Sure, you then get to draw some money but with some strings attached including limits on how much you can earn without incurring additional taxes. It's difficult to calculate the exact amount but it would probably be about $2,000 per month. It has no present value because if you don't live to get it you don't pass along anything. You can't use the "value" of it to but something. You can't give to someone else. You can't build up a return past the maximum allowed.

So if you earn twice as much and "save" twice as much through Social Security don't expect to get back twice as much. You're now dependent upon the politicians in Washington to give you money.

Your responsible for earning. Someone else gets to make the other decisions. You have to vote in people you hope will treat your money favorably but they don't because it's a lot of money and it's easy to give away other people's money.

You accounting wizards can check by arithmetic if you want. I could have made some errors here. I didn't get this from any source other than my little old Texas Instruments BA-II calculator.

Let's be clear! Social Security is about redistribution of wealth and giving the government total control over your money. It makes us dependent upon the government. It's a very poor savings program and it's very likely that someone else is going to spend the fruit of your labor. It doesn't matter whether it's spent on "retirement" or some other government program such as the welfare program administered by the same agency. It's all money you earned that you or you descendants don't get to have.

Further, if you have any other retirement savings like pensions, 401k, or IRA plans, you're likely to pay tax on your Social Security "earnings" because you'll be deemed to be making too much. How's that? You get to pay tax on top of tax because you did well! Never mind the likely possibility that, given a shortage of funding, your Social Security "earnings" may be cut or your other "benefits" may be pooled with them. Don't underestimate the politicians power to buy votes with your money regardless where it's being kept!

 

keep in mind...if a private individual tried to replicate Social Security in the private sector, he/she would go to jail.

It's called a "Ponzi scheme."

And most politicians are busy talking taxes...but they mean income taxes. Social Security/FICA is much more likely to sink us...and it's a tax that no one in Washington wants to address.

I would gladly let the gubmint keep all the money they've taken from me in SS taxes...if they'd just let me out now, I'd love to call it even.

Of course, ministers can exempt themselves from SS taxes, but only on religious grounds. So I can't, in good conscience, do it (mine is on "common sense" grounds).

 

Technically speaking it's their money. We can scrap the social security program and it would still be their money. That's the crux of the matter. Social Security is not the primary cause of the tax burden on Americans, nor is it any other means-tested assistance program.

 

Why are you so envious of those who earn more than you do?

 

When you say, "their money," are you talking about that it is the government's money?

If so...that goes against everything this country was founded upon. If that's what you meant...I couldn't disagree more.

It's OUR money. Do we have a scriptural obligation to pay the taxes? Yes. But we also have rights as citizens to protest when those taxes become confiscatory.

BTW, Filmproducer...how about posting some sources for your statistics? I would strongly disagree that SS is not a problem. Just run the numbers. In a few years, there will be a shortfall in the hundreds of billions of dollars...or more. Without a fix, it will bankrupt this country.

And it is our money. I think the government should have a very good reason for taking my money and giving it to someone else.

• Supporting someone who is too sorry to work is not a good enough reason.
• Propping up half the world financially is not a good enough reason.
• Building a multi-million dollar bridge to nowhere in Alaska is not a good enough reason.
• Pouring more money down the rathole of the Department of Education is not a good enough reason.
• Wasting money to watch FEMA screw up every conceivable angle of a natural disaster is not a good enough reason.
• Giving billions of dollars to the anti-American United Nations is not a good enough reason.

And those examples were just the ones I thought of right away...

 

I'm not envious. I could care less about the amount of money someone has. That does not negate the fact that the government is wasting the money it receives through taxes. I on the other hand am not all that concerned about the 17% used to assist the poor. Why don't we trim the fat in the 83% first? Do you think there is nothing wasteful or perfectly useless being funded with that 83%?

Personally I do not find it practical that churches and private citizens alone can take on America's poor in any type of efficient method. I do find that the the tax burden on Americans could be greatly reduced if officials would stop using taxes to fund their pork projects. Once that is accomplished then we can discuss cutting programs to help the poor, although with the tax burden lessened is may not be as much of an issue. (i.e., the tax burden lessens therby leaving the wealthy more wealth and able to create more jobs and strengthen the economy so on and so forth...)

 

rbell, I think you may be misunderstanding me. Social Security is mismanaged and a problem, but that is not the "real" problem. The 17% for means-based assistance programs, (TANF, food stamps, medicaid, sec 8, and the like), is not the problem. It is the governments mismanagement of ALL tax money. It is the spend, spend, spend mentality, and then if that is not bad enough the gross mismangement of funds.

I brought up the means-based assistance as an example, mainly because of the whole redistribution argument. BTW the stats are from the US Bureau of the Census 1999(?), Statistical Abstract, p.373, I don't have an internet link as the research came from a hard copy found in a good old-fashioned library . I was using it as an example. In the report approximately 65% of all government spending is on social programs. A breakdown shows that 24%, (of the 65), is spent on education, 47% on social insurance (SS, Medicare, worker's comp, unemployment insurance, and public employment retirement), 17% om means-based assistance (Medicaid, SSI, TANF, food stamps, sec 8, etc.), 3% towards veterans affairs, 5% medical research, and I am unsure about the last 3%.

A lot of times people focus on that 17% used for assistance and put the other 83% on the back burner. I would rather we focus more on the mismangement of the 83% first. Contrary to popular belief there are many people who would need these programs, and it is not due to laziness.

 

Went back through my posts and realized that in my initial post I did not clarify that I was speaking about the 65% of government spending on social programs when I listed the 17/83% breakdown.

 

That might be true if there were actually any money. There's not. The Social Security Trust Fund is empty.

But maybe I misunderstood what you are actually saying.

 

The average American doesn't have the sense to plan ahead for retirement or for anything else. The Average American buys toys on credit. The choice is between a govt welfare program - social security - and old people living on the streets and dumpster diving. In the bad old days Granny could be put in the corner of the farm kitchen but no longer. How may of you are planning to care for your parents when they are incapacitated? Not many!

Mom had Alzhimers. When Dad died they had a deal that she would go 3000 miles and live with my brother. That lasted about 3 months and she was in an old folks home. She had a good AT&T pension but no more good pensions out there except for govt gobs.

 

See my previous post for the arthmetic!

A long standing argument is that the government must provide social security - retirement income - because the citizens are too stupid to provide for themselves and therefore we'd end up with a nation of destitute people. The stupidity is when believe this line!

Sure, there are plenty of people who don't plan ahead - never have and never will - but that are plenty more who do. Those that don't come up short while those that prepare have a chance. Doesn't the Bible address that issue by several examples?

Ask yourself how secure you are with the future of the government's wonderful mandated social security retirement income program. Wouldn't you rather have your money in hand to do with what you decide is best for you rather than be forced to pay it into taxes and have someone else decides when, how, and how much of it you can have back and how much of it gets passed on to others outside your control?

Where's your money today? Can the Social Security Administration give you a statement showing your balance of payments - including your employer's payments on your behalf - along with reasonable interest? No, they can't, because they don't consider it your money and they're betting you'll die before you receive it all in monthly installments. They're also hoping, if you have additional resources, that you won't mind them taking some of what you earned and giving it to someone else because, according to them, you have what you need.

Can your family inherit your lifetime savings held by in the social security trust fund like they can a savings account? No, someone else will get it - someone else our politicians decides is more deserving of the fruit of our labor. That makes community property of your private property. What's next? Perhaps the same can be done with your pension, 401k, IRA, or regular savings account. The argument can be made that someone other than your selected heirs deserves it more.

It's a totally un-American concept from its inception to its present maturity and like most socialist - nee Communist - ideologies it's a miserable failure.

 

Our founding fathers did not design a system of government to protect its citizenry from irresponsibility.

It is my job to plan for my retirement, and my family's provision. That's why I...

• Carry several hundred thousand dollars of life insurance.
• Save five percent of my salary...invested in four types of mutual funds...high diversity...some high-yield risky stuff, and some safe, low-yield stuff...all tax free and/or deferred.
• Have no consumer debt (paid plenty of stupid tax over the years, but we're now debt free, except for the house).

Furthermore, we've done it on onemodest income, with two kids.

Are there folks that simply get a bum deal, and can't do this? Yep...but it's my contention that many folks that reach retirement simply didn't prepare as they should. I know, I know...everyone can name exceptions.

Here's how I expect things to go (I'm currently in my 30's):

• About my 55th birthday or so, I look for Socialist Security to either go bankrupt, or there will be a skyrocketing increase in FICA taxes, and a plummet in benefits.
• About my 65th-70th birthday, it will go completely insolvent, and the tens of thousands paid in (which in my retirement would be high 6 figures with interest) will go up in smoke.
• I'm not planning on retiring at 65...which I think will be advantageous...because when SS fails, the market will be flooded with senior adults who have to work. Hopefully, if I already have a job, I won't have to look for one.

But, God willing, I'm gonna be ready for it. I'm not waiting until I'm old to to prepare for my senior years.

 

Which political party passed the law that gave us social security in the beginning? That's right, the Democrats. Which candidate for President campaigned on preserving social security by putting it in a "lock box?' Al Gore of the Democratic party. Which party has driven the national economy deeply into the red making social security and medicare much more vunerable? Uh, uh that's the Republicans.

 

The national economy is doing very well thanks to individual and corporate capitalism.

Government at every level continues the trend to control more to spend more thanks to socialism.

Social security traps us all in our old age just as the politicians desired. We've become wards of the government. Remember when it started in 1935 it was going to be just a few percent of wages at most and covered only a very limited scope. The camel got much more than his nose well into the tent since then!

 

Jesus said we would always have poor people so any attempt on the part of the govt to care for them is unchristian?

 

It is quite true that the government has really botched handling social security. They failed to fund the system, in part, by raiding for other spending, which is nothing more than legalized thievery.

We as Americans are not completely without blame. First of all, for decades we have elected people that failed to fix the system. The biggest mistake was that we were told from its inception, that social security was NOT to be viewed as a complete retirement, it was a supplement. Well, some did not believe this, and failed to provide for their own retirement. In fact, the real injustice of the system is that if one dies early, say at 60, all that money is lost, while there are others who have been collecting from the system for years who paid little or nothing into it.

To argue which party has done a worse job, what a waste of time. Both parties have failed miserably. The democrats use it as a fear card to get the elderly vote, and the republicans flap their jaws about reform and do nothing.

There are lots of comments in this and other threads about God would do it this way or Jesus would take that side. I would be very leary about using the Holy Name of God in conjuction with the two parties we have. In my opinion, what He would do if anything but let them rot in their on depravity is get rid of them.

 

I absolutely agreed!

 

What is astounding is how unwilling congress is to act on SS, and how uninformed the public is about SS (as shown by many posts on here). Bush had the right idea by proposing reforms. Sadly, he caved when congress refused to act. We need leadership on this issue. Dems aren't going to give it, and the GOP has failed to follow through when Dems blocked earlier.

Some measure of individual ownership of retirement accounts funded by SS taxes is IMHO the best answer. A piggy bank practically gives you better ROI than presently used, and it would finally make true the notion that individuals have a claim to SS benefits because they have paid in.

 

Are you making this statement or asking this question to justify the use of social security taxes as charity instead of as retirement income for those who earned it? Was it not sold to the American public as the latter?

Further, is not charity that is forced by taxation no longer charity at all and, in the hands of politicians, nothing more than vote buying schemes? Let individuals and their churches be the source of charity whereby decisions can be made based upon a match between willing generosity and true need. They can do an infinitely better job of it than government.

 

Exactly! People need to take responsiblity and ownership of their own savings.