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Social Security - 12/30/2010 9:00:42 PM   
KenDckey


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quote:

ORIGINAL:    http://news.yahoo.com/s/ap/20101231/ap_on_re_us/us_medicare_money_s_worth

The same hypothetical couple retiring in 2011 will have paid $614,000 in Social Security taxes, and can expect to collect $555,000 in benefits. They will have paid about 10 percent more into the system than they're likely to get back.

quote:



My question is where did the money go.  If we put in 10% more than we receive why is social security in trouble of running out of money.   My math says it should be growing. 

Not discussing medicare costs.  Won't speculate on its solvency
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RE: Social Security - 12/30/2010 9:07:54 PM   
tazzygirl


Posts: 37833
Joined: 10/12/2007
Status: offline 		Because SS pays to those who have worked very little or not at all, depending on the situation.

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RE: Social Security - 12/30/2010 9:57:13 PM   
MrRodgers


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Status: offline 		I believe benefits are based on the average of ones last 16 qtrs. of earnings for SS.

As for the OP's math, it is possible for this reason. In 1983 the govt. 'reformed' SS which provided for a substantial increase in the payroll tax and thus an over contribution that overfunded the program. This resulted in your couple for up to 27 years, paying in more but also more than was needed for a much relatively smaller increase in life expectancy...or total lifetime benefits.

Oh BTW you are not and have not been paying attention then...your illustrious congress has blown that money...spent it...it is not there...is it ALL gone. SS received instead some 'very special' mind you. treasury notes. These notes are subject to a govt. fixed interest rate, limited redemption options and will require real taxes (more cash) to actually turn them into benefits.

An estimated $2 Trillion should be there, making SS completely flush. Can't have that, it would have been far too easy. No, our professional congressional 'thieves' stole it for I am sure some 'other' great public purpose.



< Message edited by MrRodgers -- 12/30/2010 10:09:30 PM >

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RE: Social Security - 12/30/2010 10:01:51 PM   
Charles6682


Posts: 1825
Joined: 10/1/2007
From: Saint Pete,FL
Status: offline 		Social Security?Who needs that?Lets do the Republican plan and just gut Social Security all the way.Then no one needs to worry about it.Then we can get rid of every other government run program!Those commies!!

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RE: Social Security - 12/30/2010 10:06:02 PM   
Charles6682


Posts: 1825
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From: Saint Pete,FL
Status: offline 		After we get rid of Social Security,we need to get rid of all the government programs for children!!Ungrateful kids,always asking for a hand out.Once they are 2 years old,they should be able to get a job!!!!

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RE: Social Security - 12/30/2010 10:36:22 PM   
tazzygirl


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quote:

Oh BTW you are not and have not been paying attention then...your illustrious congress has blown that money...spent it...it is not there...is it ALL gone. SS received instead some 'very special' mind you. treasury notes. These notes are subject to a govt. fixed interest rate, limited redemption options and will require real taxes (more cash) to actually turn them into benefits.


Its not my illustrious congress... i have argued against those treasury bills for years. The money is still there, its just not liquid, but it is payable upon demand.

quote:

I believe benefits are based on the average of ones last 16 qtrs. of earnings for SS.


Who is eligible for survivors benefits

Social Security survivors benefits can be paid to:
•A widow or widower -- full benefits at full retirement age, or reduced benefits as early as age 60
•A disabled widow or widower -- as early as age 50
•A widow or widower at any age if he or she takes care of the deceased's child who is under age 16 or disabled, and receiving Social Security benefits
•Unmarried children under 18, or up to age 19 if they are attending high school full time. Under certain circumstances, benefits can be paid to stepchildren, grandchildren, or adopted children.
•Children at any age who were disabled before age 22 and remain disabled.
•Dependent parents age 62 or older
Note: If you are divorced, you may still qualify for survivors benefits.

http://www.socialsecurity.gov/ww&os2.htm

How work affects survivors benefits

You can receive Social Security survivors benefits and work at the same time. However, depending on your age, your benefits could be reduced if you earn more than certain amounts.



Thats a whole lot of people eligible who dont, or didnt, have to work to get it.



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Dont judge me because I sin differently than you.
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RE: Social Security - 12/30/2010 11:04:14 PM   
AnimusRex


Posts: 2165
Joined: 5/13/2006
Status: offline 		Social Security is not a savings plan; there isn't some vault somewhere like the bank in Hogwarts, where there is a little box with your name on it, and a pile of cash in it.

The money you pay in goes immediately to old people; and in time, the money your children put in will go immediately to you. The "fund" being talked about is the surplus that builds up during the years when the boomers were in their income earning peak, before they all begin to retire.

Basically, its the same premise that every civilization has always had; young healthy people support the old sick people, and in turn, their children will support them.

The only thing that amazes me is that anyone has a problem with it.

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RE: Social Security - 12/30/2010 11:09:01 PM   
Termyn8or


Posts: 18681
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Status: offline 		And that is why I called it a Ponzi scheme.

T

< Message edited by Termyn8or -- 12/30/2010 11:10:21 PM >

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RE: Social Security - 12/30/2010 11:15:04 PM   
tazzygirl


Posts: 37833
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Status: offline 		Social Security a Ponzi scheme? No way

First, in the case of Social Security, no one is being misled. Madoff allegedly falsely claimed to have discovered a "black box" method of earning impressive results, and by doing so enticed individuals and organizations to invest with him. Social Security is exactly what it claims to be: A mandatory transfer payment system under which current workers are taxed on their incomes to pay benefits, with no promises of huge returns. (Of course, it's true that if Madoff had the power to require participation, he would have had an easier time keeping his alleged scheme rolling.)

Second, Social Security isn't automatically doomed to fail. Played out to its logical conclusion, a Ponzi scheme is unsustainable because the number of potential investors is eventually exhausted. That's when the last people to participate are out of luck; the music stops and there's nowhere to sit.

It's true that Social Security faces a huge burden -- and a significant, long-term financing problem -- in light of retiring Baby Boomers. (The latest projections anticipate Social Security tax revenues to fall below costs in 2017 and the Social Security Trust Funds to be exhausted in 2041.) But Social Security can be, and has been, tweaked and modified to reflect changes in the size of the taxpaying workforce and the number of beneficiaries. It would take great political will, but the government could change benefit formulas or take other steps, like increasing taxes, to keep the system from failing.

Third, Social Security is morally the polar opposite of a Ponzi scheme and fundamentally different from what Madoff allegedly did. At the height of the Great Depression, our society (see "Social") resolved to create a safety net (see "Security") in the form of a social insurance policy that would pay modest benefits to retirees, the disabled and the survivors of deceased workers. By design, that means a certain amount of wealth transfer, with richer workers subsidizing poorer ones. That might rankle, but it's not fraud.

Charles Ponzi, for whom the scheme is named, was unencumbered by such high-minded ideals. When he came to fame in 1920 -- 15 years before Social Security's creation, by the way -- he was a charming, likeable Bostonian who convinced himself that he had found a way to make himself and his investors rich using foreign exchange rates and international postage coupons. When he realized that his method wouldn't work, he should have come clean, but instead he tried to find a legitimate way to deliver on his promises, only to bring ruin on many of his investors and himself.

If the allegations against Madoff are true, he was even worse, having spent many years knowing that his remarkable returns were bogus. He apparently relied at least to some extent on investments from charitable foundations, nonprofit organizations and endowments, which could be counted on to make withdrawals at a predictable pace, extending the lifespan of his operations but devastating the philanthropic community. That alone suggests that Madoff's alleged actions were the antithesis of Social Security, cutting holes in safety nets created by others.

None of this is to suggest that Social Security is a perfect system or that there aren't sizeable problems facing the incoming administration and Congress. But it's not a Ponzi scheme. And Ponzi himself, who died in a hospital charity ward with only enough money for his burial, would never have recognized it as his own.

http://money.cnn.com/2009/01/06/news/economy/social.security.fortune/index.htm

Just another point of view.

_____________________________

Telling me to take Midol wont help your butthurt.
RIP, my demon-child 5-16-11
Duchess of Dissent 1
Dont judge me because I sin differently than you.
If you want it sugar coated, dont ask me what i think! It would violate TOS.

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RE: Social Security - 12/30/2010 11:35:56 PM   
AnimusRex


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quote:

ORIGINAL: Termyn8or
And that is why I called it a Ponzi scheme.


Yes. You have put your finger on it, precisely.

Caring for our sick and elderly is a Ponzi scheme.

A scheme to separate hard working young people from their money, and give it to shiftless lazy old people who have done nothing in their life except care for you and raise your fucking ass to adulthood and sacrifice everything they ever had for your benefit.

But really, keeping them out of poverty with a small monthly stipend is an outrageous infringement of our liberty.


Fuck me. Its times like this when I fear that we really will get the government we deserve.

< Message edited by AnimusRex -- 12/30/2010 11:39:01 PM >

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RE: Social Security - 12/31/2010 12:05:48 AM   
Termyn8or


Posts: 18681
Joined: 11/12/2005
Status: offline 		Hang on here. I didn't comment on that. The basis of the whole thing is like a pyramid. I had no intention of addressing the disability end of it at all. Just the pure and simple straight up retirement end of it. In that sense only, the only for the system to be sustainable indefinitely is for the infux or new workers. More and more all the time if there are to be COLAs.

I don't mean to fault anyone here, but realistically there are some really old people out there who paid, in their real dollars, a very small amount in our dollars . Let's assume nobody dies. I mean for example if every person gets back that $555 grand after paying in around $600+ grand. Everyone lives to the calculated age. All those things still only work in a growing economy because it is fueled by those who work. When potential employment is not reached, the system must suffer, because more going out than coming in will result in nothing sooner or later. When did they think later was going to come ?

They weren't worried about that. Now we have a mess, because like it or not the economy is going to shrink. What's more people don't pay SS on their welfare os SS check. This excludes from the pool of contributors. Remember for the system to really work right, you must have an ever increasing pool of people who work and pay into it. There is no way in hell it could work any other way.

Now when we get to the disabled and widows and all that, it still works against the net, the bottom line. More people collecting and less people paying in an aneathma to such a system, just as a pyramid or Ponzi scheme. The intent doesn't matter when it comes to dollars and sense. The funds could never be sequestered forever, so it has to mix up into the melting pot of money and then brings us closer to socialism. Now don't up and think that is a bad word. In a society like this, some socialism is necessary.

What now ? See what happens. Kinda good that they didn't "privatize" it now huh ? The fact is if people want SS then that's how it is. Who would want to go back, back to the time before it existed ? I can't think of anyone.

The fact is though, the only way those checks will be good is by going deeper into debt. But then, that's what we should be paying for instead of fucking up the middle east all the time.

I didn't really say I had a problem with it did I ? It's just another one of those problems.

T

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RE: Social Security - 12/31/2010 6:21:22 AM   
pahunkboy


Posts: 33061
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From: Central Pennsylvania
Status: offline 		SS is the one thing govt has done right. 

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RE: Social Security - 12/31/2010 7:25:35 AM   
Musicmystery


Posts: 30259
Joined: 3/14/2005
Status: offline 		Sorry, guys, but you are mistaken.

You do, individually, fully fund your social security. Adjust for inflation, allow for a modest return, even if only, say, 2%, and your payments absolutely cover your benefits. So the problem is NOT social security per se. [The common misbelief, that younger workers support older workers, is nonsense too--that was true only initially. Today there are more retirees, yes--but those retirees had children and grandchildren and great-grandchildren. The population of the U.S. is more than three times what it was when I entered the work force. We have plenty of workers.]

The government then said, "OK, we're going to invest this money safely, in a very trustworthy creditor--the U.S. Treasury." And they're right--the U.S. has never defaulted on its loans, and even today, is considered an excellent investment for security. So...no problem per se there.

Enter the problem. The federal government, just as the majority of states and municipalities (though not all--and those few are faring well), neglected to responsibly set aside funds for their obligations, from pension funds to debt service. They figured the next economic boom would smooth it all out, and, spurred on by voters, they pursued short term objectives at the expense of long term planning.

Enter an economic downturn. Now things come due. The Social Security administration goes to withdraw some of its investment. But its creditor, the U.S., says, "Well...we're running a deficit, and don't have it on hand. We'll have to go get it somehow." This also would be fine, except......we are the U.S. government. So...we are the creditor asked to present the funds so that we can collect them. THAT'S the problem--we spent our savings on short term gains. But again, Social Security itself is perfectly solvent. We've just created a conflict of interest for ourselves.

Even that is solvable. Small adjustments (slight raise in retirement age for full benefits, or slight increase in SS taxes--NOT a DECREASE) would readily solve this, as the inflow has a few decades before calling in our investments would be necessary, and those small changes would tide us through.

But there are those who would like to co-opt that money for their own purposes, and thus seize on this to portrary social security as an economic failure. It's not. Pahb is right on this one.

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RE: Social Security - 12/31/2010 7:30:45 AM   
tazzygirl


Posts: 37833
Joined: 10/12/2007
Status: offline 		Which is why i said its not liquid... but payable upon demand.

_____________________________

Telling me to take Midol wont help your butthurt.
RIP, my demon-child 5-16-11
Duchess of Dissent 1
Dont judge me because I sin differently than you.
If you want it sugar coated, dont ask me what i think! It would violate TOS.

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RE: Social Security - 12/31/2010 7:45:33 AM   
thishereboi


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quote:

I believe benefits are based on the average of ones last 16 qtrs. of earnings for SS.


I think you may be right, however in the case of my brother-in-law who was killed in a car accident when he was 30, you don't have to have paid in to collect. He played in a band and didn't claim wages for most of his adult life. He only worked a real job for about 2 months before he quit and went back to his band. Both his children received ss benefits until they hit 18 and my sister also got some. There are many ways to collect. You don't have to necessarily have to have paid anything into the system. Personally, I have been hearing that the ss will run out before I could collect since I was old enough to understand what ss is. Maybe it will and maybe it won't, but I am not going to loose sleep over it.

And AnimusRex.....There is no bank in Hogwarts. It's a school. The bank is in Diagon Alley.

< Message edited by thishereboi -- 12/31/2010 7:46:14 AM >

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RE: Social Security - 12/31/2010 8:13:23 AM   
pahunkboy


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Status: offline 		umm- one needs 40 quarters paid in- not 16. 

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RE: Social Security - 12/31/2010 8:18:35 AM   
Musicmystery


Posts: 30259
Joined: 3/14/2005
Status: offline
quote:

Personally, I have been hearing that the ss will run out before I could collect since I was old enough to understand what ss is.

Have you noticed those same people have been continually saying we have to cut taxes? All during the boom, all during the recession...doesn't quite add up, does it...

By the way, how do you feel about a return to widespread elderly poverty? Personally--I'd lose a little sleep over that.

And I have no problem with those who collect on disability. That's what insurance programs are for.



< Message edited by Musicmystery -- 12/31/2010 8:20:44 AM >

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RE: Social Security - 12/31/2010 11:03:03 AM   
Termyn8or


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Status: offline 		FR

OK maybe a "Ponzi scheme" is not the right word. It doesn't matter which way you think of it, is it a whole bunch of "IRA" money that when lumped together is more investable, or is it like a rotaty type fund ? Doesn't matter. Solvency requires money.

Years ago when industry was cranking, quite a few people made quite a bit of money, overtime, incentives, things like that. One guy I know gets about $2,000 per month, that's $24,000 per year. Today, people work for less than that. Too many people in fact, work for less than that. Take 15% of their gross pay, that means it takes about eight working people to generate that $2,000 check every month. But that's not the half of it. If I never work again I'll get a bit over $700. OK tht's not even ten grand a year, but at that level I should heve medical taken care of, whereas the guy getting the $2,000 per month has to pay his own. Regardless, the longer people live the more burden they put on the system.

So the fact is over the years, to not go broke they have to readjust the formula, lower benefits and raise the retirement age. This is IMO direct evidence of oncoming insolency, because if it were to keep going on, you'll pay more for longer and longer and get less and less. Where does it end, when people wait until 85 to retire and get $100 per month ? If the current trend continues, that's where it's headed.

Being born in 1960, I am part of the next boom. I'd best start saving. I suppose I could get by on $700 per month but only because of a house that is paid off and the fact that I generally buy cars with cash. So no house or car payment. It could be alot worse, think of the costs people normally have, rent, car payment, probably a healthy hit from a credit card or two..... then the numbers cease to add up.

At that time I will become part of that burden, and it'll be a pretty good size burden, due to the sheer numbers. How many working people will it take to support me ? It adds up to a big CRUNCH around the year 2025 give or take. If I live long enough, and SS is still around, I can almost count on the fact that it won't be enough. Indeed that's why people are encouraged to have their own nest egg in the form of an IRA or whatever.

What of the people who simply can't afford private investment ? They grow in numbers as engineers apply for fast food jobs. Right now, I only know a couple of people who make over $50,000 per year without owning their own business. What of those working at or near minimum wage ? At $8 per hour, a person will pay about $2,500 in per year, provided they work full time.

The bottom line is that there has to be alot more people working and paying in than collecting, and that is precisely the part that is unsustainable. Even with the economy in good shape, it's not easy to keep the system afloat. People better start dying or there won't be much, if anything left for the rest of us. Sounds harsh, but they have that figured in, so it's not sensible to ignore the factor. If people live longer, it gets worse, and that assumes they stay healthy. You can hem and haw that medicare is separate, but the money is all in the melting pot now anyway, the separation is just a number in a book somewhere. And it has to be, which will pass the burden on either in  the form of taxes or more debt.

Pessimistic ? No, realistic.

T

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RE: Social Security - 12/31/2010 11:12:19 AM   
thishereboi


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Joined: 6/19/2008
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quote:

ORIGINAL: Musicmystery

quote:

Personally, I have been hearing that the ss will run out before I could collect since I was old enough to understand what ss is.

Have you noticed those same people have been continually saying we have to cut taxes? All during the boom, all during the recession...doesn't quite add up, does it...
If by same people you mean politicians in general, then yes, I have noticed that.

By the way, how do you feel about a return to widespread elderly poverty? Personally--I'd lose a little sleep over that.
I have always been concerned with that. Even before I realized how old I was really getting. I have never understood kids who think they have no responsibility to their parents or communities who feel they don't have a responsibility to the elders in their population who can't care for themselves or have anyone to do it for them.

And I have no problem with those who collect on disability. That's what insurance programs are for.
I have no problems with those who need it. I know several people who collect who honestly can't work for themselves. I also know quite a few who collect who have no reason except plain out laziness and a feeling that somehow everyone else should support their sorry asses. It's a shame that the fraud is so widespread




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RE: Social Security - 12/31/2010 4:27:35 PM   
willbeurdaddy


Posts: 11894
Joined: 4/8/2006
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quote:

ORIGINAL: thishereboi

quote:

I believe benefits are based on the average of ones last 16 qtrs. of earnings for SS.


I think you may be right, however in the case of my brother-in-law who was killed in a car accident when he was 30, you don't have to have paid in to collect. He played in a band and didn't claim wages for most of his adult life. He only worked a real job for about 2 months before he quit and went back to his band. Both his children received ss benefits until they hit 18 and my sister also got some. There are many ways to collect. You don't have to necessarily have to have paid anything into the system. Personally, I have been hearing that the ss will run out before I could collect since I was old enough to understand what ss is. Maybe it will and maybe it won't, but I am not going to loose sleep over it.

And AnimusRex.....There is no bank in Hogwarts. It's a school. The bank is in Diagon Alley.


Benefits are based on the highest 35 years (or all years if less) where your inflation averaged index are the greatest. Inaddition to the other benefits previously mentioned the benefit formula is weighted toward lower earnings workers, so taking an "average earnings couple" is not the same as the "average benefits couple".

The analysis fails to take into account interest on either end, and it fails to distinguish between the $89,000 dual income couple and the $89,000 single income couple (or a dual income couple where one earns the majorith of the income. the value of benefits vs taxes is vastly different depending on the makeup of the couple.

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