[SE3P_to_E90]

As we all know, the future of social security is uncertain. Based on "rough" approximations, and despite the fact that the baby boomers are in their peak earning years, the annual surplus is expected to evaporate in about 30 years.

Although the future of SS seems glum, no one can really predict future trends with certainty. There are proposals, i.e. privatization, but that's nothing more than a mere Ponzi scheme -- a shell game.
Realistic proposals include cutting benefits, raising revenue, etc... And we can all deduce that the size and security of future retirement benefits ultimately depend on our country's general prosperity at that time in the future.

In short, and in my opinion, there's no such thing as pay-as-you-go systems. Current payers-in are financing current payers-out, not their own retirements, and consequently, these financing activities won't hold provided the fact that people are having fewer children as well as living longer.

Given that, what's your .02c on Social Security? Do you guys think the Social Security "trust fund" will be self-sustaining, or do you think it'll be exhausted must sooner/later than forecasted?

[derek0480]

I would think that our government will do whatever it takes to keep the program going. For reasons such as those listed below:

1. Imagine if they did kill the program...all the money you had paid up until that point would be lost. PUBLIC OUTCRY!!!

2. Politicians are to big of panzee's to make a call to take aid away from potential voters no matter how bad it financially strains our country.

3. It's easy for congress to pass a bill re-allocating funds from other programs to fund SS.

4. The poverty level would go through the roof and we'd be in a worse economic position than we are today.

I am 32 right now and up until about 5 years ago, I thought for sure there would be nothing left for me. But after watching the emasculation of the US throughout recent years - (i.e. we have lost our balls as a country) - I would think it almost unimaginable to our politically correct culture that we dare to cut aid from public programs.

No matter what your political affiliation is...you have to admit that all politicans are afraid of losing voters. No politican in their right mind would dare to tackle a problem as big as SS. Until some folks in congress grow a sack...you can bet that SS will live on.

[darkcloud]

If you're self-employed I don't think you have to pay S.S. Tax. I'll have to double check when I have my forms in front of me later but I don't think I had anything that paid S.S. directly. Unless my payments to the IRS had S.S. tax rolled into the amount and I don't even know?

Personally I hate S.S. tax. I remember getting my first paychecks when I was 14 or 15 and having like a solid $40-60 taken for S.S., that fucking blew. I wanted to go around and kick old people in the junk for stealing my monies haha, jk

[SE3P_to_E90]

Originally Posted by derek0480

I would think that our government will do whatever it takes to keep the program going. For reasons such as those listed below:

1. Imagine if they did kill the program...all the money you had paid up until that point would be lost. PUBLIC OUTCRY!!!

2. Politicians are to big of panzee's to make a call to take aid away from potential voters no matter how bad it financially strains our country.

3. It's easy for congress to pass a bill re-allocating funds from other programs to fund SS.

4. The poverty level would go through the roof and we'd be in a worse economic position than we are today.

I am 32 right now and up until about 5 years ago, I thought for sure there would be nothing left for me. But after watching the emasculation of the US throughout recent years - (i.e. we have lost our balls as a country) - I would think it almost unimaginable to our politically correct culture that we dare to cut aid from public programs.

No matter what your political affiliation is...you have to admit that all politicans are afraid of losing voters. No politican in their right mind would dare to tackle a problem as big as SS. Until some folks in congress grow a sack...you can bet that SS will live on.

I mean, it's easy to say that, and at the time being, that's our best bet... How dare our gov't take something away~ let alone, something as important as SS...

I think the crappy part is [provided SS still exists in the future], and this is adding to DarkCloud's hatred for SS , the people putting in money today (future retirees) will get a far worse deal~ even if the system makes good on ALL of its promises.
On a liberal note, i think in the future, we can let the SS "trust fund" raid general tax revenues as a solution. General income tax is fairer than the social security tax--the former exempts low incomes; the latter exempts high incomes--so if more moeny is needed, it's better to get it by reducing the size of an income tax cut than by raising SS tax [a solution Darkcloud could be happy about]
Yet, on a conservative side, how do we get past one of the biggest flaws in the SS design? That is, how do we move from a system where each generation pays for its predecessor to one where everybody pays for themselves? I think that's the trickiest situation of all... and no matter what the outcome may be, one generation will have to pay twice~ which will probably be my generation (i'm currently 21).

My knowledge and opinion thus far, is that even if today's benefit promises can somehow be kept, SS represents a much worse return on "investment" (taxes paid in) for future retirees than past and present retirees have enjoyed. And as a solution, the most direct way for SS to affect future prosperity is to increase national savings (somehow, thank you D-ass Bush), of which the SS reserve is part, by trimming benefits and/or increasing revenues. Since that's the extent of my knowledge, it would be interesting to see what others think about this issue. It should be one of the pressing social/political issues for the next few decades.

[MCS]

I think that SS will be gone due to the resaons that you explained:
Babay boomer retiring
less of their children (meaning most of the posters on the board) working to sustain the retired boomer collecting checks.

2 factors may keep it around a bit longer:

immigration - The reason that the us may not go the the way of Italy or Japan (Shrinking populations)

Inflation and Job specialization - The US jobs are becoming more segregated to higher paying/advanced skills (farming out base manufacturing to China and base technical to India) I.E. The paycheck of the young is greater than when their parents started out.

Why politicians are frowing on legal immigration is somewhat strange to me, as I beleive that the country has thrived off the backs of immigrants trying to do better in the US.

without getting overly political, I think that SS will stick around for longer than the doomsayers proclaim.

[SE3P_to_E90]

Originally Posted by MCS

I think that SS will be gone due to the resaons that you explained:
Babay boomer retiring
less of their children (meaning most of the posters on the board) working to sustain the retired boomer collecting checks.

2 factors may keep it around a bit longer:

immigration - The reason that the us may not go the the way of Italy or Japan (Shrinking populations)

Inflation and Job specialization - The US jobs are becoming more segregated to higher paying/advanced skills (farming out base manufacturing to China and base technical to India) I.E. The paycheck of the young is greater than when their parents started out.

Why politicians are frowing on legal immigration is somewhat strange to me, as I beleive that the country has thrived off the backs of immigrants trying to do better in the US.

without getting overly political, I think that SS will stick around for longer than the doomsayers proclaim.

i was going to comment, but i misread "legal" to be "illegal"
I don't understand the reasoning behind legal immigration as well. One thought i can speculate is that, for the most part, a majority of immigrants are poor. This being said, the US already faces heavy criticism due to extravagant Medicaid costs. These immigrants will further [exponentially] raise projected healthcare costs, and this would thus fail to rectify the prevalent SS problem.

[F32Fleet]

Look forward to a reduction in benefits and inflation. Congress had raided the SS General Fund for years and replaced those funds with IOU's. The treasurary will have to print money when it comes time to collect on these IOU's because the working population will not be able to do it with payroll tax increases.

[SE3P_to_E90]

Originally Posted by Socom

Look forward to a reduction in benefits and inflation. Congress had raided the SS General Fund for years and replaced those funds with IOU's. The treasurary will have to print money when it comes time to collect on these IOU's because the working population will not be able to do it with payroll tax increases.

I think the most likely case would be a reduction in benefits (especially to the current beneficiaries). This is because their benefit is significantly larger than the amount they contributed, so it would only make sense to curb these benefits a tad bit: also, they really can't complain because most are covered under medicare right? i.e. FREE health care

As for your IOU note... is that info entirely credible? Or maybe my knowledge is just a bit outdated...
I thought during the very end of the 1990's [up until now], SS currently brings in more revenue than it pays out in benefits... and the surplus is invested in government bonds. Given that, i thought within a couple decades, the annual surplus would [eventually evaporate], and SS will have to start drawing on this nest; and for the government to honor these bonds, they will then require huge borrowing (essentially replacing these IOUs to itself with real IOUs to private individuals) or a huge tax increase. Has the surplus already been exhausted?

As for the reduction in benefits and inflation remark... i agree w/ the reduction in benefits... as for inflation to be reduced as well, how would increasing the money supply (i.e. printing more money), reduce inflation? Wouldn't increasing the money supply do the exact opposite; depreciating the dollar, increasing inflation...?

[Revlis]

Basically the Boomer are going to wipe it out, all of us following behind the boomers are screwed. Plain and simple, are parents are sticking it in our butts. The most affluent generation thus far, the ones responsible for raising many of us are also the ones that have pretty much brought the country to where it is, the environment to where it is, and now as their swan song? They are going to freaking rape us financially through Social Security... Wait and see, the first boomer just opted for early retirement, she "doesn't really need the money" she just figured she might as well....

Classic... Gens X-Y are left holding the shitty stinky adult diaper of what remains of the country, world politics, and the Environment....

Hooray!!!

[darkcloud]

If an old person gets grouchy with you, just tell them you pay S.S. which pays them so fuck off haha. I help put dinner on your table bitches!

[nyczyang27]

INCREASE IMMIGRATION! Immigrants tend to start paying ss right away and often return to their homelands in the future before they start recieving benefits.

but yeah, i think the best plan to prevent this "crisis" is to cut/reduce benefits.

[SE3P_to_E90]

Originally Posted by nyczyang27

INCREASE IMMIGRATION! Immigrants tend to start paying ss right away and often return to their homelands in the future before they start recieving benefits.

but yeah, i think the best plan to prevent this "crisis" is to cut/reduce benefits.

immigrants are almost always [at initial arrival] poor... and they reap the US Medicaid system~ which also puts an excess burden on Healthcare costs.
And more often than not, these healthcare costs are in greater amounts than their SS contributions.

[AndrewAZ]

Its the biggest pyramid scheme ever and it needs to be shut down. Let the people handle their own money and not the government(Its been proven that private SS money is handled better than the government, at least let us have a choice if we want private or not).. After all Clinton used the SS surplus money to create a false surplus in the economy.. Which is part of the reason its in trouble.

[NaTuReB0Y]

yo mama so old, her social security # is 000-00-0001

[scollins]

Originally Posted by darkcloud

If you're self-employed I don't think you have to pay S.S. Tax. I'll have to double check when I have my forms in front of me later but I don't think I had anything that paid S.S. directly. Unless my payments to the IRS had S.S. tax rolled into the amount and I don't even know?

Personally I hate S.S. tax. I remember getting my first paychecks when I was 14 or 15 and having like a solid $40-60 taken for S.S., that fucking blew. I wanted to go around and kick old people in the junk for stealing my monies haha, jk

Dude, as a self-employed individual, you get DOUBLE FISTED! SS Tax is really 15.3%, but for those that work for an employer (ie you receive a W2 each year), you split that tax with the employer. In other words, your employer pays 7.65% and you pay 7.65%. That total is really broken into two parts: 12.4% for SS and 2.9% for Medicare. The SS portion is capped at $97,500 of AGI, but the Medicare portion is not.

Now, as a self-employed individual, guess what, you get to pay the ENTIRE 15.3%!!! The money is paid directly to the IRS, and it is called "Self Employement Tax." It is line 58 on Form 1040, and you file Schedule SE to figure the tax.

So, you are getting it worse than us schlubbs who work for a company. :sad0147:

[Maestro]

Guys, the math is simple here...

There is going to be 48 Million people who are going to be retiring in the next 20 to 30 yrs (babyboomers) and will be pulling money from SS systems and at a higher rate then they actually paid in (remember SS tax has not always been 7.65% and the cap use to be as low as 55K 10 yrs ago). behind this 48 million is only 36 million (Gen X) paying in, and the pollution behind them is even smaller. The original idea behind SS was that as long as the people who collect is a smaller population then the one paying in then every thing is fine. The problem came about because people began to live longer so they draw on SS longer than anyone imaged.

I'll give you a simple example that was in the news, there was guy who worked for GM for 30 yrs and returned at 55, he has been collecting SS, GM pension, GM health Care for the last 40 yrs, this guy lives in FL today and is 95 and still going strong. He lives better today then when we worked for GM. This is the reason ever GM car sold today $1500 of it goes to support people like this guy and why GM is in trouble and why SS will be soon too.

Here is another piece of data to think about, As it was pointed out SS is actually 15%. so I have been paying into this for 20 yrs now, also I have been putting away 10% of my pay into a 401K and making some smart investments for the last 20 yrs. As it stands right now, if I collect SS at age 65 or 67 the government will give me about $2100 a month to live on. Now with my 401K if I keep doing what I have been doing, it will pay me 3 times that of SS.

So I personally did better with my 10% investment than the government did on the 15% they took from me. I wish they give me a lump some now, allow me to stop paying in and then ask may employer for the other 7% so I come invest that too, I would be so much further ahead than what the gov will do for me.

Another point, someone mention illegal immigration. Here is another well kept secret, back in 1986 went the government past the immigration reformed act they made it illegal for a company to hire someone without a SS #, so what happen was illegals got hold of real SS# and used them. For the last 20 yrs some peoples' SS # have been used and have multiply payments form various companies all over the place. The Government has known about this never did anything about for obvious reason, one being that the illegal could never collect SS benefits in the future, and two if they were using your number you too could not collect that money later since SS put a cap on the max payment out no matter how much you paid in. Some SS # have been estimated that 10 people have been using them. This is part of the reason the government has been unwilling to address the immigration issue, because all this extra money will go away and they would have to pay benefits to all those who can show they have been paying in all long.

One last point on self employment, it is true people who work for themselves pay the whole 15% themselves, but if they are smart about how they set up their business and most are, you pay yourself a minimum salary and any extra income the business generates in the year you distribute those fund via a dividend payment, so you do not have to pay SS or medicare on that amount and in some locations local income tax too.

I have friend who does this, he made an initial investment in his business, and pays himself a 30K salary a year and pays all the normal taxes including the 15% SS, than at the end of the year he gets a huge dividend check form the business which he only pays federal and state tax on the dividend amount which is far less then if he paid income and SS taxes on that same amount as a salary.

So it is just us who work for companies who are idiots and are losing out, I wish I knew this 20 yrs ago.

[MCS]

excellent post - very good reading

[SE3P_to_E90]

Originally Posted by Maestro

Guys, the math is simple here...

There is going to be 48 Million people who are going to be retiring in the next 20 to 30 yrs (babyboomers) and will be pulling money from SS systems and at a higher rate then they actually paid in (remember SS tax has not always been 7.65% and the cap use to be as low as 55K 10 yrs ago). behind this 48 million is only 36 million (Gen X) paying in, and the pollution behind them is even smaller. The original idea behind SS was that as long as the people who collect is a smaller population then the one paying in then every thing is fine. The problem came about because people began to live longer so they draw on SS longer than anyone imaged.

I'll give you a simple example that was in the news, there was guy who worked for GM for 30 yrs and returned at 55, he has been collecting SS, GM pension, GM health Care for the last 40 yrs, this guy lives in FL today and is 95 and still going strong. He lives better today then when we worked for GM. This is the reason ever GM car sold today $1500 of it goes to support people like this guy and why GM is in trouble and why SS will be soon too.

Here is another piece of data to think about, As it was pointed out SS is actually 15%. so I have been paying into this for 20 yrs now, also I have been putting away 10% of my pay into a 401K and making some smart investments for the last 20 yrs. As it stands right now, if I collect SS at age 65 or 67 the government will give me about $2100 a month to live on. Now with my 401K if I keep doing what I have been doing, it will pay me 3 times that of SS.

So I personally did better with my 10% investment than the government did on the 15% they took from me. I wish they give me a lump some now, allow me to stop paying in and then ask may employer for the other 7% so I come invest that too, I would be so much further ahead than what the gov will do for me.

Another point, someone mention illegal immigration. Here is another well kept secret, back in 1986 went the government past the immigration reformed act they made it illegal for a company to hire someone without a SS #, so what happen was illegals got hold of real SS# and used them. For the last 20 yrs some peoples' SS # have been used and have multiply payments form various companies all over the place. The Government has known about this never did anything about for obvious reason, one being that the illegal could never collect SS benefits in the future, and two if they were using your number you too could not collect that money later since SS put a cap on the max payment out no matter how much you paid in. Some SS # have been estimated that 10 people have been using them. This is part of the reason the government has been unwilling to address the immigration issue, because all this extra money will go away and they would have to pay benefits to all those who can show they have been paying in all long.

One last point on self employment, it is true people who work for themselves pay the whole 15% themselves, but if they are smart about how they set up their business and most are, you pay yourself a minimum salary and any extra income the business generates in the year you distribute those fund via a dividend payment, so you do not have to pay SS or medicare on that amount and in some locations local income tax too.

I have friend who does this, he made an initial investment in his business, and pays himself a 30K salary a year and pays all the normal taxes including the 15% SS, than at the end of the year he gets a huge dividend check form the business which he only pays federal and state tax on the dividend amount which is far less then if he paid income and SS taxes on that same amount as a salary.

So it is just us who work for companies who are idiots and are losing out, I wish I knew this 20 yrs ago.

This is some great info. I had no idea on the immigration problem, etc.
As for the 401k paying better in the future, what is your company's influence in this? i.e. do they match what you put in to the dollar, part of a dollar, etc?

As for privatization... people argue that it would be much better for people to put in money in their own interest and invest for their retirement. there are a few problems with this. It is well known that permanent life insurance is a great product, but you need a steady job/pay to get this done. whatever policy you go into requires you to put in an annual/semi-annual premium that collects interest, etc. so that when you retire (approx. age 65 or so), you will have much higher payouts, etc.
however, the main problems are... 1. a lot more people won't invest in their own retirement, thus, when they retire, they will not have enough savings to fund their retirement... and this will force many elderly people [in the future] to work and get out of retirement. this is why the government has to step in and make measures so that old people in the future won't be homeless etc.
another problem is that people don't have steady jobs. thus, even if they wanted to invest in a permanent life insurance product, they are unable to do so due to their inability to pay, etc. and this all leads to the homeless problem and complications in the future.

No matter what the case may be, it's pretty apparent that the general concensus is that SS will simply die out.

On another note, going with what Maestro said about how great outside investment (investing funds in the market for better yield), this has been a proposal; but has died out without much contest. This is because of one main reason. Despite how questionable the future of SS may be, SS is funded by a very reliable government bond, etc... this has a low yield. Investing in the market will without a doubt produce a higher yield, but the market is extremely volatile and we have even less knowledge about where the market will be in the future (than where SS will be).

[Maestro]

SE3P_to_E90,

To answer your questions, yes, some of the places I worked matched funds but not 100% more like 40%, and some of the companies I worked for had some really good fund choices (like Magellan in the late 80's early 90's) others did not, I personally rolled over money into IRA when my choices were not good and did very well there.

Your correct about people taking the money and investing in something or anything, but as we know 70% of the population will not do that, they will take ever bit of money they get their hands on and spend it and never worry about the what if, they all assume they will work to the last day on earth, well that is nice but as we know that will not happen, and for sure I do not want to work like I do now in 20 yrs.

I know why the govern stepped in, hey what happen to person responsibility, and I am not personally interested in whether you have a house to live in when you retire, that is your problem and I do not want to pay for it. Do not get me wrong, I am the first person to help someone out when something bad happens and it was outside their control, but if you choose to be an idiot, or play the victim do not come to me nor will I ever help these people.

[ska///235i]

Not sure what the future holds for our SS, but I'm putting 10% (plus a 5% company match) to my 401k. You guys must take advantage of 401ks and if you're self-employed...please open an IRA account to save on taxes and save for your future. You can't rely on SS

[TurboFan]

I would sign a release TODAY taking full responsibility for myself, and waive any right to what I've paid so far if I never paid FICA again.

The rate of return on social security is miserable. I could be a millionaire 5 times over investing my FICA dollars on my own. Add that to what I'm already doing.....I'd retire at 45.

[TurboFan]

Originally Posted by darkcloud

If you're self-employed I don't think you have to pay S.S. Tax.

True. You pay DOUBLE SS tax!