Could you live on Social Security?
02-15-2013, 08:21 AM
#11
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Then the SSA seems to be operating on a false premise, because they refer to it as a retirement program and for about 40% of Americans it is the only thing keeping them out of poverty.
http://www.ssa.gov/pgm/retirement.htm
What was the original intent? What was it meant for and why is it the only retirement for a large chunk of America?
http://www.ssa.gov/pgm/retirement.htm
What was the original intent? What was it meant for and why is it the only retirement for a large chunk of America?
02-15-2013, 01:45 PM
#12
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Could I live on that? Yes.
Would it be easy to adjust to that lifestyle? No.
If I worked for minimum wage all my working life, could I live on that SS amount? Yes.
I believe it was meant to give people a means to survive once beyond their years of effective usefulness in the workplace.
I could use my brother as the example. I do his taxes, I know what he makes. I don't have his records here in front of me but he has made about $20k-22k for all the years I have done his taxes. Hypothetically if he was retired today and was making $1130.33/month in retirement he would be fine. He wouldn't be living the high life but he wouldn't be destitute on the street.
I believe that was the purpose of SS when it was created.
It does little for the people that have been living the $50-$100k a year lifesyle and want to continue living that lifestyle into retirement. But on their first day of retirement and they woke up pennyless except for SS, they could survive and not be on the street.
Is that the answer you are looking for?
Would it be easy to adjust to that lifestyle? No.
If I worked for minimum wage all my working life, could I live on that SS amount? Yes.
I believe it was meant to give people a means to survive once beyond their years of effective usefulness in the workplace.
I could use my brother as the example. I do his taxes, I know what he makes. I don't have his records here in front of me but he has made about $20k-22k for all the years I have done his taxes. Hypothetically if he was retired today and was making $1130.33/month in retirement he would be fine. He wouldn't be living the high life but he wouldn't be destitute on the street.
I believe that was the purpose of SS when it was created.
It does little for the people that have been living the $50-$100k a year lifesyle and want to continue living that lifestyle into retirement. But on their first day of retirement and they woke up pennyless except for SS, they could survive and not be on the street.
Is that the answer you are looking for?
What if your brother was allowed to take his SS contribution of 12.4% of his income(half his, half his employer's or all 12.4% if self-employed) and place it into his account at say 3% over his working lifetime? What would the difference be assuming 45 years of contributions, payout starting at age 65 and ending at age 75?
The answer may surprise you.
02-15-2013, 06:35 PM
#13
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That is assuming my brother has the intelligence to invest this money in some sorta investment vehicle that makes 3% a year. Or he could just continually invest this money into losing investment vehicles. How much money would he have with a -3% yearly return for 45 years? For every person buying the stock market in the fall of 2007 there was someone selling it, the same in spring of 2009. From what I said about my brother what do you think he would have done? How many years of 3% returns would he need to get to break even from that year and half loss?
I know what your getting at, SS is a horrible investment but think of it as insurance. It is some sorta weird cross between unemployment insurance and whole life insurance. Term life insurance has a terrible rate of return unless you die within the term of the agreement. At retirement age your working life has expired and are paid monthly amounts instead of some lump sum?
Of course why should everyone have to purchase this crappy insurance policy when only a certain percentage of the population need it? Because like life insurance no one really knows who really needs it until you actually need it. Jungle you are a smart individual but it doesn't mean you can't make some poor investment decisions or fall prey to some sorta financial crime against you leaving you penniless at retirement. Is it likely no, but possible.
I feel like this post is already too long with plenty of errors that I don't feel like going back to correct so I will leave it at that for now.
I know what your getting at, SS is a horrible investment but think of it as insurance. It is some sorta weird cross between unemployment insurance and whole life insurance. Term life insurance has a terrible rate of return unless you die within the term of the agreement. At retirement age your working life has expired and are paid monthly amounts instead of some lump sum?
Of course why should everyone have to purchase this crappy insurance policy when only a certain percentage of the population need it? Because like life insurance no one really knows who really needs it until you actually need it. Jungle you are a smart individual but it doesn't mean you can't make some poor investment decisions or fall prey to some sorta financial crime against you leaving you penniless at retirement. Is it likely no, but possible.
I feel like this post is already too long with plenty of errors that I don't feel like going back to correct so I will leave it at that for now.
Treat it like a real insurance program with specified payouts and a balance available even if you kick the bucket prior to payout, instead of all that money just vanishing.
You are correct in one respect, there is a financial crime in progress.
There are massive and indisputable losses in the future and a burden that cannot possibly be handled.But you never really answered my question.
We both know the current program would be illegal in any private offering, people get locked up for a long time for that sort of operation.
Last edited by jungle; 02-15-2013 at 06:51 PM.
02-15-2013, 08:25 PM
#14
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Especially if they reduce the promised payout after they have collected your premiums. A financial advisor told me: "We anticipate changes in the Social Security benefit structure. The exact nature of these changes is still unclear, but they will not be to your advantage. Our advice is to start collecting benefits as soon as you are eligible."
02-16-2013, 04:04 AM
#15
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49% of Americans aren't saving for retirement - May. 10, 2012
Article from last year and the number they show is telling .
Another foreseeable problem will be future increases in the inflation rate which will at some point kick in and when it does individuals who have'nt saved will have a hard time playing catch up in my opinion.
Ally
Article from last year and the number they show is telling .
Another foreseeable problem will be future increases in the inflation rate which will at some point kick in and when it does individuals who have'nt saved will have a hard time playing catch up in my opinion.
Ally
02-18-2013, 08:59 AM
#16
Libertarian Resistance
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The easy solution would be to simply put everyone in the TSP "G fund". By definition you do not lose principle. The money is yours and the risks of the equities markets are nullified.
Politicians won't do this because they take your SS withholdings and spend it on electric cars and fur-bearing trout farms--your SS withholdings are replaced with an IOU. This patronage is not possible if you have your own account.
WW
Politicians won't do this because they take your SS withholdings and spend it on electric cars and fur-bearing trout farms--your SS withholdings are replaced with an IOU. This patronage is not possible if you have your own account.
WW
02-18-2013, 09:16 AM
#17
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The standard ploy under the current system has been the handy expedient of raising the payout age, this has been done several times and is a real boon to lowering total payout with little muss or fuss.
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