Social Security - your thoughts?

#401
#401
lawgator1 said:
For purposes of this discussion, you are comparing apples and elephants.

Let's say that starting in 2025 new people entering the work force contribute to a privatized investment platform rather than SS. And that another group does so in 2035.

In 2064, as that first group nears retirement, catastrophe strikes and all of their assets lose 60 percent of their value. Now, the second group may have time left to recover. But not the first group. The first group, the 2025 group, has their retirement nest eggs utterly cut in half, and just as they were to draw on it.

If you take all of the 30 year horizons over time do they recover? Sure. But there is a not insubstantial chance that when you retire and leave the work force your savings are severely diminished because you had the misfortune of bad timing.
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Step back from the ledge my friend.

1. Your doomsday scenario supposes a catastrophic event the magnitude of which has been observed exactly Zero times in the last 100 years of the S&P 500 Index.

2. In what world would someone 5 years out from retirement be heavy in Equities? Certainly not in the system I’m advocating. Those people in your catastrophic group would be 80% Fixed Income at that point.

So you’re arguing an event we have never seen happen.
And an allocation situation that would never occur.
 
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#402
#402
lawgator1 said:
For purposes of this discussion, you are comparing apples and elephants.

Let's say that starting in 2025 new people entering the work force contribute to a privatized investment platform rather than SS. And that another group does so in 2035.

In 2064, as that first group nears retirement, catastrophe strikes and all of their assets lose 60 percent of their value. Now, the second group may have time left to recover. But not the first group. The first group, the 2025 group, has their retirement nest eggs utterly cut in half, and just as they were to draw on it.

If you take all of the 30 year horizons over time do they recover? Sure. But there is a not insubstantial chance that when you retire and leave the work force your savings are severely diminished because you had the misfortune of bad timing
Click to expand...

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#403
#403
Orangeburst said:
I am not sure where you guys get the concept that you have to draw until you are very old to get all your returns
Say you make 5M over 30 years, basically 170K annually and inflation adjusted.
At 6%, that is 300K in contribution, and really not even that much because the gross is inflation adjusted significantly.
Employer matches 300K, so total is 600k, with say an annual draw of 60K. That is only 10 years.

I am not advocating for it, but it isn’t as bad as some suggest. It is not good if you pass early, but spouses draw of their deceased SS,
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If I am looking at it correctly, SS wouldn't pay out 60k in that situation. it would be paying out just over 31k a year. a bit more if you are disabled. you would need 20 years to get your money back. assuming the payments & rates stay the same over that 20 years.

Estimated Social Security Benefit

www.ssa.gov

considering changes are needed in about a decade, counting on that much for even 20 years, 10 years beyond average life expectancy, you are going to be disappointed.
 
#404
#404
McDad said:
The psychology behind SS is fascinating to me.

The "what ifs" created to refute changing the current bad system are not part of the Federal Governments constitutional obligations and yet, many have accepted that it is the government's duty to care for citizens.
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Those same what ifs could also be used to justify any level of government involvement.

“If we don’t mandate you do x, y% of people won’t do it!”….okay? And?
 
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#405
#405
lawgator1 said:
I'm just saying that privatizing it, in whole or in part, has risks which have to be considered.



I am unaware of any investment vehicle that has an absolutely ZERO risk, much less one with a suitable rate of return.
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annuity. guaranteed payments. at a consistent rate, which is something that SS doesn't give.

SS is already a loss. acting like there isn't already some risk in SS is lying, and acting like changes won't happen that further increase the risk to SS is also lying.

death and taxes are your only guarantees. SS isn't even on that.
 
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#406
#406
lawgator1 said:
For purposes of this discussion, you are comparing apples and elephants.

Let's say that starting in 2025 new people entering the work force contribute to a privatized investment platform rather than SS. And that another group does so in 2035.

In 2064, as that first group nears retirement, catastrophe strikes and all of their assets lose 60 percent of their value. Now, the second group may have time left to recover. But not the first group. The first group, the 2025 group, has their retirement nest eggs utterly cut in half, and just as they were to draw on it.

If you take all of the 30 year horizons over time do they recover? Sure. But there is a not insubstantial chance that when you retire and leave the work force your savings are severely diminished because you had the misfortune of bad timing.
Click to expand...

So there’s a small chance something bad could happen?

That’s true in all aspects of life. Do you believe the government should directly involve itself in all aspects of life?
 
#407
#407
LouderVol said:
If I am looking at it correctly, SS wouldn't pay out 60k in that situation. it would be paying out just over 31k a year. a bit more if you are disabled. you would need 20 years to get your money back. assuming the payments & rates stay the same over that 20 years.

Estimated Social Security Benefit

www.ssa.gov

considering changes are needed in about a decade, counting on that much for even 20 years, 10 years beyond average life expectancy, you are going to be disappointed.
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not sure where you got your numbers, but they look suspect. You make 5M over 30 years, you bring home more than 31K.
 
#409
#409
yall need to look at the indexing factors as well.
I did a lot of research on this when I hung my spurs.

In 1991I earned about 30K, so only paid 1800 in SS. Today my income for that year is adjusted by a factorof 3, with 90K in year earnings.

Indexing Factors for Earnings

Cost of Living Adjustment
www.ssa.gov
 
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#412
#412
Orangeburst said:
not sure where you got your numbers, but they look suspect. You make 5M over 30 years, you bring home more than 31K.
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Got the numbers from the social security website calculator. entered in the information as you presented it.

they don't look at the 5M you have been taxed, they look at what you made at the end, and give you some percentage of that.
 
#413
#413
LouderVol said:
Got the numbers from the social security website calculator. entered in the information as you presented it.

they don't look at the 5M you have been taxed, they look at what you made at the end, and give you some percentage of that.
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You can only put current year earnings in and it assumes you only made 1300 income in 1978, in which you only contributed $78 that year


I said 5M of eranings over 30 years.



Estimated Social Security Benefit

www.ssa.gov
 
#414
#414
LouderVol said:
annuity. guaranteed payments. at a consistent rate, which is something that SS doesn't give.

SS is already a loss. acting like there isn't already some risk in SS is lying, and acting like changes won't happen that further increase the risk to SS is also lying.

death and taxes are your only guarantees. SS isn't even on that.
Click to expand...
My Dad told me when I graduated from college and went to work to save and invest as if SS wouldn't be around when I retired. I'll never forget him saying that if it is still around it might cover your utilities
 
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#416
#416
lawgator1 said:
For purposes of this discussion, you are comparing apples and elephants.

Let's say that starting in 2025 new people entering the work force contribute to a privatized investment platform rather than SS. And that another group does so in 2035.

In 2064, as that first group nears retirement, catastrophe strikes and all of their assets lose 60 percent of their value. Now, the second group may have time left to recover. But not the first group. The first group, the 2025 group, has their retirement nest eggs utterly cut in half, and just as they were to draw on it.

If you take all of the 30 year horizons over time do they recover? Sure. But there is a not insubstantial chance that when you retire and leave the work force your savings are severely diminished because you had the misfortune of bad timing.
Click to expand...
we have been over this LG.

Lets say that 2025 group makes 65k their entire life, and contributes 6.2% income, replacing SS, with no raises, or other adjustments and gets a modest 5% return. (Historically markets tend to be around 7%). they will contribute 160k over their life time (very similar to their SS taxes over their life). their holdings will be worth 490,000 at retirement.

even with a 60% loss, which has literally never happened, they would still have 226,000. more than their initial investment.

If you took that same situation on SS, they were very very lucky they would get close to that 160k back.

so even with a fictional 60% loss, you would still have more money investing in the markets, than you would from SS.
 
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#418
#418
If you die, your spouse gets up to 50% of the SS benefit you collected.
 
#419
#419
BernardKingGOAT said:
My Dad told me when I graduated from college and went to work to save and invest as if SS wouldn't be around when I retired. I'll never forget him saying that if it is still around it might cover your utilities
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same. my dad was a CPA, so I tend to give the financial advice he gives very seriously.

a lot more credence than I give someone like LG or Monty telling me how my retirement is guaranteed by the government.
 
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#420
#420
LouderVol said:
same. my dad was a CPA, so I tend to give the financial advice he gives very seriously.

a lot more credence than I give someone like LG or Monty telling me how my retirement is guaranteed by the government.
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Was mentioned before, but I guarantee you our Fathers know each other, at least in passing.
Can you say who your Dad worked for?
 
#421
#421
85SugarVol said:
Step back from the ledge my friend.

1. Your doomsday scenario supposes a catastrophic event the magnitude of which has been observed exactly Zero times in the last 100 years of the S&P 500 Index.

2. In what world would someone 5 years out from retirement be heavy in Equities? Certainly not in the system I’m advocating. Those people in your catastrophic group would be 80% Fixed Income at that point.

So you’re arguing an event we have never seen happen.
And an allocation situation that would never occur.
Click to expand...
You would want to see the growth happen from early to about 50 years of age. Then start shifting to more less volatile assets to primarily very limited volatility at age 60.
 
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#423
#423
GroverCleveland said:
If you're single, $255 helps to pay the funeral expense. That is all.
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Well if you die, do you really think you will care how much you left on the table?
But I get it, if private you could will it to children etc.
As stated I am not advocating SS, just pointing out you typically donr have to live to be 90 to collect.
There is a reason it is going insolvent, which they wouldnt if flush with unpaid benefits. People are exceeding their contributions cause they live longer.
 
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