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Originally Posted by will2power
You've got to be joking, right? Social Security is not Fixable as it is, because the Government is managing it? They've mismanaged it from its inception. Did you know that Social Security was supposed to be a temporary program when it was enacted?.
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I agree with fundamentally altering social security.
Quote:
Originally Posted by will2power
It would be far wiser today to stop social security for everyone under the age of 35. You would do far better if you took what you paid into social security each year and placed it in bonds, ira, mutual funds and the like, then you ever would waiting on the government to do it for you. Somewhere along the line, we all got this idea that the government was much better at managing our own lives than we are.
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Government isn't great at planning retirement.
But neither are most people. And nothing is going to change that.
What conservatives call "lazy" is the norm in human nature. As is short-sightedness.
People who are good with finances in general... are great at managing retirement (within some margin of error). Not so much with the rest of the population.
Without social security, most poor workers would never be able to retire... despite most likely wearing their bodies out earlier. And does a person who worked all his/her life deserve to die when no longer able to work because of simply being normal and not all that great at risk management and long-term planning?
Also don't underestimate the importance of social security for the disabled. It's impossible to plan for getting disabled at a young age. You'd have to be independently wealthy.
The fact is that if we are to completely get rid of social security, we'd still need some sort of program for the disabled and for those whose investments go bust at the wrong time... and even those who make bad investments. Otherwise we risk loss of... well... sociaal security. We no longer live in a communal agrarian age.
To keep this at a minimum I see two possibilities:
1. a government default where people automatically save some amount of money from their paychecks and it is invested in an IRA, automatic enrollment in 401ks... supplemented with a government disability insurance for all citizens that pays out a minimal amount to those who are disabled, funding to organizations that provide services to the disabled, and an emergency insurance for those whose 401k investments and IRAs are lost in economic disaster near retirement.
2. A government disability/old age insurance that comes out of general funds rather than a social security tax. It pays one flat (amount not percentage) minimal living value, indexed to inflation, for any person that is disabled or reaches a certain age. There is no pretense that one can live anywhere near how they live pre-retirement without their own savings. In addition fund organizations that provide services to the disabled and elderly.
Those are two plans that put a larger focus on personal savings but provide necessary safety net, without raising all the complexities and ethical dilemmas of social security. They're far more honest about what they are and come out of general taxes rather than the extra ss tax. And they should be less expensive (either all people get the equivalent of the minimal social security payment or only those who are disabled get it).
Quote:
Originally Posted by will2power
Look at it this way. Say you have to put as much as you put into social security each month into an IRA. Now let's say that you have a pension available from your work as well. Now at my age(37 next month), I would be able to take about 1700.000 per month from my IRA. Add to that another say, 1,500.00 dollars per month from my pension. Without Social security, I would be making about 3200 dollars per month. Now I ask you, do you think the government can do better than that? Millions of people on Social security right now would tend to confirm that they can't.
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They won't. Psychologically speaking, retirement savings does not come naturally. And when people fail to save enough (as even many responsible and well-off people do), it creates dire social consequences.
In some way or the other the government must at the very least nudge people into saving and investing properly (by automatic enrollment) and provide aid for those who could not be reasonably expected to save (the disabled and people who reach retirement age at a very bad time).
Quote:
Originally Posted by will2power
I'm saying right now, the Government should divorce itself from Social Security entirely. They pass a law that you must in some way provide for your own retirement, and they give people graduated lump sum payments as a buyout to their social security--provided they put that money into an ira or other retirement account and leave it there. The law would mandate that you pay into that IRA whatever percentage you would normally have to pay social security. Believe me--you would end up in a far better financial situation then relying on social security. Then the goverment would have only to take care of the people who are on it now and eligible for it after the cutoff date and they can let go of that trillion dollar albatross around our necks called Social security.
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I can see the point of defaulting to IRAs, but I don't think it's enough.
We still need a program for the disabled and the unlucky.
I still would not call this "government divorcing Social Security" because it still has involvement in dictating that people do save for retirement.
But when we get into private savings, I think people should be able to opt-out. People should be allowed to work unto death or seek other methods of saving.
For an extra twist, they should have to renew their opt-out however... so that if they reach an age of realizing the folly, they will return to the default of IRA contribution.