Social Security. Who Does A Better Job When It Comes To Investing For Retirement?

Well dumb people need the government to do it for them because they're... well... dumb.

People who know how to do things like save money and make good investments are much more capable of doing it on their own and don't need the government to do it for them.

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tell us how you have invested toby ... want to see if you have any idea what you are writing about

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bob barr (stolen from pj o'rourke):

yeah, I would rather have it as an option where the default was government. I don't plan on risking my retirement through investments, I would like to have something secure and there is nothing as secure as T-bills.

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I don't understand. Why couldn't you just invest in T-bills on your own?

Depends.
People with money, good jobs, education, and some understanding of finance... tend to do a better job.
When it comes to between everyone else and government... It's more a matter of who will get it done at all.

Social security is crappy to live off of. But if it's all you have- like if you're a low wage worker, someone unlucky in investments, encountering a profoundly expensive unanticipated crisis after retirement, disabled, a homemaker with an ingrateful/irresponsible dead breadwinner, or... hell, just bad at planning (like most people, actually)... then it beats the hell out of nothing- or depleting your family's ability to save for retirement.

Personally I think SS should be changed into a simple disability/old age insurance program that either pays everyone some flat amount at a certain age or when disabled... or only pays the disabled or people in certain special circumstances.
The latter, of course, would also require some form of mandatory savings and investment for workers. Or at least automatic (perhaps people could opt-out if they insist, but it should require work to do so).

Expecting the norm of humanity to be abnormally interested in finance, long-term thinking, good at predicting, and aware of everything... is really setting yourself up for disappointment.
Especially consider that saving is even more difficult for the poor- who are less likely to be abnormally finance-savvy... and also more likely to retire from a broken body rather than because they can afford to.
And no one who is not independently wealthy at a young age can prepare for disability.

There has to be some safety net. Maybe Social Security has mutated too much (in our minds mostly) into something wrong. After all, it is only intended to be a safety net and many treat it like it's a full-on retirement program- these people either don't realize how crappy the payments are... or don't expect to live to retirement... or, like most people, don't think about it until it's getting late.

But I can see where there are some issues... After all, why should the middle classer who wasn't thrifty get a higher payment than a poor person who couldn't save or someone who was disabled? Just because of being used to a better lifestyle? BS. They should get the same tiny payment and live in an apartment if they didn't save.

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Repeat after me: Social Security is an insurance program, not an investment program. Criticizing it on investment terms is really missing the point.

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Man up.

I have the thrift savings plan (its like a military 401K), bonds and a 20 year federal pension upon retirement compleate with medical and dental benefits. I currently dont make enough to invest in anything else but at the age of 26 with over $45,000 invested for my past 7 yeras of military service I think Im off to a good start! Oh and the $45,000 dollars doesent include the $30,000 that I have contributed to social security. Can you imagine how much that money could have grown if I was allowed to invest it on my own?

What does the federal goverment do with your social security when you are not using it?

Allegedly they sit on it... but really they dip into it. Not aware of any investing.

I think raytri actually did hit the nail on the head. I think social security might need some reform... but let's call it what it is. It's a safety net. That means it catches you when you fall.
Investing is what you do to try to avoid falling.

I think the main problem with social security is that too many think it is a stand-alone retirement plan... or that it should be appreciating.
That's not what it's for.

So should we cut its scope and focus on getting more people to invest, making social security a smaller and more targeted safety net? Sure. Let's look at that.

Get rid of it completely? Not so much.

Compare its outcome to that of a fundamentally different thing? All that does is add to the confusion about what social security is.

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