A Large Part Of My Social Security Money Won't Be There When I Retire

Great Debates
41

My point was that if you are concerned about paying life insurance premiums to leave something for your son, then one could argue that you don’t really need SS. Sure, it would be nice to leave something for your son, but is there a reason he is unable to provide for himself? It almost sounds as tho you wish your estate - created by life insurance - to be partially subsidized by SS.

I have the 1999 “Fast Facts and Figures About SS” before me (just cause the hardcopy was handy in my office. You can find later years on-line.) In 1999:
66% of aged beneficiaries depended on SS as 50% or more of their income;
30% depended on it as 90% or more;
and 18% depended on it as 100% of their income.
That bottom 18% doesn’t have a 401(k), and I bet they aren’t worried about leaving an estate for their kids.

Also - off topic - IMO you could probably do better off investing your funds in something other than life insurance, either term or whole life.

The greens fees and presents line was not a strike against you. Instead, it is how most of my friends and family use their SS. And it doesn’t bother me a bit. Many if not a majority of my golf partners are retired. As they know I work for SS, we talk about this shit a lot. At least until I can switch the topic! Fortunately, they positioned themselves so that they did not need SS to pay for life’s basic necessities. When they start to receive it, they view it as supporting some of the luxuries they enjoy in this stage of life.

Your penultimate sentence emphasizes the reason there cannot be a dollar-for-dollar entitlement to one’s own contributions. How do you know when you are going to need it? If you become disabled tomorrow, you will get it tomorrow. If you drop dead tomorrow, benefits will be available based on your earnings records to any surviving spouse or children.

If you truly are concerned that the system is in dager of collapsing if it isn’t fixed - well, you are simply mistaken.

Do you simply disbelieve the stats I presented in my former post? (I don’t have a site - I copied them from a transparency I was given as an SS employee trained to be a “facilitator” in the nationwide “dialogue on SS” Clinton proclaimed. Unfortunately, the economy went gonzo, the asteroid got pushed back a couple of years, and that dialogue went nowhere.)

The SSA has a HUGE website. You can find all kinds of stuff there. Of course, if you prefer hanging on to some irrational fear…

You bring up the 2013 date. Nothing is going to happen to SS benefits in 2013. So stop mentioning it. Whoever told you about it was wrong. There are at least 3 relevant dates on the horizon. As you should know, SS trust fund receives/records income from both current receipts as well as interest on the trust fund.
FIRST DATE: According to some stats I have - a couple of years old - 2013 is the year tax receipts alone will be insufficient to pay obligations. However, tax receipts + interest will still exceed outgo. So, payments can continue without interruption.
SECOND DATE: In 2021, total income from taxes and interest will fall below necessary expenditures. As before, payments will continue without interruption. BUT, the trust fund balance will need to be drawn down to pay them.
THIRD DATE: The asteroid crashes. The trust fund is depleted, so we cannot use that to pay expenses AND it generated no interest. So all we have is current taxes paid to cover benefits owed.

*(Note: these years change regularly, depending on how the economy is going. For example, if employement is high, more taxes are coming in. But they don’t suddenly move in huge increments.)[//i]

So don’t sweat it. Even if NOTHING is done, after the trust funds are depleted in 2030-something - current income will be sufficient to pay something like 70-75% of predicted benefits. So AT WORST, you would get only 75% of what you were promised. Maybe you’ll have to switch from Friskies to generic catfood.

Moreover, as far as I have heard, no one recommends doing NOTHING. Of course, politicians being what they are, there seems to be a whole lot more talking being done than doing.

If the gov’t had the balls to do anything now, relatively minor changes - or combinations of changes - would give us a huge breathing room. Increase the max salary subject to SS withholding, or eliminate it altogether. Increase the withholding rate a fraction of a percent. Institute some sort of means testing. (Personally, it wouldn’t break my heart to have a maximum net worth to receive SS - whether you paid in or not. Many many folk would disagree.) They are already raising retirement ages.

I personally strongly disfavor individual control or private investment of any part of SS funds. Sounded really great when stocks were going through the roof, but not too good if you have to retire during a downswing. And greatly favors sophisticated investors over the poor and ignorant who - IMO - are likely to have the fewest investment alternatives available.

The info is out there is you care enough to look for it. But for me - this is getting too close to work for my taste. I’m off to check out Madonna and Brittney smooching again.

42

Hey there Dinsdale!

  1. If penultimate is in fact, a recognized word of the English language - it really shouldn’t be.

  2. That’s the point - we’re going to have to work longer, retire later. The concept of working when I’m 70 doesn’t appeal to me in the least.

  3. Ewww.

43

:: throws a shiny object into the thread ::

44

As Dinsdale points out, the projected date when this depletion will occur changes year-to-year and the tendency at least during the late 90’s into last year while the economy was pretty good was for that projected date to move out faster than time itself was advancing (e.g., in 1997 the projected date was 2029 whereas last year it had moved out to 2041!) This is the mid-range scenario. The most pessimistic scenario has the date being 2029 whereas the most optimistic scenario has it remaining solvent for at least another 75 years! Here is a CBS News story on this.

Here, by the way, is a PDF file from the Economic Policy Institute that discusses social security and why some people want to make you think it is in worse shape than it is! (Note that this was written in 1998 which is why they have the 2029 depletion date in there.)

45

And, what’s more, I think it’s highly debatable that…

Ooohh. Looky there.
Can we get some donuts and cookies in here or what?

I would like to formally apologize to all posters and mods of the Great Debates board at this time… :smiley:

46

Europeans have a serious problem looming in retirement incomes.

The falling birthrate, and proposed increases in working life, along with increases in lifespan means there is a pensions black hole .

In the UK the future problems are such that there is at present a £55billion shortfall in company pension schemes.

http://news.bbc.co.uk/1/hi/business/3127185.stm

Part of it has to do with changes to tax regimes and accounting practices, but much of it is because very many UK companies took pensions contributions holidays when times were good.
Naturally times eventually change and assets secured upon stock market evaluations are suddenly in deep trouble, and this is where changes to accounting rules come in, because there has be to a guarunteed level of fund security.

UK state pensions are far smaller than the European average, and it’s in the Euro zone that things look bleakest, it could be the deal breaker that might dissuade Britain from joining the Euro.

I cannot imagine that the UK will vote to join the Euro if it means contributing in some way to filling the void in Continental Europe’s state pensions.This would not be in a directly funded way but would probably be as a result of increased borrowing by the Eurozone and the consequent rise in interest rates.

We in the UK who are less than 50 are in the position of funding the pensions payments of our elders who maybe never had much chance to build up a decent occupational pension, we will have to pay for our own pensions too, and probably will have to pay for the pensions of those following us as well.

It means we may well have to work longer, get lower pensions and possibly poorer standards of state provision (such as healthcare) for which we have paid all our working lives.

One of the great cons in the UK that has not yet been picked up upon by the public is the “minimum income guaruntee for all retirees”
It’s a flagship policy of the current administration but few folk at my level have any real understanding of its true meaning.

At present the basic UK state pension is around £67.50 per week, but the minimum income guaruntee is somewhat higher than this, IIRC it’s about £102.

cite

What this means is that if you get a company pension, then if that together, with state pension, adds up to over £102 then you will not be given any further income support, however if you depend in total on state pension, you will have additional benefits to bring your income up to the £102 level.

This is a method of means testing pensions, and if the state pension level is increased at a lower rate than national pay rates(and hence at a lower rate of increase level than the minimum income guaruntee), then the state pension value will slowly be eroded, so the gap between the minimum income guaruntee and state pension will become greater.The link between state pensions and national pay rates was broken over 20 years ago and the result is that the relative vaue of state pension has indeed fallen against the national pay index.

Effectively it will mean that if you have been prudent all your life, paid all your taxes and saved for your retirement, when you retire the amount you get from the state will have little value, in contrast to the feckless individual who will recieve the minimum income guaruntee and yet will have saved little or nothing, and probably contributed little in taxes during their working lives too.

If you are from the UK you should be paying very serious attention to this matter, there is a poverty trap problem here where the someone who has slightly more than the minimum income guaruntee will actually be worse off than someone just below it as they will not be eligable for such things as assistance with rent, medical drug prescriptions, heating allowances etc.

For those who were well employed, saved up and bought their own houses, things will be good, but in todays employment market where there may be frequent changes in employer you really need to pay attention.

47

Dinsdale, I believe the signifcance to Q of the year 2013 is that it is HIS SS projected retirement date.

Blonde, penultimate is a great word. ‘Second-to-last’: boring and choppy and full of unpleasant connotations [‘can’t even fail right, comes in second-to last’]; ‘penultimate’: rich and flowing and full of pleasant connotations [it makes me think of a particularly well-written sentence]. Just try it; unlike what your mother said about liver, you really will like it. [want a coconut cruller?]

Susanann: Your original post, “As long as the United States has continuing buget surpluses, a positive balance of trade, a strong dollar …” definitely implied that the US CURRENTLY has a budget surplus.

But I really take issue with the whole ‘just cut spending argument’. Debt for projects that are an investment in a better future is a GOOD thing. [Warning: individual v. government analogy coming] No-one would advise you to wait to buy a house until you could pay the entire purchase price (particularly now since housing is still the brightest spot in the economy.)

We can not cut Head-Start and hope for more, more productive workers to support the economy during our retirement.

And a strong dollar makes US goods (to we still make any?) and services expensive abroad.

48

Donuts all around. On me. Krispy Kreme or Dunkin’?

:smiley:

Quasi

49

Krispy Kreme, of course!

Quasimodem, you’ve done us proud. You MUST start another GD thread!

50

HEY! MY da was a door greeter and a damned good one at that. Criminy name me one other person who bothered to record HOW many people went in and out in one night.

Okay so he worked the 11pm to 7 am shift. What’s you point?

Hell, the way social securrity is going my age group 35 to 45 should just start getting used to cat food now.:smiley:

51

Well, Quasi, we haven’t been to hard on you, have we? I hope you’ve enjoyed yourself. Please come back another time. Really, once you get the hang of it, GD’ing is fun, too. :slight_smile:

Ssssh, I’m trying to reel him in. Don’t scare him off.

52

Cat food isn’t all that cheap, girlfriend!

Tuscalan - unless y’all start debating about accounting I won’t have much to add - but thanks for welcoming our Fearless Leader Quasimodem. Happy Labor Day!! :wink:

53

“Fearless Leader”, indeed! :smiley:

I was more afraid of this place than I am of The Pit.:wink:

Tuscalan I may lurk a bit to get the hang of things, but I’ll be back at some point.

Blonde: Thanks, hon! You too! I’m “laboring” the entire weekend!

Q

54

Or…

Great scam.

55

Blonde, maybe we can debate FAS #144 and accounting for discontinues operations? Once I figure out what that is, anyway.

56

The way SS is currently set up, your benefits depend entirely on lots of younger people in good jobs paying in to it, with lots of social security and income tax money coming in to fund it.

If you export or outsource most of your high paying factory and high tech jobs to asia, then how are you going to get the younger people here to pay your benefits, and your mothers and neighbors benefits, in your old age?

That is all there is to it.

57

I don’t think it’s quite that black and white - one could argue that outsourcing results in lower costs for U.S. companies, enabling them to offer higher salaries, retirement plans, 401(k) contributions, etc.

Quasi - where are those Krispy Kremes? Tusculan, if I explained FAS #144 to you, I’d then have to kill you. :smiley:

58

We are not talking about 401ks, nor higher salaries.

We are talking about social security.

If american companies lay off american workers, and outsource or move their factories to asia, then there are no social security contributions from either the employer, or the ex-worker. Futhermore, the lost income taxes not paid by the displaced american worker further reduce our fiscal strength with lost revenue.

59

No, we ARE talking about 401(k)s and higher salaries, because those perks enable us to live out our retirement years without resorting to eating Alpo for dinner.

I’m certainly not in favor of laying off American workers - but our economy is in crisis, and many businesses are on the brink of failure. I’m just saying it’s not surprising that companies would search for cheaper labor outside the U.S. - and thus perhaps some of those companies would survive. I don’t have a cite, but many of the goods we purchase in the U.S. are manufactured outside the U.S., and I believe that’s been the situation for some time now.

60

The title of my thread relates to SS, yes. But it doesn’t exclude what I am doing to supplement my retirement. Hence the mention of 401K and other means of saving. Outsourcing to benefit me with a higher salary? It may benefit someone in upper level management, but not the average Joe Worker. (No cite, just my opinion, okay? ;)) Besides, why would I want some other guy to lose his job to someone in a foreign country just so I can have a little more money? I work in the health-care field, so this doesn’t impact me but I still wouldn’t want someone else to suffer just so I can line my own pockets.

Blonde’s point is (if I understand her correctly) that we have to supplement SS with a 401K or a separate savings account in order to make it. Sorry, but the prospect of knowing that I may only see 75% of my projected SS payments when I retire, does not make me a happy boy, so I’ll continue to save and pay what I can into my 401K. Of course there’s always the “take it or leave it argument”, and of course I’ll take it, but it doesn’t mean I’ll like it.

And I also understand that the amount of money I get depends on younger workers getting good-paying jobs. I don’t much care for that either, because at some point they are gonna need the same thing from other younger workers.Social Security?

Q