I have done the numbers again using the 12.4% rate for SS.
This means I will be paying $ 6,340 / year to the tax.
(51,131 x 12.4 %)
So with new numbers of:
n: 492 (months)
i: .01% (per month)
pmt: $528 (down from $639 in the OP)
I now am going to have $7,011.000 dollars at retirment.
This system is destroying the financial future of generations of Americans.
I am not even saying that we need to disolve the whole SS system. (although, that would be nice.)
More realistically, you can just let me out. Sure, you won’t have my money to help pay for the old people now. But, when I’m old you won’t need to pay me. The system will eventually collapse anyways with or without me, so they may as well let me go.
You see we have two big problems if we get rid of SS, or allow dudes like Debaser to “opt out”. Problem 1- the current generation is going to be asked to still pay into SS for some 50 years without getting a dime out. Sure, it could be a a slightly lower rate. Hey Debaser (and others)- if you knew your kids wouldn’t have to worry about the SS “pyramid scheme” would you still agree to pay in and get nothing out? I do not think the majority of voters will agree with this.
Problem 2- the “OK I’ll starve” or “Let them eat cat food” arguement. The USA is simply not going to let millions of Senior citizens starve to death because they had bad luck in their retirement investments. Not going to happen. So- even if we did phase out “Social Security”, there would still have be a large safety net of SOME program- which might as well be called Social Security. OK, maybe the tax on this would be half of what SS currently is. Still substancial.
What we need is Social Security REFORM. First thing we have to do is stop the AARP and it’s kneejerk opposition to any sort of reform. Their obstinance on this is going to ruin the American economy.
Reform #1- increase the rate at which the retirement age increases. People today are still fit at age 65- instead of DEAD, which is what the average 65yo was when SS came into being. Step it up to 4 months per year, instead of 2. It’s OK, I can wait another 5 years or so to collect.
#2. Let’s stop the whole "trust fund " scheme. There ain’t no “trust fund”.
#3 This is where the knee jerk will really come in- we need a “means test”. In order to do this, we have to restructure the way Social Security sells itself. They talk about how much is in your “account”, etc. There is no “account”. We have to get the voters out of the idea that because they paid in- they get to take out. No one thinks that about Unemployement- and it is administered in a similary fashion. Let us start the means test at an AGI of $100000 for a married couple. Not “filthy rich”, but no one can argue that a retired couple pulling in $100K will be eating cat food & government cheese if they don’t get that monthly SS check.
So, people who save for their retirement are punished by not getting any SS benefits. And, these same people are still forced to pay into the system whether they like it or not.
It isn’t- or at least that’s my answer if you’re asking the question I think you’re asking. In order to continue paying those who are currently on, or will soon be on SS- the current generation of wage earners will have to pay in for quite some time. The next generation will pay for thet last generation’s SS. And so forth- in theory. Without reform, that “and so forth” can not continue forever.
So- in order to break the nasty cycle of the current gen paying for the last gen’s SS, we’d have to have the current gen continue paying- but also agree they won’t “get theirs”.
As to whether or not the CURRENT generation keeps paying in- there is no choice on that. You have to pay for your Fathers benefits. That’s just the way it is. We are not going to turn to the current retirees and tell them- "Sorry, the checks stop tomorrow as Debaser “wants out”.
So if you can get 50+% of your gen to agree to pay in without getting anything out- we can stop the cycle. OR you’d have top get the current crop of retirees to agree to stop cashing their checks. Otherwise- sorry, we are either going to watch the whole system collapse in a few decades, or make some reforms. That’s just reality.
But you see- it is SO easy to say NOW “Hell, I am not going to want that Social Security check when I reach 67”, and yet another to actually refuse it when you ARE 67. It seems like one’s view of social security changes as you get older. At 25 you hate it, and don’t want it- at 65 you insist on what’s “yours”.
That calculator says you’ll get $7,630.00 a month if you retire in 2047. Still not nearly as much as your $8 million. You also have taxes on that $8 million, so maybe its closer to $6 million while SS income is not taxed in many states. Plus there is no guarantee of a constant 12% growth rate. Plus there is no guarantee an employer would give you 6.2% of your annual income to invest as you see fit.
Actually, there is – the cost of employing you (including the SS “employer contribution”) is the going rate for hiring somebody with your skills, reliability, etc – if it weren’t, the employer wouldn’t hire you at that price.
Remove the SS “employer contribution”, and you suddenly have 6.2% more money chasing the same pool of available employees. The result (upward pressure on wages) is Economics 101.
Just an FYI to anyone reading this thread: This is an old thread from 2003. I recently linked to it during this discussion about social security privatization. That’s why it got bumped up now.
You never read about this, but hese two scams are looting the SS system:
(1) SS disability pensions. Every two-bit law office in the country is advertising how you can get disability payments from SS! Some people are getting on this as young as 30! They will be collecting for 50 years! Absolutely NO oversight-one of these guys was found to be working as a construction worker, AFTER being awarded a SS disability pension!
(2) Crazy Money: children with “verifiable” mental disorders are allowed to get a monthly stipend from SS-so what do parents do? Tell little Keisha or Lashonda to “act crazy” at the hearing! Another thing totally without oversight!
Basically, politicians DON’t care that these scams are going on-they figure the stupid taxpayers will continue to foot the bill!
