Just so we have it available in this thread, from my link:
So, this wouldn’t be free-for-all where people could bet their Social Security money on the latest tech IPO or a land development scheme in Elbonia.
Yeah - my concerns were never that the funds would be super-risky (although even minor variations in market valuation could lead to dramatically different retirement outcomes).
It was that it would destabilize the existing system (by removing up to a third of revenue) which would likely lead to a sooner collapse (some probably saw that as a feature, not a bug). Particularly since one might reasonably assume that those most likely to opt out of standard SS would be high-earners, leaving low-earners in a perpetually underfunded system.
Also, one has to wonder how it would be decided which funds would be included, and who would manage them (and get the tasty 0.3% expense ratio).
Check the value of your 401 K for a clue. I was burying money in it when i could and it sunk like a stone when i reached 65. What did i do wrong? I did well for a while, but when the market dropped, it took me with it.
Who “told” us that, and why did we believe him/her? And the Dow is currently up from 10 years ago. It was actually a very short window of time in 2008 when the 10 year Dow was negative. I had to go back to the early 80s to find another time when it was negative, before that it would have been in the crash of 74.
My 401k looks great, thanks for asking.
Wanna know what you did wrong? You had money in the stock market that you couldn’t afford to lose. After 55 you needed to phase out of anything with risk, and into extremely safe funds. When you’re 25 and starting your retirement plan it’s fine to be 100% in stock. Every year until 65 you need to work towards being 0% in stock.
But the real thing you did wrong was not bothering to ask, “what happens to my 401k if the market crashes?”
Another goo question people could have asked was, “what happens to my mortgage if the value of my house falls?”
But the only question I would have liked was, “what happens to my mortgage if the value of my house doesn’t double?”
Ah, yes, the Stockbrokers and Investment Bankers Full Employment Act. I’m agin it. You can’t fool me, I saw Too Big To Fail. Trust those guys? OK, maybe Bill Pullman, but James Woods? Give 5.7 Godzillabucks to that pool of piranha? You kidding?
Oh, well, we’ll bulld in some safeguards! Yeah, right. It is said that love laughs at locksmiths, it always finds a way. Greed already has the combination. And who, pray, is going to build these safeguards and protections? You have to be smarter than the people you are trying to protect against, if you were that smart, you would already be one of those people. And of course brokers and that ilk must make a respectable profit! In the words of Don Barzini: “After all, we are not Communists…”
Like Lehman Brothers. Or AIG. Triple A rated investments.
Yeah, but do you trust the “Fiber One” guy? He was in it, too. Took me awhile to place him, but I’m pretty sure it’s the same Indian guy.
No, those are the opposite, those are what you are NOT supposed to invest in when you NEED the money. But you knew that, so you’re post was obviously just to get a rise out of people, since you have no ability or desire to back up any of your statements. But there go you, more food.
Personally, I’d recommend those that want a secure and risk-free base retirement plan to invest in a fixed-income annuity with survivor benefits. Preferably one backed by the full faith and credit of the US government.
Then they should be able use additional income to invest in tax-preferred instruments full of more risky equities and mutual funds. Maybe provide plans that allow employers to match contributions up to a certain level with tax benefits. And then a few stand-alone options - something like an “individual retirement account”.
I think with that sort of scheme we could have a basic net of social security (hey! there’s a good name!) with flexible tax-preferred individual retirement accounts (hey! we could call them IRAs) for those with additional income to invest.
Cute, but it’s a fiscal non-starter.
Social Security will not survive. There’s every chacne that retirement accounts will be raided for taxes. Frankly, it’s either that or Medicare and Medicaid being raided, and that’s even less likely. The math simply does not allow for anything else. You either start cutting benefits or you bleed America dry in taxes. And I’m not even sure we can raise taxes by the amount needed. The plain fact is that Social Security cannot operate as it currently does without a much younger tax base. And with AMericans living longer and having fewer children…
Well, some things are obvious. Democrats have shoved back on any kind of Social Security reform for years. The problem grew and will continue to grow. The program is edging close to failure*. Which means that its benefits are very likely to become a big flaming lie and go to to whomever Democrats most favor instead of its current distribution scheme.
*You can look at Social Security in two ways. If we use the Government-fantasy-land-where-accounting-rules-are-made-up, it’s going broke faster than a railroad with a slipped carrying Enron. If you use the actual fiscal scheme, it’s going to start draining off funds, and lots of them, from the general budget. And that starts the fight over which entitlement wins, because it will come down to a choice between giant budget-busting entitlements.
If the Democrats do manage to push Obamacare, that simply makes the situation worse. Their budget numbers are a flagrant deception and the program is very likely to speed government medical costs and overall medical cost growth.
And your prescription, Doctor Doom?
A more difficult question. Frankly, the vast entitlements need to go. First, yes, we need to take Social Security private. We also have to put it on a firm financial footing by reducing benefits. For existing users, means-testing will help reduce program costs, and raising the retirement age via Social Security. I’m perfectly happy to offer only low-risk options.
There’s a number of other issues related to it. I would actually free up money for Social Security and cut Medicare and maybe Medicaid - because anyone who isn’t an idiot can choose to spend their money on medical services if they like. Of course, the real problem there is that the AARP, as near as I can tell, will die in the last ditch before allowing a single dollar which could have been spent on relatively well-off old people to go towards, well, anything else. So it isn’t going to be easy.
But the beauty of it that this is really your best option. You may prefer the “kick the can down the road” approach to budgeting. Many leftists have, which is why California is slowly-boiling disaster. The plain fact is that the ability of the government to raise taxes is remarkably limited. Many people want to tax the rich, but that simply won’t do: they don’t have enough money, not for what the current budgeters want to do. The plain fact is that you cannot indefinitely increase spending by more than growth, and the question of whom you tax isn’t really relevant.
I agree with a lot of what you said. Social Security is a bomb that’s going to explode. The money’s already been spent through government chicanery. Means-testing is the first step in addressing the problem. And AARP will tear anyone a new asshole who suggests doing anything.
The only point I disagree on is that this is a leftist problem. Face facts, the deficit and the trust fund debacle both have plenty of Republican fingerprints on them.
Dopers wasted hours trying to cure you of this ignorance.
Is it still your position that if the U.S. SocSec buys $1 billion of bonds from Canada SocSec, and Canada SocSec buys $1 billion from U.S., that each country is now $1 billion richer? 
:dubious: :smack:
Or were you the guy that thought ten mildewing $100 U.S. banknotes had real value, but a $1000 Treasury bond did not?
Nevermind, don’t answer.
We blush with embarassment, at how poorly we compare to conservative’s prudence and self-discipline, as evidenced by the stunning success of Republican fiscal policies and financial oversight. Bang up job there.
Hell, if a liberal were to spend a trillion dollars, he’d probably squander it on people, rather than cool things that go bang and shred folks.
You mean like bank bailouts and extending the Bush Tax Cuts?
No, you spent hours defending your ignorance.
And I see you still don’t understand what I said.
Yes, I’m sure it makes your life easier when people don’t confuse you with facts.
Nobody was forced into making a bad loan. That they were able to do that was a result of government intervention in the banking industry. If you go back to the 50’s and 60’s those loans would not have been made.
i am cautious. I did not expect the housing bubble to be permanent. But I did not expect it to crash. A slow drop until it became back to reality would have been nice.
The crash was because the genius bankers built huge tension in the market by squeezing home owners and investors for every dime they could steal. Their greed and love of money put the world at risk. Those pricks will do it again. Fleecing the people in their “entitlement program”.
A matching 401 K was one of the best investment opportunities a working man could get.