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Message
re: Social Security - Help me understand better
Posted on 2/9/23 at 2:34 pm to NC_Tigah
Posted on 2/9/23 at 2:34 pm to NC_Tigah
quote:
ORLY?
Run the numbers for a new retiree w/ a 45work-yr history, SS vs a US Treasury account.
Then compare those numbers to a 1 day old child's whose 18 year old parents had paid zilch into anything including life insurance or any means to provide for that child's sustenance. That child's return on investment would approach zero because they had NO investment at all yet receieve a benefit. Infinity is way more than all of the money ever made in actual investments.....and investment that allows a single investor, let alone multiples, to enjoy a ROI approaching infinity is superior to any investments ROI which requires an actual investment....
1
Posted on 2/9/23 at 2:35 pm to RogerTheShrubber
quote:
What kind of interest am I getting?
Depends on your situation my friend. Could be none, could be approaching infinity.....
Posted on 2/9/23 at 2:43 pm to AwgustaDawg
quote:
Depends on your situation my friend. Could be none, could be approaching infinity.....
It will almost always be "none" for those who have paid in their entire lives.
The opportunity cost of social security is outrageous.
Posted on 2/9/23 at 2:45 pm to AwgustaDawg
quote:No.
Then compare those numbers to a 1 day old child's whose 18 year old parents
Run the fricking SS ROI numbers vs US Treasuries instead of running your mouth.
Compare ROI in the two equally low risk accounts over the same timeframe.
You'll learn something, nitwit.
Posted on 2/9/23 at 2:47 pm to RogerTheShrubber
(no message)
This post was edited on 2/9/23 at 6:05 pm
Posted on 2/9/23 at 2:50 pm to AwgustaDawg
quote:
Social security has never been presented in a similar fashion as a Ponzi Scheme by anyone who wasn't villifying one of the most successful social programs in the history of mankind.
Pushing a liability on to future generations has a way of making programs look good...until they run out of money.
quote:
I am not ignoring folks who claim any adjustment is a cut in benefits that people have paid for...I think that any adjustment is rightfully seen as just that.
How is it rightfully seen as a cut in benefits that people paid for...if different people for them? You acknowledge the disconnect between benefits and payment. You say SS is open and honest about it. So how can people be indignant about benefits they didn't pay for?
You know, unless they were sold a bill of goods.
quote:
That is because of 2 things....social security is not a private insurance company and no private insurance company would feign to undertake the basic mission of social security because there is no way to do so and turn a profit. Every penny of social security is used to administer the fund and pay benefits. Insurance requires investors be made whole. They could not do that and meet the basic requirement of the mission of social security
Huh, so the profit motive is why this wouldn't work in the private sector? Here I was thinking it was the fact that enrollment is mandatory and they don't need to follow any of the rules that other private companies (insurance or investment) do. No investment/insurance company could say "hey, your returns will be great as long we get enough people to keep investing" and not be thrown in jail. The defense of "we were honest about it" would not fly.
Profit motive... great googly moogly.
Don't get me wrong, I am glad social security exists, but it's financing is screwed up. And it's hard to describe how it's screwed up without using terms that sound an awful lot like a ponzi scheme.
Posted on 2/9/23 at 2:55 pm to BigJim
quote:Not really a Ponzi. It's stable for 75yrs. Just 20% underfunded.
I am glad social security exists, but it's financing is screwed up. And it's hard to describe how it's screwed up without using terms that sound an awful lot like a ponzi scheme.
This post was edited on 2/9/23 at 3:03 pm
Posted on 2/9/23 at 3:05 pm to NC_Tigah
quote:
Not really a Ponzi. It's stable for 75yrs. Just 20% underfunded.
We are saying the same thing. The underfunding caused (greatly exacerbated) an intergeneral shift (that's the ponzi part). And the instability was evident for longer than 75 years. Thus the changes in the 80s.
Posted on 2/9/23 at 3:10 pm to AwgustaDawg
quote:
People with a brain understand that there has NEVER been an alternative offered that would accomplish what Social Security has accomplished since its inception and implementation.
BS. It started as a Ponzi Scheme that became a DC zero or negative interest loan to paper over deficits.
It could have transformed into a real retirement fund, but then it wouldn't be a DC slush fund. $1000 invested into a stock index saw around a 9% yearly growth on average for the last 40 years. That would have turned the original $1000 into about $36,000 not the $2000 the SS "Trust Fund" produces. Which would you prefer $36,000 in returns or $2,000 in a "lock box."
Now imagine if 15% of wages for 40 years had been invested in a stock index instead of the DC shell game!
https://www.jewishpolicycenter.org/2019/04/04/the-case-for-chiles-private-social-security-system/
The only people who screwed themselves in the Chile system where those who worked off the books and didn't pay taxes.
Posted on 2/9/23 at 4:14 pm to Auburn1968
quote:Rather incredibly, it didn't actually. It was a straight out mandatory public lending (i.e., we are forcing you to buy US Savings Bonds, but at a far lesser ROI) program.
It started as a Ponzi Scheme
FDR somehow sold it as a retirement benefit.
But though collections commenced at a 16:1 worker to retiree ratio, the first payout was not for 5 yrs, and any payout was based on personal contributions.
Regarding the concept of a forced borrow, folks were additionally given the option to "buyout" for the cost of their mandatory input during the preceding timeframe.
This post was edited on 2/9/23 at 4:34 pm
Posted on 2/9/23 at 6:04 pm to RogerTheShrubber
quote:Bingo
It will almost always be "none" for those who have paid in their entire lives.
The opportunity cost of social security is outrageous.
Posted on 2/9/23 at 7:55 pm to kingbob
quote:
When social security was created, the retirement age was equal to the average adult life expectancy. Thus, those who survived past it were a relatively small percentage of the population.
No, no, no. That's the wrong number.
You are using "life expectancy at birth". That's a relatively low number, because it includes deaths to childhood disease, etc.
If you got to working age, or to retirement age, your life expectancy would be longer.
LINK
quote:
Life Expectancy for Social Security If we look at life expectancy statistics from the 1930s we might come to the conclusion that the Social Security program was designed in such a way that people would work for many years paying in taxes, but would not live long enough to collect benefits.
Life expectancy at birth in 1930 was indeed only 58 for men and 62 for women, and the retirement age was 65. But life expectancy at birth in the early decades of the 20th century was low due mainly to high infant mortality, and someone who died as a child would never have worked and paid into Social Security.
A more appropriate measure is probably life expectancy after attainment of adulthood. As Table 1 shows, the majority of Americans who made it to adulthood could expect to live to 65, and those who did live to 65 could look forward to collecting benefits for many years into the future. So we can observe that for men, for example, almost 54% of the them could expect to live to age 65 if they survived to age 21, and men who attained age 65 could expect to collect Social Security benefits for almost 13 years (and the numbers are even higher for women).
Posted on 2/10/23 at 7:47 pm to MidWestGuy
quote:I missed this post earlier. The data SS is including is odd.
No, no, no. That's the wrong number.
You are using "life expectancy at birth". That's a relatively low number, because it includes deaths to childhood disease, etc.
If you got to working age, or to retirement age, your life expectancy would be longer.
LINK
quote:
Life Expectancy for Social Security If we look at life expectancy statistics from the 1930s we might come to the conclusion that the Social Security program was designed in such a way that people would work for many years paying in taxes, but would not live long enough to collect benefits.
Life expectancy at birth in 1930 was indeed only 58 for men and 62 for women, and the retirement age was 65. But life expectancy at birth in the early decades of the 20th century was low due mainly to high infant mortality, and someone who died as a child would never have worked and paid into Social Security.
A more appropriate measure is probably life expectancy after attainment of adulthood. As Table 1 shows, the majority of Americans who made it to adulthood could expect to live to 65, and those who did live to 65 could look forward to collecting benefits for many years into the future. So we can observe that for men, for example, almost 54% of the them could expect to live to age 65 if they survived to age 21, and men who attained age 65 could expect to collect Social Security benefits for almost 13 years (and the numbers are even higher for women).
e.g., They cite 9 million Americans over 65y in 1940. Yet it's an irrelevant number.
SS tax collections began in 1937. First "benefit" payments began 3 years later in 1940, but only IAW with accrued work credits.
So only a very few of the 9 million were actual "beneficiaries" in the program.
On a practical basis, the program wasn't fully actualized until around 1950.
Posted on 2/10/23 at 10:04 pm to NC_Tigah
SS has been going bankrupt for the last thirty years. It's all just a scare tactic.
Posted on 2/11/23 at 12:46 pm to AirbusDawg
quote:That's a false narrative. Not necessarily a bad one, mindyou. But even in its current structure, if payout was simply reduced 20%, SS would remain viable for at least century, and probably into perpetuity. Keep in mind SS just awarded an 8.7% COLI (nearly 1/2 of the 20% deficit), and it should be obvious the Feds are looking to expand the program. It's not bankrupt.
SS has been going bankrupt for the last thirty years.
Likewise, the Feds determine which investment vehicle(s) are used to account for SSTF "ROI." If ROI in the "trustfund" was bumped up a few %, SS would remain in balance. But of course, investing in highest returning Fed vehicles (translated: most expensive borrowing cost for Uncle Sam) would defeat the purpose of SS as a means to provide a cheap federal borrowing mechanism.
Bottomline: There is no way in hell the Feds are giving up their ability to force the American workforce to finance Federal debt. Sans an electoral revolt, eliminating or cutting SS will never happen. It is a too much of a benefit to the government, far more than to the SS recipient.
Unaffordable 8.7% COL SS payouts illuminate another M.O. at work though. There is attempt to alienate GenY/GenZ from preceding their Gens. Increasing the SS burden on Gens Y&Z helps in that regard, and is necessary to convince relatively naive GenY/GenZ'ers that Feds rather than Boomers/Silents should "handle" and distribute a $68 trillion "great wealth transfer" coming over the next two decades.
Posted on 2/11/23 at 1:50 pm to El Segundo Guy
quote:
I'm Gen X and am not counting on a single penny from SS. I've planned and budgeted accordingly. I hate to think of it as a sunk cost, but I've come to look at it that way.
Cut off SS immediately & then government should pay out to the ones who put into the system and cut a lump sum check to the contributors for the amount they are owed. Once the payouts are done, abolish social security and encourage saving and investing.
Posted on 2/11/23 at 2:24 pm to NPComb
quote:Bravo!
Cut off SS immediately & then government should pay out to the ones who put into the system and cut a lump sum check to the contributors for the amount they are owed. Once the payouts are done, abolish social security and encourage saving and investing.
Just as long as you understand why this won't happen.
BTW, a "payout to the ones who put into the system" is probably Constitutionally required IAW the 14th Amendment.
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