Social Security

[nasa1974]

If you are FERS you pay into Social Security and will collect as part of your retirement. Those that retired under CSRS are not eligible for Social Security unless you earned the points outside government employment. Then you are penalized because you are receiving a government pension. But yes, something does need to be done to keep Social Security from running out of money.

 

[tsptalk]

Retirement Crisis Faces Government And Corporate Pensions

When President Roosevelt first enacted social security in 1935, the intention was to serve as a safety net for older adults. However, at that time, life expectancy was roughly 60 years. Therefore, the expectation was that participants would not be drawing on social security for very long on an actuarial basis. Furthermore, according to the Social Security Administration, roughly 42 workers contributed to the funding pool for each welfare recipient in 1940.

Of course, given that politicians like to use government coffers to buy votes, additional amendments were added to Social Security to expand participation in the program. This included adding domestic labor in 1950 and widows and orphans in 1956. They lowered the retirement age to 62 in 1961 and increased benefits in 1972. Then politicians added more beneficiaries, from disabled people to immigrants, farmers, railroad workers, firefighters, ministers, federal, state, and local government employees, etc.

More: Retirement Crisis Faces Government And Corporate Pensions - RIA

 

[Bquat]

They steal from the "G" fund when ever they want, I suppose they would find a way to CONTINUE stealing from the SSA coffers.

I posted this else where but it's good here too:

Social Security was a safty net. The goverment created FERS to help keep SS more solvent down the road and make it part of our retirement to show that they were paying less out on their buget when we retired as a savings to taxpayers.
Now one tier of our retirement is comming out of SS and making it even worse but to the public doesn't see it. They just see saving Social Security is in their best interest and dont think about the FERS drain on it as more and more of us turn 62 when the SS suppliment runs out.

I agree that if we could have the option to put SS tax and the employee matching into TSP would be a great idea, but the goverment knows that the general public will be willing to bailout Social Security but not TSP. They even mention about making TSP more like SS to save us from making bad investment choices.:suspicious:
They already made automatic TSP deposits into the G fund to help all the new employees retirements. I think this is just to increase the cash availiblity to borrow against to kick the can down the road. Just my opinion.

 

[Buster]

Social Security fund now seen to be empty by 2037
​

This year alone, Social Security will pay out $45 billion more in retirement, disability and survivors' benefits than it collects in payroll taxes, the nonpartisan Congressional Budget Office said. That figure nearly triples — to $130 billion — when the new one-year cut in payroll taxes is included.

http://news.yahoo.com/s/ap/20110127/ap_on_re_us/social_security

 

[nnuut]

They steal from the "G" fund when ever they want, I suppose they would find a way to CONTINUE stealing from the SSA coffers.

 

[JimmyJoe]

That's nice about moving SS to our own personal retirement system but how are the politicians going to steal from it?

 

[nnuut]

The same thing as 401Ks etc, millions of people lost their butts and their retirement is going to be grim, it's the Government's all knowing STUPIDITY!

 

[Frixxxx]

My point on retirement is, we need to move the burden of retirement back onto the individual. The government should begin to phase out SSA. I vote put all of my SSA contributions past and present into my current TSP account and I would be one happy camper.

And in a perfect world where no one makes stupid investment mistakes:worried:
People who are in the know on investing will do it right....people who have no clue....have no investment....and in a socialist world...everyone DESERVES a retirement....DID YOU NOT KNOW THIS A_G??????:laugh:

 

[Buster]

My point on SSA is that put all of my SSA contributions past and present into my current TSP account and I would be one happy camper.

I like that or let me invest it into my own IRA, etc.....but the trouble with that idea is;..most or let's say, a lot of individuals would squander their SS money on other BS (living for the day mentality) and then when they are of the age to retire they'd have nothing and would need some form of GOV welfare to help them through their senior years...I've heard this same discussion many years ago and you and I would probably do well with managing our own SS plan (for lack of a better term)..But big brother don't think we can do it ourselves.:suspicious:

 

[Aviator_Guy]

My point on SSA is that it’s almost totally hand to mouth. You can’t pay out more than you take in and today you have the bulk of the baby boom generation cashing in on SSA. The government wants us to believe that the answer is to bump up SSA tax yet again and also bump up the retirement age. If you believe that’s the solution, I have some beachfront property I could sell you in Arizona. My point on retirement is, we need to move the burden of retirement back onto the individual. The government should begin to phase out SSA. I vote put all of my SSA contributions past and present into my current TSP account and I would be one happy camper.

 

[Buster]

Well do the best case scenario..

Let's say hypothetically that a teenager of 18 years would be able to put $2000.00 (I never knew too many 18 year olds that could afford to plunk down $2000 unless it was for a car) into an account if he could find one that paid that much of 10%...and let it do it's thing for 65 years..then the kid would be 83 years old at that point, or if you use the 70 year mark..then the kid would be 88 years old..I guess the money would come in handy to pay for his nursing home, if the kid was still alive.:cheesy:

 

[Aviator_Guy]

$2K, put into an account, and earning 10% per year for 70 years, would grow to $1,435,904.

I was using my Sprint hTc cell phone Droid App called pFinance to perform my calculations of depositing $2000.00 earning 10% compounded monthly. You can also Google “Savings Calculator” on your computer and then click on “Savings Calculator” and it comes out to the exact same amount. These links are awesome tools when you’re talking to your kids or younger coworkers about the importance of saving money over a long period of time. The magic of Compound Interest!! Gotta Luv it!!!

65 yrs = $1,294,931.88
70 yrs = $2,130,563.00

Note: If that person let it ride for a full 100 years it would be $42,254,829.20.

:blink::blink:

 

[Silverbird]

C fund? If I'm going to ride a tiger, I prefer S fund - but most people don't know what to do on the back of a tiger.

Plus, although I understand why Bureaucrats invest their retirement money in a general Stock fund (no possibility of taking advantage of knowledge through job function or inside information stock purchasing), in the grander scheme of investing in a company, it should reflect the company, rather than just investing in the whole market as if the business model of the companies you are investing in do not matter as long as they are in the stock fund. Stock prices in the end are supposed to reflect how well the company is doing - we are moving further and further away from that and it really worries me. People now think that the key to business is stock price, not how well your product or service sells, and that should be nonsene.

 

[James48843]

I think it would be a lot cheaper for the government to just pay every newborn $2000.00 into an account tied to the TSP C Fund and let it ride until that person reaches their new retirement age of 70 or whatever… LOL… According to my calculations, 2000.00 earning on average of 10% over 70 years = a little over 2 Million..

$2K, put into an account, and earning 10% per year for 70 years, would grow to $1,435,904.

2000 2200
2420
2662
2928.2
3221.02
3543.122
3897.43
44287.178
4715.89
55187.485
5706.2336276.8576904.5427594.9978354.4969189.94610108.9411119.8312231.821345514800.51
6280.5517908.619699.4721669.4123836.3526219.9928841.9931726.1934898.838
388.6842227.5546450.3151095.3456204.8761825.3668007.974808.6982289.5690518.5199570.36
109527.4120480.1132528.2132528.2145781160359.1176395194034.5213437.9234781.7258259.9284085.9
312494.5343743.9378118.3415930.1457523.1503275.4553603608963.3669859.6736845.6810530.1891583.1980741.51078816 1
186697 1305367 1435904

Shows the power of compound interest.


Not bad, but still -70 years from now, what will $1.435 million buy? Certainly not a lifetime of happy retirement. Shucks- it probably wouldn't even buy you five years in a retirement home by then....


And how exactly would you get 10% per year?

I know, I know- the TSP TALK Sentiment Survey method, right?


But I hear your point.

Perhaps some tweaking of the tax code- and give new parents a $2,000 credit per year to put money away for their children's retirement.

(Not like it isn't hard enough already to tuck money away for my own retirement, plus the kid's college! )

 

[Birchtree]

Why not put those percentages in a private savings or investment plan - I guarantee you'd have more money tucked away come retirement age.

 

[Buster]

What is SS payroll withholdings right now?..7%?..Why not make it 8% or 9%...That would be easier on everybody.

 

[Silverbird]

The changes to Social Security in the proposal, from what I understand, only affect the people currently in the big "67 Retirement age bracket. There will be more brackets with more years added (There is at least a new 68, may go to a 70 full retirement bracket if I remember properly).

 

[Birchtree]

Do people who spend their productive years enjoying the benefits of welfare also get social security.

 

[Aviator_Guy]

TSP participants understand how money can grow over time. It’s really amazing how fast our accounts grow if you just stick with maxing it out year after year. Can you imagine how much money you would have if you were forced to save 15% of your gross over 45 years vice giving it to SSA??!!??. My SSA statement goes back to 1972 when I started my first official job, pumping gas and earning about 1 dollar per hour at age 15… LOL… Don’t laugh, I was able to pay off my first new motorcycle with that job in less than one year… Anyway, I personally don’t expect to see one penny from the SSA when I reach my retirement age of 66. All of my retirement planning doesn’t factor SSA in at all…

I think it would be a lot cheaper for the government to just pay every newborn $2000.00 into an account tied to the TSP C Fund and let it ride until that person reaches their new retirement age of 70 or whatever… LOL… According to my calculations, 2000.00 earning on average of 10% over 70 years = a little over 2 Million.. But, I think it would wake people up once they begin to understand the importance of saving money consistently over a long period of time will give them financial freedom. Saving money vice spending it on SSA would get my vote hands down. Anyway, I just think it would be a lot smarter than dumping more tax dollars into SSA / Medicare... It’s pretty much hand to mouth right now!! LOL

 

[Silverbird]

Along with the money swiping, Social Security was based on a shorter lifetime than we have now, so it is now more than the calculations. That does not mean I think its fair to tag the Boomers for living longer when they are already retired or about ready to.

Not sure what's going to happen with us Busters, either, some with over 15 years working, and 10-20 out to our current "benefits age". That gives more time for planning, so I get this feeling it's more likely we and the Gen Y's and later are the ones who are going to get punked.

Home interest tax deduction? Just get rid of it for second houses; most people don't speculate on their only residence.