Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Feb 28, 2023 23:02:44 GMT
Agree - the third rail thing is solid but... I was looking a little bit at the dem's Social Security 2100 bill. What worries me about congress is that the dems will be putting up bills designed to trip up republicans instead of focusing on strengthening SS in a smart way. If the dems can blame SS cuts on the reps, that's better than fixing it. Maybe I'm being too cynical. Sigh - that's what we have in OUR elected law makers. Both parties operate that way now. Edit - I should add that the 2100 bill does increase the tax burden on low income folk too; far as I can tell. It also just moves the SS cut date out 4 years, by estimates. Please provide support for the assertion that the SS2100 bill (or any other proposed fix) is designed to trip up somebody. How so? What about it, specifically? I don't have a problem with everyone paying more to secure their financial futures. I don't think that we should advance that the burden shouldn't rest solely on the shoulders of upper income taxpayers, AND that lower income tax payers shouldn't also contribute more, in their own self-interest? Seems contradictory and very limiting to do otherwise. The fix will have to be many faceted. Who is estimating it only "moves the SS cut date out 4 years" - citation needed. IMO, anyone who doesn't act or participate in fixing SS deserves blame. We can call it "responsibility" if that is a more acceptable term. Maybe it will motivate them to do the right thing? Probably not, people tend to run interference for those that they view as "their own". What would probably work would be everyone sending the message to their elected officials that failure is not an option and excuses will not be an acceptable outcome.
|
|
|
Post by bb2 on Mar 1, 2023 16:52:49 GMT
Krugman today in the NYT says the same - don't worry. SS "will probably continue much as it has". Is he saying an 20% cut is nothing to worry about? He's against raising the age because longevity is correlated with income level. But so is smoking - we make our own choices.
|
|
|
Post by retiredat48 on Mar 2, 2023 0:49:35 GMT
Mustang posted: "Now its around two workers per retiree and the trust fund is expected to go broke around 2034."
-------------------------------------- For perspective, I have spent six decades listening to concerns that "Social Security is going broke."
And citing year 2034 is a "lifetime away" before political concerns get really serious. Suspect it is currently just a Dem political football as one republican, Senator Scott of FL, opened the door about making major SS/Medicare overhaul... to deletion.
So any poster, who thinks we should do something to fix SS now, (and that poster is a politician), you run smack into a headline that reads: Poster _________________ wants to take away your SS, now!"
In the "olden days, a Dem (think Sam Rayburn, or Tip Oniel) and the republican leader would get behind closed doors and work out the details to fix SS (or taxes), emerge and the votes would be there. But now we have "sunshine laws" that no such meetings are to take place.
R48
|
|
|
Post by Mustang on Mar 2, 2023 2:04:51 GMT
retiredat48, I agree that Social Security will be fixed. Nevertheless, there were more paying in for each retiree when it started than now. It was something like 3.2-3.4 workers to 1 when they fixed it in the 80s. They will most likely do the same things they did last time: raise the full retirement age, raise the cap on wages subject to payroll taxes, raise the rate a little. www.mercatus.org/research/data-visualizations/how-many-workers-support-one-social-security-retireeSocial Security was created in the 30s and it was fixed in the 80s. Another fix should take it into the 2100s.
|
|
|
Post by retiredat48 on Mar 2, 2023 2:20:40 GMT
retiredat48 , I agree that Social Security will be fixed. Nevertheless, there were more paying in for each retiree when it started than now. It was something like 3.2-3.4 workers to 1 when they fixed it in the 80s. They will most likely do the same things they did last time: raise the full retirement age, raise the cap on wages subject to payroll taxes, raise the rate a little. www.mercatus.org/research/data-visualizations/how-many-workers-support-one-social-security-retireeSocial Security was created in the 30s and it was fixed in the 80s. Another fix should take it into the 2100s. +1...I agree..it will be fixed with a variety of changes.Anecdotal stuff: At GE where I worked, we had a pension plan. Retirement age was 65 (mandatory). THE AVERAGE RETIREE up to 1960's DREW HIS/HER PENSION FOR 18 MONTHS...THEN DIED. So we reflect how much longer people are living now...way beyond the SS early visions. Thus the funding takeout should, and must, increase, if the country is to cover the greatly aging society. And as you cite, the declining worker to recipient ratio a negative as well. Simple actuary stuff. R48
|
|
|
Post by archer on Mar 2, 2023 5:38:48 GMT
|
|
|
Post by win1177 on Mar 2, 2023 15:13:25 GMT
I strongly suspect it will be “fixed”, but unfortunately Congress tends to wait until the house has about burned down before calling for help, so there is NOT enough pressure yet. Sort of like the “debt ceiling”, wait until the LAST minute and hope a fix is made!
They could easily fix it- 1) raise income limits, 2) raise ages in stepwise fashion, 3) maybe make a few “tweaks” payment formulas over time, but Congress is too focused on politics of changing it to do much of anything now.
Read an interesting article today- several Senators are proposing a “sovereign wealth fund” for US, with profits to be paid into Social Security. Interesting concept! But I still believe we need to make the other changes in addition to this.
Win
|
|
|
Post by mnfish on Mar 2, 2023 15:20:46 GMT
Maybe just baloney but read this today - A bipartisan group of Senators is talking about raising the retirement age on Social Security
- A bipartisan group led by Sens. Angus King, I-Maine, and Bill Cassidy, R-La. is considering gradually raising the retirement age to about 70 as part of their legislation to overhaul Social Security, Semafor has learned from two people briefed on their efforts.
- Other options on the table include changing the existing formula that calculates monthly benefits from one based on a worker’s average earnings over 35 years to a different formula that’s based instead on the number of years spent working and paying into Social Security.
- The plan also includes a proposed sovereign wealth fund (as previously reported by Semafor) that could be seeded with $1.5 trillion or more in borrowed money to jumpstart stock investments, the people said. If it fails to generate an 8% return, both the maximum taxable income and the payroll tax rate would be increased to ensure Social Security stays on track to be solvent another 75 years.
|
|
|
Post by archer on Mar 2, 2023 15:25:38 GMT
Before politicians raise the retirement age, they should spend a few months doing manual labor in the heavy trades.
|
|
|
Post by steelpony10 on Mar 2, 2023 15:58:36 GMT
|
|
|
Post by bb2 on Mar 2, 2023 17:20:16 GMT
I think the jury might be out on labor and longevity: www.thelancet.com/journals/lanpub/article/PIIS2468-2667(21)00032-3/fulltextMight be that the incidence of smoking/drinking is greater in men who do labor. (Painters are notorius drinkers. Guy I know in the trades said they all sipped all day long.) Depends on the country too. In US now most labor is done by immigrants, with different genetics. Lots of factors that some of these studies ignore. As long as the labor isn't crushing, which I don't think much of it is. But true too, labor over say, 55, sucks. I might like the suggestion to start counting working years on the date works starts, in a way that those spending 4 years drinking beer in college need to work 4 years longer than the guy who's swinging a hammer.
|
|
|
Post by Chahta on Mar 2, 2023 18:15:43 GMT
Since SS is a Ponzi scheme, it is obvious what the fix is; raise payroll taxes by percentage or by income limits or extending the FRA as they did before.
|
|
|
Post by archer on Mar 2, 2023 21:17:03 GMT
The issue with manual labor isn't so much about longevity as when you are no longer able to work. Starting around age 50 in some of the more physically demanding trades, worker productivity decreases. In my experience, I saw this was expected and allowed. buy 60, many are too beaten down with joint problems to continue working. In my trade, union workers could retire and draw their pensions at 55. FRA and a higher pension was 62. I never knew anyone working past 62.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Mar 2, 2023 23:19:31 GMT
People way underestimate the physical toll of even the less demanding manual labor jobs. Or working outside in inclement weather. After age 50, even climbing ladders and moving them around, is demanding. People who simply pay others to do the heavy lifting may have little true understanding.
When does SS cease to be a Ponzi scheme? After the boomers are all gone and the millennials make up the bulk of the workforce? They already are the largest demographic (72 million) and will be for many years to come. The balance will shift.
|
|
|
Post by Mustang on Mar 3, 2023 13:39:22 GMT
My kids are millennials (1981-1996). They will be retiring in 25 years. Replacement level fertility is 2.1 children per woman. According to this article it is down to 1.64. Our future workforce is dwindling. fivethirtyeight.com/features/how-low-can-americas-birth-rate-go-before-its-a-problem/Currently retirees are 16.9% of the population. www.statista.com/statistics/457822/share-of-old-age-population-in-the-total-us-population/ When the younger millennials retire (around 2060) retirees are expected to be 23% of the population. So were are going to have a much smaller workforce paying for a larger group of retirees. I pretty much got a good laugh at the comment "The next generations of workers may constitute a smaller slice of the population, but they’ll be more educated and thus more productive and better poised to satisfy the needs of older people." More productive at what? Do the over educated elite make anything? Cars, appliances, houses? Do they fix anything? Are they the ones climbing the poles to fix the electrical grid or the one's working in extreme heat on tops of buildings to fix the refrigeration system? We have one of the best educated populations in history and productivity has recently started going down. The employment rate is also going down. I have read that the 55 and over are back to work at the pre-pandemic levels. The ones not returning to work are the younger workers. Manufacturing and some service companies are filling the employment gap with robots. The problem for social security is that robots do not pay payroll taxes. I don't think the problem with social security is going to cycle around. I think its going to get worse. We can fix it for our lifetimes but I worry about our kids.
|
|
|
Post by retiredat48 on Mar 3, 2023 13:58:12 GMT
When does SS cease to be a Ponzi scheme? After the boomers are all gone and the millennials make up the bulk of the workforce? They already are the largest demographic (72 million) and will be for many years to come. The balance will shift. If you mean "ceasing what you call a Ponzi scheme", I see it differently. The vast majority of young college grads etc are very, very socialistic...want government involvement in EVERYTHING. Second, the millennials and younger are saving little wealth...not investing much...many to age 50 before student loans even paid off. THEY WILL DEMAND THAT SOCIAL SECURITY EXIST... for they have little alternative. R48
|
|
|
Post by gman57 on Mar 3, 2023 16:22:13 GMT
Why worry/care about things you won't be around for? I have no worries for the next generations. The next gens will be smart enough to go to a guaranteed income plan. More vacation, less work, less or no struggling for an education or health care and more lifetime enjoyment. Europe is farther along than us on this front, we have a lot of catching up to do. They'll look back at us as crazy for working so hard.
Every generation says the same thing, the next gen is lazy etc... in the 20's there were those crazy drunks dancing the Charleston, then the only "greatest" generation because of the wars, then a bunch of lazy pot smoking hippie(s) , now it's all they do is sit around all day on their phones or play video games. They'll all be fine or maybe even better than previous generations just like all the generations before them IMHO.
|
|
|
Post by archer on Mar 3, 2023 17:45:49 GMT
Why worry/care about things you won't be around for? I have no worries for the next generations. The next gens will be smart enough to go to a guaranteed income plan. More vacation, less work, less or no struggling for an education or health care and more lifetime enjoyment. Europe is farther along than us on this front, we have a lot of catching up to do. They'll look back at us as crazy for working so hard. Every generation says the same thing, the next gen is lazy etc... in the 20's there were those crazy drunks dancing the Charleston, then the only "greatest" generation because of the wars, then a bunch of lazy pot smoking hippie(s) , now it's all they do is sit around all day on their phones or play video games. They'll all be fine or maybe even better than previous generations just like all the generations before them IMHO. Interesting perspective gman. The previous generations had had their unique challenges, and over time made better lives for society as a whole, albeit some always left behind. I think though that in each case, the previous generation created the means for the next. The folks that create govt and economic policy and opportunity are for the most part up in years. The young men coming back from WW2 went to work in an economy that was bossed by their parents generation. Those young men were merely the labor force to fit into that machine. The ww1 generation didn't have much of that and became known as the lost generation. They faced the same hard times the first few years after the war, and then a depression which their parents generation finally helped pull out of, creating programs such as the Civilian Conservation Corps, WPA, and beefing up the Army Corps of Engineers. Later, the lazy pot smoking hippies fit into the economic policies and environment of the previous generation under Nixon, Regan and other old guys. Now, what my generation is leaving for the next, I'm not clear, but I do see a burden just by our numbers, which may on the other hand be a help in that the boomer generation creates jobs based on our being cared for in old age. Currently the boomer generation is setting the playing field for the next in line.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Mar 3, 2023 18:34:04 GMT
Why worry/care about things you won't be around for? I have no worries for the next generations. The next gens will be smart enough to go to a guaranteed income plan. More vacation, less work, less or no struggling for an education or health care and more lifetime enjoyment. Europe is farther along than us on this front, we have a lot of catching up to do. They'll look back at us as crazy for working so hard. Every generation says the same thing, the next gen is lazy etc... in the 20's there were those crazy drunks dancing the Charleston, then the only "greatest" generation because of the wars, then a bunch of lazy pot smoking hippie(s) , now it's all they do is sit around all day on their phones or play video games. They'll all be fine or maybe even better than previous generations just like all the generations before them IMHO. A lot truth here actually. And it has a lot to do with "stewardship" and how people view it. Personally, I have little skin in the game. My retirement income is about 4x what I require and my offspring are in good financial shape. No grandchildren. But, there is some drive within not to screw up anything for future generations. Maybe it is irrational. The other end of that spectrum is utter self-involvement though. I have a hard time embracing that. To follow your thought process, I suppose a glass half-full perspective would say that all the negativity about the future of entitlements may be providing the younger generations with an incentive to look out for their own financial self-interest and prepare better than previous generations. So, point taken!
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Mar 3, 2023 19:42:30 GMT
LINK
Not only are there vastly more employable people from age 20-54, their percentage rate of labor participation is significantly higher than the group 55+, which make perfect sense. If looking at the numbers of participating workers, versus those SS eligible, the proportion is even greater, of course. There are many conflicting headlines, stories and theories about who is leaving the workforce, who is returning and why. But, it is clear that we are not running out of workers to contribute to SS.
|
|
|
Post by archer on Mar 3, 2023 21:04:53 GMT
I agree about the conflicting headlines. On the street I hear a lot of misinformation about SS. An unfortunately large number of people confuse the surplus reserve with ability to pay out anything. Some folks don't think deeply enough to realize that for SS to not be able to pay benefits would mean that no money was being paid in.
There is a declining ratio at work here such that as we all know, something needs to change. In 1949 the US population was 140 million. The next 15 years added 70 million babies. Future generations from 1965 on have not increased near 50% per, and, people are living longer. Since the year 2000 population increase % per decade has been in the single digits.
|
|
|
Post by liftlock on Mar 4, 2023 0:39:22 GMT
LINK
Not only are there vastly more employable people from age 20-54, their percentage rate of labor participation is significantly higher than the group 55+, which make perfect sense. If looking at the numbers of participating workers, versus those SS eligible, the proportion is even greater, of course. There are many conflicting headlines, stories and theories about who is leaving the workforce, who is returning and why. But, it is clear that we are not running out of workers to contribute to SS. Consider this: In 1940, the life expectancy of a 65-year-old was almost 14 years; today it is over 20 years. The number of Americans 65 and older will increase from about 58 million in 2022 to about 76 million by 2035. In 2022, there are an estimated 2.8 covered workers per each Social Security beneficiary. By 2035, the Trustees estimate there will be 2.3 covered workers for each beneficiary. www.ssa.gov/news/press/factsheets/basicfact-alt.pdf
|
|
|
Post by retiredat48 on Mar 4, 2023 3:37:55 GMT
Why worry/care about things you won't be around for? Well, I gave my grandkids 50 cents for remembering/reciting each of the following mantra their grandpa desired of them...same as passed on to me. It is: --always do your best...and --always care for others, especially the less fortunate. ---------------------------------------------- I started posting with the intent to help younger investors...still my primary goal but it seems the younger ones are not participating much. I think of when I started at age 22 with GE, and thankful they had a pension plan I could contribute to, run by GE professionals who knew how to invest. Today youngins have no pension plan, but are expected to contribute to 401.Ks and IRAs and do all the investing themselves. A daunting challenge...like sheep going to the wolves. Thus, I consider society has a duty of the elders to try to teach the next generations. Doesn't matter I won't be around for it. And I am planning on having a family charitable trust, managed by my granddaughters, such that this wealth may go on, forever, until confiscated somehow, by some society/government. R48
|
|
|
Post by yogibearbull on Mar 4, 2023 13:17:10 GMT
I think that "Ponzi" is used incorrectly on this thread.
When promises to pay, or for returns, are backed by reserves, or by taxing powers of the government (local or federal), they are NOT "Ponzi". A true "Ponzi" has no backing of any kind, and when the outflows start to exceed inflows, they collapse.
Otherwise, most banks, insurance, government benefits can be called "Ponzi" but that wouldn't be correct.
BTW, the FICA (6% + 6% = 12%) covers only 78-80% of SSA benefits now and the remainder is coming from the "so-called" SSA fund/Treasury-IOUs. And when those IOUs run out in 2034, there would be a sudden 20-22% SSA benefit cuts. In a previous post, I was imprecise on Treasury-hammer, but it doesn't matter what government agency actually makes the determination of the cuts (if nothing else is done), but those cuts will kick in once the SSA is in an overdrawn mode at the Treasury; the FICA inflows will then be simply matched with the SSA outflows.
|
|
|
Post by mnfish on Mar 4, 2023 14:23:13 GMT
Madoff had new investors money to pay existing investors, same as SS, and it worked for many years. The difference is that Madoff investors could opt out and be paid a lump sum. If the market had not collapsed in 2008 his Ponzi may have gone on for many more years. What would happen if current employees and retirees wanted to opt out and have the money they paid in returned to them plus some percentage of a return?
|
|
|
Post by yogibearbull on Mar 4, 2023 14:55:12 GMT
mnfish , there is no opt-out for Social Security - any skipping contributions would be criminal. Not only that, but most SSA benefits end with death (except some survivor benefits). There cannot be any demands on SSA as you outlined. BTW, some states were exempted from Social Security because they already has retirement plans. IL was among them, so, I don't get any Social Security. Then IL changed rules and now requires FICA for all new state employees.
|
|
|
Post by bb2 on Mar 4, 2023 18:24:33 GMT
Krugman in the NYT says SS was designed from the beginning to encourage misconceptions but says later it's not a Ponzi scheme. It's true, there is no fraud here but one could make the stretch that SS is sort of a Ponzi scheme because of the misconceptions but I think they'd lose the argument becuase all the facts about SS are available. From Krugman: "The thing about Social Security is that from the beginning it was designed to encourage misconceptions. It looks, on casual inspection, like a giant version of a private pension plan. You pay into such a plan during your working years, contributing to a pension fund, and when you retire you receive payments from that fund in proportion to the amount you put in. I haven’t studied the detailed history of the program’s origins, but I’m pretty sure that it was set up to look like an ordinary pension fund because that made it politically easier to sell. But in reality, Social Security has never been run like a private pension plan. For one thing, for the first half-century of the program’s existence it had almost no assets; in 1985, the trust fund was only large enough to pay around two months’ worth of benefits. So it has always operated mainly on a pay-as-you-go basis, with today’s payroll taxes paying for today’s retiree benefits, not tomorrow’s. I often get mail from people claiming that this makes Social Security a Ponzi scheme. But it isn’t. It’s just a government program supported by a dedicated tax, which is fairly common — for example, that’s how we pay for roads and bridges, which are funded by gas taxes. So in 1981 a bipartisan commission set out to secure Social Security’s future. It tried to do so with two measures. First, it increased the payroll tax rate; the idea was to make Social Security a bit more like a “real” pension fund by taking in more than it was spending, building up a serious trust fund that could help defray costs once the baby boomers hit the system. It also set in motion a gradual rise in the age of eligibility for full benefits, which started at 65 and will reach 67 for those born after 1960. All of this was supposed to secure the system’s finances until 2060. It did in fact buy the system a number of decades, but the Social Security Administration currently expects the trust fund to be exhausted by 2035. The main reason for the shortfall, as I understand it, is that taxable wages have grown more slowly than expected, which in turn is largely the result of rising inequality: A growing share of overall income has gone to people with really high earnings, and much of that income isn’t subject to the payroll tax with its limit. So what happens once the trust fund is exhausted? The system doesn’t collapse — but payroll tax receipts are expected to be only about 80 percent of promised benefits. So if nothing is done, benefits will suddenly have to be slashed by 20 percent. That, however, almost certainly won’t be allowed to happen. These programs are both immensely popular and deeply relied upon, after all." Some interesting data.... www.ssa.gov/oact/STATS/table4a3.html
|
|
|
Post by mnfish on Mar 5, 2023 13:17:52 GMT
mnfish , there is no opt-out for Social Security - any skipping contributions would be criminal. Not only that, but most SSA benefits end with death (except some survivor benefits). There cannot be any demands on SSA as you outlined. BTW, some states were exempted from Social Security because they already has retirement plans. IL was among them, so, I don't get any Social Security. Then IL changed rules and now requires FICA for all new state employees. Yogi, I'm well aware there is no opt-out.
|
|
|
Post by bb2 on Mar 14, 2023 18:16:44 GMT
papers.ssrn.com/sol3/papers.cfm?abstract_id=4321916Abstract Although annuities confer the benefits of lifetime income, the market for them is minuscule. Explanations include annuities’ high cost, reluctance to part with accumulated assets, and underappreciation for insuring against outliving one’s resources. Employers could increase the availability of lifetime income by adopting a Social Security bridge strategy within their 401(k) plans. The bridge option would use 401(k) assets to pay retirees an amount equivalent to their Social Security benefits so they can postpone claiming, thereby increasing their monthly benefit when they eventually claim. We gauge workers’ potential interest in a bridge option; results indicate that up to about one-third of respondents would use the bridge. The experiment shows that framing increases the share of assets allocated to the bridge strategy and that defaulting workers into the strategy is even more effective. Further, each of the two treatments substantially increases projected Social Security benefits, increasing retirees’ access to additional lifetime income. I was wondering if people are looking for subtle ways to slowly privatize SS. This would be a good start.
|
|
|
Post by johntaylor on Apr 17, 2023 14:17:25 GMT
After the Alaska pipeline was finished, a Permanent Fund was established setting aside a share of natural resource revenues.
Should the U.S. extrapolate from that?
|
|