So had a professor touting SS as a socialist success story…
He deleted our thread because he had no response to my assessment.
Assume the following:
$30,000 base income at the age of 18
15.3% deduction for SS
2% inflation, 0 pay increases in addition to inflation
5% ROI
Payment @ $30,000 from SSI = $1319.68 currently.
Maximize SS payments @ 70 Years Old
When you turn 70, the following would hold true, assuming annual interest rather than monthly so this is low balling it. (I’m lazy and just used annual interest)
Your current wage with 2% inflation over the years would now be $ 84,000 per year or $7000 a month.
With the 2% inflation, you could expect a SS payment of $3,695 per month.
Here’s the fun part:
Invest your 15.3% into an investment averaging 5% over the 52 years. You would now have a nest egg of $1,594,047.93. At 5% ROI, you could expect a monthly paycheck of $6,641, or 95% of your current paycheck for LIFE (You can take more assuming you want to deplete the fund in 30 years), then you would leave your kids with $1.594MM. That’s $2,946 per month more than the SS payment you could expect. To EQUAL the SS payment, the ROI would have to equal 3.9% in this scenario.
Is there a larger benefit beyond the benefit to the individual in this scenario? Of course there is. Think about this money going into investment as it builds. What if the 55 million people on SS had $1MM each in an account today? Would it be good to have an additional net worth of $55 Trillion instead of a national debt of $22 Trillion along with an unfunded liability of $125 Trillion?
The point here is without this socialistic program, we could have a massive amount of wealth accumulated. The only argument I’ve seen is that people WON’T invest that much without a mandate but would people miss it if we threw that money into investments? Would it create inflation and devalue the currency because we have so much invested? Would it kill the need for investments and harm the ROI long term? Maybe… but it’s a big damn planet and we always can invest into other places. Either way, I’d suggest it would be a far better problem than the $125 Trillion in unfunded liabilities that we have to fund through taxes… having spent all of the SS revenues over the past 70+ years…
Well stated!
I used to work up illustrations showing the difference between a private investment versus the Ponzi scheme of the Social Security plan.
The argument I used to get is the employers contribution was free money not an earned benefit. Scheesch!?
The professor tried that as well. He said I’m double the contributions that I should be including… apparently the company contribution doesn’t count to these idiots…
Right.
What many with what I call ‘slave mentality’ don’t get is, the actual cost to the employer per employee equals the annual wages of that employee with any matched contributions, paid holidays and vacations, health, disability and life insurance, etc.
Social Security is the definition of a Ponzi scheme. Orher countries have hedge funds and PE funds manage their equivalent of SS. Ours just goes into an amorphous black hole. We are basically being taxed and told it’s a benefit. Let me out!
More right wing lunacy! How about SS is a way to keep people from dying because of poverty. Not everything a government does is bad. Some level of wealth redistribution is needed in order to keep stability in society.
Social Security has never been more important to our economic security…about 2 out of 3 seniors depend on Social Security for most of their income, and one-third of seniors rely on it for at least 90% of their income. Social Security’s benefits are modest, but vital.
There are a lot of people that have worked hard all their life but unfortunately have little or no savings at retirement. For some, Social Security is a means of survival. If it’s a Ponzi scheme and someone’s getting rich it certainly is not the seniors.
How the hell is it wealth distribution to REMOVE 15.3% from your paycheck for 50 years, then give you a fraction of what you would have earned? It’s called a Ponzi scheme and it’s designed to give government more control over you.
Once again, part of the REASON that they’re in deep shit is due to the amount of taxes government has taken for 50+ years and now we’re supposed to thank our lucky stars that they’re getting poverty wages when they should be getting many times that amount? A lot of people (my parents included) didn’t invest a hell of a lot because they were told for decades that SS would be there for them and it would be great. To keep them from living in poverty conditions, I kick them around $1,000 a month and my brother kicks them some as well. SS is a SCAM and here we have people singing its praises as if it’s the only thing that stood between these folks and starvation… Tell you what… you give me $1000 and I’ll hand you $500 back in a year and then I’ll tell you how badly you needed that $500 so you should be grateful. . . fair deal?
Why the hell WOULDN’T we? Just because the government has raped me and removed 15.3% of my paycheck for my entire working life is no reason to throw my toys down and not take the portion that they’re offering back… I won’t need it but you’re damn right I’m taking some of what I paid in. What I’m PISSED about is knowing the amount I would have earned with 5% ROI on that same 15.3% would have allowed me to leave my kids several million more than I’m leaving them when I die. It’s called wealth accumulation and SS is a great way to ensure the middle class shrinks by removing a large portion of those savings from personal control and granting it to government. It’s criminal.
74 percent of Americans say Social Security benefits should not be reduced in any way.
65 percent of adults aged 18 to 29 oppose cuts to Social Security; 77 percent of adults aged 30 to 49 hold that view while 80 percent of adults over 50 hold that view.
64 percent of adults with a Bachelor’s degree say Social Security benefits should not be cut for future retirees; 79 percent of those with less education say Social Security benefits should not be cut future retirees.
Again, some mistake the want to keep the benefits because we’re being charged 15.3% and wanting to completely change the system to benefit the tax payer… it’s all in the way you ask the questions… do you want benefits reduced? I don’t. Would you prefer an alternate method? YES but even IF we move away from the system, people have paid in a TON of money that they cannot recoup. You take $50 out of my wallet and then claim victory when I say I want it back… that’s idiotic.
I do find it funny… you post something showing how we’re being raped by government and the only retort is “but people like it in the polls” and “bet you cash the checks”… absent is the argument showing why it’s preferable to have government control your money over you. Absent is the argument showing why we shouldn’t be able to leave hundreds of thousands of dollars to our kids, rather than let government rape us.
I fund two of them… (my parents). You’re exactly correct. Government collects tens of thousands of dollars over 50 years and still can’t fund a decent retirement. Instead, they’re going to bankrupt the entire nation with it. Only government can figure out how to screw up this badly.
There’s nothing wrong with social security, it was a great idea, and when FDR presented the concept in one of his fireside chat addresses, it was described as one leg of a three legged stool for most. The other two legs were retirement pensions (which were just becoming popular) and personal savings.
It was never intended to be a persons sole resource at retirement.
My dad paid into social security his entire working life, retired at 62 and died at 92, well overdrawing his account. That is a major problem with SS today.
