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Social Security

sadolite
Posts: 8,837
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9/24/2012 10:47:23 PM
Posted: 4 years ago
SOCIAL SECURITY - NOW CALLED 'FEDERAL BENEFIT PAYMENT'/ENTITLEMENT!

"(Paraphrased)"

A Social Security check is now referred to as a "Federal Benefit Payment"

This isn't a benefit " its earned income!

Not only did we contributed to Social Security but our employers did also

It totaled 15% of our income before taxes.

If you averaged $30K per year over your working life, that's close to $180,000 invested in Social Security.

If you calculate the future value of your monthly investment in social security ($375/month,including both your and your employer"s contributions) at a eager 1% interest rate compounded monthly, after 40 years of working you'd have more than $1.3+ million dollars saved! This is your personal investment.

Upon retirement, if you took out only 3% per year, you would receive $39,318 per year, or $3,277 per month.

That"s almost three times more than today"s average Social Security benefit of $1,230 per month,according to the Social Security Administration (Google it - it"s a fact).

And your retirement fund would last more than 33 years until you're 98 if you retire at age 65)

One can only imagine how much better most average-income people could live in retirement if our government had just invested our money in low-risk interest-earning accounts.

Instead, Washington pulled off a bigger Ponzi scheme than Bernie Madoff ever did.
They took our money and used it elsewhere. They "forgot" that it was OUR money they were taking. They didn't have a referendum to ask us if we wanted to lend the money to them. And they didn't pay interest on the debt they assumed.

And recently, they've told us that the money won"t support us for very much longer.
But is it our fault they misused our investments? And now, to add insult to injury, they"re calling it a "benefit," as if we never worked to earn every penny of it.

Just because they "borrowed" the money, doesn't mean that our investments were a charity!
It's not your views that divide us, it's what you think my views should be that divides us.

If you think I will give up my rights and forsake social etiquette to make you "FEEL" better you are sadly mistaken

If liberal democrats would just stop shooting people gun violence would drop by 90%
JaxsonRaine
Posts: 3,606
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9/24/2012 10:57:53 PM
Posted: 4 years ago
First, Social Security is not a retirement fund.

Second, where on earth did you get your figures for how much you would save?

$375 at 1% annual interest, compounded monthly, after 40 years, comes out to around $228,000.
twocupcakes: 15 = 13
Ragnar_Rahl
Posts: 19,297
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9/24/2012 11:09:28 PM
Posted: 4 years ago
This isn't a benefit " its earned income!

Not only did we contributed to Social Security but our employers did also
Then go collect from the dead people you paid it to. It in no way entitles you to my income, I never got anything from you.
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
RoyLatham
Posts: 4,488
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9/25/2012 12:27:21 AM
Posted: 4 years ago
Social Security taxes are use to buy Treasury Notes, which have about the lowest interest rates of any investment. However, about a third of Social Security is paid out immediately as aid to dependent children and disability. That's welfare, which may be a good thing or not, but the money is not even pretended to be invested.

Few people contribute to Social Security for the full forty years of a work life. People enter and leave the work force, such as mothers who stop working when raising a family. Immigrants enter the work force late, there are pauses for advanced education, and sometimes medical problems. Benefits are paid out based upon the three highest years of earnings, not upon lifetime earnings.

I have done the calculations in detail, using historical Treasury rates. Very few people will put in enough to pay for what they draw out of the system. If you happen to die relatively young, then the government will make money off of your contributions, but the expectations are that you will take out more than you put in.

The situation could be corrected if money were invested in a stock market index. That yields more than twice the interest rate. Mart returns vary, but Treasury yield vary considerably as well. The reason for not allowing private investment is mainly that Social Security is a guaranteed source of money for the federal deficits.
Chaos88
Posts: 247
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9/25/2012 2:04:36 AM
Posted: 4 years ago
At 9/25/2012 12:27:21 AM, RoyLatham wrote:
Social Security taxes are use to buy Treasury Notes, which have about the lowest interest rates of any investment. However, about a third of Social Security is paid out immediately as aid to dependent children and disability. That's welfare, which may be a good thing or not, but the money is not even pretended to be invested.

Few people contribute to Social Security for the full forty years of a work life. People enter and leave the work force, such as mothers who stop working when raising a family. Immigrants enter the work force late, there are pauses for advanced education, and sometimes medical problems. Benefits are paid out based upon the three highest years of earnings, not upon lifetime earnings.

I have done the calculations in detail, using historical Treasury rates. Very few people will put in enough to pay for what they draw out of the system. If you happen to die relatively young, then the government will make money off of your contributions, but the expectations are that you will take out more than you put in.

The situation could be corrected if money were invested in a stock market index. That yields more than twice the interest rate. Mart returns vary, but Treasury yield vary considerably as well. The reason for not allowing private investment is mainly that Social Security is a guaranteed source of money for the federal deficits.

I think you are thinking of pensions.

If memory serves, SS is paid on the average of the best 35 years' income, adjusted for inflation. I couldn't find a source, but running a calculator proves I am closer than you. Using $30K for years 2000-2044, my benefit is $900, but using only years 2011-2044, my benefit is lowered to $828. This eliminates eleven years, some are ignored as they are not the top 35, and the others lower the average resulting in lowered benefit.

If it were just the top three years as you claimed, the benefits would be the same.

http://www.ssa.gov...
Chaos88
Posts: 247
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9/25/2012 3:41:03 AM
Posted: 4 years ago
At 9/24/2012 10:47:23 PM, sadolite wrote:
SOCIAL SECURITY - NOW CALLED 'FEDERAL BENEFIT PAYMENT'/ENTITLEMENT!

"(Paraphrased)"

A Social Security check is now referred to as a "Federal Benefit Payment"

This isn't a benefit " its earned income!
Partially true. The employee share is earned, the employer may have been earned if not forced, and any adjustments are not earned income.

Not only did we contributed to Social Security but our employers did also

It totaled 15% of our income before taxes.
False. Social Security was 6.2% for employers, and in 2010 and 2011, it was 4.2% for employees (a holiday from 6.2%). This is 14.4%, not 15%. Also, you are assuming this amount was paid throughout the past. Before 1990, it was 6.06% or less. Before 1980, it was 5.08% or less. And before 1970, it 4.2% or less.
Did you factor in these different numbers when crunching yours? Because in your hypothetical, someone making $30K in 1979 would have saved only $254/month, not $375.
If you averaged $30K per year over your working life, that's close to $180,000 invested in Social Security.

At 15% for the whole time, which it isn't and hasn't. The baby boomers collecting now paid in far less than 15% over 40 years.

If you calculate the future value of your monthly investment in social security ($375/month,including both your and your employer"s contributions) at a eager 1% interest rate compounded monthly, after 40 years of working you'd have more than $1.3+ million dollars saved! This is your personal investment.

I don't know if you meant eager or meager, but 1% compounded MONTHLY is crazy. Most banks offer quarterly at best, unless you buy 1-month CD's, which I could not find online (Ally bank offered 3-month for 0.39% interest). A google search did show a few places that offer no more than 1.10% on a 12-month CD, but I would eat my hat if they compounded monthly.

How did you get the $1.3 million figure? I have crunched the numbers four ways, using the $180K as a lump sum, and using $375/month and adding this amount each month, while using either 1% APR compounded monthly, and 12% APR compounded monthly (which is 1%/month). I have the following figures:
180:1% =$268+K
180:12% =$21+M
375:1% =$221+K
375:12% =$4.4+M

Upon retirement, if you took out only 3% per year, you would receive $39,318 per year, or $3,277 per month.
Assuming your figures are correct...

That"s almost three times more than today"s average Social Security benefit of $1,230 per month,according to the Social Security Administration (Google it - it"s a fact).
Because baby boomers haven't been making $30K all their lives. In fact, the median household income in 1986 was less than $25K. Before that, it was less.

Furthermore, in future dollars, if I were to make $30K from working in 2000 until I was 67 in 2049 (born in 1982 retiring at "full retirement age"), my benefit would be $4,933/month, 50% more than your calculations yeild.

So, tell me, how is this descrepency my "earned income"?

And your retirement fund would last more than 33 years until you're 98 if you retire at age 65)
Using what my SS check would be, I would be out of funds in about 21 years using your figures.

One can only imagine how much better most average-income people could live in retirement if our government had just invested our money in low-risk interest-earning accounts.

What interest did you use?

Instead, Washington pulled off a bigger Ponzi scheme than Bernie Madoff ever did.
They took our money and used it elsewhere. They "forgot" that it was OUR money they were taking. They didn't have a referendum to ask us if we wanted to lend the money to them. And they didn't pay interest on the debt they assumed.

This is why we should eliminate SS.
And recently, they've told us that the money won"t support us for very much longer.
Another reason to eliminate it.
But is it our fault they misused our investments? And now, to add insult to injury, they"re calling it a "benefit," as if we never worked to earn every penny of it.

Same can be said about any tax dollar that is misused.
Just because they "borrowed" the money, doesn't mean that our investments were a charity!
Your investment is a charity if you die before you can collect. Imagine paying in $100K and receiving nothing because you died at age 55. It is a benefit if you collect more than you paid in.
Using my example of $30K for 50 years, I will have paid in (we'll use 14.4% even though I don't like to) $216,000. Yet my monthly payment, in current dollars, will be $1,278. So, after 14.08 years, any money is a benefit (or welfare).

http://www.ssa.gov...
http://www.ssa.gov...
http://www.census.gov...
sadolite
Posts: 8,837
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9/25/2012 6:53:59 PM
Posted: 4 years ago
I must admit I didn't check the math. Never mind. FScrew congress anyway though. Corrupt scum the whole lot.
It's not your views that divide us, it's what you think my views should be that divides us.

If you think I will give up my rights and forsake social etiquette to make you "FEEL" better you are sadly mistaken

If liberal democrats would just stop shooting people gun violence would drop by 90%
Contra
Posts: 3,941
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9/25/2012 7:36:45 PM
Posted: 4 years ago
And there would be no $20 trillion unfunded debt liability. Just to put that out there.

If you use the figures from the Heritage foundation for the average return on Social Security vs stock market investments, if a guy had instead put only 10% of his wage into the stock market and got a relatively conservative return of 6.34% annually, he would retire with a private account with a value of about $1.2 million dollars. So people are missing out on a great deal compared to what the fed gov'ts scheme.

http://www.heritage.org...
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