[golgiaparatus]

Is bush's plan a on social security or a
Any accountants/financial wizes among us?

As for everything else in his speech... I knew he was going to say that

 

[N8 v2.0]

I was hoping this topic would come up.

 

[Westy]

I've tried reading up on the topic and the general conclusion seems to be that there really isn't a SS crisis if the deficit isn't so big as it is now. But a balanced budget seems like a fairytale anymore. I would like to see some reform only because collecting 0% interest on my SS taxes is freaking stupid. Somehow I can't help thinking that the only reason bush wants to do this though is to divert more money into stocks to drive up the prices so his rich croney friends can laugh at us more.

 

[Westy]

I was hoping this topic would come up.

N8 scurries off to cut and paste some article......

 

[N8 v2.0]

N8 scurries off to cut and paste some article......

...and...

Here is the President's Plan:

-President Bush will not change benefits for today's retirees or near-retirees.

-The President wants to see Social Security permanently strengthened for our children and grandchildren, without raising payroll taxes.

-The President favors voluntary personal accounts as part of a comprehensive solution to give younger workers the option to save some of these payroll taxes. Personal accounts give younger workers the opportunity to receive higher benefits than the current system can afford to pay, and provide ownership, choice, and the opportunity for workers to build a nest egg for their retirement and to pass it on to their spouse or their children.

-Those who do not choose to have a personal account would continue to draw benefits as Americans have long done from the Social Security program.

-Personal accounts will provide Americans who choose to participate with an opportunity to share in the benefits of economic growth by participating in markets through sound investments. Any proposal will include limitations on the risk of investments permitted in personal accounts and will include low-risk, low-cost options like broad index funds similar to those currently available to Federal employees.​

I find it hard to argue against any of the items outlined above. If you are young, you have the flexibility to manage your own account. If you are old you can stay with the existing system. Options are always a good thing in my opinion.

 

[golgiaparatus]

...and...

Here is the President's Plan:
-The President favors voluntary personal accounts as part of a comprehensive solution to give younger workers the option to save some of these payroll taxes. Personal accounts give younger workers the opportunity to receive higher benefits than the current system can afford to pay, and provide ownership, choice, and the opportunity for workers to build a nest egg for their retirement and to pass it on to their spouse or their children.

-Those who do not choose to have a personal account would continue to draw benefits as Americans have long done from the Social Security program.

-Personal accounts will provide Americans who choose to participate with an opportunity to share in the benefits of economic growth by participating in markets through sound investments. Any proposal will include limitations on the risk of investments permitted in personal accounts and will include low-risk, low-cost options like broad index funds similar to those currently available to Federal employees. [/INDENT]

If they work then yeah, I have no problem with what he's saying. But they again I dont know jack schitt about finances. I knwo that as of now a really large chunk of my pay is going into SS and that later when I'm say, 60 I will start getting this money back. That is cool with me, I will let the gov draw interest off my cash to help it survive. I live in this country, I owe it a lot. However, me getting my money back is at risk apparently.

I'm not cool with that, not in the slightest. I may count on that check later in life. Now bush is proposing that I take my SS money and invest it in stocks? Arent stocks risky to a point? Is bush guarenteeing that I will at least get my money back?

Anyway, I just dont understand it all that much.

 

[Westy]

Any proposal will include limitations on the risk of investments permitted in personal accounts and will include low-risk, low-cost options like broad index funds similar to those currently available to Federal employees. ​

Here is what worries me, the gov lets you manage your money a little better but then limits where you can put it. Just looks like another path for corruption

 

[reflux]

I went to an economics seminar yesterday and this was briefly covered. I mean, very briefly, but this is what I recall:

The private account system can work in theory. Chile is one of the few (only?) countries that allow private accounts and they have been doing it for years. Not only has it not failed, but it has worked very well since it was first implemented. If some one can find and post some raw data on this, that would be great (I wouldn't know the first place to look). Off topic, but interesting nontheless, is that Chile also uses private unemployment insurance. Whatever unemployment taxes w/h or paid on your behalf, are deposited into a private account that only you have access to. The catch: you can only receive as much unemployment wages as you have money deposited in the account. Brilliant.

What I put together after the seminar is this. In order to make the private account system work, the US will have to borrow heavily from foreign sources. The makes a big problem with the huge deficit and current account imbalance that our government has been running under. If for whatever reason China and other Asian nations stop funding our government, the Fed will have to raise interest rates, the value of the dollar will severely drop, foreign imports will become more expensive (Detroit will like that), and the US economy will likely experience stagflation (not good at all). Where does that leave social security? Probably better off if we had just left it alone.

Conclusion: ???

 

[golgiaparatus]

Here is what worries me, the gov lets you manage your money a little better but then limits where you can put it. Just looks like another path for corruption

LOL! No doubt, there will be more corporate big wigs walking around with lips stained with the stink of the governments butt.

How much corruption would be able to affect us... thats the question I'd be interested in. What steps will be taken to prevent corruption in this new system.

 

[Silver]

If there was ever a time to borrow a couple of trillion dollars, we might as well do it now while deficits are small.

 

[fluff]

If there was ever a time to borrow a couple of trillion dollars, we might as well do it now while deficits are small.

Lend me a million, that's all I ask...

 

[BigHit-Maniac]

Here's the problem: Americans are too stupid to manage their own retirement, let alone drive a car between the little white dotted lines correctly.

With an average IQ of 100, this country's going NO WHERE when it comes to smarts. We're a bunch of puppets.

 

[N8 v2.0]

Here's a fun linky that illustrates, in pretty easy to understand terms, what kind of return on investment you'll get given all the $'s you pay into the system:

Your Retirement Calculator

For even more fun, you can compare your results with this calculator:

Social Security Admin Website

 

[narlus]

(after plugging info into that link N8 listed) sweet:

Your rate of return under today's Social Security is 0.01%

beat that, wall street.

the privatization of SS is one of the few good ideas W's had. i am definitely for it.

 

[fluff]

(after plugging info into that link N8 listed) sweet:

Your rate of return under today's Social Security is 0.01%

beat that, wall street.

the privatization of SS is one of the few good ideas W's had. i am definitely for it.

I'll agree that 0.01% return is rubbish, but that is down to mismanagement rather than being state run (unless you equate the two in which case privatise the governement and be done with it).

Privatisation without very thorough regulation will lead to disaster.

 

[reflux]

of SS is one of the few good ideas W's had. i am definitely for it.

I'm still undecided about SS, but I'm definitely on the bandwagon for limiting the settlements for malpractice lawsuits--W's BEST idea imo.

 

[Silver]

I'll agree that 0.01% return is rubbish, but that is down to mismanagement rather than being state run (unless you equate the two in which case privatise the governement and be done with it).

Privatisation without very thorough regulation will lead to disaster.

Nah...it'll just end up with SS2, the sequel.

Once investment limits on the private accounts are lifted and people throw all their retirement money into google/ebay/enron/whatever and lose it all, we'll need a supplemental retirement income program so that old ladies aren't eating cat food (not the good stuff, either. I'm talking grocery store catfood here.)

So then you'll end up paying for SS, your private account, SS2, and your own retirement savings. Where do I sign up?

 

[N8 v2.0]

(after plugging info into that link N8 listed) sweet:

Your rate of return under today's Social Security is 0.01%

beat that, wall street.

the privatization of SS is one of the few good ideas W's had. i am definitely for it.

Sucks huh?

Just about anything would be an improvement over the existing system.

Interesting reading:
1. http://www.fee.org/vnews.php?nid=6531
2. http://www.thisnation.com/question/045.html

 

[ALEXIS_DH]

what about privatizing social security???
and having some sort of insurance a la fdic?

fluff, privatization of SS is not that hard. it worked wonders here and in Chile...

 

[fluff]

what about privatizing social security???
and having some sort of insurance a la fdic?

fluff, privatization of SS is not that hard. it worked wonders here and in Chile...

How long has it been running?

There is no shortage of stories in the UK of private pension funds being pillaged and made worthless, some people losing thousands of pounds (which are much bigger than dollars btw).

I'm arguing for good and tight regulation, not necessarily against privatisation, don't put words in my mouth.

 

[ALEXIS_DH]

How long has it been running?

There is no shortage of stories in the UK of private pension funds being pillaged and made worthless, some people losing thousands of pounds (which are much bigger than dollars btw).

I'm arguing for good and tight regulation, not necessarily against privatisation, don't put words in my mouth.

you got me there, it hasnt been running for a while.
in peru, about 10 years. in chile around 20, but so far, so good...

here public pension funds have been pillaged ad infinitum.. my grandad gets 110 dollars a month from his retirement fund....
so i guess whatever the private systems ends up being, it just cannot be worse...
i agree tight regulation is needed..

 

[narlus]

I'll agree that 0.01% return is rubbish, but that is down to mismanagement rather than being state run (unless you equate the two in which case privatise the governement and be done with it).

Privatisation without very thorough regulation will lead to disaster.

what's to regulate though? the SEC already regulates the industry. i want a money manager who knows his stuff, and the fund's performance is linked to his bonus/review (and if i want a low-risk, low-yield fund, it better come as advertised. not saying i'd opt for that, but just trying to allay fears of old women eating catfood).

i am hard pressed to see how the public sector will be able to compete w/ the private sector at this game. but i'm all ears.

 

[Silver]

i am hard pressed to see how the public sector will be able to compete w/ the private sector at this game. but i'm all ears.

Right now, they compete on risk.

T-bills are as close to riskless as it gets.

 

[narlus]

but could the public sector hire and manage people with commensurate ability as the private sector?

 

[Silver]

but could the public sector hire and manage people with commensurate ability as the private sector?

You don't need a genius to buy t-bills

 

[narlus]

agreed, and that can be one of the options (low-risk). from my (admittedly limited) understanding, the plan would work in a similar fashion to a 401K. you'd have 5 or so categories of where to put your $.

will there be a halliburton option?

 

[dan-o]

will there be a halliburton option?

Of course, that's what W meant by "conservative investments".

 

[El Santo]

[zipping up flame retardant suit]

Using a little common sense, it's a bad idea to move retirement accounts out from under the umbrella of government protection.

One thing that I give the Bushies (and Clinton- he did as much of this as his successor) credit for doing well is the relaxation of rules that prevent big business from behaving like the selfish gene. Without those rules and laws protecting the American public, it's open season on us, and more of our money winds up making the absurdly wealthy even more absurdly wealthy.

I am not financially well-informed enough to know whether or not privatizing SS is fiscally a good or bad idea. Anyone with expertise on this should chime in. I sure as hell don't want retirees to be eating cat food.

And as I understand it, a simple elimination of the 'cap' on SS taxation would solve the problem entirely. Currently the cap on SS tax is 6.2% of an $87K salary/year, which comes out to a maximum payout of $5400 from your salary (your employer matches this 6.2% tax up to 87K/year). Currently, if you make $10M a year, you still only pay $5400 a year in SS tax. Making the SS tax linear for the upper-income brackets would more than pay for the 20% reduction in payout we are likely to see somewhere between 2042-2052 (depending on which actuarial math you believe). In other words, why the hell aren't the upper-class folks paying the same percentage of their wages as you are?

I don't trust this asshat is able to wield a spoon correctly - let alone act in my best interests for retirement.

[/unzip flame retardant suit]

 

[fluff]

Interesting article from factcheck.org:
http://www.factcheck.org/article305m.html

 

[narlus]

i don't care about quibbling about bankrupt. i want MY money to actually get a decent return for me.

anyone who knows anything about investment knows there is no such thing as a sure thing, but i'll take my chances w/ MY money.

 

[fluff]

i don't care about quibbling about bankrupt. i want MY money to actually get a decent return for me.

anyone who knows anything about investment knows there is no such thing as a sure thing, but i'll take my chances w/ MY money.

If you invest it privately (i.e. yourself) you can access the original investment whenever you want (and pass it to your kids). Dubya's way stops you doing that. If people are savvy enough to invest for thier future themselves, where is the benefit of this scheme?

 

[narlus]

well you can't pass on social security benefits now, can you? so while i agree w/ you in principle that that doesn't seem right, he's not changing that part of the system.

 

[Westy]

well you can't pass on social security benefits now, can you? so while i agree w/ you in principle that that doesn't seem right, he's not changing that part of the system.

50% of your benefits can be passed on to a surviving spouse when you kick the bucket.

 

[narlus]

ok, i stand corrected. i wonder why bush's plan is cutting out that benefit?

 

[bmxr]

If you invest it privately (i.e. yourself) you can access the original investment whenever you want (and pass it to your kids). Dubya's way stops you doing that. If people are savvy enough to invest for thier future themselves, where is the benefit of this scheme?

-The President favors voluntary personal accounts as part of a comprehensive solution to give younger workers the option to save some of these payroll taxes. Personal accounts give younger workers the opportunity to receive higher benefits than the current system can afford to pay, and provide ownership, choice, and the opportunity for workers to build a nest egg for their retirement and to pass it on to their spouse or their children.

I know quoting N8 is questionable with some of you hippies ( ), but I heard the same thing in the State of the Union...One of the biggest differences IS the ability to pass the assets along upon your death. If you die young on SS, the govt wins.

 

[bmxr]

If you invest it privately (i.e. yourself) you can access the original investment whenever you want (and pass it to your kids). Dubya's way stops you doing that. If people are savvy enough to invest for thier future themselves, where is the benefit of this scheme?

-The President favors voluntary personal accounts as part of a comprehensive solution to give younger workers the option to save some of these payroll taxes. Personal accounts give younger workers the opportunity to receive higher benefits than the current system can afford to pay, and provide ownership, choice, and the opportunity for workers to build a nest egg for their retirement and to pass it on to their spouse or their children.

I know quoting N8 is questionable with some of you hippies ( ), but I heard the same thing in the State of the Union...One of the biggest differences IS the ability to pass the assets along upon your death. If you die young on SS, the govt wins. The squandered your money and gave you NO return, then IF you are married, give your spouse back half? Why aren't more of you pissed about that?

 

[fluff]

I know quoting N8 is questionable with some of you hippies ( ), but I heard the same thing in the State of the Union...One of the biggest differences IS the ability to pass the assets along upon your death. If you die young on SS, the govt wins. The squandered your money and gave you NO return, then IF you are married, give your spouse back half? Why aren't more of you pissed about that?

I was working from the factcheck article and the point I was trying to make (only partially successfully) was that if you invest the same amount of money yourself, rather than pass it into this scheme, you may end up with more money in the end.

The scheme does have merits.

 

[Westy]

I think they should just get rid of SS. Everytime you file your tax return the government sends you a letter based on your age and income telling you how much you should have saved up and how much you need to save the following year for different retirement ages. If someone screws it up they should have a SS office in each major city that people can go to for additional help when they retire. The trick being the SS offices are just soylent green factories. That would help fund school meal programs too.

 

[fluff]

This bit:

And even at retirement, the government would control what becomes of the money. First, the government would automatically take back a portion of the money at retirment and convert it to a guaranteed stream of payments for life -- an annuity. The amount taken back -- called the "clawback," descriptively enough -- would depend on the amount of money the retiree requires to remain above the official poverty guideline. That's currently $12,490 for a couple or $9,310 for a single person. Only after the combination of traditional Social Security benefits and the mandatory annuity payments from the private account equal the poverty level would any remaining portion in the account be "yours."

"Senior Administration Official:" They would be permitted to leave those (leftover) funds in the account to continue to appreciate; they could withdraw those amounts as lump sums to deal with a pressing financial need -- and, obviously, any additional accumulations in the accounts could be left as an inheritance. But the main restriction, again, to repeat, is that people would not be permitted to withdraw money from the accounts to such a degree that by doing so they would spend themselves below the poverty line.

 

[SkaredShtles]

<snip> I will let the gov draw interest off my cash to help it survive.

With SS $$ they don't draw interest - they use the incoming to pay the current beneficiaries. They're not "saving" your money for you. They're using taxes on currently employed people to pay benefits to those entitled to them.

What you may end up getting is some benefit when you retire, but it appears that it'll be alot closer to Jack Schitt than to a living stipend.

-S.S.-