Op-Ed: Why it's time to kill Social Security
Social Security is unfairly taking workers' money and fueling income inequality. It's time to phase out the program, says Jake Novak.
www.cnbc.com
Social Security is a scam..
- Thread starter gobluetom
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www.cnbc.com
MoeDude
LIVE FREE OR DIE!
They forgot to mention that the government raided the Social Security Trust and borrowed against it for General Fund spending. The scam is that DC Politicians are there to work for us when in reality they are working for themselves and have stolen the SS Trust money for decades.
Come on, young people love to help out the elderly. I have just viewed SS taken from me as part of my civic duty and money I may never get back. But dont stop now, my turn is about to come up.
As fewer people retiring have employer provided retirement benefits SS becomes an even greater need .
I dont expect SS to go away, but it would not surprise me whatsoever for it to become more like Medicaid and be need based. Punishing those with discipline to save for the future is the American way. If only the people below a certain net worth qualify for SS we will spark a financial boom in consumption as people nearing retirement bleed off assets to qualify for SS .
As fewer people retiring have employer provided retirement benefits SS becomes an even greater need .
I dont expect SS to go away, but it would not surprise me whatsoever for it to become more like Medicaid and be need based. Punishing those with discipline to save for the future is the American way. If only the people below a certain net worth qualify for SS we will spark a financial boom in consumption as people nearing retirement bleed off assets to qualify for SS .
MentorGrad2002
Well-known member
Well duh. It's always been a scam. You pay way more into it than you get when you collect it. And my generation will be lucky if it doesn't go completely bankrupt
That is true for almost no one.
OhioBobcatFan06
Well-known member
It’s a Ponzi scheme
MentorGrad2002
Well-known member
How do you figure ? I can make way more on what I get taken out if I could invest it myself instead of having the government take my money.
nutsnbolts
Well-known member
Huh!
SS tax is a flat 12.4% (employer pays half, employee pays half).
If someone worked 41 years at $50,000.00 per year they would have paid in $254,200.00 direct dollars (no accumulated interest).
The average life expectancy is just under 79.
Someone retiring at 66 with $50,000.00 income would be eligible for $1785 per month.
$1785 per month x 12 months per year x 13 years = $278,460.00
Interest would more than cover that difference - plus - you probably get the privilege of paying taxes on your SS benefits on top of that.
The average interest rate on a bank deposit from 1971 to 2021 is 5.52%
12.4% of $50,000 is $6200 per year
Adding that amount every year plus using 5% for 41 years would be a little over $750,000.00
5% of $751,000 is $37,550
$1785 x 12 months is $21,420
So it should be GAINING money during the payout years.
My 401k has averaged considerably more than 5% return.
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MentorGrad2002
Well-known member
That's exactly my thinking. You could easily get more investing on your own than what most get back from the government
And that's with a relatively low wage of 50 k for your whole work time. Gets worse at you make more. And that isn't even counting those who die without collecting at all or collecting for a few years.
SS is garbage.
We can play with the numbers. $50k per year at retirement likely means an average income of 25k or less over the 41 years. 6% ( the part paid by an employee) of $25k is $1,500 / year. So you actually only paid in $61,500. In three years you get more back than you paid in.
McMurphy
Well-known member
SS might be garbage, but investments are lousy right now too.
MentorGrad2002
Well-known member
I can make more in mutual funds alone than what the government does with the social security deductions you pay ....
It's a screw job program. You can make more investing that money for all of those years
HE74
Well-known member
If someone worked 41 years at $50,000.00 per year they would have paid in $254,200.00 direct dollars (no accumulated interest).
Wrong, The employee would have paid $127,100.
The average life expectancy for someone 65 is 83.
Most people who receive social security receive far more than they paid in.
Wrong, The employee would have paid $127,100.
The average life expectancy for someone 65 is 83.
Most people who receive social security receive far more than they paid in.
McMurphy
Well-known member
Yes for overall. But investments right now suck
MentorGrad2002
Well-known member
Some do but I doubt most. Especially if you have even elementary knowledge on investing. Your rationale assumes zero interest and zero investment income over many decades where the government holds your money interest free.
And that is the point big government liberals can't understand.
MoeDude
LIVE FREE OR DIE!
Again if the crooked politicians had left the money in the SS Trust alone and let it earn money it would not be going bankrupt. The slime in the sewer are liars. They say they didn't raid the SS Trust but the truth is they did. They technically didn't take the money out but what they did was "borrowed" from it and then have not paid it back. It's a paper shuffle so on paper it says there is all this money in the Trust but there isn't because of how much the Politicians have "borrowed" from it to suport their pet projects. Ask one of the Sewer Rats how much they've borrowed out of the Congressional Retirement Fund. They should have never had a separate fund for their so called "retirement" THey should have been paying into Social Security like the rest of us and maybe have a 401K like the rest of us. Once the Sewer Rats separated their retirement funds from the rest of us we the taxpayers were screwed.
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True, the employee would have paid $127,100, but the employee's employer matches that amount, for a total paid in of $254,200.
And here's the things people who make this argument (that the employee is only paying half and thus their ROI is better than you state) miss...
1. If I'm self-employed, I pay both parts of the FICA tax.
2. If my employer didn't have to pay the FICA tax, that is more money they could use to compensate me.
2 more "flaws",
1.) Once you collect before 70, the government limits how much money you make until you reach the age of 70, if you continue working.
Why does the government restrict earning of it's citizens while giving a zero percent return on money, that has been stolen from them over the course of their career.
2.) Once you collect, you continue to "contribute" to SS if you are working, even though the money you are not paying will not increase your monthly benefit.
If an individual did this to someone, they would be thrown in prison. The government does this and nothing happens to those crooks.
Playing devils advocate here, if your self employed you get to deduct 1/2 of your self employment tax from your adjusted gross income, saving you thousands per year.
I think the general thought is todays workers need to pay into the SS pile in order to make it remotely workable. They can not allow old geezers making $7.95 / he at Walmart to skip out on their donation to the social protection of Americans.
People should be able to invest their retirement how they choose, and if done wisely will be much better off financially 100% of the time.
The government eff's up retirement, education, medical coverage, and pretty much everything it touches minus the military.
Flat tax, school vouchers, line item federal tax receipts so each citizen can see how their tax dollars are being spent/wasted, lower federal spending, deregulation, more prosecuting of criminals and less "social justice", and closed borders for illegals would be a good start.
Deductions don't save people as much as they think. People gladly pay the bank thousands in mortgage interest every year instead of paying off the loan because they incorrectly believe it is saving them money on taxes. In reality, for most people, those deductions are only saving you 22-25% of what it costs to use that deduction.
Let's do the math on the FICA taxes: If I am self-employed and make $75,000, I pay both parts of the FICA taxes (15.3%), or $11,475. I get to deduct half of that off my AGI. That's $5738. Assuming I have no other income, I'd safely be in the 22% bracket. So, the SE tax deduction would save me $1262. I'm making an $11000+ tax payment to "save" $1262...which is not thousands.
Your correct by your example. But , if they made 150k the savings would be thousands.
Yeah! I paid $23000 in FICA to save $2500 in income tax. What a great tax savings.
Two separate taxes. The point as I made it originally was with the deduction of 1/2 of self employment tax you are not paying out net 12.4% of income on SS tax.
Personally though, I would happily pay the taxes due on 150k vs the taxes due on 75k. What an I missing?