Only generate âunearned incomeâ Note that going this route results in not being able to contribute to a retirement account (as far as I have found at least)
OK, I am tired of this bullshit. I did NOT say the article was inaccurate, I said it was "trash." I gives an entirely biased view of the Social Security System. Here are a few facts. 1. Social security is not a Ponzi Scheme. It's absurd to suggest that. It is based on sound actuarial principles. When you've identified any true Ponzi Scheme that's based on sound actuarial principles, please do let me know. 2. The Trustees have determined that as of the last summary report an increase in the contribution rate from 12.5 % to 14.5% is needed to keep the system sound and account for changing demographics. That's 2 cents additional contribution per dollar of earned income up to the cap. 3. Currently there is a two and one-half trillion dollar surplus in the Trust fund. The money in that fund belongs to those who have contributed and that's why this is one of the programs that is called an entitlement. You are entitled to that money. 4. In the S.S. system those who die early subsidize those who live longer than would be expected from an actuarial standpoint. Lifespans are increasing and this is one of the reasons a change in the contribution rate is required. 5. Because of the insurance aspect of social security, you will have to contribute significantly less per month into social security than you would to any conceivable private, defined contribution plan to assure the same benefit for life! What you give up for this very substantial benefit that all contributors receive is an estate if you should die relatively young. Your unused contribution will not be returned to your estate, but instead used to subsidize the retirement of others. This is a huge benefit to the country, because it makes it possible for low wage earners to have at least a subsistence income after they are too old to work. These same workers could never afford a privately funded plan. 6. The only significant problem faced by social security is that the government has borrowed from the trust fund by selling it government bonds, put the borrowed money into the discretionary budget, and then spent it, mainly on wars. Now, as the Trust will need to start redeeming its bonds, the government, because it is running a deficit, has no money to pay to the Trust what it is owed. The government will have to borrow to pay its debt to the Trust and won't be able to borrow any more from the Trust because going forward the contributions will not produce a surplus, at least not for a number of years. This of course will lead to inflation; hence dollars paid back to the Trust will have less buying power than the dollars lent. In this way Social Security recipients will be cheated and end up subsidizing endless U.S. wars. I am so sick and tired of this nonsense drivel about social security. Wall Street has been out to kill it for years, for obvious reasons. Then we have absurd media articles such as the above. It is fine to be philosophically opposed to Social Security. If you are, say so say and be done with it. But for God's sake stop this nonsense.
All citizens can contribute as much as they like to a private retirement account without limit, however only earned income qualifies for tax advantaged contributions. Thus if you choose to start a private retirement account using some of your net unearned income there is nothing to stop you from doing so. You are aware of course that unearned income is often already tax advantaged when netted out.
Move to Haiti. You'd be a fool, as would anyone, not to pay the absolute maximum you can into social security. It's by far the best deal you'll ever get with regard to return on your money assuming you live longer than the average lifetime. Unless you know you will die young, I urge you to contribute as much as you can and urge your congressmen to get on with adjustments needed to keep the system sound.
Thank you so much lindq for your correct analysis of the situation. I am so G.D. tired of the crap spewed out daily about Social Security by politicians and the media. Thanks again!
Lol, Haiti is way too hot for me. But seriously I have family members who live off SS and it's not a lot of money. These people contributed all their adult lives to get these small checks, it just seems to me there has to be a better way to invest that SS money.
That is correct. My problem is not with SS. It is one of the few examples in history of a program that has worked. The problem is that congress has been ripping off SS funds for general use, and leaving IOUs behind. What are the odds that the funds will be payed back in the lifetime of anyone on this board? Go figure. The point is that next time you hear someone say Social Security has a problem...well, it doesn't have a problem that can't be easily fixed. So long as congress keeps their hands off the funds. Also keep in mind that there are powers who would love to see the program killed, and who would like to convince you that it is broken beyond repair. And who are they? Well, think about it. Who would benefit? (How about the same people who were advising Bush when he was president and wanted to "privatize" the system.)
Privatization is what we had before Social Security, people had to do their own saving and investing. Privatization has been great for other countries. Usually there is a choice between going in to the privatized plan or the socialism plan and usually the workers that choose the privatized route pass up the income that the socialism ones will have after only eight years... Democrats threw an absolute shit-fit when Bush talked about privatization. It was like when Bork got nominated to the Supreme Court... People on Social Security are basically in the poor house. That's the result of the Democrats after all their decades with their stranglehold on the media, education systems, etc...