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State of the Union 2005

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State of the Union 2005

Social Security Reform

from JoeUser Forums

Last night the President gave the State of the Union address.  I usually don't watch them, and I honestly didn't watch all of this one.  My main reason for watching it was to find out what he was going to say about Social Security.

I have had a sinking feeling about Social Security for quite some time.  This feeling was based on the fact that our population grows vastly each year, cost of living increases, and people live longer.  All of those factors have given me the impression that Social Security, even if run completely efficiently, would be bankrupt by the time I retire, and all the money that I contributed by then I could kiss goodbye.

Obviously, from listening to the State of the Union, my feeling are founded.  According to the speech, Social Security will be paying our more than it takes in by 2018, and will be bankrupt by 2042.  Well, if I retire when I am 65, that means that I will retire in 2038, which is 4 years before the system is completely bankrupt (I believe in the speech he quoted that it would be hundreds of Billions in deficit by then).

His plan involves the following (which can be found at: http://www.whitehouse.gov/stateoftheunion/2005/#2):

Saving Social Security for America 's Future Generations

  • Fixing the Current Social Security System: The President wants to strengthen Social Security for the 21 st century. His fiscally responsible plan calls for reforms that would keep Social Security's promises for today's  seniors and those near retirement ; solve the financial problems of Social Security once and for all; and give younger workers a chance to save in personal accounts for their own retirement.
  • By 2018, Social Security will owe more in annual benefits than the revenues it takes in, and when today's young workers begin to retire in 2042, the system will be exhausted and bankrupt. As currently structured, Social Security cannot afford to pay promised benefits to young workers. President Bush  has laid out basic principles to guide reform:
    • We must make Social Security permanently sound;
    • We must guarantee no change for those 55 years or older (born before 1950);
    • We must not jeopardize our economic strength by raising payroll taxes; 
    • We must ensure that lower-income Americans get the help they need to have dignity and peace of mind in their retirement;
    • We must make sure any changes in the system are gradual, so that younger workers have years to prepare and plan for their future; and
    • We must make Social Security a better deal for younger workers through voluntary personal retirement accounts.
  • The President laid out his vision for voluntary personal retirement accounts. Under his plan, personal retirement accounts would start gradually. Yearly contribution limits would be raised over time, eventually permitting all workers to set aside 4 percentage points of their payroll taxes in their accounts.
    • There will be careful guidelines for personal accounts to provide greater security in retirement, including a conservative mix of bonds and stock funds similar to those offered under the Federal employee retirement plan; protection from hidden fees; protection from sudden market swings on the eve of retirement; and a requirement of pay-outs over time to prevent a person from emptying his or her account all at once.

It's honestly a lot to think about.  I would love to be able to invest my own money instead of it going to the government.  I know that I wouldn't have access to all the money I pay to SS, but even if I had a fraction, at least that would be a fraction that I know will be there for my retirement.  As is, I worry that I am not saving enough to cover retirement, knowing that my fears about SS are founded isn't helping any.

I really hope that we are successful at reform.  I hate to think that my husband I could pay in for a combined work life of almost 90 years when we retire and end up not seeing a dime of our money.  (The real dollar value of that money, BTW, without interest is over a half million dollars that we will contribute even if our contributions don't go up per year past this year.....which I am sure they will). 

politics
30,417 views 39 replies
Reply #26 from JoeUser Forums Top

People just don't seem to understand. The purposed privatization of SS is the same thing as your 401k


well at least one of us dont understand how and why it isnt the same thing. 

most obviously, you can voluntarily cash in your 401k (admittedly youll pay a penalty assuming you havent gone broke by next april) and spend it.  a 401k is intended to permit you to accrue interest and defer taxes on earning you elect to save.  it isnt intended to keep you from starving to death or dying from untreated illness when youre too old--or unable--to work.  your 401k can vanish without putting you at the mercy of your relatives', friends' or some other kind soul's kindness  

Reply #27 from JoeUser Forums Top

your 401k can vanish without putting you at the mercy of your relatives', friends' or some other kind soul's kindness

That is wrong. If it is your only retirement fund, it will do just that.  You apparently dont understand the issue, and blindly following the bleating of the democrat leadership. 

Bottom line, the fix is going to be painful for some as there is no easy fix, and to ignore it is just plain stupid and myopic.

Siege of Centauri
Reply #28 from JoeUser Forums Top

The rest of the link is here:Link

Thanks Lee.  It is interesting to see that the system was not corrupted until 1956.  The year I was born!  Seems you can trust politicians do one thing. Screw up a good idea very badly.

Reply #29 from JoeUser Forums Top

You apparently dont understand the issue, and blindly following the bleating of the democrat leadership.


i provided several key reasons why 401k differs from social security.  here's one more:  people who earn only enough money to get buy can't afford to fund a 401k.  those for whom social security may prove to be their ownly retirement income (possibly because their 401k was stolen by enron executives or lost in the dot-com bust) shouldnt be permitted--much less encouraged--to take any risks with their future.   whether you agree or not has no bearing on the extent of my understanding of the issue.  

to the best of my knowledge there is no *democratic leadership* but even if there is, my positions are my own and not your usual flurry of cut-and-pasted opinions expressed by some crackpot flacks at newsmax.  as far as bleating partison propaganda goes, i dont recall once seeing you disagree anything you perceive as official republican policy or show any hesitancy in leaping to the defense of even the most hare-brained of your party's proposals.  

it wouldnt surprise me a bit to learn you sleep in red elephant pajamas and your underwear is emblazoned with pics of bush and cheney.

Reply #30 from JoeUser Forums Top

i provided several key reasons why 401k differs from social security. here's one more: people who earn only enough money to get buy can't afford to fund a 401k.


EVERYONE can afford a 401K.  After all, 12.6 percent of every penny a poor person makes (his 6.3 and the employer's 6.3) goes into a Ponzi scheme that has less than a 2% return, if that (he has to live to be very old to get a positive return on SS).  So that breaks your arguement there. 

Reply #31 from JoeUser Forums Top

to the best of my knowledge there is no *democratic leadership* but even if there is, my positions are my own and not your usual flurry of cut-and-pasted opinions expressed by some crackpot flacks at newsmax.


You will note that I correctly called it 'democrat', not democratic, and that I did not link to Newsmax.  You need a pair of reading glasses.


as far as bleating partison propaganda goes, i dont recall once seeing you disagree anything you perceive as official republican policy or show any hesitancy in leaping to the defense of even the most hare-brained of your party's proposals.


Guess you dont read much of my comments then.  Because if you did, you would know that


I AM NOT A REPUBLICAN


and 2


Being a conservative, I disagree with a lot of republican policies and actions.


But my statement still stands.  You dont understand the issue at all if you can make the statement that some people cannot aford a 401k.  under the democrat plan (which is no plan, just a blame game), you are correct.  Under the Plan being proposed, you are just wrong, and that is why I say you just bleat the democrat leadership line.

Reply #32 from JoeUser Forums Top

EVERYONE can afford a 401K. After all, 12.6 percent of every penny a poor person makes (his 6.3 and the employer's 6.3) goes into a Ponzi scheme that has less than a 2% return, if that (he has to live to be very old to get a positive return on SS). So that breaks your arguement there.


first of all, lemme apologize for the the 2nd and 3rd paragraphs of my previous reply.  i apparently just saw the dr part of your nick and since i had initially been responding to the other learned (?) dr,  and a a response that made little or no sense in context ("That is wrong. If it is your only retirement fund, it will do just that") i mistakenly concluded your comments were his--thus the newsmax reference and the jab about eternal partisanship.  to your credit, i have seen you venture a tiny step off the party line on occasion.  if you were truly were that rarest of politcal species--conservativus authenticus americanus (generally considered to have gone extinct in 1998)--you'd be so busy denouncing the pomps and works of the pretenders in the whitehouse, you wouldnt have time to do much else.

as to your contention that everyone can afford to bank some of their earnings, there's prolly some sorta mall or shopping complex near you.  step away from your computer, walk or drive over and see how many of the non-mgmt adults stockin shelves or sellin them discount shoes that make people 'look like a million' are in agreement.  better yet, go around to the loading dock and run your theory past some of those guys.     

Under the Plan being proposed, you are just wrong,


yeah i musta been so overstimulated after a half hour of being exposed to the irrepressible scintillation that is a bush speech i missed the part bout how everyone is gonna start being paid a decent wage like real working people in first world industrial nations elsewhere as soon as his plan is put into play. 

Reply #34 from JoeUser Forums Top

Reply #26 By: kingbee - 2/4/2005 3:10:47 AM it isnt intended to keep you from starving to death or dying from untreated illness when youre too old--or unable--to work. your 401k can vanish without putting you at the mercy of your relatives', friends' or some other kind soul's kindness


Well your SS can't do that. Because you will not be allowed to put your entire SS into that type of account only a portion. Plus no one is forcing you to do it it's voluntary. So why is everyone so bent on taking away someone elses choices?

Personal retirement accounts would be voluntary. At any time, a worker could "opt in" by making a one-time election to put a portion of his or her payroll taxes into a personal retirement account.


Presentently to fix SS taxes would have to go to approx 18% almost a quater of what you make for no more return for your extra money. The above quote is from here.
Link
Reply #35 from JoeUser Forums Top

Well your SS can't do that. Because you will not be allowed to put your entire SS into that type of account only a portion. Plus no one is forcing you to do it it's voluntary. So why is everyone so bent on taking away someone elses choices?


That is it in a nutshell.  Liberals want to deny us a choice.  But is not that the Liberal mantra?  We are too stupid to decide for ourselves?

Reply #36 from JoeUser Forums Top

Interesting...


During 8 years of Clinton, the Dems were hammering away at the fact that Social Security was going bankrupt (and, of course, blaming it all on the Republicans, contrary to fact, but I digress...). Now, with Bush in power, it's not going broke and Bush is just trying to steal our money to help his oil buddies.


Democrats, study the word "inconsistency". When you comprehend that word, you MIGHT begin to understand why I no longer count myself in your number.

Reply #37 from JoeUser Forums Top
Something must be done and accomplished to correct the wrong in Social Security. President Bush will try his very best to do so but I see the next Administration raises Social Security Taxes extremely high. It's my opinion this is the only solution.
Reply #38 from JoeUser Forums Top

Presentently to fix SS taxes would have to go to approx 18% almost a quater of what you make for no more return for your extra money


there's a much more viable alternative to fund social security. what's more it's inspired by a program currently advocated by senate republicans.   i've described it here Link

Reply #39 from JoeUser Forums Top



Reply #38 By: kingbee - 2/4/2005 4:41:56 PM
Presentently to fix SS taxes would have to go to approx 18% almost a quater of what you make for no more return for your extra money



there's a much more viable alternative to fund social security. what's more it's inspired by a program currently advocated by senate republicans. i've described it here Link


Why do Democrats and liberal alike keep on ignoring this?

Because you will not be allowed to put your entire SS into that type of account only a portion. Plus no one is forcing you to do it it's voluntary. So why is everyone so bent on taking away someone elses choices?

Personal retirement accounts would be voluntary. At any time, a worker could "opt in" by making a one-time election to put a portion of his or her payroll taxes into a personal retirement account.


Is this not America? Where is the freedom of choice? BTW There is a $1000 cap on how much your allowed to put into a private SS account.