Topic: Opting out of Social Security - page 4. (Read 7319 times)

For those born after 1959 the "normal retirement age" is 67 years old.  It probably should be raised to 70.

People can start collecting at 62 but their benefit would be reduced.

The problem with SS, is that when it first started it did a good job to help older people get out of poverty.  As living expenses and people's expectations of what makes normal living has increased, the social security benefit becomes paltry.  The average social security benefit in 2012 is $1,230.

66% of Americans do not save enough for retirement.  This means that 25% reduction in the expected social security benefit will be very bad for the future elderly.

So what can we do?  I agree that getting rid of the Social Security program would just have people take their extra money and spend it on more things they don't need.  They won't buy disability insurance, they won't buy long term care insurance for their parents, and they won't save for retirement.

Often, people are told to do more for other people, but I say first people need to take responsibility for themselves.  If people went to a financial advisor and they did not have life or disability insurance, then most financial advisors would require their clients buy this insurance.  If the client refused, then the financial advisor would refuse to serve the client.  Our government could do the same thing.

Get disability and life insurance.  Save for your retirement.  Problem solved and no need for the Social Security Program.

Yes, the elections are an issue. The problem with a Democracy is people don't act until it's to late unless there is a 'leader' that gives people what they need rather than what they want. The Republic did well for awhile, the Democracy is not doing so well. True Democracies are a disaster. We are at the part of Rome where its leaders give the mob what they want to prevent them from revolting. As Rome found out, that wasn't the best thing to do. Actually the comparisons are scary. Power was consolidated in Caesar because the Senate didn't want to shoulder the blame. Caesar took that power and ran amuck, making the Senate just a token without any real power.
Congress willingly gives up its power to the Executive branch for political reasons.

I have hope however, we have a Judicial Branch that should come to its senses but if that fails, the U.S. isn't really a Country but an agreement of States to act as a country. So as things go wrong, the power will fall back to individual states. Those states that get it right will prevail and those that get it wrong will fail and copy those that get it right. The U.S. is centralized decentralization. California is learning that its ways are running them into the ground and there is no money form the FED to help them.

The problem with using means testing to deny benefits to rich people is that it could create perverse incentives on the margin. It's similar to how some people are better off staying on welfare/unemployment because getting a job would reduce their total income. Old people who are REALLY good at something might decide to stop very early if they value a dependable safety net.

IMHO we should replace all this red tape with an equal basic income for all citizens, all ages. Since it doesn't punish anyone for getting a job, the resulting drop in employment isn't as big as you might guess. If this basic income isn't enough for everyone, the government could fund a public health insurance option.

BTC_Bear - teh baby boom "bulge" is the cause of the present issue.  Its not likely to happen again as modern contraception means that educated people are less likely to have kids.  So the 3 years is a one off fix to a one off problem.

I agree its strange that rich and poor all get the same benefit. In fact, if you means test the social security benefit, then there will never be a need to to add the 3 years provided you find a cost effective way of means testing.

I also understand your multi-generational point.  But you guys have elections every 2 years and no politician who even hints at changing social security seems to get anywhere.  That suggests the system as it stands is very popular and that its popularity is reinforced every 2 years.

I have many problems with it.

You say the fix is just add 3 years. Hmm.. Lets look at that. It was 60, 62, 65, 67, and now lets just add another 3 to get to 70. Ok, I will concede the fact raising the age helps extend its use. So lets just raise it until have the people die before they will be eligible to receive any of it. Why stop at 70, go for 100 and give caveats to the program. If you make it here, your first check includes an all expenses paid trip around the world.

Yes of course raising the age helps the program. But be careful of what you wish for because you might just get it and its consequences. 

I say to not raise the age but lower it BUT take people off of the program that does not need it. People still think the money they paid into it was for them. It wasn't. It's not 'their' money that 'they' get back.

SS is not a retirement system. It's a safety net. The fall should still hurt when you hit the net though. You have millionaires collecting social security.

The government shouldn't have to fix it if they were doing their jobs. They should have prevented people from ever needing it, but that takes some power and control away from the government. They don't like to do that. They could've have easily just applied that tax and provisioned it as the contributors 'own' money and invested it for them. Even people at minimum wage that contributed for 50+ years would've had a nice chunk of change for retirement. But NO, they want control of the money and how and where it is to be spent.

In general, I am not for government programs that go into ∞ and effect generations that didn't even get a say in its original passing.

If the government felt it was necessary at the time, sure go ahead and pass it but within a generational timeframe so that it needs to be renewed in order for the program to continue. e.g. Congress must renew the program every 30 years or so. That way the next generation can't be burdened with the previous generations mistakes with out them voting on it.

Your logic isn't flawed.  Your problem is that you are ignoring the facts and ranting. The fund will be fine if 3 years are added to the retirement age and your response is "Social Security will go down as one of the greatest schemes ever perpetrated on the public."  From what I see, social security has worked as intended for 80 or so years.  It will carry on doing so for another 20 or so.  Thats a century of success.   Add the 3 years to the retirement age and it works as intended forever.  

So you have a system that is cheap to run and that works as intended.  What exactly is your problem?  Is it the 3 years added to retirement age?

No, it was kind of hard to miss the Baby Boom. It's nice that Regan made provisions for it. (lol)  

Do you think the government just puts it into an account and keeps it for you? They borrow against it all the time and don't repay. But lets suppose they did pay even a modicum of interest on their borrowings. Unless they can at least keep its value on par with inflation, there is a problem.

Entitlement spending has become the Gorilla in the room. It is eating up more and more of our money. No problem just print more says the Keynsian. (I actually expect this, thanks cause I have made provisions for that).

So what is the easiest way to keep social security, it will be pay everyone with 'Zimbabwe' dollars at the cost of increased inflation. It's a trick, you think your getting your benefits but because the cost of everything increased they have actually decreased your benefits. The 'sheep' will never notice.

Everybody knows what Social Security is, but since it is the government doing it, it must be ok and it'll work.

I am from the government and I am here to help.

Tell ya what, why don't you try setting up the same system but with private funds from private people. You'll get arrested.

Social Security will go down as one of the greatest schemes ever perpetrated on the public. They will re-write history books about it.

My logic may just be flawed though. I do expect the government to NOT admit its failure and to 'make provisions' (lol) for it. Those 'provisions' will make people a lot of money because they are so predictable.

The problem with your logic is that it assumes that no-one noticed the baby boom and that no provision has been made for it.  In fact, Ronald Reagan reformed social security in the 1980s and the baby boomers are provided for.  Social security will have it worst year around 2037 and its outgoings will fall from then on as the boomer bulge dies off.  

If nothing is done to fix it, it will pay out 75% of due benefits from 2037. But if you add 3 years to the retirement age, there is never a problem.

The puzzle to me is that social security looks like a good deal.  If you didn't have it, you would have to buy a private pension plan which has higher admin costs and payout is not guaranteed.  Why would you even consider anything other than taking the extra 3 years work?

Whether or not it's a good deal depends entirely on
A) if you actually want to stop working
B) if there are even better investments available

If it is such a good deal, then it could be made optional and only a few fools would suffer, right?

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And please forgive this science fiction tangent, but what if human life expectancy goes up a lot more due to a medical breakthrough? What if it becomes possible for the rich to live indefinitely? What if population growth worldwide plummets? What if a new financial system significantly limits which taxes are feasible? Who should foot the bill for these risks - the taxpayer or the investor?

Because I don't trust a bunch of bloodthirsty short-sighted voters to make the best choices on my behalf. The next 30 years might get pretty damn confusing.

Feudalism worked just fine for hundreds of years.

It's the simple math and dynamics of the SS system as structured. Everyone gets it. But even worse, everyone gets it disproportionally.

It worked great when there are more workers than retired people. Actually the more workers:elderly the better. However, this is soon not to be the case. Do you know how hard, if not impossible, it would be to maintain a Worker:Elderly ratio > 1 ?   Especially when everybody lives longer because of the system itself.

80 Years, hmm bet the problems start at year 72 (lol).

So they came up with a program that was doomed for failure but way off into the future to sell to people today. I'll gladly pay you Tuesday for a Cheeseburger today.

I'm not saying it can't work but it can't work with 'everybody' receiving benefits. Want to extend it further than 2037? Tell everybody over the poverty line at retirement that "they are out of it" until they fall below the poverty line. That'll add a few more years. Go sell that to the masses.

BTW: I'd bet 10 BTC that it won't even make it 10 more years at 10,000 retiring EACH DAY. Lets look at that: 300,000 people a month go onto the system and barely that amount get jobs using Government tweaked stats. Real stats would be below that employment. It goes beyond employment though and into the Participation Rate which is terrible in the U.S. The Wizard(s) behind the curtain will soon be shown for what they are.

About 11,683 people are born each day in the US and 6,815 daily deaths.

Nope, can't continue offer Social Security as it is.

Um. Lets think.  Its been going fine for 80 or so years.  If nothing is done to fix it, it will pay out 75% of due benefits from 2037.  When it was introduced, life expectancy was less than 65.  By 2037, we can hope for life expectancy in the 90s.  If retirement age is raised to 68 from 65, the system will pay 100% of expected benefits forever.

Do the math on that; 30 years life with no need to work in return for 3 extra years work.  Isn't that a good deal?

Is that really your idea of "quickly paved the road to hell" To me, that looks like an amazing success.

Here is the problem. Everyone wants the Gold Spoon and Platinum Fork treatment. Unfortunately, not everyone contributes to the service equally. Those who pay more will get more and we are shocked at why that isn't a fair system. Those who pay less will get less.

Trying to equalize care will be doomed to failure. First, who decides at what level of care everyone should get. Second, the rich if they are not happy will 'supplement' their care and the inequalities will resume.

The program, imo, isn't really about care. It is about control of money for the governments use and through that control they will try to control people. We are reaching a breaking point where the government will be told. GTFO of our lives. Alas, it won't happen until 'the people' (and I mean the poor people) realize that all those promises are echos in the wind with no hope of it being accomplished.

The Bills are coming due and what really pisses me off is that those bills won't die with the people that caused the problems but will be passed on to the children and grandchildren. Don't be surprised when THEY have to start paying they say: "Screw this, throw the old farts away." Pass Euthanasia laws to get rid of the elderly that are having problems (being a burden).

Everyone likes math here (or most) but refuse to calculate the costs. I've herd people even argue the debt doesn't even matter, just print more money to increase liquidity. Seriously?

Social Security had good intentions that quickly paved the road to hell. Giving governments money and power that isn't necessary is ALWAYS a bad idea. Time and time again all programs taken over by the government have skyrocketing costs with decreasing efficiency and ineffectual programs.

People often mistake my positions as being for the wealthy, on the contrary, I want poor people to have a chance at becoming more fiscally secure. But I realize that there will always be poor people proportioned based on Middle, and High classes.  The ultimate goal is to have the largest middle class possible based on available resources. You will NEVER make everyone rich and wealthy. Maintaining a balance is hard but it isn't done by the Government. The King didn't want to sign the Magna Carta, he was forced to sign it by the people.

Democracy is bad because people always want what they consider to be free, but there are no free lunches. When they say: "Give me this program", they assume someone else will be paying for it or at least the cost is reduce because others are paying for it. Hence, they tend to vote in people that will give them what they want and not what they need. This is an old argument though, and a famous Scottish Economist had figured it out a long time ago. Ironically we have gone through his stages of a Democracy and now we are at the precipice. So, are we better than being 'selfish' and willing to take the sacrifices necessary or are we doomed to the collapse?

People tend to forget that their time here is limited and expect to never die and if they do to take it with them. They should be for providing for their prodigy to survive better than they did. People often mistake Democracy with Capitalism. Capitalism is not a system of government it is a system of Nature. Capitalism is a natural process on equal standing with evolution. There is a place for Social Security in a Capitalistic society. i.e. Groups will tend to protect and take care of themselves BUT not everybody.

Governments should provide a level playing field and protect the poor from 'bad' laws and the powerful that try to prevent them from becoming wealthy rather than protect the wealthy and powerful from being punished. Big Companies and Powerful people should fear the government and stay on the 'up and up' or be 'investigated' rather than the poor people being prevented from opening up 'Lemonade Stands' because it breaks some law. (if know the news story I'm referring to here.)

meh... I ranted again.

If given a choice, I would rather just pay a tax that says "each year you are going to pay for an elderly person to live with dignity for a month" than the one that pretends the government is putting my money in a savings account for me.

Thats option (a) put another way.

c) Have people bothered by the elderly dying in gutters (most people) pay taxes for or pay/donate to organizations that will offer a service that takes care of this problem.

But we know the answer...if you give drug makers a patent monopoly on life saving drugs, patients have to pay more.  No matter what way the numbers are sliced up, it always comes back to people who are close to death and will pay anything for a few extra weeks of life.

The US is unique in allowing this strange combination of patent monopolies for the vendors and a "free market" for the sick who need the drugs.  Until that is fixed, the US will always have the most expensive system.

In economic terms, its like the US comnpetitive economy has to carry a huge burden of overpaid medical staff but its not a disaster as every economy has inefficiencies. 

But in terms of this thread, the choice is between
(a) freedom to skip SS but then accept that people who do it must die in the gutter if they are broke or else
(b) make them pay as they earn and then support them at the end of life.

I forgot my point. My point is that noone really cares if millionaires are spending tons of money on experimental end-of-life care. We should look at the data in a way that would tell us whether this was the source of the discrepancy in average cost.

I just think a logical argument is the first step. Then we have to look at the data to try to guess how things actually work out in reality, at this point we almost always discover the data is telling a story that is much more noisy and complex than what you hear on the news. For example:


You are using average cost as the basis for that statement. The cost per citizen may not be normally distributed (in fact we know it is not) so the average may be meaningless. I think the best way may be to compare yearly costs for the top 10% of healthcare spenders between countries, then 10-20%, etc. Even better is you plot cost/year per percentile for each country and fit a curve (probably logistic) then compare the parameters (rate constants, etc) of the curve fit. Next step is to try to explain those parameters.

There is also the issue from that previous news story that some people may define the "cost" of procedures in countries with universal healthcare as the fee the patient pays and not include taxes payed. The quality of journalism and even much research is so low people really need to start analyzing the raw data for themselves.

You did shoot most of my other ones down in flames