BoatBanter.com - View Single Post - ( OT ) AARP suggestions to save Social Security

On 13 Apr 2005 13:20:55 -0700, wrote:

Chuck, that isn't the money under discussion. The money being discussed
is that
which the government takes from our checks for Social Security. If I
could
invest it and get a better return, why shouldn't I be able to? If I
could pass
the savings on to my children, why shouldn't I be able to?

All the IRA, 401k, and 403b plans are great - for those who can take
advantage
of them. But whether an individual can or cannot take advantage of them
is
beside the point. The point is the return on the money the government
takes for
Social Security.

************

The challenge with your perception is that you are looking at Social
Security primarily as a pension plan. It is not, and never was intended
to be primarily a retirement pension system.

The purpose of Social Security is to provide a social safety net for
people who cannot take care of themselves. For esample, when my
brother in law died last November and left a dependent wife and a
4-year old son behind, the money he and others paid into social
security is being used to insure that the 4-year old will have a very
basic but secure lifestyle during the 14 years it will take for him to
become an adult and legally responsible for his own care. (My sister in
law gets 1200 or so a month from SS- just enough to live at about the
poverty level- so the family helps out, and she has a mini-wage job to
do what little she can- of course).

Among the persons identified as less-able under the social security
system are those individuals who are too old or sick for gainful
employment. When the system was enacted, very few people lived to be
65, but in today's society probably 85-90% of the people who make it to
55 will survive to 65 and beyond. Social Security has become a defacto
pension plan, when it should not have. We would probably have to raise
the age to 75 in order to once again extend retirement benefits to the
same small group of old folks that the system was originally designed
to serve.

It's downright silly to talk about the "return" on the money impounded
for Social Security. What is the rate of financial "return" on our
dollars spent for national defense, for the interstate highway system,
or for federal law enforcement efforts? None, nada, zip, and who cares?

You want to invest for retirement? Great! Everybody should. But those
who are in such tight financial straits that they can only free up
investment money if 2% of their wages are returned to them via a
reduction in SS taxes? Those people have NO BUSINESS in the stock
market. None. Anybody cutting it that close can't afford to be exposed
to the ever present risk of loss with securities. If it's all spent
every month so that there is no money to invest for retirement, a
worker would do far better to analyze his family budget and figure out
how to free up some serious money rather than moaning that SS has dealt
him a cruel blow.

As long as you consider SS a welfare system, then there's little point in a
discussion.

For many folks, SS *is* a large chunk of retirement income, if not all of it.
Perhaps that wasn't the intent, but it's a fact.

For those people, maximizing a return should not be precluded. I would much
rather my SS withholdings go to the Thrift Savings Plan than wherever they go
now!

Right now, about 6% of my taxable earnings go to FICA. What is silly about my
withholdings going to something like the TSP? Notice, I've never said anything
about the withholdings being returned to the individual as a reduction in SS
taxes.

--
John H

"All decisions are the result of binary thinking."