If we didn’t have social security, how many people in the country would “really” save that money at the end of every month, every year, until their 65? The amount of people who will do right with that money are very few.
Agreed. I work in a job where the people in my department literally make 2-3x what the average person makes. I had a guy who will make roughly 130k this year tell me last week that he couldn’t afford to put more than 4% pre tax into his 401k. Single guy, never married, no kids, making 130k a year…can’t afford to save more than 4% pretax lol.
Baby boomers are the problem here, because so many are retiring at one time, they are taking their money out of social security faster than the new generations can put more back in. So as they keep retiring, the money keeps leaving, and if this trend continues, we won’t have it when we get that age.
Its not that they are retiring that is the problem, its that over their life time they voted to use social security funds for other purposes and now the next generation is going to pay either with higher taxes, lower return on investment in our SS payments when we retire, and higher retirement age.
If social security was a 401k what the boomers have literally done is take multiple 401k loans, never pay it back, and then when they want to retire demand the next generation put all that money back for them.
But for practical reasons, i do think the US government should provide social security because you can trust Americans to take care of themselves and make smart decisions. So i get your point, but without social security, we would end up paying even more tax dollars in government assistance in the form of health care, and regular living expenses.
It wouldn’t be a terrible program for diversification if it wasn’t so poorly managed in addition to being designed so that the more you pay into it the worse your return on investment is. But yeah, I agree, most people simply would save nothing for retirement and we’d take care of them one way or the other, it just sucks being one of the responsible people looking at social security, how much you pay in, how much you’ll get, and thinking f~~~ if I could just plop that money in an IRA or in my brokerage account instead I’d end up with a ton more retirement income.
Pretty much if your making 90-100k a year and paying 12k towards SS for 30 years what do you get, like 1800 bucks a month? If you did that same thing and invested it and average 6% a year you’d have over a million stashed away. What if you live for 20 years in retirement? 1800 a month x 12 months x 20 years is only 432k…even with cost of living increases each you won’t get that million out of it…plus the million is still going to be earning you interest in retirement. Let’s just say for the sake of argument, you get 0% on that million after you retire…split it up by month for 20 years and you’d be getting 4166 per month…more than twice what SS pays. Factor in interest/capital gains post retirement on that money and you could easily triple what SS would pay you.
Eyeswideopen 2 years, 8 months ago.
