"Entitled Selfishness": Great article on the dismal future of Social Security

[tedhowe]

I agree that it's not the government's job to make sure that retirees are comfortable -- if you think about it, it doesn't make much sense. Prior to Social Security, there was no precident for government paying old folks. It wasn't necessary that they start it.

HOWEVER, they did start such a program, and they took our money to fund it. Having started this, they now owe it to us. Anytime they want to stop it (and pay back what we've put in), it's fine with me . . . but as long as they're taking it upon themselves to run the program, they owe it to those of us who've paid in.

We're just going to have to disagree about this. I understand your feelings on it, but don't share them. I don't feel that there is any reason I need to be paid just because I've paid in to the system. What I've paid is going to help others... it's not like the government is just sitting on it and refusing to return it to me.

I will say that I think two problems with the high taxation and wealth transfer aspects of social programs are 1) that people don't have as much money remaining to support charities ans 2) because the governemt will take care of people - fewer people feel a responsibility for individual community service.

Before social security and welfare there were many Mutual Aid Societies in the US. People would voluntarily contribute resources and support those who were members when those other members fell into need or distress.

Those societies are largely gone (either disbanding completely or turning into commercial insurance companies) as people have come to rely on the government for things that civil society (families or fraternal organizations mostly) used to provide.

Are more people helped with the way the things are today?
Probably.

Have we lost something that was great in our society because of that?
I think so.

Ted

 

[tedhowe]

To add, families tended to live together in extended family groups with the younger taking care of the elderly, financially and physically until the end of WWII. (the begining of the baby-boom years)

Anne

This is a very good point, but it makes me wonder which is the chicken and which is the egg?

Did older generations stop living with the younger because they were able to continue to live apart from a financial perspective? (largely because of social security).

or

Did we need to have larger wealth for retirement because society shifted to not have the older generation live with the younger ones any more?

As with most things, it probably is a combination of both, as well as many other factors.

Ted

 

[disneysteve]

I don't feel that there is any reason I need to be paid just because I've paid in to the system.

But isn't that the whole point of the system? Otherwise, why does SS send me a statement every year showing the benefits I'm slated to receive when I retire? Why do they track how much I've earned and how much I've paid in? It shouldn't matter unless they are planning to pay me benefits at a later date.

I'm glad you are so altruistic, but I think most of us feel we've been paying in all these years with the promise of getting something back.

 

[ducklite]

This is a very good point, but it makes me wonder which is the chicken and which is the egg?

Did older generations stop living with the younger because they were able to continue to live apart from a financial perspective? (largely because of social security).

or

Did we need to have larger wealth for retirement because society shifted to not have the older generation live with the younger ones any more?

As with most things, it probably is a combination of both, as well as many other factors.

Ted

I think it was the relative prosperity that the 1950's brought. Many of the elderly who had been "retired" during the depression had passed by then, and most of the people who were working adults during the depression had time to save for a retirement in the 50's or 60's.

Additionally the advent of commerical aviation, Interstate hi-ways, and an expanding industrialization throughout the country made for a more mobile upwardly mobile population.

Anne

 

[tedhowe]

But isn't that the whole point of the system? Otherwise, why does SS send me a statement every year showing the benefits I'm slated to receive when I retire? Why do they track how much I've earned and how much I've paid in? It shouldn't matter unless they are planning to pay me benefits at a later date.

I'm glad you are so altruistic, but I think most of us feel we've been paying in all these years with the promise of getting something back.

Steve, I agree that the plan is marketed in a way that probably is designed to make it easier for people to feel they will get something when they retire, but it is not guaranteed - congress could change the law at any time.

My point about not feeling I need to get paid is really related to the means testing question. If I've worked hard in this country and done well enough for myself that I have enough at retirement to be "comfortable" (to bring out that semi-loaded word again , then I won't feel shorted by having paid in far more than I receive back.

In my mind, its part of the lottery of social security -- the same thing as not feeling shorted if I happened to get run over by a bus on the way home from my retirement party -- except that if the situation is that I have enough to not need social security, I've had a much happier outcome which leads to no payback.

Ted

 

[MrsPete]

But isn't that the whole point of the system? Otherwise, why does SS send me a statement every year showing the benefits I'm slated to receive when I retire? Why do they track how much I've earned and how much I've paid in? It shouldn't matter unless they are planning to pay me benefits at a later date.

I'm glad you are so altruistic, but I think most of us feel we've been paying in all these years with the promise of getting something back.

My thoughts exactly. The government didn't have to get into the retirement-pension-SS business, but they chose to do so way before I was born. The "deal" for all of my working years has been the same: You put in X amount every paycheck, you'll get something back someday. Whether it's my actual money or someone else's just-paid-in money is irrelevant. It's a "contract" between workers, employers and the government -- a "contract" that is compulsory. We all get those statements every year telling us how much we'll be able to draw at a certain age, how much our children would get if we were to die before they reach adulthood, etc.

I'm also not altruistic enough to say, "Oh, just keep over seven percent of everything I've ever earned."

If they wanted to stop Social Security today, I wouldn't care a bit -- as long as they "squared up" with all of us who are owed something someday.

 

[MrsPete]

I think it was the relative prosperity that the 1950's brought. Many of the elderly who had been "retired" during the depression had passed by then, and most of the people who were working adults during the depression had time to save for a retirement in the 50's or 60's.

Additionally the advent of commerical aviation, Interstate hi-ways, and an expanding industrialization throughout the country made for a more mobile upwardly mobile population.

Anne

I'll throw in a few more things: Soldiers returning from war took advantage of the GI bill, and the percentage of Americans able to attend college soared, which led to higher incomes. Advertising promoted "the American dream" of a home of one's own with 2-3 kids and a car in the driveway -- Grandma and Grandpa weren't in that picture. It became socially acceptable for women to work (as long as they didn't have small children), and that increased families' buying power. More merchandise was available (and more was shipped from overseas).

LOTS of things contributed to the economic boom of the 1950s and 60s.

 

[MrsPete]

My point about not feeling I need to get paid is really related to the means testing question. If I've worked hard in this country and done well enough for myself that I have enough at retirement to be "comfortable" (to bring out that semi-loaded word again , then I won't feel shorted by having paid in far more than I receive back.

Well, then, you are definitely a nicer person than I am. I can only see it this way: I earned that money. The government took it with a promise -- implied or otherwise -- that I'd receive it back in the long run. In fact, because I have a professional job, they have taken more from me than they've taken from the minimum-wage worker. The size of my savings account has nothing to do with it.

 

[mickeyfan2]

But isn't that the whole point of the system? Otherwise, why does SS send me a statement every year showing the benefits I'm slated to receive when I retire? Why do they track how much I've earned and how much I've paid in? It shouldn't matter unless they are planning to pay me benefits at a later date.

I'm glad you are so altruistic, but I think most of us feel we've been paying in all these years with the promise of getting something back.

 

[C.Ann]

But isn't that the whole point of the system? Otherwise, why does SS send me a statement every year showing the benefits I'm slated to receive when I retire? Why do they track how much I've earned and how much I've paid in? It shouldn't matter unless they are planning to pay me benefits at a later date.

I'm glad you are so altruistic, but I think most of us feel we've been paying in all these years with the promise of getting something back.

----------------------------

Exactly.. If they had given people the opportunity of opting in or opting out, it would be an entirely different matter.. But they didn't - so they need to pony up - as per their agreement (implied or otherwise) - at the appropriate retirement age..

 

[spima3]

But isn't that the whole point of the system? Otherwise, why does SS send me a statement every year showing the benefits I'm slated to receive when I retire? Why do they track how much I've earned and how much I've paid in? It shouldn't matter unless they are planning to pay me benefits at a later date.

I'm glad you are so altruistic, but I think most of us feel we've been paying in all these years with the promise of getting something back.

They do so to show you what you "could" collect should you "need" it. Granted that isn't the way it has worked, although I believe that is how it was originally intended.

I do consider it a welfare program not a retirement one, and I am w/ Ted, I don't feel the need to get anything in return just because I paid into it.
If their are others out there who "truly" need it to survive, and that means their basic needs are being met, I'm fine with that.

My problem is for all those who lived to excess their entire lives and then never bothered to save anything because they would have SS in their futures. That is the problem w/ welfare programs, it creates passivity.

lori

ps. I am the one who posted about the aunt w/ the 1 Million. This area's average household income is $26,000. Sixty to 70K is acheived by most through dual incomes. Almost everybody we know falls into that range. I am a SAHM, 3 kids, and we earn less than the $46K national average. We still have most of what we need and a lot of what we want. So the aunt, living in this area, can have one heck of a life w/ the 1 million.

 

[MrsPete]

They do so to show you what you "could" collect should you "need" it. Granted that isn't the way it has worked, although I believe that is how it was originally intended.

I do consider it a welfare program not a retirement one, and I am w/ Ted, I don't feel the need to get anything in return just because I paid into it.
If their are others out there who "truly" need it to survive, and that means their basic needs are being met, I'm fine with that.

Can you cite a source that shows it's for those who "could" need it? I can pull out my last SS statement that says I'm eligible for X amount at X age, which proves the opposite.

My father-in-law recently reached retirement age and applied for Social Security. They didn't ask him about his bank account, his two pensions (one from the military, one from a private company for whom he worked after retiring from the Army), or his personal savings. They just looked at whether he'd paid in his 40 quarters and his birthday. He paid in, he's getting a check out. Simple.

And if you insist that it's a welfare program, then explain this: Why is it listed separately on our paycheck stubs as a separate program, one which is treated differently at tax time? Why is it that even teenagers who earn measley salaries are required to pay Social Security? Why is it that even the lowest-earning wage earners -- those who get back all of their federal and state taxes -- can't get back a penny of their Social Security? If it's a welfare program, why isn't it treated as our normal taxes? Answer: Because it's not a welfare program.

The facts simply don't support your statement that it's just for those who need it.

My problem is for all those who lived to excess their entire lives and then never bothered to save anything because they would have SS in their futures. That is the problem w/ welfare programs, it creates passivity.

I agree entirely that the welfare safety nets create the idea that "someone" will always take care of us at a minimal level, so there's no need to save today . . . but that has more to do with programs like Food Stamps and Aid to Families with Dependent Children -- you know, welfare.

 

[C.Ann]

They do so to show you what you "could" collect should you "need" it. Granted that isn't the way it has worked, although I believe that is how it was originally intended..

-------------------

Not to nit pick, but I have never seen anything on those statements informing me that "this is what you could collect if you need it".. Don't have a form right in front of me, but I believe the wording is more along the lines of "entitled" to..

Then there's the whole Medicare issue.. Most - if not all - health insurers require that you enroll in the Medicare program and I don't think you can do that if you're not enrolled to collect SS..

 

[disneysteve]

Not to nit pick, but I have never seen anything on those statements informing me that "this is what you could collect if you need it".. Don't have a form right in front of me, but I believe the wording is more along the lines of "entitled" to..

You beat me to it. You posted while I was pulling out my last SS statement.

On the front page, it says, "It gives you estimates of your SS benefits under current law." Inside, it says, "Retirement - You have earned eough credits to qualify for benefits. At your current earnings rate, if you stop working and start receiving benefits... At age 62, your payment would be about ....$1502 a month" and so on. Nowhere does it state that would be my benefit IF I could show that I needed it.

Of coure, they do hedge by saying repeatedly that it is based on current law, which Congress can change at any time.

 

[tedhowe]

And if you insist that it's a welfare program, then explain this: Why is it listed separately on our paycheck stubs as a separate program, one which is treated differently at tax time? Why is it that even teenagers who earn measley salaries are required to pay Social Security? Why is it that even the lowest-earning wage earners -- those who get back all of their federal and state taxes -- can't get back a penny of their Social Security? If it's a welfare program, why isn't it treated as our normal taxes? Answer: Because it's not a welfare program.

The facts simply don't support your statement that it's just for those who need it.
I agree entirely that the welfare safety nets create the idea that "someone" will always take care of us at a minimal level, so there's no need to save today . . . but that has more to do with programs like Food Stamps and Aid to Families with Dependent Children -- you know, welfare.

I agree that it is NOT a welfare program as it is at this point, but it was originally intended to be that type of program.

Most mf my posts yesterday were about what is was SUPPOSED to be (something I get caught up on from time to time )

In terms of what Social Security IS, I agree that it is not now a WELFARE program.

For all of my altruistic beliefs about the system, I'll gladly accept the check when I retire (as long as it is still there). Why? because if I don't, then the government will just turn around and find some other bridge to nowhere to build instead of actually reducing the amount that they collect from then current workers.

Unless a means test is eventually enacted so that I CAN'T get a social security check, I will collect whatever is coming to me. I'll do what my parents are doing - invest that portion of my income in retirement and put it in trust for my kids and grandkids to inherit if I don't end up needing it in the long run.

Lord know with all of the national debt and the taxes that will be required to service it, those future generations are going to need savings even more than we do.

Ted

 

[stemikger]

I was born in 1964. It would not be fair if we can't collect after paying into the system. If they let us invest the money we have been paying into it had been invested we would be better off. However, that option was never given to us. They better fix it or they will have riots in the streets.

However, medicaid is in worse trouble then ss.

 

[spima3]

Can you cite a source that shows it's for those who "could" need it? I can pull out my last SS statement that says I'm eligible for X amount at X age, which proves the opposite.

My father-in-law recently reached retirement age and applied for Social Security. They didn't ask him about his bank account, his two pensions (one from the military, one from a private company for whom he worked after retiring from the Army), or his personal savings. They just looked at whether he'd paid in his 40 quarters and his birthday. He paid in, he's getting a check out. Simple.

And if you insist that it's a welfare program, then explain this: Why is it listed separately on our paycheck stubs as a separate program, one which is treated differently at tax time? Why is it that even teenagers who earn measley salaries are required to pay Social Security? Why is it that even the lowest-earning wage earners -- those who get back all of their federal and state taxes -- can't get back a penny of their Social Security? If it's a welfare program, why isn't it treated as our normal taxes? Answer: Because it's not a welfare program.

The facts simply don't support your statement that it's just for those who need it.

I said I don't believe it is being run as "intended", so of course there aren't going to be facts to support that, as it's never been run that way.
In the early days it didn't matter, as there was plenty to go around, but that is no longer the case, and why we now have the problems we do.

And does anyone ever expect the gov't to run things as intended?

lori

 

[spima3]

Then there's the whole Medicare issue.. Most - if not all - health insurers require that you enroll in the Medicare program and I don't think you can do that if you're not enrolled to collect SS..

Oh I agree. The whole system is a mucked up mess. Their good intentions, way back when, has returned to bite everyone in the butt.

I worked w/ a gentleman, 70, who paid close to $300 a month to a former employer to maintain his medical insurance, top of the line.
They required him to claim Medicare first, then they would pick up the difference. It should have been the other way around, in my opinion.

The current practice basically gouges the consumer, and the gov't/taxpayers.

lori

 

[mickeyfan2]

Since DH and I have both worked and paid into SS we would get ~$3K/month. That is $36K/year. Why should we not get that if we both worked and paid into it.? That is equivalent to almost $1 million dollars of investments. That $36K would go a long way to funding our retirement. It would more than pay for all of our medical insurances and bills. Should it be taken away from us because we chose not to lease Mercedes cars our whole life but just bought simple cars and put the rest away for our retirement. We would be getting penalized for doing the right thing. That is not the mentality the government needs to permiate!

 

[kinntj]

-------------------

Not to nit pick, but I have never seen anything on those statements informing me that "this is what you could collect if you need it".. Don't have a form right in front of me, but I believe the wording is more along the lines of "entitled" to..

Then there's the whole Medicare issue.. Most - if not all - health insurers require that you enroll in the Medicare program and I don't think you can do that if you're not enrolled to collect SS..

True, but entitled doesn't mean that the formulas couldn't change and that law will remain the same. I get a statement too, but I think it's to keep us off their back and ask where our money is. Somewhat of a pyramid scheme to keep us paying in and not questioning it. I just don't trust the govt. with my money anyway. That's why I won't count on getting as much back or anything back even if they say I'm "entitled" to on my statement. I'm not naive.