A good way to get more $ into Social Security

[dquan97]

The 12.4% (half for employees) rate that every wage earner pays for Social Security (part of the 15.3% FICA or SE tax) is subjected to the first $87K of one's income. If there was no annual limit, that would help stabilize the Social Security system by bringing in more $.

Any thoughts?

 

[PlatinumGold]

Originally posted by: dquan97
The 12.4% (half for employees) rate that every wage earner pays for Social Security (part of the 15.3% FICA or SE tax) is subjected to the first $87K of one's income. If there was no annual limit, that would help stabilize the Social Security system by bringing in more $.

Any thoughts?

ya, it makes sense. just as % of people living beyond 70 has increased significantly and the % of people earning more than $80k per year has increased. so ya, it would make sense to increase the limit.

 

[jaydee]

If Social Security works the way I think it works (which may or may not be true), that's only going to be a very temporary solution. Once these guys at $200k per year salary retire, they'll be getting back there share they've put in and social security is in the same situation. I'm no politician, but I'm guessing the limit is there, because if you're making a great salary, you've got your own retirement plans and are not going to need a lot from S.S.

 

[emmpee]

Originally posted by: jaydee
If Social Security works the way I think it works (which may or may not be true), that's only going to be a very temporary solution. Once these guys at $200k per year salary retire, they'll be getting back there share they've put in and social security is in the same situation.

That's not how social security works. You don't get back what you put it, you just get $X per month.

 

[MacBaine]

There is no fixing it until it is privitized or opt-in.

 

[Tom]

The main argument for the limit usually is that since there is a limit to how much a person can get in benefits that raising the limit will lessen support for SS amongst the wealthy.

However I think it definately should be raised above it's current value.

But the underlying theme here, that SS is running out of money, isn't true. SS hasn't even started using the SS trust fund which is enormous and earns interest in the form of bonds.

But it still makes sense to raise the limit or do away with it.

 

[jaydee]

So how much you put in has nothing to do with how much you get back?

 

[emmpee]

Originally posted by: jaydee
So how much you put in has nothing to do with how much you get back?

correct

 

[jaydee]

That sucks, no wonder everyone hates Social Security.

 

[MacBaine]

Originally posted by: Dead Parrot Sketch

But the underlying theme here, that SS is running out of money, isn't true. SS hasn't even started using the SS trust fund which is enormous and earns interest in the form of bonds.

The latest pessimistic forecast shows the Social Security Trust Funds running out of money in 2027 ... They found that the chance of a really bad outcome is much higher than commonly expected.

http://www.businessweek.com/magazine/content/02_02/c3765072.htm

Social Security will run out money in 35 years

Old Article: http://edition.cnn.com/ALLPOLITICS/stories/1999/03/30/retirement.programs/

Social Security's Chief Actuary projects that in present-value dollars the total net Social Security cash flow for years 2003 through 2077 is projected to be nearly -$4.9 trillion. When the trust fund balances of $1.4 trillion at the beginning of 2003 are added to this value, we get a financial shortfall (or unfunded obligation) for the 75-year period of $3.5 trillion.

http://www.ssa.gov/qa.htm

 

[PlatinumGold]

Originally posted by: jaydee
That sucks, no wonder everyone hates Social Security.

it's a tax not a retirement fund.

as to privatization. tho it does sound like a good idea, there are problems with it as well.

there are no easy answers to something as big and large as social security.

 

[jaydee]

Originally posted by: emmpee

Originally posted by: jaydee
So how much you put in has nothing to do with how much you get back?

correct

http://www.ssa.gov/:
Social Security benefits are based on earnings averaged over most of a worker's lifetime. Your actual earnings are first adjusted or "indexed" to account for changes in average wages since the year the earnings were received. Then we calculate your average monthly indexed earnings during the 35 years in which you earned the most. We apply a formula to these earnings and arrive at your basic benefit, or "primary insurance amount" (PIA). This is the amount you would receive at your full retirement age, for most people, age 65. However, beginning with people born in 1938 or later, that age will gradually increase until it reaches 67 for people born after 1959. For more information, see http://www.socialsecurity.gov/pubs/ageincrease.htm

Alright, I'm confused now.

 

[emmpee]

Originally posted by: jaydee

Originally posted by: emmpee

Originally posted by: jaydee So how much you put in has nothing to do with how much you get back?

correct

http://www.ssa.gov/: Social Security benefits are based on earnings averaged over most of a worker's lifetime. Your actual earnings are first adjusted or "indexed" to account for changes in average wages since the year the earnings were received. Then we calculate your average monthly indexed earnings during the 35 years in which you earned the most. We apply a formula to these earnings and arrive at your basic benefit, or "primary insurance amount" (PIA). This is the amount you would receive at your full retirement age, for most people, age 65. However, beginning with people born in 1938 or later, that age will gradually increase until it reaches 67 for people born after 1959. For more information, see http://www.socialsecurity.gov/pubs/ageincrease.htm Alright, I'm confused now.

It says 'based on', and then a forumla is applied... i'm positive you don't get the full amount back though (if you've put in alot). There's probably a per-month cap.

 

[jaydee]

Well at least it has something to do with how much you put in, which what I was trying to decipher. Bah, I'll stop now and let people who know what they're talking about do the posting.

 

[Tom]

"Social Security will run out money in 35 years"

It is ludicrous to think anyone can make accurate predictions for the next 35 years ! That is my point, the only reason for doing so is to try and change Social Security, it isn't based on anything that is knowable. It's an excuse to change a program by some people who don't like it to begin with.

 

[cliftonite]

Is there a way to calculate how much you get back once you retire? How much would someone who has been taxed at 40,000 per year get back as opposed to someone who has made atleast 87k? Does the person who paid 2X the tax get more money? How many years do you have to work to get the full benefit?

 

[SirWoj]

I believe you can go to the social security website and order a report which lists your contributions over the years. They probably have information about how that money is returned to you after retirement. I belive it's http://www.ssa.gov.

 

[dullard]

Originally posted by: jaydee
So how much you put in has nothing to do with how much you get back?

Half true, half false. They keep track of how much you put in and give you credits related to how much you put in. There is a credit limit - once you hit that limit you are set for life and you will get the full social security payment. So the quote above is true ONLY AFTER YOU GET ALL THE CREDITS. However if in your lifetime you only pay enough social security to recieve half of the credit limits - you only get half the amount in your social security checks. If you put $0 into social security, you get no credits and get $0 back. So for many people the social security they receive is directly proportional to the amount they put in.

There are many ways to fix social security. Here are the most talked about ways:
1) Raise the credit limit - meaning you have to put in more to get the full social security benefits.
2) Raise the % taken out for social security tax.
3) Lower the social security payments.
4) Raise the retirement age faster than it currently is raising (as life expectancy gets longer you should work more as well).
5) Currently social security pays out far less than it takes in. This excess is placed into the general government funds and is spent on non-social security items. If instead this surplus was saved (or invested), social security will be saved (at least last many decades longer).
6) Don't give social security benefits to multimillionaires even though they paid in (Bill Gates will get the same exact social security benefits as I will if we both live to the same age).
7) And your proposal as well - to raise the limit of income which is taxed.

 

[McCarthy]

Based on the popularity of state lotteries I say give everyone the option to pay 5% more per month with a 1/100,000,000,000 chance of getting a bigger SS check at retirement. Figure about half the population will go for it.

 

[DWray]

I'm 29 and if they let me opt-out of the system now, they can keep everything they've already taken from me. I promise I won't ask for a single penny from the government when I retire.

 

[Tom]

"5) Currently social security pays out far less than it takes in. This excess is placed into the general government funds and is spent on non-social security items. If instead this surplus was saved (or invested), social security will be saved (at least last many decades longer)."


The Social Security surplus is already invested, in treasury bonds which earn interest. It isn't just put into general revenues.

The real issue is getting the government's fiscal policies in order so that the Socail Security fund will be able to redeem these bonds when they are needed. The opponent's cries of alarm about Social Security are mostly just disguised attempts to use this money for other things..

like tax cuts for the ultra-rich.

 

[StageLeft]

You can't really have a voluntary opt-in system, because frankly too many adults don't know their ass from their bank account. They'd opt out for a few more bucks during their life, then turn 65 and look at the $9500 they have in ther bank account for retirement and go "oops!". It needs to be forced in some manner or other (be it social security, or a government-insured private system) so that we don't have millions of seniors on the streets like a bunch of monetarily childish imbeciles as a result of their lack of planning. Sometimes Big Brother does know best

 

[Tom]

Originally posted by: DWray
I'm 29 and if they let me opt-out of the system now, they can keep everything they've already taken from me. I promise I won't ask for a single penny from the government when I retire.

What will you do if you become disabled 4 years from now ? Are you prepared to buy your own disability insurance ? Most people with limited incomes will just hope they don't get disabled, and then the ones that do will still need to be cared for.

See, Social Security helps society maintain a certain amount of order, it's one of the reasons our society has been as financially successful as it has been.

 

[DWray]

Originally posted by: Dead Parrot Sketch

Originally posted by: DWray
I'm 29 and if they let me opt-out of the system now, they can keep everything they've already taken from me. I promise I won't ask for a single penny from the government when I retire.

What will you do if you become disabled 4 years from now ? Are you prepared to buy your own disability insurance ? Most people with limited incomes will just hope they don't get disabled, and then the ones that do will still need to be cared for.

See, Social Security helps society maintain a certain amount of order, it's one of the reasons our society has been as financially successful as it has been.

AFLAC, ask about it at work.

 

[PaperclipGod]

How about the government fsck's off, and let's us save our own money? If you're too stupid to save for retirement, you deserve some sh!tty 'golden years'.