Random thought of the day - reversed social security plan

[vi edit]

When born - each person gets awarded a certain amount of money by the government...in this case...say $200,000. I figured the average person drawing SS get's about $10,000 a year (if not more, and is on it for 20 years, so just used 200k...numbers out of my butt, of course)

The money is deposited into secured account that is largely conservative funds, but also has a small amount of more agressive funds. The money can't be touched until you reach retirement age, or in some situations handicapped to where you can't work.

You would continue to pay in social security like normal. I don't know what sort of rules there would be for payouts to family members...say if you die before retirement your money rolls back into the pot. If you die after you start drawing, spouce maybe gets a percentage, but the rest rolls back into the pot.

I know it's lucrative...but would people be better off than with the current system? Compounded interest over 65 years would have to turn that $200,000 into an insanely large number...assuming you pulled better interest than the rate of inflation.

Interesting? Dumb? Possible? Or should I just stop thinking

 

[amdskip]

Interesting for sure!

 

[ReiAyanami]

as long as they can only withdraw when they are a few hundred years old, then your plan would work fine!

 

[Mookow]

Originally posted by: vi_edit
When born - each person gets awarded a certain amount of money by the government...in this case...say $200,000. I figured the average person drawing SS get's about $10,000 a year (if not more, and is on it for 20 years, so just used 200k...numbers out of my butt, of course)

The money is deposited into secured account that is largely conservative funds, but also has a small amount of more agressive funds. The money can't be touched until you reach retirement age, or in some situations handicapped to where you can't work.

You would continue to pay in social security like normal. I don't know what sort of rules there would be for payouts to family members...say if you die before retirement your money rolls back into the pot. If you die after you start drawing, spouce maybe gets a percentage, but the rest rolls back into the pot.

I know it's lucrative...but would people be better off than with the current system? Compounded interest over 65 years would have to turn that $200,000 into an insanely large number...assuming you pulled better interest than the rate of inflation.

Interesting? Dumb? Possible? Or should I just stop thinking

Its a nice plan, but the up front costs are rather high... and you assume congress wont touch that cash, an assumption I am not willing to make.

But, aside from the start up costs of $200,000,000,000 (thats 200 trillion, with a 't') per million births, its great

 

[vi edit]

Its a nice plan, but the up front costs are rather high... and you assume congress wont touch that cash, an assumption I am not willing to make.

Yeh, obviously, there is no realistic way to ever implement it, it was more of a "what if" situation. And as far congress not being able to touch it, in a perfect world, they would not be able to. But we know how well that works.

 

[RU482]

but then where would the government borrow money from every time they appoint themselves a raise??

 

[dullard]

While your plan has many flaws (ie where does the money come from, how do we make the transition, etc.) there is one flaw I'd like to point out. Social Security is only for people who have worked sufficiently and paid SS taxes. Then when they retire they get the money back they paid in (and at least so far an average of 3%-4% yearly interest). Your plan will give money to people who have never worked and never contributed to SS. Then it no longer fits the purpose of the current SS plan. There is a dramatic difference between paying in money and getting it back vs. guaranteed money. We already have guaranteed money plans - why not just alter those if that is your goal?

 

[Mookow]

Originally posted by: redly1
but then where would the government borrow money from every time they appoint themselves a raise??

Realistically, when you are talking budget deficiets in the Trillions, Congressmen giving themselves an extra million each per year doesnt do jack to the overall picture

 

[vi edit]

there is one flaw I'd like to point out. Social Security is only for people who have worked sufficiently and paid SS taxes. Then when they retire they get the money back they paid in

Correct me if I'm wrong, but my money that I pay right now is actually paying for people drawing. It's never actually getting lumped into an account and stored with post-it-note on it that says "vi_edit's money...DON'T TOUCH!". And when I go to draw in 40 years, I'll be paid by somebody who is my age right now.

 

[dullard]

Originally posted by: vi_edit
Correct me if I'm wrong, but my money that I pay right now is actually paying for people drawing. It's never actually getting lumped into an account and stored with post-it-note on it that says "vi_edit's money...DON'T TOUCH!". And when I go to draw in 40 years, I'll be paid by somebody who is my age right now.

Yes you are correct about that. But my point is still correct. If you never work, you never get SS. If you only work half the required number of hours you only get partial SS. If you work the full number of hours, you get the full SS. With your proposal everyone gets SS even if you work little or not at all. Who pays for it and when doesn't matter for that. I would like to have SS put into an untouchable account, but that plan was already suggested (Al Gore) and rejected by many voters.

 

[DrPizza]

Just imagine the number of 16-18 year old welfare moms whose strategy is to have 1 kid every 9 months, then hope the kids make it to 65 (and they make it to 83)