- Sep 30, 2003
There are many people who have savings insufficient for retirement, but not because they too stupid to save or preferred to buy 'rims' etc.If the government did away with Social Security... people still wouldn't save for retirement. Then you would have all these retired people without a dime to their name needing assistance from the government.
I would like to have back my money going to SS... but we are going to be paying for dumb asses who don't save one way or another.
If people are so stupid they need the government to save for them... at least revert social security back to a contributory system... but at this point it is a little late for that.
As a tax CPA for +30 years I have seen all types of people lose their assets, including retirement assets, for all types of reasons under many different scenarios.
Going back to 80's, and including 20000 and 2008, stock market crashes can virtually wipe out large saving accounts. This can, and has been, exacerbated by trading rules that favor large institutional investors over individuals and their IRA or 401(k) plans.
Then you've got examples like Enron and many others that went bankrupt. Typically, the employees, who have done nothing wrong, have much of their retirements assets tied up in the employing company's stock (favorable stock purchase plans etc.). Upon such bankruptcy much of their retirement assets are wiped out.
You've got people who become disabled or face major medical. Even if your HI covers the medical costs you cannot work and often retirement assets must be used to avoid the loss of a home or a pay a kid's college costs. Likewise for disabled people even if they collect disability insurance under the SS program.
You've got hard working, very successful people who are business owners. But in times like these (and others where the economy goes bad) draw upon their retirement assets to stave off business bankruptcy. Sometimes it works, sometimes it doesn't.
We had a case here where a crooked broker, or at least a monumentally incompetent one, lost the life savings of hundreds of retirees. The broker also went bankrupt so there is no recovery for these people. All they have now is SS. There are cases like this all the time, you only hear of the occasional Madoff type that makes the news.
There are many, many ways decent hard working people can find themselves victims of circumstances out of their control. Things that could not be reasonably foreseen. This is why we need a 'net'. This is why we have one.
SS was created in 1935 because many people, who had saved etc, were wiped out by the Great Depression. It was not their fault their life savings evaporated etc.