Originally posted by: Engineer
Being 36, I want the option to OPT-OUT of regular SS in return for full placement of my future contributions going into MY PRIVATE account!
Your not alone.but I dont see that happening this decade.
Your not alone.but I dont see that happening this decade.
People do NOT withdraw all of their retirement money all at once from their private accounts. Only so much is taken out at a time. This allows time for the market to rebound and for the price of the individual's stocks to go back up. Even then stocks should compose only so much of an individual's retirement fund who is near retirement age.
What part of that don't you understand?
Originally posted by: upsciLLion
People do NOT withdraw all of their retirement money all at once from their private accounts. Only so much is taken out at a time. This allows time for the market to rebound and for the price of the individual's stocks to go back up. Even then stocks should compose only so much of an individual's retirement fund who is near retirement age.
What part of that don't you understand?
and you dont keep large amount of you nest egg in stock when you closer to retirement either.
Originally posted by: upsciLLion
People do NOT withdraw all of their retirement money all at once from their private accounts. Only so much is taken out at a time. This allows time for the market to rebound and for the price of the individual's stocks to go back up. Even then stocks should compose only so much of an individual's retirement fund who is near retirement age.
What part of that don't you understand?
When the market has one of its "corrections" Social Security is currently unaffected. After your "privatization" suggestion it would be. My point has nothing to do with the suggested private investments. My point is that when the market tanks those previously safe, secure Social Security benefits will tank right along with it. The safety net Social Security provides, as the no-risk component of retirement, will be lost.
Instead of having a defined benefit it will all be at risk.
Zebo
Elite Member
- Jul 29, 2001
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This is exactly why Bush is liking this plan. Being clueless like he is and so rich he has nothing to worry about he finally discovered 403b's when he went to counties in south texas as govenor. He found janitors retiring with 1.5 million in thier accounts, county attoneys with 3 million etc... These plans vest just like he's talking but more... usually 10% of sal and match 10% from employer. I have been part of such a plan for 7 years now hav'nt paid any SS and hope/prey I never have to pay another dime to SS.
Zebo
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Pessimist in me says stock market is already over valued.. has'nt moved in ~6yrs in real terms..P/E ratios are still historically insane... the last big jump was during the 80's-90s when all those new annuity funds were created and were all the rage...all traded from more secure pensions and bonds...
Now that the market is stagnet.. they, the market, are looking for more cash money and SS is a gold mine...
1929 could easily happen again once all funds are vested...(albeit slower because of locks they have in place on street)..
You just know wall street is salivating over the fees they will get...and profit to be had...
Shhh. Don't confuse the ignorant with facts. It helps them to think that proponents of privatization have 100% of their retirement tied up in stocks. Let them have their sh!tty system while the ones that are smart enough to invest (and diversify) will reap the benefits and laugh at them when they try to live off of their false sense of Social Security.
Zebo
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The facts are DOW did'nt move at all from 1965-1980. That's 15 years you could be SOL, not making a dime on your investment. Has'nt moved at all the last 6-7... Any investment house will tell you there is no guarantees...and you could loose it all.
IMO all the gains, and overvalued market we have today is from 401(k)tax code that was enacted in 1981... notice the jump post 1980... once all those funds were vested...like now we are leveling out again (...we will jump again if this SS plan goes thought creating even more overvalued corps. Don't know where they are going to find money the next time....SS is last gold mine. When no ones buying stock does'nt move...
You could, yes, but you don't think there's any risk with social security? Historically the stock market has done nicely and it probably will do so for a long time. Also when you start to reach the age of retirement, you sure as heck shouldn't have too much invested into the stock market just because you're too old to afford the risks that come with it.
Also you're looking at a weird period of years. In the last 6 - 7 years the stock market got overvalued because of the tech bubble (and the feds not raising interest rates enough). It had to recover from that and is doing so now. Just because the average is about the same doesn't mean it hasn't moved at all. If you kept on investing after the crash you'd still have a nice chunk of money because of the rise in the stock market over the last year or so.
1965-1980 - You're right if you invested around that time in an index fund you wouldn't have made crap. Generally people do have a retirement account started before 15 years before they retire though. Also during that period, you still had other options than the stock market. If you didn't like them you could have always done bonds which were doing pretty nicely at that time.
You also say there are no guarantees that you will make anything; infact you can lose it all. Well let me ask you, what contract did you sign with the government that entitles you to your Social Security money? They don't have to give you anything. Chances are in a few years you might be getting as much as you had put in if you're lucky, there's also a nice possibility of you getting less than you paid in. Sure, you aren't guaranteed money with a private institution but at least you know what you are signing up for. Many people that pay into Social Security have no idea how it works.
Also if Social Security is so great, why can't you opt out of it? It would seem that everyone would choose it if it were the best (or even a good) option.
Zebo
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I'm just looking at the periods of what caused money to flow in and out of the market. Basically it has nothing to do with intrest rates/tech bubbles or other mythical tales. What it is, is when you are granted special tax breaks for 401k and SEP plans. These people will take advantage of such breaks, will vest will full faith, like you have, that it can only go up...forgetting these companies aint worth a fraction of their asking price. They are banking on other fools to vest after them and more than them raising stock price to realise profit instead of sound divided ratios for thier payouts. And it worked/works great until equilibrium is reached.. IE same amount is invested as people pulling out, then you get lull. For 20-25 years it was only up, besides a few profit taking moments.. But Now is another period of lull after booming 80's and 90's, the market needs cash because anyone with a lick of sense does'nt buy anything that won't net you a return,.. Return visa vi company profits is impossible at any appreciable level due to poor earnings vs. stock outstanding..hell most don't even pay dividends today... people only hope is SS vesting to relise a return... then whats going to happen? You're stuck with a thousands of companies with a 100 P/E ratios and no more money left in the economy to buy stock at any appreciable level.....stagnet at the least.. worse if people buy a clue..
We are entiled to what ever we vote for. FDR's plan is a guarntee, later expaned by eisenhower to include lots more peoples and disabled..Still it's a gurantee, todays workers pay for yesterdays and disabled.
You can't opt out, unless you have passive income or a special annuity, because congress says so. It's a paygo tax, not a retirement plan.
Where in the world is this 10%/yr gain in the market coming from, anyway? no links, no nothing, just the usual rightwing flat, unqualified assertion of "the truth"-
Hogwash, and worse. The real figure, adjusted for inflation, is in the 6.7% to 7.0% range-
http://biz.yahoo.com/funds/cs6.html
And that's an average, doesn't account for some rather serious swings... Folks who are quite elderly are often frail, and simply can't work, so a huge hit to their assets, as in the recent downturn, forces them to spend a greater % of the principal.
The one thing elderly people often dread more than death itself is the prospect of outliving their money... even when collecting SS as well, which only averages ~$800/mo...
And for those of you seriously offering that old folks can just go on welfare, try to remember that welfare isn't permanent, certainly not anymore. After a few years you're no longer eligible... thanks in part to rightwing ranting about that, too...
Hogwash, and worse. The real figure, adjusted for inflation, is in the 6.7% to 7.0% range-
http://biz.yahoo.com/funds/cs6.html
And that's an average, doesn't account for some rather serious swings... Folks who are quite elderly are often frail, and simply can't work, so a huge hit to their assets, as in the recent downturn, forces them to spend a greater % of the principal.
The one thing elderly people often dread more than death itself is the prospect of outliving their money... even when collecting SS as well, which only averages ~$800/mo...
And for those of you seriously offering that old folks can just go on welfare, try to remember that welfare isn't permanent, certainly not anymore. After a few years you're no longer eligible... thanks in part to rightwing ranting about that, too...
If you were to be saving for the last 40 years, the drop of 2001 would be tiny in the whole scheme. It is also expected that as you age, you diversify into lower risk investments to protect retirement assets. No idiot at the age of 65 would have 100% of his money in stocks, more likely to be 25% to 45%, most would be in bonds at that point making an almost guaranteed 6%+.
That would be hogwash, but I adjusted for inflation in my original numbers (3.1%) - so technically adjusted it is 9.7% to 10.0%. Everyone has pegged it at about 10%. I also made some other assumptions that you guys fail to see.
I assumed that the guys making $25,000/yr, made that his entire life, no raises, nothing. How many people (percentage wise) are in that situation. I have also shown that even investing in CDs and Money Market accounts would be SS. The only account that does not beat SS returns (ties) is a simple Savings account at under 1.5% interest. Normal people have no business using a Savings account as an investment tool.
"From 1926 through 2003, the S&P 500 stock index achieved an average total return of 10.4 percent. (Total return includes dividends and price gains.) But for the period from 1982 through 1999, the average total return of the S&P 500 was an unprecedented 18.7 percent. - Sun Times"
"Maybe it's payback time for all those bull market years. In the next decade or so, stock market return might be at -- or lower than -- the 10.4 percent long-term historical average. That doesn't mean you should give up investing in the stock market. It just means you'll have to adjust your expectations to more modest returns. That's the Savage Truth. - Sun Times"
Heh, how many percent of American do you expect to know asset diversification and know how to actaully move their investments from a stock fund to a bond fund. Do you actaully expect some 70 year old who live somewhere on a farm who doesn't even know Internet to know that?
I am sure people have mentioned this but you just don't get it. The SS is not meant to be a investment tool. It is a social program to make sure "ALL" American are protected after retirement and in the event of job lost and disability. Of course you cannot compare it with the return you would get when you invest your money somewhere else. But the benefit of that is you get a society that is more stable and people who are less fortunate is less likely to form a communist party or commit crime and take money from someone like you.
Originally posted by: BBond
Originally posted by: upsciLLion
People do NOT withdraw all of their retirement money all at once from their private accounts. Only so much is taken out at a time. This allows time for the market to rebound and for the price of the individual's stocks to go back up. Even then stocks should compose only so much of an individual's retirement fund who is near retirement age.
What part of that don't you understand?
When the market has one of its "corrections" Social Security is currently unaffected. After your "privatization" suggestion it would be. My point has nothing to do with the suggested private investments. My point is that when the market tanks those previously safe, secure Social Security benefits will tank right along with it. The safety net Social Security provides, as the no-risk component of retirement, will be lost.
Instead of having a defined benefit it will all be at risk.
I'd rather take that "risk" than have a system that sucks all of the time.
Besides, by your logic SS will lag behind when the market is booming.
Stop the handouts. Stop the pork. Give line item veto to the leaders from the local level up. Force all public representative agencies to appropriate funds to the issue for which they were approved. Eliminate the general fund expenditure system and hold the politicians accountable for their actions. Mandate a balance on all budgeted expenditures.
Until the public takes action with the power we have as citizens no one can bitch about how it is.
The problem with this and most financial issues is the people running the system keep their eyes closed to injustice as long as the plate in front of them is getting filled in the process.
Until the public takes action with the power we have as citizens no one can bitch about how it is.
The problem with this and most financial issues is the people running the system keep their eyes closed to injustice as long as the plate in front of them is getting filled in the process.
My guess is there would be rules on such an account. At times of retirement it would turn into annuity to pay out over a given period of years. Complete payout to heirs at time of death.
This is not a hard problem to solve either.
The biggest dangers in recessionary declines of the market aren't to folks planning to retire, Inwincur, but to those already retired. In such a scenario, their biggest problem is asset preservation. Yeh, sure, expenses can be trimmed, but in a situation where net value drops by a quarter, as it did in 2001-2002, some additional unplanned withdrawals from the principal are inevitable. This is particularly true for those of modest means. Less principal means less earnings down the road, once again invoking the problem of outliving your money. That won't happen with SS.
Old age is full of uncertainties- might pass on at 66, might live to be 102. The prospect of going broke in one's 90's is singularly unappealing... Maybe your investment firm will send a cyanide pill with the last cheque, kind of as a courtesy. Probably not- it'd cut into their bottom line...
Zebo definitely has a point about earnings in modern corporations. Coupled with a lot of forced investment, the net effect may well be absolutely lousy P/E ratios, coupled with even more outrageous salaries and perks for execs and BOD's...
I also wonder that the years of highest market growth coincided with the years of explosive federal debt... not to make any attributions, but it does seem... interesting, anyway. Maybe Wall Street is hooked on govt debt, too, and this proposition of privatized accounts will merely feed their habit...
Old age is full of uncertainties- might pass on at 66, might live to be 102. The prospect of going broke in one's 90's is singularly unappealing... Maybe your investment firm will send a cyanide pill with the last cheque, kind of as a courtesy. Probably not- it'd cut into their bottom line...
Zebo definitely has a point about earnings in modern corporations. Coupled with a lot of forced investment, the net effect may well be absolutely lousy P/E ratios, coupled with even more outrageous salaries and perks for execs and BOD's...
I also wonder that the years of highest market growth coincided with the years of explosive federal debt... not to make any attributions, but it does seem... interesting, anyway. Maybe Wall Street is hooked on govt debt, too, and this proposition of privatized accounts will merely feed their habit...
Tell you what...I want to opt out of this SS mess...I don't want to pay into it...I don't want my employer pay into it...I don't want Medicaid..I don't want Medicare..I'll take and invest what I would have paid into this blood-sucking system and take care of myself....I'm sick of sharing the load...and it's all going to get a lot worse...there is a revolution coming.........
Engineer
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- Oct 9, 1999
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Sadly, while I agree that I would like to invest my own money, I don't think it's going to happen most likely. (P.S. Just because I want to invest for myself does not mean that I don't think that we should fund the current SS folks until it's gone. I would like to take my 6.2% and invest and let the 6.2% company match continue. Also, I would like to see the current cap REMOVED to help shore up and transition the system over.)
Zebo
Elite Member
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I don't even see how it's constitutional. Per article 1 and 16th amendment Congress has power to TAX not forcablably make you put your earnings/funds into stock houses accounts which is not a tax.
They are already that way. Investing today in stock with expectation of dividends to relise a return is asinine since they can only pay out a fraction of a percentage point of todays share prices, even cutting CEO salaries to zero. It's only the buying of new, and more shares, which the SS influx will do in spades, which will skyrocket share price. ... temporarly. I rue the day when equilibrium (same coming in into market, as seniors cashing out) is reached. You're only holding paper at this point, worthless as an investment, and only the trap of continued SS/401 vesting will stave off complete financial catastrophe. Since thier are no new shemes/money left to vest thoughout the economy, and face it the last 25 years of market activity is basically a pyramid scheme, we have only one way to go an it aint up.
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