Will SS Run Out Before Your Time?

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herm0016

Diamond Member
Feb 26, 2005
8,385
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Now that I think about it it's even sillier than that. It's not just the government promising to pay itself, it's promising to pay itself in a currency it creates! So it's not even [DHT]Osiris paying himself $100, he's paying himself 100 OsirisBucks which he can create by writing on the back of a napkin.

that's how fiat currency works, in a nutshell. its almost like a religion, the only thing that keeps it going is the users faith in the guy writing on the napkin/dollar bill
 
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fskimospy

Elite Member
Mar 10, 2006
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that's how fiat currency works, in a nutshell. its almost like a religion, the only thing that keeps it going is the users faith in the guy writing on the napkin/dollar bill
To an extent that’s the case but fiat currency also has inherent value as you can satisfy tax obligations with it.

I always find it funny that people buy gold to hedge against fiat currency but outside of some relatively small industrial applications it’s mostly valuable because people think it’s valuable. Yes it’s used in jewelry but that’s also in many ways just a statement of perceived value. Otherwise people would just use much cheaper fake gold.
 

Bitek

Lifer
Aug 2, 2001
10,647
5,220
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For an awful ot of people, this is their only income after they stop working. For others, it's a drop in the bucket compared to their other retirement income. Is it time to cut the second group off so the first group can survive?

What? You want to punish the people who worked hard and saved lots of money?
Fuuuuuuuuk that and anyone who seriously suggests so.
 
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herm0016

Diamond Member
Feb 26, 2005
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To an extent that’s the case but fiat currency also has inherent value as you can satisfy tax obligations with it.

I always find it funny that people buy gold to hedge against fiat currency but outside of some relatively small industrial applications it’s mostly valuable because people think it’s valuable. Yes it’s used in jewelry but that’s also in many ways just a statement of perceived value. Otherwise people would just use much cheaper fake gold.


yes. agree.
the tax thing is true.

I figure something like my tractor, a chicken, fuel have actual value because you can use them to satisfy a human need of producing food. lumber, etc. but all value is simply agreed upon between the parties exchanging it. a tractor may be worth a live yak, or a processed yak. ( my neighbor raises yaks) etc.
 

BUTCH1

Lifer
Jul 15, 2000
20,433
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Thanks Boomer!
You're welcome!, 13 more months before I can file for the full amount, about $1650/mth and since I have no pension and only $15K in savings I'm gonna need the full amount. My glorious golden years will see a lot of chicken thighs, Ramen noodles, and Gunsmoke re-runs!. You kids keep working though, Daddy's depending on 'yall!.
 

Paratus

Lifer
Jun 4, 2004
16,613
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So off on a tangent here but I’ve been putting together a retirement spreadsheet and was curious how SS was calculated and oh my god are there a lot of steps.
  • You start with your top 35 years of earnings
  • But they have to be multiplied by a scale factor to put them into today’s dollars
  • Those factors change for every year you worked and is different for everyone based on their retirement date
  • Once you do that and take the average of the adjusted 35 years of wages you divide by 12 to get your monthly Average wage
  • There are then two “bend points”. You compare your monthly average wage to to the total of the bend points to start calculating your benefits
  • The first bend point provides a benefit equal to 90% of your average wage or the 1st bend point (which I think is $996 this year) whichever is less
  • You then get 32% from the amount of your average monthly wage over the first bend point up to the second bend which ever is less (second bend point is $6002)
  • Finally anything over the second bend point you get 15% of up to your total monthly average or the maximum which ever comes first
  • This is the benefit you get at your normal retirement age.
  • Then you apply a penalty or bonus depending on when you take your benefit. 70% at 62, 100% @ 67, & 124% @ 70
  • If you have deferred taking your benefit besides the decreasing penalty/increasing bonus I think you can get cost of living adjustments in there
  • Finally if you want to figure this out for the year you retire you’ll have to assume all kinds of things to account for inflation in your wages, bend points, COLAs and maximums.
For 2021 the maximum benefit with the maximum bonus is $3895/month or $46.7K

So if SS does go “bankrupt “ it sounds like they’d have enough money to pay 76% of the benefit. So I guess the max would be $35.5K if it happened this year.
 

[DHT]Osiris

Lifer
Dec 15, 2015
14,003
12,067
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No they don't, not in any meaningful way. The idea of a social security trust fund is illogical on its face. How could it ever exist? I guess technically we could buy massive amounts of offshore assets to eventually sell back, but that would cause worldwide chaos and regardless, we don't do that.

Think about it this way. What is the social security trust fund, according to the SSA? It's treasury bills, right? What's a treasury bill? A promise by the government to pay $X at some future date. So the SSA trust fund is the government promising to pay... the government. If you promise to pay yourself $100 tomorrow do you have a $100 asset? Of course not.

See how it doesn't exist and can't exist?
Currency, trust fund, treasury bill, I don't give a shit what you call it. When the bell tolls, someone at the top is gonna say 'hey, we're not paying you geezers this stuff anymore, we gotta build more sea walls and armed sentries', and it'll be like it never existed.
 
Nov 17, 2019
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Some people have retirement packages that will pay them $10, 15K/month or more. They should not be getting SS. Some number, maybe double the max SS benefit should exclude them.
 

fskimospy

Elite Member
Mar 10, 2006
83,716
47,398
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Currency, trust fund, treasury bill, I don't give a shit what you call it. When the bell tolls, someone at the top is gonna say 'hey, we're not paying you geezers this stuff anymore, we gotta build more sea walls and armed sentries', and it'll be like it never existed.
Because it never did exist!

I think you are right that in the end we will prioritize climate change over taking care of the olds, but also that’s not really an either/or position.

The trust fund is an accounting fiction. What really matters is the productive capacity of the United States. Protecting that productive capacity from climate change increases the sum total of resources that can be used to take care of the olds.
 

manly

Lifer
Jan 25, 2000
10,907
2,057
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Some people have retirement packages that will pay them $10, 15K/month or more. They should not be getting SS. Some number, maybe double the max SS benefit should exclude them.
They paid FICA into the program like everybody else, so they should receive benefits. If they want to donate that money to charity or write a check to Treasury, that is their right.

Hypothetically, if this class of wealthy Americans didn't receive SS benefits, it's such a small portion of the entire program that it would have essentially no effect on the program's sustainability.
 

dank69

Lifer
Oct 6, 2009
35,203
28,216
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Currency, trust fund, treasury bill, I don't give a shit what you call it. When the bell tolls, someone at the top is gonna say 'hey, we're not paying you geezers this stuff anymore, we gotta build more sea walls and armed sentries', and it'll be like it never existed.
You really do not know what you are talking about.
 

KB

Diamond Member
Nov 8, 1999
5,394
383
126

The SS trust fund is government debt in the form of T-bills. Its not an asset, if the government can't repay it. They have to borrow more and more money every year because they can't repay the debt without taking on more debt. It shares this particular characteristic of a ponzi scheme. More money from debt needs to come in to pay off the previous debt holders.
 
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fskimospy

Elite Member
Mar 10, 2006
83,716
47,398
136
The SS trust fund is government debt in the form of T-bills. Its not an asset, if the government can't repay it. They have to borrow more and more money every year because they can't repay the debt without taking on more debt. It shares this particular characteristic of a ponzi scheme. More money from debt needs to come in to pay off the previous debt holders.
This is not even remotely true. First, the government can repay the debt on the agreed upon terms at any time it chooses. Second, no deception is involved, third, sovereign debt has nothing to do with private debt. Like, absolutely nothing.
 
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