For some fucked up reason SS tax is only up to something like $165k income. So a textbook regressive tax. Ridiculous. Don’t put a limit on it. There. The shit is funded until climate change creates starvation and mass human migrations of such size that there is a break down the social structure.
Aktchually… SS benefits are pretty progressive. Those with lower lifetime earnings will see a much higher income replacement percentage than higher earners up to that $165k-ish limit.
Lifting the taxable income cap would not fully eliminate the funding gap. We’d also have to pay out more to those higher earners too. If we didn’t, it would change SS from insurance to wellfare. And that would lead to (Republican) lobbiests fighting even harder to privatize, limit, or end SS.
Plus don’t forget there are special rules for taxing social security benefits, where most recipients are not taxed but as your income increases, more of your benefits are subject to income tax. Also quite progressive.
Benefits may be progressive but the funding is regressive. Actually enduring the prerequisite significantly harder life? Also regressive.
Lifting the cap would increase funding.
It is welfare regardless, but lifting the cap and then paying the extra revenue out to people who don’t need it would not do much, so good call there.
We are perfectly capable of taking care of one another, so technical explanations of why people actually have to suffer because yacht construction stimulates GDP are inherently suspect.
The report offers two main solutions to the retirement crisis: expanding and strengthening Social Security—“the most successful government program in our nation’s history”
Social Security has each generation depend on the next generation paying for its retirement. That’s kind of what happened historically, when kids took care of aging parents. Problem is that everyone else’s kids pay for your retirement, which means that your incentive to do the work of raising kids goes away; Social Security puts the load on people who have kids to turn them into the next generation of productive workers. It’s great if you never raise kids, but it’s a pretty raw deal if you do raise kids.
It also deals poorly with scenarios where the population pyramid inverts – like, birth rates fall off and such. Then suddenly instead of lots of kids supporting a few older people’s retirement, you have a lot of retirees expecting a few younger people to pay for their retirement.
I’d kinda favor 401(k)s or something more like that; that has each generation fund its own retirement, rather than relying on the next. That way, the payments in are proportional to the size of the population cohort, rather than proportional to the size of some other population cohort (like, the next generation).
SS is insurance you cannot outlive. 401K’s only work for the middle class and up that are able to out save living and medical costs. They are not the same thing and do not work as a replacement.
I’d kinda favor 401(k)s or something more like that
I’d rather not have to rely on market gambling to survive in my old age. Many people probably agreed with you until about 2008, when a LOT of retirees lost most of their retirement money during the recession and a lot of really old people went back to work. It was pretty bad, and I’ll never forget it.
Not that it matters. I can barely afford to live week to week now, let alone save money for retirement. I’ll probably just die, I guess. 🤷♀️
Problem is that everyone else’s kids pay for your retirement, which means that your incentive to do the work of raising kids goes away; Social Security puts the load on people who have kids to turn them into the next generation of productive workers. It’s great if you never raise kids, but it’s a pretty raw deal if you do raise kids.
I think it more closely follows social insurance than simply asking for a handout from everyone else’s kids. Afterall, you are paying into it until you are eligible, and when you are eligible, a person just one year younger than you is supporting you. Saying that it’s just “kids” paying into it makes it seem like we all stop paying into Social Security when we turn 25. I agree that the onus falls to the next generation in so much that it is their burden to pay into, but making it seem like we are forcing them into baby farms to push out kids to pay for our retirement is a bit dramatic. The population would have to take a pretty drastic nosedive over one generation to cause the system to collapse for the current retired generation, and the population numbers of the US don’t support that line of logic.
The biggest issue that we are running into with Social Security is the Wage Base Limit that stops the payment of Social Security tax after you are taxed a certain amount. It adjusts for inflation each year, which is great, but it doesn’t adjust for the disparity in wealth. Sure, the average person makes a certain amount per year, but that average doesn’t mean anything anymore when it’s the smallest percentage of earners in America. There are too many that don’t pay up to the cap due to their low wage, and too many that make more than the cap and don’t pay any more, and so we are left with a shrinking bank of fund as the wealth disparity increases each year. If we want to fix Social Security, we don’t need to set up “generation funds”, we need to abolish the Wage Base Limit and force everyone to pay in the 6.8% they owe, instead of just relying on the bottom 60% of Americans to do what they can.
As far as 401(k) goes, those are dependant on a volatile market, and often struggle to meet inflation, making them just slightly better than hiding your money in a mattress, but if you hide it in your mattress you don’t have to pay a fee if there is a medical emergency you needs the funds for. 401(k) is great for people with true disposable income in the excess of thousands a month, but there aren’t enough of those people around anymore, and they aren’t the ones that will rely on Social Security, anyway.
I think it more closely follows social insurance than simply asking for a handout from everyone else’s kids. Afterall, you are paying into it until you are eligible, and when you are eligible, a person just one year younger than you is supporting you. Saying that it’s just “kids” paying into it makes it seem like we all stop paying into Social Security when we turn 25. I
I think more importantly, it suggests having children is necessary. And it is not. I say that as a loving parent.
It doesn’t require having children, but working population growth in general. Some of that is people having children, some is immigration, some of that is increasing workers by raising retirement age
Endless population growth is both unnecessary and harmful to the environment. That’s one of the reasons we only had one child. One child replaces two of us.
That’s not the topic of discussion. Funding of social security is designed around increasing working population, regardless of whether that’s desirable in other ways
While I also think the wage cap should be lifted, it won’t have as big an effect as you expect. Remember ss is somewhat progressive (higher income get less percentage return), ss benefits on the high end are subject to income tax, and that benefits are also capped to match the wage cap. High earners are putting in more for less getting back, at least to some extent
If you raise the wage cap, there’s an argument the benefits should increase for higher earners as well. Remember this is not welfare, it’s meant to be a social insurance program, which has implications
Social Security has each generation depend on the next generation paying for its retirement.
This is a true statement but misleading.
Social Security deductions from worker’s paychecks just go into the general government coffers, not specific savings for Social Security recipients. The government spends this regularly, and separately takes part of the money out of the general coffers and pays today’s Social Security recipients. For decades the government has spent the Social Security surplus on non-Social Security stuff. If it hadn’t, there would be plenty of money in the Social Security “savings account” without having to reduce benefits to future Social Security recipients.
Al Gore was going to set this up in the year 2000. Instead Florida couldn’t count votes cast properly and we had President George W. Bush.
I appreciate seeing this information but lines like this will dissuade non believers. “while 1 in people are fighting to survive on less than $15,000 annually.”
The editor or whomever submitted the article missed it during revisions.
This is exactly why state pensions are the norm in Europe, and I think many other places around the world.
Here in Portugal, your taxes accumulate pension credit similar to social security in the US, but when you retire you receive around 80% of your highest salary over your career, instead of a few hundred dollars or whatever from American social security.
I mean, social security will help you get enough medicine as long as only take 1/4 of the prescribed amount and there’s lots of fancy cat food out there…you can eat like a rich person’s pet for only $2-$3 a can!
On the bright side, between the too-poor-to-retire elderly and kids, we think we can fill all the open jobs created by covid deaths without having to let any immigrants in.
On an unrelated note, we’re on track to invent the “trillionaire” within the next decade. If that’s not innovation, I don’t know what is.
I’m Only 30 but I have no plans for retirement savings. How can I when half my paycheck goes to a roof over my head and a quarter goes to taxes and another quarter goes to food, clothes, and other necessities?
By the time I’m fifty it will probably be 60% to a roof, 30% to taxes and 10% to food and clothes.
You may not have much money, but you still have a huge amount of time you can invest. You only need to figure out a few percent of your income, much smaller than taxes, rent, or food, then let time do the work for you. Use the power of compounding returns
It’s time for a revolution because it looks like most of the population’s in the same boat. The war between the super rich and everyone else has been fought and we lost. They’re leaving us with two options: revolution or die starving on the streets.
Regular Americans are struggling to survive in a nightmare dystopia. News and weather at 11.
Not surprising that a lot of boomers got left behind. The American system is designed to grind everyone to zero with overwhelming debt to keep everyone working at nonliving wages.
Making sure income can’t match debts is a form of wage slavery. Company towns with mines back in the day. This current “economy” is that bullshit on steroids.
Marketing and the media are also to blame. We’re constantly bombarded by advertising and people telling us that what we have isn’t enough. We’re so status conscious and aware if how much is out there that they have us chasing dreams straight into massive debt.
I’m in my 50s with no savings. It isn’t lifestyle or marketing driven though. I just have had very few years where we had any extra. Also three teenagers and the price of food is killing me, cost of cars too. It’s just surviving that’s gutting me.
A society in which the poor can’t afford 3 kids and retirement savings is a failed society. I’m not one of those birth rates people but you absolutely should be able to afford to have the replacement rate number of children
It’s still a bad argument. You should be able to have kids and not starve. The fact that people choose no kids and still starve shows how fucked things are. We are all fighting the same fight, though our positions may be different.
Companies spend millions of dollars to influence your behavior and have mountains of studies to prove that it works, but it’s your fault if you’re swayed by advertising.
Were you putting in a nickel per paycheck? The market has killed it over the last 30 years, even with a relatively low contribution, if you contributed consistently for 30 years you should have way more than that
Most people here decided they’re better than those with less money than them and it’s fine to blame those less fortunate for “thier mistakes”. It’s pretty depressing.
The only person I see being blamed obviously fucked up their 401k, or is complaining that they added a couple hundred dollars over the course of decades and don’t have a ton of money.
It has nothing to do with them being poor, but with them fucking up and then trying to claim they are the victim.
I think you just figured out why we’re doomed. Don’t assume I have spent my life doing this, I’ve tried to stay out of poverty for most of it. Now that I can, I do. Those who have good pay right after college spend their lives paying in.
The trick is to set aside something, anything, no matter how small, to start. Then whenever you get a raise, set aside part of that so you will never have seen it or spent it.
Your most powerful weapon is not how much you can set aside now, but how early you can start. Investments over the length of your career can turn a little into a lot. Get started now, no matter how small, and use time as your greatest weapon.
Living expenses > income. It’s not complicated math. You can’t save when you don’t have enough to live and already putting off things like car repairs, health care, hair cuts, buying clothes…
I’ve always made decent money, so admittedly it has been easy for me, but my first job, on the advice of our security officer (of all people lol) I immediately put 10% of my income into my 401k. So I went from making no money to 90% of what I had negotiated and learned to live on that. Every raise I got, I increased the amount so my raise was smaller, but my savings larger.
Either you weren’t contributing for decades, or you literally only contributed $10-$20/mo for ~30 years. If your job provides a 401k option, with tax write-offs and everything else you should have been contributing a lot more to maximize its future utility. This is assuming your employer wasn’t even matching.
Either you aren’t telling us the full details, or you haven’t fully been contributing for decades.
I don’t even know what that is, man. I worked, I didn’t play with stocks.
4th option confirmed. Everyone that has a 401k in some capacity, and isn’t sure how they work, please go check your 401k elections right now. It isn’t really “playing stocks” but just putting it somewhere that isn’t cash equivalent. Otherwise your money is depreciating in value from inflation. This is your chance to learn from WarmSoda’s mistake and hopefully will keep you from making the same mistake!
Figured. A lot of people just straight believe everything they are told and remain ignorant to how things work. If your job offers any type of benefits, fucking read all of the documentation and if you don’t understand something, ASK QUESTIONS! So many people I work with are oblivious to some benefits available to them and when I try to explain, “hey this one thing is basically free money”, they shrug it off. Whatever, your loss.
Look stranger, no one is saying you’re wrong to call out the problems with the economy. Everyone is on your side there.
They’re saying that you personally made a mistake, and that’s one that other people can and should avoid for themselves. If after 45 years you REALLY TRULY only have like $2k USD in your retirement account then you messed up somewhere. That’s almost impossible the way compounding interest works.
Many 401ks are not actually invested by default, it’s up to the account holder to assign those funds themselves. Guessing that’s what happened to you. Unfortunately this isn’t widely known for some reason and companies don’t bother to educate employees about it.
Right right, being called a fucking idiot, accused that I’m lying, absolutely goes along with what you’re saying. I too enjoy blaming the victim. Everyone’s on someone’s side alright.
Someone that’s replying multiple times to different conversations in the same thread with name-calling and accusations would be.
I hope your life gets better.
Nope. Company matching and everything.
You can doubt all you want, but I’m the one sitting here without anything to show for being in the workforce my whole life.
You seem to be in complete disbelief that other people have a hard time, questioning anyone that relays 401k does almost nothing for them. It must be nice for you to be in a better position, a huge portion of the population is not though.
If you put “money in for decades” it would be almost impossible to only have enough for “two months rent” at this point. Either you’re not telling the whole story or you were literally robbed.
This still doesn’t explain the “only 2 months rent” part, but I’ve had friends who thought they were investing in a 401k but were seeing virtually no growth. Upon looking into it, they hadn’t allocated funds but were required to do so, so the money was sitting in a cash reserve pile earning the typical .02% interest.
So, this could mean losing out on 30 years of gains if it were to go on long enough. But 30 years of deposits should still have been way more than 2 months rent so dunno what to say about that part
WITH a company match? Did you have it invested in Enron or something? Even if you have zero investment gain, a company match just plain doubles your money.
I put 4%, matched by my employer, for 5 years and have 40k in there. Have you sorted out where the money all went? It’s wild that you can contribute and have nothing.
What a strangely hostile response to a perfectly reasonable question. If you don’t want people to comment on what you say, you really shouldn’t participate.
Is them saying 45 years of working not enough? If they would have thought their job mattered they would have said that. You guys are just horny to say they did something wrong and they are cutting you off.
It is interesting that you assume that people are looking to break this person down, it really comes off as projection. In fact, we are curious about the type of job he had because that changes things. If he was a government employee, then retirement is required. If he was in public sector, then what you get will depend on employer. If you’re a contractor, then it is fully up to you to put money into it. We have no idea who this person is or what their experiences are like. Assuming the worst from us says more about you than anything.
You’re projecting. I actually don’t care about the person or their story, but noticed someone have a little temper tantrum when someone asked a question in response.
Participate in posting my personal work history which as zero to do with this thread and would do nothing to add to it except to invade my privacy? Ok Chief.
It’s called having a conversation…… someone says something. Someone else asks a question to stoke the conversation….
And like. Context as well. yes it is a diff conversation if they worked 45 years min wage vs 45 years as a mega corp ceo lol. It def is a valid question for someone to understand the conversation that’s happening.
No ones being hostile by trying to get context to continue the conversation that was totally friendly until they got butthurt for some weird reason.
Clearly the guy is ashamed of his job for the majority of his life and the reason he didn’t want to share it is probably the reason they let themselves get stuck there for decades.
It’s a shame more people don’t accept help from others even in the form of discussion
|Clearly the guy is ashamed of his job for the majority of his life and the reason he didn’t want to share it is probably the reason they let themselves get stuck there for decades.
I was never stuck at any job and when I had my Heart Attack I was doing quite well.
Lmao.
What help>? To be criticized for not owning Apple stock?
Get over your disappointment of not being able to pry into my life,
You’ve hit it on the head and all the naysayers here are just being oppositional. This is sort of like that fake Libertarian rage you see periodically.
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