Just normal American Utopia...

[Archy1221]

14 minutes ago, BigRedBuster said:

28 minutes ago, Archy1221 said:

Someone making $40,000 wouldn't be putting anything into an investment account.  They would be living paycheck to paycheck so SS basically forces them to have some form of safety net at the end of their work life.

Don’t those people pay 6.2% portion of their FICA tax towards SS? And employers an additional 6.2%? Honestly I haven’t looked if it’s graduated based on income or not but I didn’t think so.  

[BigRedBuster]

7 minutes ago, Archy1221 said:

Don’t those people pay 6.2% portion of their FICA tax towards SS? And employers an additional 6.2%? Honestly I haven’t looked if it’s graduated based on income or not but I didn’t think so.  

Yes.  And if that weren't the case, typically, people making $40,000 aren't going to be putting 12.5% of their income (or even 6.2%) into a retirement account.

[Archy1221]

18 minutes ago, BigRedBuster said:

 

This is a safety net.  You bring up the 11% returns over the last 40 years.  However, what happens to the people who have to retire say in 2008 or other times when the market crashes and their retirement investment account is cut in half or worse?  I know people like that even with SS.  The amount they got from SS during that time was a big help to them.

I understand it’s supposed to be a social safety net but quite frankly it’s a crappy one.   I see too many people too many days who live solely on social security and their standard of living is basically just above homeless.   Not much a living or safety net if you ask me.  I’d like to change that!   Let’s raise the max income level on the SS tax, let’s allow SOME (I wish all) to be invested privately.  
 

As to the people close to retirement age and a market crash like 2008, I would ask why those people currently getting SS at that time were invested so heavily in equities and not money market/income driven accounts?  That can be worked on through education and asset allocation.  

[Archy1221]

1 minute ago, BigRedBuster said:

Yes.  And if that weren't the case, typically, people making $40,000 aren't going to be putting 12.5% of their income (or even 6.2%) into a retirement account.

Who is saying they are?   They are currently putting 6.2% plus the employer 6.2%= 12.4% that would go towards an investment account INSTEAD OF SS account.   You are stating something I didn’t state.   I asked which account would be better off after 40 years!!!!!

[BigRedBuster]

Just now, Archy1221 said:

Who is saying they are?   They are currently putting 6.2% plus the employer 6.2%= 12.4% that would go towards an investment account INSTEAD OF SS account.   You are stating something I didn’t state.   I asked which account would be better off after 40 years!!!!!

You are stating that if SS wasn't there, these people could invest that money for a better return.  I'm saying they wouldn't be doing that.

[Archy1221]

Just now, BigRedBuster said:

You are stating that if SS wasn't there, these people could invest that money for a better return.  I'm saying they wouldn't be doing that.

I’m saying that it’s not a choice similar to SS tax not being a choice.  

[Guy Chamberlin]

42 minutes ago, Archy1221 said:

 

 

 If you were an investment advisor for someone making $40,000 a year, would you advise them to put the $4,960 a year in SS portion of FICA tax into the SS system or a private investment account for the next 40 years?  Which way would this rich person be better off? 
 

 

 

 

As pointed out, the person making $40,000 a year would not have an investment advisor, nor would they be putting the $4,960 into any investment. They would be spending it. Americans are among the worst savers in the world. If you see people living strictly off Social Security just above the homeless level, consider that Social Security was indeed the safety net that prevented the homelessness. Most people, of course, use it to supplement modest retirements and live with a tick more dignity. Wealthy people probably shouldn't complain that they could have been marginally wealthier if they had been able to invest their own social security funds. 

 

I'm not going to argue that SS isn't a nanny state move. It absolutely is. But the smarter rich folk realize that the safety net prevents calamitous poverty and returns that same money back into the economy with each payout. In the big picture, it's good for business. 

 

Or you can dream of that magical day when the free market can get ahold of those Social Security savings and put them into can't miss money generators like the bundled derivatives that were such a hit back in 2007. 

[deedsker]

58 minutes ago, Archy1221 said:

Yes as I told you, to give a less rosy input number than the tweeter did to appease the masses here and also give a slightly more realistic investment return number (still not the 11% last forty year historical figure). 

Once again, that isn't speaking to the theory laid out in the original post. If I got 50% returns a year I would be a billionaire and if I had wheels I would be a bike.

58 minutes ago, Archy1221 said:

At a $160,000 cap, each year he/she would have $19,840 put in (12.4%) each year  times 40 years (assumption being the threshold never changes above $160,000 for 40 years which is unrealistic) equals $793,600 which is  $193,600 above the number you are disputing.  So no, not 60.5 years if my math serves me correctly.  And please let me know if it’s wrong and I will gladly apologize and concede.  But if my math is correct, wouldn’t it seem odd that you are railing on a tweet for being incorrect by using incorrect data/math yourself?  

 Back to my #2 that you changed and BRB showed your flaw on. If you want "on my behalf" as employer contribution my original analysis is good if you want his money only the 60 years stands. I stated that out individually for you. Pick which awesome scenario this guy should be in.

58 minutes ago, Archy1221 said:

 If you were an investment advisor for someone making $40,000 a year, would you advise them to put the $4,960 a year in SS portion of FICA tax into the SS system or a private investment account for the next 40 years?  Which way would this rich person be better off? 

Depends on who I am talking to. My brother, yes. Warren Buffet, no. Is the program good for the general public, yes. Are rich people trying to dismantle it by making up rules to make the system hard, yes.

[funhusker]

17 minutes ago, BigRedBuster said:

You are stating that if SS wasn't there, these people could invest that money for a better return.  I'm saying they wouldn't be doing that.

My wife and I aren't living a lavish lifestyle.  We aren't struggling, but house, cars, and kids cost a lot.  We both make well over $40,000.  Even if SS wasn't a monthly deduction, that difference would find a use somewhere besides investment portfolios.  We'd pay cash for braces instead of on credit, among other similar expenses.  We are going to have 3 drivers in the next 3-4 years: insurance is going to be a b***h!

[deedsker]

21 minutes ago, BigRedBuster said:

You are stating that if SS wasn't there, these people could invest that money for a better return.  I'm saying they wouldn't be doing that.

And that is why the program was needed in the first place. It is a service to the many at the expense of many. If allowed to function properly without interference and additional made up rules/problems, it does serve it purpose well enough.

[Archy1221]

5 minutes ago, Guy Chamberlin said:

 

As pointed out, the person making $40,000 a year would not have an investment advisor, nor would they be putting the $4,960 into any investment. They would be spending it.

No, they actually wouldn’t because it would be automatically deducted from pay just like FICA taxes are, but instead of the SS component of FICA on my scenario.  I’m not taking about in addition to.  

 

6 minutes ago, Guy Chamberlin said:

Wealthy people probably shouldn't complain that they could have been marginally wealthier if they had been able to invest their own social security funds. 

Non wealthy people would have had more wealth to live off in the retirement years if they had been able to invest their own social security funds.   

[Archy1221]

7 minutes ago, deedsker said:

1 hour ago, Archy1221 said:

 

Once again, that isn't speaking to the theory laid out in the original post. If I got 50% returns a year I would be a billionaire and if I had wheels I would be a bike.

Not necessarily as you could be a car.   Cool snark though.  

 

8 minutes ago, deedsker said:

1 hour ago, Archy1221 said:

 Back to my #2 that you changed and BRB showed your flaw on. If you want "on my behalf" as employer contribution my original analysis is good if you want his money only the 60 years stands. I stated that out individually for you. Pick which awesome scenario this guy should be in.

There is no such thing as “his money only”.  That’s not the way it works.   It’s his/her money plus the employer portion.   So I pick the scenario that includes ALL the SS tax inputs not just half

 

 

[Guy Chamberlin]

1 minute ago, Archy1221 said:

No, they actually wouldn’t because it would be automatically deducted from pay just like FICA taxes are, but instead of the SS component of FICA on my scenario.  I’m not taking about in addition to.  

 

Non wealthy people would have had more wealth to live off in the retirement years if they had been able to invest their own social security funds.   

 

Presuming that the sudden entry of trillions of dollars into a volatile marketplace with plenty of bad actors and no guarantees would result in more wealth for everyone is a tad naive and definitely unprovable. Hence, risky. 

 

There are plenty of people like me who pick and choose our investments, but also take comfort that a Social Security cushion is waiting. 

[Archy1221]

11 minutes ago, funhusker said:

My wife and I aren't living a lavish lifestyle.  We aren't struggling, but house, cars, and kids cost a lot.  We both make well over $40,000.  Even if SS wasn't a monthly deduction, that difference would find a use somewhere besides investment portfolios.  We'd pay cash for braces instead of on credit, among other similar expenses.  We are going to have 3 drivers in the next 3-4 years: insurance is going to be a b***h!

But I’m not and have never said get rid of SS and not make an investment account a monthly deduction.  Far from it, so that money would not be a choice to spend similar to the current SS system.   I understand that all of SS would never go private, as that’s a pipe dream of mine for a more financially secure senior population, but I believe there is merit for a small portion of it going private.  
 

And yes it’s tough to make ends meet and having multiple teenage drivers does suck money wise, but it’s awesome time wise.  
 

As far as braces goes, Does your employee have an HSA option?   That’s what we are using to pay for molar removal and some other dentistry work in September. 

[Guy Chamberlin]

12 minutes ago, Archy1221 said:

No, they actually wouldn’t because it would be automatically deducted from pay just like FICA taxes are, but instead of the SS component of FICA on my scenario.  I’m not taking about in addition to.  

 

 

So you still wouldn't let me get to my own hard-earned money and spend it as I see fit?