I guess it depends where you live in the country. My West Coast real estate market has huge appreciation attached to housing; giving most retired people I know an enormous amount of equity that does not compare to their SS benefits.
Like my nextdoor neighbor. He and his wife bring in $4k monthly from SS, however, their paid off home is worth $1 million.
GurProfessional9534 on
I’ve voted a straight democratic ticket ever since I became voting age.
But I think Social Security is a bad deal on average.
SS gets 12.4% of your gross income annually. Half of that comes from you, half from your employer. (Let’s ignore the self-employed and people maxing the contribution limit to keep it simple.)
The average individual gross income is $62k. So that is about $7700/yr contributed. If someone contributed that much to the S&P 500 annually with its average annual growth of 11%, starting at the age of 20, that person would retire at 65 with $8.4 million just from those investments alone.
Social security is taking money that otherwise could be devoted to long-term investment, and putting it in an extremely low-growth vehicle only to pay you a small pittance of what it could have been. It just doesn’t make sense for the average person.
We should be investing that money instead. There’s no 45-yr span where the money didn’t grow substantially, even if you start the clock at 1929.
sowhat4 on
It’s ‘insurance’. You get vested in SS either by working 10 years or by working 6 ‘quarters’ three years before death and your survivors get full benefits. You get sick and have to retire early – you get Medicare and your full retirement benefits.
I know that I would have spent all the money I had to pay in FICA taxes on my kids ***if*** it had been left to me to fund my own retirement. (single mom w/ no child support), so the system we have now is better for us. The only thing we need to do is take FICA percentages out of ***everyone’s*** yearly income. As it is now, all the income past $176K is FICA tax free. If yearly income to say $500,000 was subject to FICA tax, we wouldn’t be experiencing a shortfall.
I took SS early at age 62 as I was sure it would be means tested like it is in Canada as that’s only ‘fair’. (HA!) I wanted to get back what I’d put in at least. So far, I’ve collected about $500,000 in Social Security income and about $1,120,000 in a state pension. The pension has had no COLAs for the last 28 years. I could live on both combined, but not very well if I had a house or car payment to make. Inflation is going to make both of these income sources less and less ‘valuable’ over time, by (political) design if I had to guess.
Uncle_Bill on
Social Security started as a program for those few who outlived their savings and lived longer than the average life expectancy. Now it is the way the majority expect to live after retirement for a decades longer.
There is a moral hazard in telling people the government will take care of you in old age. They believe you, and act accordingly.
Baller-Mcfly on
That is if we are still going to be able to receive it. For years, the account has been raided. Inflation is gobbling any decent income from it. Social security was a scam from the start, and it needs to be ended. It was great for the first generation who received it because they basically took the money from the younger generations and that’s what kept it going. But like all government programs, it was severely reliant on factors that couldn’t be planned out and it’s a dying program. Let me save my money at thos point, I’ll do better with it than the government who has used it to fund isreals wars against its neighbors.
Kurt_Knispel503 on
End social security. End the ponzi scheme. I want to invest my money as i see fit. The roi is horrible. If people don’t want to save and invest for their own retirement that is their problem, not mine.
6 Comments
I guess it depends where you live in the country. My West Coast real estate market has huge appreciation attached to housing; giving most retired people I know an enormous amount of equity that does not compare to their SS benefits.
Like my nextdoor neighbor. He and his wife bring in $4k monthly from SS, however, their paid off home is worth $1 million.
I’ve voted a straight democratic ticket ever since I became voting age.
But I think Social Security is a bad deal on average.
SS gets 12.4% of your gross income annually. Half of that comes from you, half from your employer. (Let’s ignore the self-employed and people maxing the contribution limit to keep it simple.)
The average individual gross income is $62k. So that is about $7700/yr contributed. If someone contributed that much to the S&P 500 annually with its average annual growth of 11%, starting at the age of 20, that person would retire at 65 with $8.4 million just from those investments alone.
Social security is taking money that otherwise could be devoted to long-term investment, and putting it in an extremely low-growth vehicle only to pay you a small pittance of what it could have been. It just doesn’t make sense for the average person.
We should be investing that money instead. There’s no 45-yr span where the money didn’t grow substantially, even if you start the clock at 1929.
It’s ‘insurance’. You get vested in SS either by working 10 years or by working 6 ‘quarters’ three years before death and your survivors get full benefits. You get sick and have to retire early – you get Medicare and your full retirement benefits.
I know that I would have spent all the money I had to pay in FICA taxes on my kids ***if*** it had been left to me to fund my own retirement. (single mom w/ no child support), so the system we have now is better for us. The only thing we need to do is take FICA percentages out of ***everyone’s*** yearly income. As it is now, all the income past $176K is FICA tax free. If yearly income to say $500,000 was subject to FICA tax, we wouldn’t be experiencing a shortfall.
I took SS early at age 62 as I was sure it would be means tested like it is in Canada as that’s only ‘fair’. (HA!) I wanted to get back what I’d put in at least. So far, I’ve collected about $500,000 in Social Security income and about $1,120,000 in a state pension. The pension has had no COLAs for the last 28 years. I could live on both combined, but not very well if I had a house or car payment to make. Inflation is going to make both of these income sources less and less ‘valuable’ over time, by (political) design if I had to guess.
Social Security started as a program for those few who outlived their savings and lived longer than the average life expectancy. Now it is the way the majority expect to live after retirement for a decades longer.
There is a moral hazard in telling people the government will take care of you in old age. They believe you, and act accordingly.
That is if we are still going to be able to receive it. For years, the account has been raided. Inflation is gobbling any decent income from it. Social security was a scam from the start, and it needs to be ended. It was great for the first generation who received it because they basically took the money from the younger generations and that’s what kept it going. But like all government programs, it was severely reliant on factors that couldn’t be planned out and it’s a dying program. Let me save my money at thos point, I’ll do better with it than the government who has used it to fund isreals wars against its neighbors.
End social security. End the ponzi scheme. I want to invest my money as i see fit. The roi is horrible. If people don’t want to save and invest for their own retirement that is their problem, not mine.