Saving Social Security with Personal Retirement Accounts

[mrgoodvibrations]

personal accounts will just be scammed and ripped off just like the S/S trust fund had been in the Reagan administration

[pghrunner74]

I would opt out of Social Security in a heartbeat if I could take my payroll taxes and invest them into my 401(k).

[huckfinn22]

Instead of exempting all earned income over $100,000 for Social Security or Medicare tax, try taxing all earned income. Sure, Social Security caps payments to recipients, hence the $100,000 cap, but with half of all income in the hands of the rich today, who owe their wealth to investments, the least they can do is expose more of their investment income to taxes that benefit those consumers who made their profits possible. Without them, they would have earned nothing

[medlock01]

@huckfinn22

Typical statist drivel.

So you support ponzi schemes and reject liberty huh? What a sheep.

So you want people to pay MORE money NOW for less benefits later? Gee great where do we sign up?

How about I save for my retirement and everyone else do the same. I know that freedom thing scares you but the MATH and EVIDENCE shows the current system is crashing.

[huckfinn22]

@medlock01 I love how republicans just keep repeating the same lies over and over in lockstep. No Ponzi scheme ever lasted 77 years, by definition that would be imposssible. Before Social Security, half of all seniors lived in dire poverty. Without it today, more than 40% of seniors would live in poverty. Even today, we pay less than 21% of federal revenue to sustain it, about the same as on defense or Medicare/Medicaie. This despite the lowest percentage of GDP taxed in 100 years.

[medlock01]

@huckfinn22

I love how leftists ignore the successes of privatized accounts in favor of mother hen government leading everyone around by the nose their whole life. Your "pre-SS seniors dying in the gutter" is utter BS. Nice try.

[huckfinn22]

@medlock01 Poverty statistics are relatively easy to find online from any number of legitimate websites, both conservative and progressive. You will find none that dispute my figures. Try it and see.

[huckfinn22]

This is complete Heritage Foundation crap! It assumes that all of the Republican policies implemented since Reagan will continue. In 1972, more than 80% of all men worked. Today it's less than 60%. Today only 50% of all income is taxed for SS and Medicare, in 1972 80% was taxed. That's because income over $106,000 is exempt and half of all income is in the hands of the top 20% now. No Republican has voted to restore sane tax policies on the rich or corps since 1990, hence the debt.

[centayne]

While I don't agree with Social Security as a program, and I believe that it needs to be reformed it is different than a ponzi scheme, as in a ponzi scheme the earlier adopters are paid based on the number of individuals that join under them. Social security pays a specific amount out based on what you have paid in. Let's stop the ponzi scheme analogy as it doesn't truly apply, and makes creating a rational case for reform difficult.

[orangedac]

SS is a ponzi scheme

[TheTruthHurtsAlot3]

Take everything away from all Americans, get rid of Social Security, Medicare, Medicaid, Veteran's benefits and unemployment benefits. Raise taxes on the middle class and working class and lower taxes for the very wealthy. Now if you believe everything I just said you are a teabagging cocksucker who should drop dead.

[tbwil11]

@TheTruthHurtsAlot3 such intelligence from you, wow, a typing baboon. Can you do tricks other than throw bullshit?

[joetheeconomist]

@HexTest - visit the site fixssnow(dot)org. We are trying to find a source to answer questions about privatization. Be the source. I hope that it does work. The numbers don't seem to add-up though...

[HexTest]

Indeed, personal accounts are a massive improvement over what we have now.

To get an idea of how massive we're talking about - look up 401(k) savings calculator on Bloomberg.

Already I'm wishing I could opt out and put it all in an IRA instead of the ponzi scheme Obama wants to give more power to.

[HexTest]

@deficithawker - If I put a gun to your head and take whatever is in your account and buy whatever I deem is necessary for you, is that freedom?

And how is the Jefferson quote a strawman?

Deregulation did nothing to cause the economic collapse, except in areas where it allowed government to do more than it was supposed to. Look up Peter Schiff.

[codediporpal]

Personal retirement accounts, with a supposed better return, imply interest. This interest is paid by younger generations through mortgages, etc. It's still a transfer payment.

Making it private just lets Wall Street take their typical 30% cut though their deceptive practices, as opposed to SS "cut" which is negligible.

[joetheeconomist]

You can't fix Social Secuirty by making the system bigger. CATO wants to add ownership to the package. That makes it bigger. They pay for existing liabilities out of the general fund - which is a tax increase on future generations. You can't fix a failed government program by making it bigger. FixSSNow.Org.

[HexTest]

@joetheeconomist - How is scrapping a failed government program in favor of one that is tried and tested making that program "bigger?"

[joetheeconomist]

@HexTest , Ownership is a new benefit and one that is very expensive. People get benefits earlier in life. Tried and tested where? Where was it tried when there is about 1 trillion in unfunded liabilities. Where was it tried where they have medicare? Where was it tried that has an obliation to make every govt program tilted to income redistribution. Here is something that has been tried and tested 401Ks. If privatization was the answer why haven't 401K already solved the problem?

[HexTest]

@joetheeconomist - I never said I was against 401K's.

In fact, I am largely in favor of using IRAs as well as 401K's as an alternative to Social Security.

If you do a search on IRA calculator, there is a cool feature on Bloomberg that shows how they would work.

[joetheeconomist]

@HexTest I never said that you were for or against them. They pretty much disprove your original statement that privatization has been tried and tested. 401Ks have been tried and tested, and now the Baby Boomers have reached retirement still without a way to retire. So we are going to double down by making what hasn't worked required by law. Now you want to fix Social Security by making it bigger. You are adding to the benefits. What American can turn down more mommy-government.

[HexTest]

@joetheeconomist - Not everyone works for a company that offers 401Ks. Hence the reason I also mentioned IRAs as well.

As anyone who has a 401K or an IRA if it gives a greater return than Social Security. As an example, see next comment. Using an IRA calculator on Bloomberg I've gotten a pretty good idea of what my IRA will give me by the time I retire at 65. It's on tiny url slash agoraIRA.

[HexTest]

@joetheeconomist - I opened up a Roth IRA at 25 and put $10,000 in it to start. Since that time I have put in $8,000/year in it (the same amount I pay in SS taxes). My growth rate has been 12% so far, but let's say it grows below average at 8% a year.

By the time I'm 65 I will have over $2,250,000 before it gets taxed.

The average stock growth rate over the last 50 years has been about 11%. I've done slightly better the last two years at 12%.

This will mean $7,000,000 when I retire.

[joetheeconomist]

@HexTest , At 12%, you would be a great investor. w3w crestmontresearch(DOT)com/pdfs­/ Stock-Matrix-Tax-Exempt-Nomina­l4-11x17.pdf . Over the past 50 years, the S&P has returned 9% on the highside, and that is nominal not real returns. Real returns are closer 5. But you aren't the last 50 years. To get to 9 you had to start investing before 1983. For anyone under 50, stocks have returns about 7%. Anyone under 40, nominal returns are about 5. You ought to be very happy with 12%.

[HexTest]

@joetheeconomist - I guess I should be, but I don't think I'm doing anything unusual. Since 1932 (just after the great depression) the Dow Jones Industrial Average has been just over 11%. The same is true when looking at the last 25 calender years.

Anyone who stuck just with a precious metals IRA (that's part of what mine consists of due to the "Quantitative Easing" that happens to be in play right now) and no stocks can still expect a 5% return at a minimum.

[HexTest]

@joetheeconomist - I'm not saying private accounts are perfect, but small annual transitions towards such a thing do seem like they would give a much better return than what those same Social Security tax dollars would do. Someone making $30,000 a year and putting 15% ($4,500) into a primarily bullion-based IRA (the same amount in taxes they and their employer would pay into SS) could expect far more than what they would get out of SS.

Silver right now is better than gold in return rate.

[joetheeconomist]

@HexTest, Someone making 30,000 pays about $4,000 a year in FICA, so they are down to 26,000. Housing and healthcare probably 20,000K. Utilities, clothes and food, $6,000. Student loans... Where is the $4,000 a year coming from. The system is broken. We aren't going to fix it by making it bigger. We need to fix the structural problems it can't allocate risk within beneficiaries. Only the government could create a retirement tool with no sensitivity to risk appetite. 

[HexTest]

@joetheeconomist - I don't know how may times this need be repeated, but gradual privatization of Social Security isn't changing the size of anything but changing it's composition. It's actually DECREASING the size of SS in the context of how much the government manages.

Why not let people put some of that $4,000 into an IRA so they can attain a better return?

[joetheeconomist]

@HexTest You can say that the sky is purple as many times as you like and it doesn't make it so. You will make benefits larger. That is what ownership is. It isn't there now. It will be there in the future of privatization. I don't disagree that letting people invest their own money isn't a good thing. It is a more expensive thing. And my question is who is going to pay for it. You are giving people benefits earlier in life.

[americaretoday]

Those of you who use "i'm entitled" as your way of dancing around the obligations created post 1983 with the Social Security taxing scheme. Clem owns an engine repair shop and has undressed the issue; so bring your Kleenex, we're peeling the onion that is the social security issue; here's the link: s o b report dot com

[poindexterwitkowsky]

~~Stand up 4 your RIGHTS Americans. + The REPUBLICANS have been FOOLING YOU for the last 30 yrs. SOCIAL SECURITY*, (SS) , is NOT entitlement! SS HAS A $2.6 TRILLION SURPLUS. SS CAN pay every claim at least until 2030. SS DOES NOT increase the federal budget by one cent! Tell the REPUBLICAN GANGSTERS& THEIR WALLSTREET BANDIT FRIENDS that you will FIGHT any PRIVATIZATION*OF your SS pension. You will FIGHT ANY REDUCTION IN BENEFITS. YOU will FIGHT any change in AGE REQUIREMENT FOR SS BENEFITS!

[SoA990]

I'm 19 and you want me to give all my money to Wall Street so they can gamble with it like a Las Vegas casino, Hell no! I'd rather spend my retirement money on blackjack because there you actually have some control of your winnings instead of relying on corrupt rich bankers and insiders to not take your money and put it in their pockets. Want to fix social security? Start taxing the rich 50-70% again including accounts in tax havens! We coddle the richest 1-2% at the expense of the public.

[wilmaohman]

Why isn't he explaining,how at the end of the physical year,any SS funds taken in but not paid out,is put into the general fund,with an IOU put into the SS fund. SS has a huge surplus, not in cash,but in IOUs, for the monies they have taken from the fund. Some politican/s,(whom or when, I don't have a clue)decided to pass a law stating, no actual funds may be left on the SS books at years end,but taken for other funds at Govt discretion,with an IOU left on the books.

[barker131776]

"At the tipping point...???"

I'm under the impression that Social Security actually took in less this year than it paid out this year; Social Security is ALREADY running a deficit.

Oh... and don't get me started on Medicare/Medicaid...

BILL

Harriman, NY

[dumpgrump]

yeah right watch the money go into the hands who caused our economic crash. the banksters,wall street,big corps.and our paid off politicians!!

[momtopiglet]

@dumpgrump Hey dufus, that's where the money is NOW.

[803brando]

cato institute!?!? privatize SS? when that happens get ready for another economic crash, similar to 2008

[sabwree]

@803brando

Wth are you talking about? Feel free to actually elaborate on your insane prediction.

[BRINK00]

OK - I get what you are trying to say and I don't yet agree or disagree with what you are saying. The problem that I run into with your video is that your claims aren't backed up by any sources. Your claim that the transition cost from pay-go to personal accounts is lower than the current projected costs is unfounded - please cite your source - if you have one - otherwise, if you have no sources, then you just wasted my time and gave me your opinion. Non-cited sources are no source at all.

[Ninjax2000]

Just one note: It's Chile (Chill-lay), not chili (chill-lee). One is a country in South America. The other is a food dish. Note the difference. :)

Other than that, I enjoyed the video, and I think we need to end this ponzi scheme that we call "Social Security".

[LibertarianRealist]

Social Security is a bad deal for white males. It's OK to say it, Dan! Your own chart shows that black females have LONGER life expectancies than white males. Whites on average also pay MORE in Social Security taxes throughout their lifetimes than blacks (who have higher rates of unemployment). Blacks are more likely to collect unemployment and other welfare benefits while paying a proportionately small share of the taxes. Please either be real about race or refrain from race-based appeals.

[a4finger]

Social Security is a Ponzi scheme that needs to end!

[chris3443]

End all taxation and let us pay for services we actually need and want.

[Leavon]

I'm all for private retirement accounts, just give me back the money I put into SS for the past thirty six years and I'll establish my own retirement fund.

[mayt7]

Who the hell wants to save this piece of crap? Allow people to opt out and put it on the road toward extinction. I don't want another government sanctioned lock box. Repeal the 16th while we are at it.

[MRKNIGHT]

Let me opt out and use my own money for my own use while Im still young enough to do something with it before hyper inflation.

[KenMacMillan]

@MRKNIGHT I agree. If they let me out, I'd let them keep the money already have in the system.

[vechorik]

Social Security is not solvent. New congressional estimates say the trust fund that supports Social Security disability will run out of money by 2017, leaving the program unable to pay full benefits, unless Congress acts. About two decades later, Social Security’s much larger retirement fund is projected to run dry as well. It's time to REFORM ALL GOVERNMENT ASSISTANT PROGRAMS NOW -- ELSE WE LOSE THEM! How about the first step to get millionaires off SS and Medicare? And I'm GOP!

[sweetpete420]

scrap it outright, and refund the private citizen.