re: Rand Paul wants you to be 70 before you can draw Social Security

quote:

---

With average life expectancy as it is, most people receive more in SS benefits than they've paid in over the course of their careers. This happens at a younger age for low income workers, those who start drawing on it at 62, and married couples.

So, yes in the first several years it is your contributions you are drawing from.

---

Is your concept of "investment" burying your savings in a chest in the backyard?

quote:

---

It isn't invested

---

Of course it is. If you invest in treasuries, your money is invested. That is the premise and structure of the SS program.

Above these posts I juxtaposed a private retirement account populated only with treasury instruments (for an average income household) vs identical SS contributions over a 45yr employment span. With identical payouts through retirement, the private fund on average would have a $40K principal remaining to pass on in inheritance, or conversely it would pay out full benefit equivalents until the retiree was 104yrs old. SS ROI stinks to high heaven!

Making it more painful, had that same average worker’s combined 12.4 % Social Security contributions been invested passively in the S&P 500 index for 45 years, then drawn down at the same $24,000/year benefit, he would still have roughly $4.8 million remaining at age 85 (avg age of death for SS retirees). Further, the account would never deplete under normal longevity assumptions.

quote:

---

most people receive more in SS benefits than they've paid in over the course of their careers

---

Your method of comparing "paid in" in nominal terms is nonsensical. But that is the comparison politicians make as well. It would be like an investment advisor turning $1K x 40yrs into $48K (1%/yr net return), and bragging that you ended up with 20% more than you paid in.

Hey, hey, hey!
Looky looky!
You only paid in $40K and you got $48K back!

correct

quote:

---

every dime I put into it with interest.

---

That doesn’t even begin to cover what I would be owed with the loss of potential gains I could have had. How about they give me what I put in, plus the what I could have had based the average gains of my personal investments over that time.

Look… I’m staring down 60 pretty soon, and I think age for benefits should go up (gradually), and should also be means tested. If you’re over $10MM net worth, then you shouldn’t get them… the price for living in a country that provided the environment to make it happen. I understand you paid I. For 40 years, but oh well… you’re independently wealthy.

I say all this as a hardcore conservative and MAGA Guy. I’m sorry if it’s contradictory, but that’s where I am.

quote:

---

If you’re over $10MM net worth, then you shouldn’t get them…

---

There is also discussion about eliminating the FICA max earnings cap so that the SS taxable wage base would no longer be limited to $176K/yr.

A major reason that has not been done is payout remains tied to total contribution. For folks making $500K/yr, lifting the FICA cap would increase their Federal tax exposure 25-30%. However, it would similarly increase SS retirement "benefits" 2.5-3 fold, which, because it is public record, would not sit well with penis envy voters.

However, if we uncouple "benefits" from contributions, as you think should occur, then it clears the path for uncapping max earnings FICA exposure as well (no payout, no penis envy). At that point with the uncapped 12.4% FICA addition, we'd see top earners' federal tax exposure jump to 49.4%. That should be your "stop-and-think moment."

As one who falls well into the group you're addressing, I'd caution you about your "… price for living in a country that provided the environment to make it happen" premise. It's an approach which could easily alter the "environment" you're referencing for future generations. There may be folks with an attitude, "I've made mine, screw the rest of you." For them, a 50% Federal Income Tax impediment for others trying to climb the mountain is just fine. That's not me. I'd strongly prefer others have at least the same opportunities I've enjoyed.

Unfortunately, voters really do not understand what SS is and isn't.

People like yourself view SS as a retirement benefit. Despite brilliant marketing, SS is NOT a retirement benefit. SS payouts aren't benefits anymore than a borrower's monthly loan payments are "benefits" to the loan company.

There are folks in this thread calling SS welfare. It isn't ... yet. But the moment we uncouple SS contributions from payout, is the moment the welfare Rubicon is crossed. That is the moment justifiable perception of our welfare-state grows from 42 million recipients to 115 million.

quote:

---

The life expectancy for an American today is 78.4 years. So he wants Americans to enjoy only 8 years of peace (if you’re lucky) before you die.

---

67 is the current age of full S.S. retirement.

The life expectancy of a 67 year old is 17.5 years.

The life expectancy of a 70 year old is 15.3 years.

No real difference.

Life tables, see page 15

Best you can do is start phasing it out and allow people to start investing on their own.

You can allow for an opt in retirement program like a 401k for those who have no idea about retirement.

For those in the system for 40 quarters or more I think you have to at least allow them their money in some fashion.

If you are under 50 give them a lump sum now to walk away. Above 50 you pick up the system until they die with a possible a scaled down payout dependent on age and time in.

If you have not reach 55 you remove the spouse benefit.

In 30 years you would be mostly done with it and anyone under 50 would have a better retirement plan.

quote:

---

. So he wants Americans to enjoy only 8 years of peace (if you’re lucky) before you die.

---

Retirement is something we made up 100 years ago.

quote:

---

I'm with SFP on this one.

---

Gross.