How to Fix Social Security

[firstdown]

Originally Posted by Sheriff Gonna Getcha

If the business purchases life/key-man insurance on the CEO/President/Founder, it's deductible. A few thousand dollars a year is not going to tank a business worth millions. Also, the estate tax only affects individuals worth $2M (including his/her interest in any business he/she owns in part or whole). So, it's not as though the guy who runs the candy shop or down the street or his family is typically unaffected by the estate tax.

Well the reason that smaller businesses do not have this problem is because Bush (I think Bush) raised the value of an estate before it is subject to these taxes. I'm not sure if or what a business can write off because this is a tax on ones entire estate and not just for the business. So if a person has a personal worth of 1.2 mil and owns a business which is valued at 3.2 mil then his death tax is on 4.4 mil.. Also this problem usuall arises later in someones life and these policies can be very expensive not just the few thousand that you mentioned. I sell life Ins. (I do not do estate planning that whay I'm not sure of the write off) and was contacted by a customer who's Atty. did an estate planning and he determind that he needed 2 mil in life ins..This man made a good living but was not rich and provided around 20 jobs. He was older and had a few health issues and for him to purchase 2 mil in coverage was very very expensive and would only get more expensive as he got older. He did not purchase the policy (which he could not afford) and latter passed away. His family lost the business due to taxes and the city lost a tax paying buisness and 20 people lost their jobs. This was all because of the federal goverments death tax. Yes, maybe he waited too long but he never realized he was worth that much because he only made a small fraction of that. This happens everyday in the US.

[That Guy]

get rid of it. teach people about investing, employer matching, and roth IRAs.

I don't want to pay social security because I can get a far better return then some crap annuity by myself and I could really use that money for better things.

annuities just aren't a good deal, and that's how most pension plans are run... investment accounts (401k's/IRA's/Roth IRA's, etc) give a much better return, and more control (though safe(r) funds exist for those not knowledgeable in investing but interested in getting more than the .07% a bank gives or the 5-6% on a bank's CD).

[Monkeydad]

Originally Posted by That Guy

get rid of it. teach people about investing, employer matching, and roth IRAs.

I don't want to pay social security because I can get a far better return then some crap annuity by myself and I could really use that money for better things.

BINGO!

Now if only Congress could understand such a SIMPLE truth, we'd be far better off.

[onlydarksets]

That's beyond privatization. What do you do about the strains on the welfare system for those who don't invest anything?

[Monkeydad]

Originally Posted by onlydarksets

That's beyond privatization. What do you do about the strains on the welfare system for those who don't invest anything?

If they're not working and paying FICA tax now, they wouldn't be losing out on anything.

Are taxes deducted from welfare checks?

[70Chip]

Originally Posted by Hog1

Check "Revelations". You won't be needing it

It's "Revelation", not "Revelations". Sorry, but this is one of my pet peeves.

[onlydarksets]

Originally Posted by Buster

If they're not working and paying FICA tax now, they wouldn't be losing out on anything.

Are taxes deducted from welfare checks?

I'm talking about the people who are working now and contributing to SS. What do you do when they decide not to contribute because they have bills to pay now, but then end up penniless and unable to work at 70?

Again, like my question above, I'm not opposing your suggestion - just asking for the full picture.

[saden1]

Originally Posted by onlydarksets

I'm talking about the people who are working now and contributing to SS. What do you do when they decide not to contribute because they have bills to pay now, but then end up penniless and unable to work at 70?

Again, like my question above, I'm not opposing your suggestion - just asking for the full picture.

Possible solution?

[jsarno]

Originally Posted by Buster

BINGO!

Now if only Congress could understand such a SIMPLE truth, we'd be far better off.

People can't have it both ways. Congress is assuming we are too stupid to figure this out on our own...but why would they think otherwise when we have SOOOO many programs to help aid the ignorant, or lazy?

[Monkeydad]

Originally Posted by onlydarksets

I'm talking about the people who are working now and contributing to SS. What do you do when they decide not to contribute because they have bills to pay now, but then end up penniless and unable to work at 70?

Again, like my question above, I'm not opposing your suggestion - just asking for the full picture.

It's not a choice to pocket the FICA tax and do what you want. Privatization allows you to invest those funds in the market rather than trusting the government to hold it for you. It won't change your take-home pay. It does however, help you establish a better retirement AND you will know it WILL be there for you, unlike with Social "Security" which is anything but secure.

[onlydarksets]

Originally Posted by Buster

It's not a choice to pocket the FICA tax and do what you want. Privatization allows you to invest those funds in the market rather than trusting the government to hold it for you. It won't change your take-home pay. It does however, help you establish a better retirement AND you will know it WILL be there for you, unlike with Social "Security" which is anything but secure.

I know what privatization is. What That Guy suggested was not privatization - it was abolishing Social Security entirely and letting people do what they want with their money. You said "BINGO", and I wanted to get your thoughts on how to handle the fallout.

[firstdown]

Originally Posted by Buster

It's not a choice to pocket the FICA tax and do what you want. Privatization allows you to invest those funds in the market rather than trusting the government to hold it for you. It won't change your take-home pay. It does however, help you establish a better retirement AND you will know it WILL be there for you, unlike with Social "Security" which is anything but secure.

It would also give you ownership of the money you invested so that your spouse and children can enjoy your hard work if you pass away unlike SS. For example. If me and my wife divorce and my children are grown and I pass away the money I have put in SS is gone. It goes back into the system for someone else to collect. Now can anyone explain how that is fair?

[mheisig]

The whole concept of "let me give my money to the government so they can manage it for the next 30-40 years at which point they'll give it back to me a little bit a time" just never sat well with me.

I don't even factor SS into my retirement planning - as far as I'm concerned the entire thing is a farce. Preparing for retirement is the individual's responsibility, not the governments.

[Schneed10]

Philosophically, I agree that the government should just stay the hell away and not have a social security program at all. It should be up to us as individuals as to how we want to plan for retirement.

But from a pragmatic standpoint, this is unrealistic. Too many Americans will use that money for other things, failing to save enough for themselves. They'll then be forced to remain in the workforce until they're 80 or dead, which will take up more jobs, leaving fewer jobs for those under 65, resulting in much higher unemployment rates and much lower productivity and hence GDP. Not having some sort of organized retirement system would be a social and economic disaster.

But what needs to change is the rate of efficiency the government gets from our money. Right now they sock it away in the Social Security trust funds, and earn 3-5% on it. That barely outpaces inflation. A big chunk of that money needs to get invested in the stock market, corporate bonds, commercial paper, real estate trusts, and international investments. Just by making this change, the forecasts for social security's solvency would be nearly 100% healthy, simply because the rate of return on those investments is so much better than what the government is currently investing in.

I mean think about it, if Peter Lynch, Warren Buffett, Bill Miller and Joel Tillinghast can become some of the best investment minds as corporate guys, why can't the US government hire one of the best to help manage the money?

I don't care if you privatize or not. The bottom line is we need a much better return on investment from the social security trust, otherwise this predicament is only going to get worse. It's actually shameful that we haven't done this ages ago.

[firstdown]

Originally Posted by Schneed10

Philosophically, I agree that the government should just stay the hell away and not have a social security program at all. It should be up to us as individuals as to how we want to plan for retirement.

But from a pragmatic standpoint, this is unrealistic. Too many Americans will use that money for other things, failing to save enough for themselves. They'll then be forced to remain in the workforce until they're 80 or dead, which will take up more jobs, leaving fewer jobs for those under 65, resulting in much higher unemployment rates and much lower productivity and hence GDP. Not having some sort of organized retirement system would be a social and economic disaster.

But what needs to change is the rate of efficiency the government gets from our money. Right now they sock it away in the Social Security trust funds, and earn 3-5% on it. That barely outpaces inflation. A big chunk of that money needs to get invested in the stock market, corporate bonds, commercial paper, real estate trusts, and international investments. Just by making this change, the forecasts for social security's solvency would be nearly 100% healthy, simply because the rate of return on those investments is so much better than what the government is currently investing in.

I mean think about it, if Peter Lynch, Warren Buffett, Bill Miller and Joel Tillinghast can become some of the best investment minds as corporate guys, why can't the US government hire one of the best to help manage the money?

I don't care if you privatize or not. The bottom line is we need a much better return on investment from the social security trust, otherwise this predicament is only going to get worse. It's actually shameful that we haven't done this ages ago.

You really think they are earning 3-5% on money that they have allready spent? Can I get in on that programe! If finacial institutions did with their customers money what the goverment has done with the tax payers they would all be in jail.