The coming Social Security fight could be 1983 all over again

[Ralph Sir Edward]

Well, as the Grateful Dead sang - "I may be going to hell in a bucket, but at least I'm enjoying the ride. . . "

 

[Brett]

"privatizing" is now the answer - - GenX and Millenials better start loading up on real estate and stocks

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[Tia]

The current system is being worked currently to take advantage of it from reading on FB group on SS. I have read posts for the last ~4 years. Not sure it's exactly 'schemes to get around it' but it certainly reads to me very close to 'what qualifies if I do this/that'

 

[bizaro86]

It's going to be even worse than the government is letting on. The official line is that when the OASDI trust fund depletes, there will be across-the-board cuts in the neighborhood of 30% (Currently projected at 25%. But this number has been increasing for most of my life.)

What's actually going to happen is that everyone under the age of 50 is going to give the program a big, fat, middle finger and move to gig jobs so they can keep more of their money. They're not getting a retirement. Why should anyone else? So I think much bigger cuts are possible. It really depends on how well the government can rein in under-the-table employment. (Currently, almost non-existent enforcement.)

I think by far the most likely outcome is no change except to the rule that the program needs to fund itself, and they print money to plug the gap.

Cutting SS would be so unpopular that no government can do it, so the benefits will be inflated away.

 

[WorldT]

"privatizing" is now the answer - - GenX and Millenials better start loading up on real estate and stocks

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View attachment 113880

Can someone explain how privatization will help the fund?

 

[ScoopKona]

Can someone explain how privatization will help the fund?

It won't.

I think by far the most likely outcome is no change except to the rule that the program needs to fund itself, and they print money to plug the gap.

Cutting SS would be so unpopular that no government can do it, so the benefits will be inflated away.

Trillions more in deficit spending. Isn't going to happen. Here's what has been done since the 1980s when we knew this problem was coming:

1) They made social security benefits taxable income.
2) They've raised the retirement age.

That's it. Nothing else has been done. Nothing continues to be done. And we're well past the point where anything meaningful CAN be done. There are a great many people who are quietly cheering about this. The program will continue to limp along, paying a fraction of what used to be the expected benefits. (Currently estimated at 3/4. I'm willing to bet a coconut that it ends up more like 2/3.)

And eventually it will be killed off when it no longer amounts to even beer money.

It's not like any of this has been kept a secret. The public just doesn't care. And they're not going to care until the size of the check goes way down. THEN they'll care.

 

[TolmiePeak]

"privatizing" is now the answer - - GenX and Millenials better start loading up on real estate and stocks

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View attachment 113880

Wrong dude. They need to learn the Renter system.

 

[bizaro86]

And they're not going to care until the size of the check goes way down. THEN they'll care.

Then they'll care so much that there will be political consensus about keeping benefits up. Because every facebook feed will be full of stories of old people getting evicted and eating out of garbage cans.

Obviously that's a huge fiscal issue eventually, but since nobody cares about that either the politicians and electorate (of all persuasions) will take the expedient route and try to kick the can down the road yet again.

 

[ScoopKona]

try to kick the can down the road yet again.

Anyone paying attention can already see the end of the road. There's little space left to kick. What's going to happen between now and 2029? Certainly nothing. So if someone decides to do something about this 26-trillion-dollar-problem we have, they'll have a couple years, maximum.

Here's as apolitical an analysis I was able to find: https://www.crfb.org/papers/analysis-2025-social-security-trustees-report

 

[HitchHiker71]

Anyone paying attention can already see the end of the road. There's little space left to kick. What's going to happen between now and 2029? Certainly nothing. So if someone decides to do something about this 26-trillion-dollar-problem we have, they'll have a couple years, maximum.

Here's as apolitical an analysis I was able to find: https://www.crfb.org/papers/analysis-2025-social-security-trustees-report

At current spending levels and deficit spending - in 2028 we will reach 100% of federal revenue consumption for mandatory SSA/SSI, Medicare/Medicaid, military, and debt interest with zero, nada, nothing left for any/all other federal programs that are considered discretionary. That’s when the music stops IMHO.


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[ScoopKona]

That’s when the music stops IMHO.

And when the finger-pointing begins. There are three big reasons we're in this mess. Two of them were sins of commission. And one was a sin of omission. Can't say any more without getting the thread locked.

People need to know this is coming. Particularly the age 50-ish workers who haven't made arrangements for considerably smaller retirement benefit checks. Those who haven't put a plan-B in order are fast running out of time. I'm already on Plan-G, having finished B-F. I agree that the music stops very soon. And I'm already sitting in my chair.

Worst-case, I'm wrong. OASDI is fixed -- huzzah! And I receive unexpected monthly income. I wouldn't bet on that. I wouldn't even take very favorable odds to make that bet.

 

[easyrider]

It's a simple fix really. The payroll tax will need to go up. The earnings cap needs to go meaning all payroll pays. The full retirement age needs to go up. A cap on pay out that is closer to the median for everyone. While this is happening a privatization program goes into effect which eventually replaces the system. Only one person of power has the cojones to do it, imo.

Bill

 

[Brett]

It's a simple fix really. The payroll tax will need to go up. The earnings cap needs to go meaning all payroll pays. The full retirement age needs to go up. A cap on pay out that is closer to the median for everyone. While this is happening a privatization program goes into effect which eventually replaces the system. Only one person of power has the cojones to do it, imo.

Bill

wow!
Just one person can raise the social security FRA, increase corporate payroll taxes and then put a cap on SS "pay outs" ?
And that same person simultaneously replaces social security with "private equity" and everyone has a nice BIG retirement package?
That person has to be a 'super genius'
(imo)

 

[WorldT]

It's a simple fix really. The payroll tax will need to go up. The earnings cap needs to go meaning all payroll pays. The full retirement age needs to go up. A cap on pay out that is closer to the median for everyone. While this is happening a privatization program goes into effect which eventually replaces the system. Only one person of power has the cojones to do it, imo.

Bill

I have been hearing this privatization and I haven't figured out how that helps the fund. I asked a couple of postings above about this but only one response which said it won't.
Can you please explain?
Or is privatization just code for ending the social security program?

 

[easyrider]

wow!
Just one person can raise the social security FRA, increase corporate payroll taxes and then put a cap on SS "pay outs" ?
And that same person simultaneously replaces social security with "private equity" and everyone has a nice BIG retirement package?
That person has to be a 'super genius'
(imo)

In other words, an intelligent person, that doesn't abide by what is considered normal, could be the beginning of getting this done. That person doesn't have to be a genius to do anything. That person would need to be in a position of power and be persistent, constant and able to take criticism. The old Athenian saying of it takes a spark to light a fire kind of sums this up, imo.

Bill

 

[easyrider]

I have been hearing this privatization and I haven't figured out how that helps the fund. I asked a couple of postings above about this but only one response which said it won't.
Can you please explain?
Or is privatization just code for ending the social security program?

It helps the Social Security fund it's recipients in many ways eventually becoming a regular type of investment that can build generational wealth. Currently, when a SS recipient passes away there is nothing for the heirs. With privatization , the heirs could inherit the remainder at the time of death.

Instead of the current "pay-as-you-go" system, where payroll taxes from current workers fund the benefits of current retirees, a privatized system would involve some portion of a worker's Social Security contributions being directed into a personal retirement account. As SS evolves to private accounts it would be a hybrid of old and new with the new eventually being the only option. This would still be based off payroll taxes. So yes, it does end the current type of the SS system but it doesn't end the SS system.

The con's are the transition would need to be financed through government spending. It could take generations to complete.

Bill

 

[joestein]

It helps the Social Security fund it's recipients in many ways eventually becoming a regular type of investment that can build generational wealth. Currently, when a SS recipient passes away there is nothing for the heirs. With privatization , the heirs could inherit the remainder at the time of death.

Instead of the current "pay-as-you-go" system, where payroll taxes from current workers fund the benefits of current retirees, a privatized system would involve some portion of a worker's Social Security contributions being directed into a personal retirement account. As SS evolves to private accounts it would be a hybrid of old and new with the new eventually being the only option. This would still be based off payroll taxes. So yes, it does end the current type of the SS system but it doesn't end the SS system.

The con's are the transition would need to be financed through government spending. It could take generations to complete.

Bill

Generational wealth... sounds good, but in reality once everybody grows wealth, say to a $1 million through this program, then what will $1 million really be? All those people will still be relatively poor and maybe have some small net improvement in their lives.

 

[billymach4]

Cut the nonsense. In the end this report sums it up. Congress will be forced to act by making the changes outlined in this report.

 

[WorldT]

It helps the Social Security fund it's recipients in many ways eventually becoming a regular type of investment that can build generational wealth. Currently, when a SS recipient passes away there is nothing for the heirs. With privatization , the heirs could inherit the remainder at the time of death.

Instead of the current "pay-as-you-go" system, where payroll taxes from current workers fund the benefits of current retirees, a privatized system would involve some portion of a worker's Social Security contributions being directed into a personal retirement account. As SS evolves to private accounts it would be a hybrid of old and new with the new eventually being the only option. This would still be based off payroll taxes. So yes, it does end the current type of the SS system but it doesn't end the SS system.

The con's are the transition would need to be financed through government spending. It could take generations to complete.

Bill

You should just say end social security.

The deductions in a private retirement account will be just like 401k maybe with some different stipulations. However, one of them will NOT be mandatory contributions.

 

[easyrider]

Generational wealth... sounds good, but in reality once everybody grows wealth, say to a $1 million through this program, then what will $1 million really be? All those people will still be relatively poor and maybe have some small net improvement in their lives.

If you take the average 45 years of working (22 - 67 ), the average current wage ($70,000) as a median, with a 12.4% mandatory Social Security contribution into consideration it looks like $8,680 a year as only a median, considering lower pay when you start and higher pay when retire, @ 7.5% you end with over $3,000,000 at full retirement age from Social Security alone.

Bill

 

[easyrider]

You should just say end social security.

The deductions in a private retirement account will be just like 401k maybe with some different stipulations. However, one of them will NOT be mandatory contributions.

You really could say it isn't Social Security because it is a mandatory pay roll contribution. The purpose would remain the same in a way.

Bill

 

[Brett]

In other words, an intelligent person, that doesn't abide by what is considered normal, could be the beginning of getting this done. That person doesn't have to be a genius to do anything. That person would need to be in a position of power and be persistent, constant and able to take criticism. The old Athenian saying of it takes a spark to light a fire kind of sums this up, imo.

Bill

OK, so it just requires a normal "intelligent" person that controls all taxes and all spending and government benefits and would also control "private equity" (and the stock market).

Yes, that would probably solve the social security funding problem. I believe that "position of power" would be a _____ (hint: starts with a K )

 

[joestein]

If you take the average 45 years of working (22 - 67 ), the average current wage ($70,000) as a median, with a 12.4% mandatory Social Security contribution into consideration it looks like $8,680 a year as only a median, considering lower pay when you start and higher pay when retire, @ 7.5% you end with over $3,000,000 at full retirement age from Social Security alone.

Bill

My point is if we have this savings enforced and everybody hits this goal, then $3 million will buy a tiny fraction of what it buys today and people only worth $3 million will be considered poor. Life and everything is relative.

If everyday is a sunny day, what is a sunny day? (Eddie Murphy quote - Vampire in Brooklyn).

 

[WorldT]

You really could say it isn't Social Security because it is a mandatory pay roll contribution. The purpose would remain the same in a way.

Bill

I am not sure a law mandating a contribution for the entire population to a fund managed by a private entity will withstand a constitutional challenge.

 

[easyrider]

My point is if we have this savings enforced and everybody hits this goal, then $3 million will buy a tiny fraction of what it buys today and people only worth $3 million will be considered poor. Life and everything is relative.

If everyday is a sunny day, what is a sunny day? (Eddie Murphy quote - Vampire in Brooklyn).

For most working people, the way things have been going, the SS retirement benefit isn't keeping up with inflation. The average SS check is under $2,000 a month. If you are married and have two SS checks coming in, that average might be $4,000 a month until a spouse passes away, at which time you have $2,000 which can be a problem.

I doubt your scenario of $3 million will be considered poor . Many would retire early with a substantial monthly check. When a spouse passes away, the funds would go to whoever is named, most likely a spouse. This kind of ensures enough money to pay for long term care. Like you said, everything is relative and that would include adjustments to the SS fund.

The Social Security surplus is invested in Government Securities that earn about 2.5%. The surplus runs out in maybe 8 - 9 years. It wouldn't be difficult to invest these funds to earn more than 2.5%. I think it's bs that the law makers haven't figured this out yet. Why should they ? They have their golden parachute retirement program.

Bill