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401(k)s or Social Security?

By tovarichpeter   Follow   Wed, 21 Mar 2012, 6:27pm   1,668 views   8 comments
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http://blogs.smartmoney.com/advice/2012/03/21/which-is-cheaper-to-run-401ks-or-social-security/

VERY interesting

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1. C Boy Follow Befriend 1 threads 208 comments Arlington, TX

   1   6:33am Thu 22 Mar 2012   Share   Quote   Permalink   Like (2)   Dislike   Vampire Squids don't work cheap you know. The cost doesn't include losses in 401-k due to the crappy market of the past 12 years.

2. drew_eckhardt Follow Befriend (1) 2 threads 324 comments Sunnyvale, CA

   2   1:04pm Thu 22 Mar 2012   Share   Quote   Permalink   Like   Dislike (2)   I'm more concerned about the ratio of payout to contributions than how much some one skims off the top. Social Security also provides horrible return rates that are actually negative for many participants. I got curious in 2005 and did the arithmetic discovering that I'd need to outlast my statistically expected lifespan by five years to get a 0% inflation adjusted rate of return provided that I wait to take the maximum benefit, the retirement age does not increase, FICA rates don't go up, the wage cap doesn't go up faster than inflation, social security benefits keep up with inflation, and benefits don't become means tested. If both halves of my contribution went to an investment vehicle with a 3% inflation adjusted rate of return I could have $134K a year for the same 15 years: over 4X my social security benefit $72K a year until I die at 100: over 2X my social security benefit $44K a year forever: nearly 30% more than my social security benefit with $1.5M going to my heirs As it stands the numbers are $32K a year with a big fat zero going to my heirs. (all numbers in 2005 dollars)

3. wcalleallegre Follow Befriend 46 comments

   3   9:34pm Thu 22 Mar 2012   Share   Quote   Permalink   Like   Dislike (2)   The analysis for SS cost likely does not include hidden costs. SS is running in the red and will continue to get worst. They can only delay the inevitable by raising retirement age, raising the max income that is taxed on, etc. It will eventually default since all ponzi schemes default. I believe we will eventually get mass inflation and value of SS benefits will be eroded.

4. Vicente Follow Befriend (8) 204 threads 4,415 comments Davis, CA

   4   2:19am Fri 23 Mar 2012   Share   Quote   Permalink   Like (1)   Dislike   wcalleallegre says SS is running in the red and will continue to get worst. Actually it's not in the red at present. Your errors compound from there.

5. bgamall4 Follow Befriend (14) 755 threads 2,590 comments 63 male Las Vegas, NV bgamall4's website Premium

   5   6:21am Fri 23 Mar 2012   Share   Quote   Permalink   Like (1)   Dislike   Privatization of social security is simply wanted by the banksters so that they can get massive fees. That is the entire reason people want it privatized.

6. ATK Follow Befriend 4 threads 29 comments ATK's website

   6   2:43pm Fri 23 Mar 2012   Share   Quote   Permalink   Like   Dislike   I was listening to some youtube videos about a guy Robert Kiyosaki who wrote Rich Dad/Poor Dad and he talks about 401K being a gimmick. He also says houses are not an asset but a liability... I think he makes some sense... very interesting way of thinking

7. C Boy Follow Befriend 1 threads 208 comments Arlington, TX

   7   2:58pm Fri 23 Mar 2012   Share   Quote   Permalink   Like   Dislike   Robert has his faults, but he was preaching about problems with SS back in the 80's.

8. bgamall4 Follow Befriend (14) 755 threads 2,590 comments 63 male Las Vegas, NV bgamall4's website Premium

   8   5:37pm Fri 23 Mar 2012   Share   Quote   Permalink   Like   Dislike   Wonder if he gets any benefits from Wall Street? I don't know, just asking.