patrick.net

JH says

By definition this "free market test" will not work. SS is not about you "investing" your money into a retirement fund. It is about your children paying 6.2% (x2) to directly pay for your retirement. It's a transfer of wealth from children to parents. If SS was truly an investment tool, then your opt in/out idea would work as a market test. And it would fail. Why? Because 6.2% (even x2) is not enough to fund anyone's retirement.

Remember also that "Social Security" isn't just for retirement, so that puts further strain on the system. The proper long name is OASDI -- Old Age, Survivors, and Disability Insurance. That means that if you die with children, your spouse and children may also collect. In addition, your spouse can collect if he/she is at retirement age if you are not getting benefits (either due to suspension or death).

Whether 12.4% is sufficient solely for retirement for a single person, and not survivorship/disability is open to interpretation, but it's probably not sufficient for the standard of living a lot of people would like, even if it's enough for the standard of living many of them deserve.

For example, if you are 25 years old, plan to retire at 70, make $55K/year now, and have $5K in retirement funds, 11% of additional funds beyond 6.2% payroll tax are needed to retire with $2.7 million according to this calculator to replace 85% of your pre-retirement income if you live to 92, which also assumes you will get Social Security:
http://money.cnn.com/calculator/retirement/retirement-need/

Fiddling with the assumptions -- adjustments for inflation, return on investment, and percentage of pre-retirement income -- makes a huge difference because this is compounding over so many years. Social Security does provide a safety net for lower income people. If you changed the assumption to 30 years old, plan to retire at 70, make $200K/year now, and have $100K in retirement funds, you'd need to bump up the savings to 18-19% to meet the assumptions because Social Security doesn't cover as large a percentage.

corntrollio says

For example, if you are 25 years old, plan to retire at 70, make $55K/year now, and have $5K in retirement funds, 11% of additional funds beyond 6.2% payroll tax are needed to retire with $2.7 million according to this calculator to replace 85% of your pre-retirement income if you live to 92, which also assumes you will get Social Security:

So the assumptions that I made were: 30 years working at $50k/year with a 5% annual return. That yields just under $500k. This does not account for inflation, however, so a median earner who started paying in in 1984 was not making $50k/year, and the 5%/year does not take into account inflationary losses, which are substantial over 30 years even if the govt claims there is no inflation.

You are absolutely right that if someone invests even a small amount of their income on top of SS, they will be fine (assuming they have paid off their home, HELOCs, cars, and student loans, and they can work until or beyond 67). But the reality is that most have not. And the second reality is that they are going to 1) run SS dry, 2) run medicare dry, and 3) charge their kids' generation a LOT of money for their homes.

I wonder how much the other SS pieces cost...probably a lot. Does it cover disabilities for veterans? If so, that's another hidden future expense of the 3 gulf wars (and a present expense for vietnam).

JH says

I wonder how much the other SS pieces cost...probably a lot. Does it cover disabilities for veterans? If so, that's another hidden future expense of the 3 gulf wars (and a present expense for vietnam).

There will also be extra costs for the VA health system as the vets get older and need more care.

HC said: It's not certain that the USPS is inefficient when compared to private carriers.
Amazon appears to be turning to the US Postal Service more for "last mile" solutions. Sunday delivery, who knew?

EBGuy says

HC said: It's not certain that the USPS is inefficient when compared to private carriers.

Amazon appears to be turning to them more for "last mile" solutions. Sunday delivery, who knew?

They do have the infrastructure and zip code system

smaulgld says

There will also be extra costs for the VA health system as the vets get older and need more care.

Not if we keep them off the wait lists.

But yes, these wars have been and will be insanely expensive. And ironically, when we started them, gas was $1/gallon. Now look where it is. Team America!!!!

JH says

Not if we keep them off the wait lists.

But yes, these wars have been and will be insanely expensive.

Figure around $1,200,000,000 spent per fatality on 9-11.

Iosef V HydroCabron says

JH says

Not if we keep them off the wait lists.

But yes, these wars have been and will be insanely expensive.

Figure around $1,200,000,000 spent per fatality on 9-11.

And about what 4 american soldier deaths per 9/11 civilian death?

JH says

Iosef V HydroCabron says

JH says

Not if we keep them off the wait lists.

But yes, these wars have been and will be insanely expensive.

Figure around $1,200,000,000 spent per fatality on 9-11.

And about what 4 american soldier deaths per 9/11 civilian death?

That'll show 'em: Suck on it, al Qaeda!

jazz music says

Come to think of it, yes, since they do lobby for harsher, longer sentences to augment their labor force that really does mean that innocent people will be there making them richer faster working for free. The guards get more money from the system too.

What it "sounds like" to me is that this "land of the free" as is is going to need an ever increasing amount of prisons, SWAT teams, police, spies, cameras, and special forces to continue disappearing any dissenting voices, or, uh terrorists.

Sounds to me like you are trying to squash the dissenting voices of the lobbyists.

jazz music says

"The real truth" as you say is this: dissenting voices ARE FREEDOM. It's not freedom to go out and conspicuously blow money, which is the very thing that the police will never disrupt.

What? It is freedom to spend your money. Now your'e trying to restrict people from spending their own money.

jazz music says

If the law silences DISSENT, then the the law is nothing better than a hostile occupation force.

I don't see anyone trying to silence you. I do see you trying to take away the freedoms of others.

JH says

You are absolutely right that if someone invests even a small amount of their income on top of SS, they will be fine (assuming they have paid off their home, HELOCs, cars, and student loans, and they can work until or beyond 67). But the reality is that most have not. And the second reality is that they are going to 1) run SS dry, 2) run medicare dry, and 3) charge their kids' generation a LOT of money for their homes.

Yeah, that's the biggest problem -- that's why I make a distinction between the retirement that people desire vs. what they deserve. I look at some Baby Boomers right now and think, "You spent all your money, bitches!" especially when you consider that they got cheap education, cheap housing, and a lot of them got pensions, and the heart of their earning years were in a 25 year bull market.

jazz music says

Wow, this is the most lengthy and honest thought you have ever posted. And it almost makes me regret putting you on ignore.

It wasn't me who said the above.
You talk about freedoms and then put me on ignore, basically denying me my constitutional rights.
Why would anyone want to put anyone on ignore? It's the internet. Relax.

jazz music says

And it almost makes me regret putting you on ignore.

My wife is always putting me on ignore....most of the time I never even find out why. There is no "Hello, how was you day" no dinner, and no explanation. So I'm forced to go to the "Yard House" have some good beer, good food, flirt with bartender or some half drunk beauty sitting next to me.
And when I get home my wife thinks I was punished. LOL.