www.washingtontimes.com/news/2012/aug/5/social-security-not-a-good-deal/

People retiring today are part of the first generation of workers who have paid more in Social Security taxes during their careers than they will receive in benefits after they retire. It’s a historic shift that will only get worse for future retirees, according to an analysis by the Associated Press.

Previous generations got a much better bargain, mainly because payroll taxes were very low when Social Security was enacted in the 1930s and remained so for decades.

“For the early generations, it was an incredibly good deal,” said Andrew Biggs, a former deputy Social Security commissioner who is now a scholar at the American Enterprise Institute. “The government gave you free money and getting free money is popular.”

If you retired in 1960, you could expect to get back seven times more in benefits than you paid in Social Security taxes, and more if you were a low-income worker, as long you made it to age 78 for men and 81 for women.

So can someone explain to me how this is not the biggest Ponzi scheme ever? Early "generations" get the big part of the carrot and the older "generations" get stuck with none and lose everything. Hmmm, could you replace generation with investor? So what the government is telling me is that when I pay into SS, I'm losing money, lol. If this is not a reason to start phasing SS out for younger workers, I don't know what else to say.

www.finance.yahoo.com/blogs/daily-ticker/america-retirement-system-failing-us-economist-153445894.html

Here is another good article showing us that a new direction is needed.

The majority of Americans (75 percent) nearing retirement age had less than $30,000 in their retirement accounts in 2010. For the poorest Americans in the 50-to-64-age bracket, the average amount saved for retirement was $16,034.

>>The majority of Americans (75 percent) nearing retirement age had less than $30,000 in their retirement accounts in 2010. For the poorest Americans in the 50-to-64-age bracket, the average amount saved for retirement was $16,034.

That's crazy. I'm only 33 and would be dissapointed if I only had that much in my 401K.

I know, and it's 75 % of Americans at that age. That's actually scary. I know most took a big hit during the crash in 2008. I think for 90 % of people, the best thing they can do is just hide their money in their mattress. Those that grew up during the Depression were very skeptical of banks and investments. They hid all their money in mason jars, etc. I think we are grooming another generation that will do the same, which isn't necessarily a bad thing.

The reason that it is a good deal for 80% of American's
is that if they had this money in a private fund they would
take it out and spend it before retirement....even if they do
pay in more than they receive, and I don't see that happening.....
A worker works for 30 years, and pays in a thousand a year, (which
is more than they pay in) retires and receives $1,200 a month, he
only have to live 15 years and he will be getting back more than he
paid in, and if he is married, his wife will get another $600 a month
off his.....SS is a good deal....what we have to do, is make it only
for retirement.....right now they take money out of the fund to pay
for college expenses for children of men that died, the same children
also get money each month ($300) they pay disability out of this fund,
if it were only retirement, it would be in fine shape.....plus if you take it
away, make it a private investment,where does the money come from
for all these things.......

>> They hid all their money in mason jars, etc. I think we are grooming another generation that will do the same, which isn't necessarily a bad thing.

Not necessarily, but it probably isn't good either as it will lead to more people who are unprepared for retirement. It's kind of hard to save successfully when you are earning zero interest. I guess its better than losing money, but you can always invest in government bonds, etc. which at least limits your risk probably more than saving in a jar.

I think its more likely someone's mason jar of money getting stolen from their home compared to the government defaulting on series EE bonds that are guaranteed to at least double in value in 20 years.

>>A worker works for 30 years, and pays in a thousand a year, (which
is more than they pay in) retires and receives $1,200 a month, he
only have to live 15 years and he will be getting back more than he
paid in

Where are you getting these numbers from?

I just looked at my recent check and i have already paid over $1,500 in social security this year.

Considering i can't start collecting until i'm 67, fifteen years would put me at 82 which means that i will live longer than the average male by a few years.

Now, by the time i'm anywhere near retirement, i'm sure that age will be up to around 70 or 72 and i'll have to live to 85/87 to get to that fifteen years you're referring to.

I guess that's why it's called "Social Security" and not "Wazzup Security"... ;)

I don't recall hearing the presidential candidates speaking up about social security. Does anyone happen to know where they stand on the issue? I'm sure there a lot of people wanting to know.

I just looked at my recent check and i have already paid over $1,500 in social security this year.

better look again, that doesn't all go to Soc. Sec. you are paying into Medicare programs
as well....and if you have paid that much, you are paying a bunch, as they take out only 7.5
percent and your employer adds 7.5.....that is FICA taxes....you have a very good salary,
and are about done paying for the year as you only pay on the first hundred thousand.

Each year, the Social Security Administration adjusts the limit on the maximum earnings subject to the Social Security tax. As of publication, the limit equals $106,800. If you earn more than this, your employer will stop taking out Social Security taxes after you reach the annual limit.

So the most you can pay in, even if you make a million dollars is 6.5%, which is less than $700
dollars......

It is very good for you to be putting money into that 401k, the more the merrier.

I recently retired from a large manufacturer. A 401k plan was offered to us around 1987, and today I am very grateful I took advantage of it.

I also took a lump-sum pension, and together with the 401k put it into an IRA which is what I live on. Hopefully, I will also be getting social security next year as well, and I do mean hopefully, because I'm not sure what the future of ss is going to be. Will they raise the age that you can collect? Will they cut the amount you receive? I get tired of ss and Medicare being referred to as "entitlements", when in fact workers contribute a healthy share of their paychecks into it.

At the place I worked, starting a few years ago, pensions were cut out for new employees. Anyone else have that happen where they work? I'm wondering what the future is going to be like for these people. They may not even have ss then. It could be that you either have sacrificed and saved enough to live on for the rest of your life( and remember life spans are increasing) or you work until you die. It IS scary.

There is a separate medicare tax besides payroll taxes. That's how it is on my pay stub.

<<Will they raise the age that you can collect?>>

inevitably, yes, IMO

<<Will they cut the amount you receive?>>

Only if you make a lot of money or have a very high net worth... then yes, I think this is inevitable as well. And smart, too.

I'm not doubting that it's smart to cut the amount you receive IF you have a very high worth (whatever that happens to be). As far as the "threshhold" of how much you make per year when they stop taking the ss tax out of your paycheck, do you know when that happens? That's been a subject of debate, too. Once you make a certain amount, the ss tax is no longer taken out. Maybe they'll take that as the sign you don't need ss.

I'm a month away from 50. I doubt I get 10 cents on the dollar.

>>better look again, that doesn't all go to Soc. Sec. you are paying into Medicare programs
as well....

This was social security only.

just over $1,500 to social security and just over $500 to medicare

>>As of publication, the limit equals $106,800. If you earn more than this, your employer will stop taking out Social Security taxes after you reach the annual limit. So the most you can pay in, even if you make a million dollars is 6.5%, which is less than $700
dollars......

For 2012, you are taxed on the first $110,100 (which is more than I earn) at 4.2% not including medicare tax.

That comes to a total of $4,624.20. Not sure where you are getting the less than $700 from.

>>I recently retired from a large manufacturer. A 401k plan was offered to us around 1987, and today I am very grateful I took advantage of it.

Yeah, it's definitely the best thing to do. Plus, my company offers a 50% match which is getting rarer these days, so it would be really foolish of me not to put money into it.

"At the place I worked, starting a few years ago, pensions were cut out for new employees. Anyone else have that happen where they work?"

About 15 years ago I worked for a large iconic Corporation - I was in my early 30's and they were ending pensions for new employees and they gave current employees the option of buying out of the pension plan and they would recieve a lump sum that would be transferred to their 401K - given my young age and with the way the company was headed, I got out of the pension plan and took the lump sum. It worked out because my division was sold (which is where I currently work) and pensions did not get bought by the new company - so now nobody where I work recieves a pension, it is all 401K match.

By the way, the iconic Corporation that I worked for is now going through bankruptcy so everyone who still works there and stayed with the pension plan are unsure of what will happen to them - the generous pensions that were handed out for years drove that company all the way to bankruptcy the same way Govt pensions are driving this country into bankruptcy.