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Bush Moves to Privatize Social Security
Topic Started: Nov 20 2004, 07:58 PM (130 Views)
kiwi_too
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Sir Perceval, Ruler of the Realm
Bush Moves to Privatize Social Security

Quote:
 
American workers currently pay 6.2 percent of their taxable income into Social Security, and employers match that amount. A starting point for an overhaul is a plan proposed by a presidential commission in 2001 that would divert 2 percent into private accounts. The remaining 4.2 percent — and the taxes employers pay — would go into the system, helping fund benefits for current retirees. That leaves an estimated shortfall of about $2 trillion to continue funding benefits for current retirees.



It sounds to me like there are a lot of unanswered questions. One of the first thing I would like to see happen is for the Congress to not be able to divert the surplusses. That may be a mute point if this is put into place. This also means that the current projections of the IRS for retirees will be reduced. Now, I am not a financial expert but this is a concern.

What say you?
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Admin
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Keeper of the Castle
I like your new avatar!!

I think the 2% part is optional in the plan. I don't think the $2 Trillion is a real number but I don't know for sure. I don't know what surplus you are talking about. I will go see if I can find out some info.
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kiwi_too
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Sir Perceval, Ruler of the Realm
Thanks. The site with the old one went south (or north if ya live in the south) and I had not saved a copy.

The 2% is optional. I would not expect everyone to availthemselves. the ultimate target is 4%. I also have a grave concern about what action will be expected when some lose their $$$. Our social welfare has been to not leave someone out. Will the rest be required to make it up. Answers now and answers then may be different. Can we let someone do withouot heat because they were unwise in investing. If not then taxes will make it up in social welfare.
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Admin
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Keeper of the Castle
Here is another interesting plan which uses the 6.2% for privet accounts.

6.2% Plan
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Mainecoons
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Keeper of the Royal Cattery
How is this so much different than what we are doing with 529s for College Expenses? The stuff is so conservative that unless the country completely tanks, in which case all bets are off, it is hard put to lose money.

If I were a 20 something this would sound VERY good to me. Unfortunately, 20 somethings don't vote in significant numbers.

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kiwi_too
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Sir Perceval, Ruler of the Realm
Buddy Kidd
Nov 20 2004, 08:19 PM
Here is another interesting plan which uses the 6.2% for privet accounts.

6.2% Plan

Buddy,
I am only about half done with the full pdf. I am finding some very intersting facts and accounting. I'll reserve most comments till completion but have a concern about funding current/near future retiree benefits. Individual accounts means reduced income to the SS fund. Now remember that I admitted up front that I am no mathematician. I'll slog through the rest and come back.

Thanks
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Keeper of the Castle
Hay, I'm not either. All I know is that right now I got mine.

(Actually I do have a degree in mathematics but accounting, now that is not math)
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kiwi_too
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Sir Perceval, Ruler of the Realm
Booooo!
I am 46 and very interested in the system.
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kiwi_too
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Sir Perceval, Ruler of the Realm
More LINKS

Threat to Women: Part I

Mrs. Colehill Thanks God For Private Social Security

How Galveston Opted Out of Social Security - This ones a little history.
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TenPacks
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Mountie of the Realm
This is an interesting concpet - one that is not shared by many Canadians - the interest in going private. Can someone give me a GENERAL idea why it seems to appeal to more Americans, especially the right-wing?

- There WAS some interest in it a few years ago, but after the way the Stock Market tanked, not many up here want to play that game anymore.

- The 6.2 "match" by your employer seems pretty good to me - thats 100% on your money! WHAT A DEAL!
My former employer (I'm retired) had a similar thing on Employee Savings plans, but with a limit of a 5% "match" - I would have LOVED to get that raised! What am I missing here?
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Admin
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Keeper of the Castle
You get no intrest or dividends on the money put into the system.
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TenPacks
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Mountie of the Realm
NO INTEREST???

Youre getting 100% interest, on that 6.2.... huh? Maybe its from your employer, but I dont care if it's from Mars.
Buddy, you show me a bank that will match me, buck for buck, on everything I put into it - and I'll break the door down to get in!
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Admin
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Keeper of the Castle
OK, you know, like the money you get on a savings account.

BTW - You would only get to put that money in very conservative funds. Like T-bills, CDs, and stock index funds. You don't get to invest it in individual stocks.
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TenPacks
Nov 20 2004, 10:32 PM
NO INTEREST???

Youre getting 100% interest, on that 6.2.... huh? Maybe its from your employer, but I dont care if it's from Mars.
Buddy, you show me a bank that will match me, buck for buck, on everything I put into it - and I'll break the door down to get in!

No, the employer is paying a tax of 6.2% of your salary into the SS system. I would have much rather they had payed it to me. My wife had a 401k where she worked and it would have payed out much more than SS if she had been able to put 6.2% in and her employer put in 6.2%.

Also the other 6.2% that would still be going into SS would mean you would still get SS when you get to the right age.
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TenPacks
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Mountie of the Realm
Well, all I can say is that if I was down there, I'd be screaming to keep the same deal, but kick it up to 10%!

Or as much as I could get them to raise it...... I always wished I could have got my employer to kick up the allowable contribution rate of 5% of my wages - If I put in 500 a month, and THEY DID TOO?..... show me where to sign!
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TenPacks
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Buddy Kidd
Nov 20 2004, 08:43 PM
TenPacks
Nov 20 2004, 10:32 PM
NO INTEREST???

Youre getting 100% interest, on that 6.2.... huh? Maybe its from your employer, but I dont care if it's from Mars.
Buddy, you show me a bank that will match me, buck for buck, on everything I put into it - and I'll break the door down to get in!

No, the employer is paying a tax of 6.2% of your salary into the SS system. I would have much rather they had payed it to me. My wife had a 401k where she worked and it would have payed out much more than SS if she had been able to put 6.2% in and her employer put in 6.2%.

Also the other 6.2% that would still be going into SS would mean you would still get SS when you get to the right age.

OHHHH! I think I misunderstood what you said - I thought you meant the employer DID match you 6.2 for 6.2 - IN YOUR ACCOUNT!

I believe I get it now......
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Admin
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Keeper of the Castle
Well, if you were down here you could have the 6.2% deal and end up with $1400 / mo after 35-40 years of working and if you have any other income your amount could be cut and you will be taxed on your SS.

Remember, you don't have to take the privatization option.
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kiwi_too
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Sir Perceval, Ruler of the Realm
Quote:
 
- The 6.2 "match" by your employer seems pretty good to me - thats 100% on your money!
Not entirely true. Much of the employer input to the System is used to support other areas such as SSD. The employee does not benefit directly from the employer iniput.

Long term investment usually outlasts the short term. The person investing from 1950 to 2002 would still be ahead. The loss over the last two years would only put a dent in the overall earnings of the previous 50 years.

I will reread the link that Buddy provided. The problem for those currently in the system is how the government will fund those now or those that will be receiving within the next 10(+) years. There are a few approaches but I do not see arecommendation or even a definite opinion.
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Admin
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Keeper of the Castle
Both the employee and the employer is taxed 6.2%.
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kiwi_too
Nov 20 2004, 10:50 PM
Quote:
 
- The 6.2 "match" by your employer seems pretty good to me - thats 100% on your money!
Not entirely true. Much of the employer input to the System is used to support other areas such as SSD. The employee does not benefit directly from the employer iniput.

Long term investment usually outlasts the short term. The person investing from 1950 to 2002 would still be ahead. The loss over the last two years would only put a dent in the overall earnings of the previous 50 years.

I will reread the link that Buddy provided. The problem for those currently in the system is how the government will fund those now or those that will be receiving within the next 10(+) years. There are a few approaches but I do not see arecommendation or even a definite opinion.

Without SSD, which is what buddylam is living off of, the system would be in good shape.
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TenPacks
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Buddy Kidd
Nov 20 2004, 08:50 PM
Both the employee and the employer is taxed 6.2%.

No, I get it now - I thought you meant that if you put 6.2% into YOUR account, they would put 6.2% INTO YOUR ACCOUNT, TOO! Buck for buck!

I'd kill for a deal like that!
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kiwi_too
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Sir Perceval, Ruler of the Realm
I feel that social plans that are more welfare than for disability (buddylam's mental disabilities aside) are a drain on society and self perpetuating. There are deserving people out there and sponges.
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