How to save Social Security
By bobmnu
@bobmnu (8157)
United States
July 19, 2012 10:24pm CST
The big question is how does the US save Social Security? When you look at all the problems that different states are having with the pension plans and the federal government is having with Social Security you wonder if there is any way to save the systems. Our founding fathers wanted the states to be a place where things could be tried and people could see how they worked. One state has developed a state retirement system that not only works but is rated as one of the top pension systems in the nation. Wisconsin has developed this employee based pension plan. All public employees at every level are in the system and between the employer and employee they pay in about 12% of their salary. The money is paid to the state which invest the money. The difference between the Wisconsin and other states and the federal government is that the state hires an investment officer and he/she answers to a board that is elected by the members of the retirement system. In other words the politicians have no say and can't touch the money in the fund.
How pensions are paid is different. When you retire your payment is based on the best three years salary and the number of years of service or you can take a lump sum pay out or your monthly payment is figured on your dollars invested. If you die your estate receives all the money you put in plus the interest and capital gains and after 5 years you receive what your employer put in too. If you become disabled you can apply for the disability benefits.It should be noted that it is harder to receive the disability than it is to receive Social Security Disability
A recent audit showed that the fund is sound and projections show that it is sound for the next 50 years. Maybe the Social Security should be run like this the government collects the money and the politicians can not touch it.
7 responses
@thegreatdebater (7316)
• United States
20 Jul 12
The best fix for social security is for the economy to get better. When that happens the inflow of money into it increases, and we get surpluses like we had in 2000. It wouldn't hurt to increase the cap on it, but that will NEVER make it through the house with republicans in control.
@thegreatdebater (7316)
• United States
20 Jul 12
Taskr, as you remember when Clinton left office Social Security had a budget SURPLUS. It was collected because the economy grew so much. If the economy were to grow at half the rate as it did during Clinton's years than it would help the budget a lot. But, raising the cap would help, along with means testing tied to tax cuts for those that would be above that, and raising the retirement age would all help. But, personally I see the economy being the biggest factor.
1 person likes this
@andy77e (5156)
• United States
22 Jul 12
No... actually when Clinton left office, it had a projected deficit. In fact, before Clinton, it had a projected deficit. In fact before Reagan it had a projected deficit.
Social Security was projected to go broke for years.
The recession only accelerated what was already happening.
And no, the economy getting better will not fix it. Raising the tax cap will not fix it either. Raising the retirement age will not fix it either.
Ponzi schemes..... can't be fixed. Hello?!? Ponzi schemes ALWAYS FAIL. Yes, adding more tax revenue will drag it out longer. Yes, a better economy will drag it out longer. Yes, a higher retirement age, will drag it out longer.
But it will still fail. Ponzi schemes, always fail. The Soviet Union is gone. It dragged out for 70s years. But ultimately it failed. The soviet union was an entire economic system of taking from people, to give to other people. It was a giant, massive multi-nation Ponzi scheme. It still failed.
We have a huge country wide Ponzi scheme. It will fail. Now, or later, but it will fail.
@peavey (16936)
• United States
25 Jul 12
Not letting politicians touch the fund is the only way Social Security would have a chance. That's not gonna happen, though. Most politicians have to have their fingers in every pie in the country and that's one reason Social Security is in trouble to begin with. That and some other stupid laws that exclude congress from paying into it and things like that.
@Netsbridge (3253)
• United States
20 Jul 12
What politicians are you referring to? I hope you do not mean the Washington DC gang; since they are the government.
Anyway, while Social Security is not perfect, it is far better than the tax on mandatory insurance. I wish the DC gang had instead introduced a healthcare tax on income, as is done with Social Security. Now, that would have been real individual responsibility.
@dorannmwin (36392)
• United States
20 Jul 12
I honestly don't think that there is a way that social security as we know it today can survive. However, I do think that there are things that can be done that will enable people to have a retirement that is secured by the government.
What I think needs to be done is to change from having a social security pool to having individual funds for social security that the government can use as needed, but the person's earnings would be based on what the markets have done during their working years. It would be like an IRA only it would be something that would be forced on working people just as social security today is.
@bobmnu (8157)
• United States
28 Jul 12
In almost every case when the state or the government can have access to the money the system has problems and can't pay the retirees. As I pointed out in another discussion if I had taken the money I paid into SS for the first ten years and invested it in some safe companies and reinvested the dividends I would be able to withdraw nearly twice what I am getting now from SS. As it stands now I will be close to 90 when I get back all I paid in over the years and if you consider the double tax I am paying now I guess I will be over 100 when I get my money back and this is not figuring in interest I could have been earning.
@knoodleknight18 (917)
• United States
20 Jul 12
I agree with debater on the economy being the biggest the biggest issue with social security. The problem with social security right now is it's actually in double jeopardy so to speak. The baby boomer generation creates a disproportional number of people collecting as compared to those paying in, but to multiply the problem that generation also worked in world with lower unemployment numbers and higher relative wages than we do today.
It's nice to dream up some plan that sounds good, but let's be honest, social security sounded good and seemed rather secure for the past 30 or so years at it ran a huge surplus, and technically the money is there, it's just on loan to a bankrupt government. For some reason there never seems to be enough money available when a large number of people who put money into something go to take it back.
@bobmnu (8157)
• United States
28 Jul 12
An improved economy would help some but the real problem is the fact that the government and the politicians saw this income from the tax and thought of ways to spend it. The government has been using the money interest free for all these years. IF a person made minimum wage all their life and put the money that was paid into SS by both them and the employer in a Savings account and averaged 3% interest . When the retired they could draw an interest payment of more than their salary for the rest of their life and not touch the principal.
Think about this we consider banks as evil because they will give you 0.06% (six tenths of a percent) interest on your savings and will charge you 3-5% to borrow money for a home and 4-7% to buy a car. The government takes money from you in withholding and pays no interest to you and if you are late in paying what the government wants they will charge you11% interest and back date the interest. They will take SS out of you pay and then use your money and not pay any interest on it and then turn around and tell us how nice they are for giving you back your money when you retire.
@AidaLily (1450)
• United States
20 Jul 12
Most of this country would be better off if politicians couldn't touch the money.
The problem would be: Who can make sure they don't touch the money?
I mean they were not supposed to touch social security, but they found a way to touch it and thus the program is shakier now than it was before. I don't think it can be saved until there is a way to keep politicians out of the money. They have dabbled into money for a lot of different programs but I think it could be saved once they can't touch it.
