<p>In many families, the older generation grew up in poorer times and acquired frugal habits, so the working generation won’t resent supporting them, especially if the working generation is much wealthier so that supporting the older generation costs relatively little compared to what the working generation can contribute.</p>
<p>But if the situation were reversed, with an older generation that is used to frivolous spending and a working generation scraping by in an economy with more limited opportunities, the potential for problems becomes much greater. Indeed, we are heading that way as a society, as future generations will have to pay more in taxes while getting less from the government in order to pay down the debt from when past generations paid for small government while taking big government services.</p>
<p>Yes, it is certainly a recipe for resentment–spend freely on whatever you want & expect others (your relatives and/or your government to cheerfully foot the bill). It will be a growing issue and concern in the US. It already is becoming a big issue in China and likely many other places as well.</p>
<p>It is one thing when someone has struggled and sacrificed for you and you choose to help ease their struggles while you have more than adequate resources but quite another to try to help others when you are feeling pinched and burdened yourself and also feel that resources were needlessly squandered. Most people are more comfortable to cheerfully help in the former and less willing to help in the latter situation.</p>
<p>"But if the situation were reversed, with an older generation that is used to frivolous spending and a working generation scraping by in an economy with more limited opportunities, the potential for problems becomes much greater. "</p>
<p>-It is estimated that the current retirees will not spend what they put in.
I am sure that you can find the opposite, I suppose your statement is based on what you found. Who is to say who is right and who is wrong? I would not make such a fast conclusion.<br>
However, to avoid this type of discussion, I agree, that SS system should be voluntary, not mandatory. People whgo put in, get their money back in SS benefits, those who elect otherwise, will support themselves by their own means.</p>
<p>Recent news articles are saying that we have recently passed the tipping point where (on average) retirees going forward will get less Social Security benefits than the Social Security taxes that they paid, in contrast to past retirees who (on average) got more Social Security benefits than Social Security taxes that they paid.</p>
<p>One issue is the many folks who are barely “getting by” and just making it from one paycheck to the next. If there is no fund like Social Security for them to fall back on once they can no longer work or stay employed (think jobs that require prolonged standing, heavy manual labor, etc.), and they have no savings or other means to support themselves, what then? Would they qualify and do they try Welfare or other forms of public assistance or charity? Do they become homeless? These are issues that can become more frequent if pensions and Social Security are eliminated.</p>
<p>“One issue is the many folks who are barely “getting by” and just making it from one paycheck to the next”
-Whatever they are paying into SS, they can pay into their saving account. I actually suggested that it exists for people who choose to participate. Now it is mandatory. Frankly, I want all money money back with interest that I would be paying if I owed. Others would like to continue participating. Many people are living from one paycheck to another, we are living below that and have to deep into our 401k. I am saying, live whachever way you choose. However, in the current system, the way was chosen for us, there are no options, we have to pay into SS. It was started by one man, who is to say that he was right?</p>
<p>I can answer part of the question vis a vis my uncle. While he is still alive at 92 here are his facts: total monthly income…821…half from a military pension, the other from SS. First question: Why doesn’t he have more ss if he was wealthy early on? Because he somehow avoided paying those taxes. (stupid for that generation). As far as welfare goes…as a single person he is not entitled to any assistance with that much money per month. Because, I surmise, he was so generous in the Jewish community prior to his downfall I believe that he is receiving free room where he is living. Other than that we are his welfare. No, he is not at the Jewish Home for the Aging. </p>
<p>No section 8 housing. When my son first moved out he looked at a building with several section 8 housing apartments. He and his roommate were offered a section 8 apartment. Despite the long waiting list my son (who was making low six figures) and his room mate (making 50,000 ish) were offered the apartment that would have been $820 psd monfh. Did I want my son to pay less? Sure. Was I furious at the landlord? Yep. Did I tell my son that I would turn the landlord in if he took that apartment? Yes. And yes my son was furious with me.</p>
<p>He has a car…don’t get me started. But the car breaks down on a regular basis…Food…he doesn’t have the ability to cook. Doctors…Trust me, he has no money. This is Los Angeles. No public transportation in his area. And he is trying to regain his fortune.</p>
<p>SS is a pay-as-you-go transfer schemed dressed up as an investment plan, but that dressing is just fiction, MiamiDAP. I don’t think any of us can avoid it. I don’t dislike it ideologically. I just assume it is another tax that I pay to help those who have had misfortune, bad luck, or who haven’t saved. The only way one might be able to avoid it is to do something similar to what Mitt and the PE guys do – get ordinary income characterized as capital gains by treating it as a carried interest. I believe that capital gains are exempt from payroll taxes including Social Security.</p>
<p>Only income from labor is taxed for Social Security, and then only up to a limit. Effectively, it is like a regressive income tax applied only on labor income (i.e. a tax on jobs, encouraging substitution of capital for labor when feasable).</p>
<p>MiamiDAP - I agree, I would prefer to invest the money myself. It is also true that anyone can save the money they are currently putting into SS. But, many, especially those living from paycheck to paycheck won’t. What do we do when they can’t work and are destitute? Certainly we as a society can’t allow a large population of destitute and homeless elderly citizens.</p>
<p>I’m very much looking forward to starting my Social Security benefit in about six years, when I’m 70. Even though I am relatively well off, it will still be a significant part of my income in retirement.</p>
<p>GTalum,
Allowing or not is secondary to having funds or not. Should we allow the whole country live under Chinese rule? Other options? I do not know any.
If some do not want to be free, it does not mean that other should not be allowed to be free. Here is a real choice. Living from check to check or not buying cheese because it is too expansive is an individual choice. My family used not to buy cheese when we felt that we could not afford it. There are many families who will do the same. So, they get punished in return for doing the right thing.</p>
<p>I very much agree with you about personal responsibility and reclaiming more personal freedom. I would like nothing better than to have a choice to contribute to SS. Again, what would we do with the glut of elderly citizens without money to live on? Yes, they may have made poor decisions, but they will/would be a burden on society. If we compare the burden of SS with the burden of caring for our poor elderly, what would be/is the hardest for the country? I’m not sure myself.</p>
<p>Actually, the elderly in the US are, on average, pretty well off. But a fairly large percentage would be destitute without Social Security (and, given how unhealthy Americans tend to be, most depend on Medicare). The Gini coefficient for the >65 in the US is higher than that for the <65 in the US – in other words, the wealth and income distribution is more unequal among the elderly than in the non-elderly.</p>
<p>I think Social Security is a fantastic institution and I have a lot of confidence that it will survive intact. I like that it rewards years of work, it emphasizes the nobility of work unlike other social safety net programs.</p>
<p>“Yes, they may have made poor decisions, but they will/would be a burden on society.”
-They woudl be a burden if we allow them to be. They definitely would be a burden on their families. SS is simply broken ponzi schema that is going to collapse. Then what? I predict Chinese rule. Do you see another option. Maybe we will develop trees that grow money? But as of now we do not have them.<br>
As it stands now, if we tax 100% and we tax everybody, not 50% of people, we are not able to cover our debt. So, it is either personal responsibility or Chinese rule, but I am open to hear other options, my brain refuses to produce more than that.</p>