<p>cptofthehouse, you make a point that bears remembering, particularly when someone complains about the amount they’ve paid into social security vs. the payout they anticipate. Lots of people think that they are smart enough to beat the market, and that they would do better with those funds if allowed to invest them themselves. </p>
<p>Most of them are wrong. Merely getting returns which equal the growth of the national economy as a whole is an “above-average” outcome for the everyday investor. Most people will do worse. A significant number will be wiped out. (Downton Abbey, anyone?) That’s just the statistical reality. </p>
<p>The problem is, 30 years later we can’t just let them starve. Given the dearth of defined benefit pensions (substituted for by 401(k)s in the best case scenario) I think it’s undeniable that a significant number of today’s retirees will have nothing but social security to fall back on in their “golden years,” regardless of whether they put money aside each month or not.</p>
<p>Kluge, that is why requiring everyone to pay for health insurance is important, IMO. We absolutely cannot just not medically treat someone needs medical care. When a true emergency is brought into a hospital, it’s all systems go. That the person eschewed health insurance, has none, makes no difference. The fact of the matter is that we are covering everyone’s health care costs in that we do provide a lot of health care to those who can’t or won’t pay for it. We are just instituting a way to get paid for what is ones right here in this country. a</p>
<p>Though, going back to the retirement issue, I still don’t know how the elderly who are getting small social security checks are living. I don’t see many of them in our soup kitchens here. Maybe we are letting them just starve and die.</p>
<p>Spoke to a former manager today and he’s talking about retiring again. He’s already past retirement age and I think that he has two pensions and a 401K and his wife has a pension. He just built a new home to retire in (I don’t think that he has a mortgage). Add social security in there + military medical benefits and I think that he and his wife are set for the rest of their lives.</p>
<p>I will have a pension, a 403b, retiree health benefits and hopefully social security.
I somehow don’t feel like I will be set for life anytime soon.</p>
<p>I think a lot of people don’t realize that they can step off the treadmill and stop working, so they keep working. Either they love their work (which is fine), or are afraid to stop working, don’t know what they would do if not working, or just haven’t run the numbers and thought about lowering expenses and don’t realize they could live comfortably without working. </p>
<p>I left a government job after slightly less than 3 years, so cashed out a small retirement benefit. I was in my next big job for 9 1/2 years - they had 10 year pension vesting, so no pension for me. Just my IRA, which now includes 2 or 3 rolled 401k’s, and some accumulated savings… to last us the rest of our lives. So we need that lifetime slightly COLA’ed annuity known as Social Security.</p>
<p>It’s nice to work in a job where you’re building something (with a team of course) and you can see accomplishments in what you do. You don’t have to do that at a workplace of course but it’s something to look forward to doing everyday. Now most jobs have some amount of drudgery and you get used to it after a few years so most can deal with that.</p>
<p>If you have pleasant co-workers, co-workers that are stimulating and that produce, and you’re feeling good at what you do, then why not?</p>
<p>My MIL used to live in a subsidized apartment complex. She collected social security and a govt pension. The social worker told me that nearly all of the residents (mostly single) were getting by on just social security. Many only had to pay $100/month for rent. Most also qualified for additional benefits for the elderly with low incomes. For example, this would allow them to get a free lunch and dinner. It wasn’t gourmet, but they could eat. They weren’t living on the streets. But many of the residents that I got to know where very, very unhappy people. But thank God they had social security as a safety net.</p>
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<p>I agree. I’ve been pestering my H to figure out if we have enough money to retire. He has an old-fashioned defined-benefit pension where 9% of his salary has been withheld from every paycheck for the past 37 years. I also have money in a 401K. We have religiously put additional money into IRAs and annuities. We have no debt and our mortgage will be paid off in 5 years. We will wait until we are 66 to collect SS to get the full benefit. Well, he met with a financial planner who helped us run our numbers. Turns out, we’re doing just fine. So H plans to retire in a couple of months from his job of the past 37 years and do something less stressful. Yippee! Once the mortgage is paid off, we will have additional money each month. Social security will just be the icing on the cake. He will have the option to continue to work if he wants, but it won’t be necessary. That’s a very good feeling.</p>
<p>Many of his co-workers were hired after he was and were not eligible for the defined-benefit pension. They have only been paying 4% towards retirement. If they haven’t been setting aside other money for retirement, they are going to be hard-pressed to be able to retire comfortably.</p>
If you treat it like an annuity and make some assumptions, sure.</p>
<p>If you assume you are getting near the maximum benefit of around $2500/month at full retirement age, you live for 18 years, and the rate of return is 3%, an annuity calculator says the present value is about $420,000. If you retired today and you were at the max salary each year, you would have contributed about $280,000 between yours and your employer’s shares.</p>
<p>Is that a good deal? Maybe.</p>
<p>If, like me, you hit full retirement age in 15 years, and assuming no inflation between now and then, you would have contributed about $480,000 in taxes for your $420,000 NPV.</p>
<p>So over 45 years of contributions, your total return is about -13%.</p>
<p>Is that a good deal? From a purely financial point of view, it doesn’t seem so good.</p>
<p>It is a good deal for the majority of the population. </p>
<p>It is a bad deal for me. So what?</p>
<p>The selfishness of some of the posts irritate me. </p>
<p>I think we should get rid of every real estate tax benefit And tax real estate gains at ordinary rates because I don’t care about those benefits.
Screw it. It is not a good deal for me.
Low interest rates are a bad deal for me. Interest rates should be raised.
And I think we should give people what they want and get the govt out of the mortgage business. </p>
<p>We should just do that. Get the govt out. We are told all day that there is too much govt. Let’s see what happens. I know what is going to happen. Lol</p>
You are the one, IIRC, who insists that SS is a pension plan. So, analyzing it in financial terms, as a pension plan it is a disaster.</p>
<p>It’s not a pension plan though, so while it is an interesting intellectual exercise, it doesn’t mean much.</p>
<p>If you are accusing me of being selfish, well… you will not find any posts anywhere where I advocate for lowering FICA tax or reducing benefits.</p>
<p>Notrichenough, you are complaining and complaining about how SS doesnt work for you. </p>
<p>It doesn’t matter what I call SS. Don’t call it a pension. I don’t care. I don’t care if SS is a bad return for you. </p>
<p>I do care that SS helps the middle class. How much has the average
50 year old saved?'or 60 year old?</p>
<p>You got bailed out notrichenough.your bail out is worth more than any shortcomings you may have with SS. Look at your total situation. You did well. </p>
<p>I am glad you are doing well. Look how excited you were to find out a 300 month pension is worth 50,000. </p>
<p>I would be happy too. Them you come up with these bs inflation numbers to disparage SS. Really…disgusting.</p>
<p>The Social Security system was designed, intentionally, so that people receiving the minimum benefit receive far more than they pay in, while those paying the maximum tax and receiving the maximum benefit (ie making the maximum contribution because they make more than the top social security wage) receive less than they pay in. So it shouldn’t come as a surprise if research confirms this. It was designed this way so that the poor wouldn’t starve, and those better off wouldn’t expect to live entirely on their social security benefits. We are rediscovering the wheel here.</p>
<p>"And you got bailed out which added hundreds of thousands or more to your net worth. "</p>
<p>I’m not certain what dstark is referring to but it may be that Bernanke and crew have inflated the stock market, so those with high equity exposure have cleaned up over the last 5 years.</p>