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 Don't Reduce Social Security

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Thump

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PostSubject: Don't Reduce Social Security   Fri Mar 25, 2016 9:43 am

People didn't trust the government to be able to pay
the benefits promised so a trust fund was created to
assure the people that there would be money availble
if the gov went broke.  The trust fund is now lower
than expected payouts many years from now.  Some
want to reduce the benefits anyway and not pay what
was promised anyway.

The average Social Security payment is $1,500.
So, the average is above poverty level but just barely.
Many are already getting the minimum and thereby
qualifying for other government benefits like food
stamps.  It doesn't come from Social Security but so
what?

If the amount of the payouts are reduced the average
Social Security recipient will be in poverty and living
off food stamps.  $1500 is not enough to pay rent in
some cities.  Reducing the payout is not a good option.

Source of some of the above at newretirement.com in
and article "Average Retirement Income 2016:
How Does it Compare to Your Plans?" LINK HERE

It's a blog and this is just an opinion post.
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rockhump

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PostSubject: Re: Don't Reduce Social Security   Sat Mar 26, 2016 6:33 am

Good article Thump. Seems like an oxymoron that social security doesn't really provide security. Should it? I tend to agree with this paragraph..

"As you can see, retirees today are more dependent than ever before on Social Security income. One of the biggest problems with that approach, aside from the fact that the program isn’t incredibly stable, is that Social Security was never intended to be a primary source of income. It was intended as a boost."

Part of the problem is that few people had the foresight of you and Ma to put away some money for retirement. I'm generally stunned by the number of friends I have that make good money and seem proud that they are putting in the minimum to get employee matching. Pensions are virtually extinct so one needs to save more, be more frugal, and or work longer in life. Very little evidence anyone wants to do that.
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PostSubject: Re: Don't Reduce Social Security   Sun Mar 27, 2016 7:51 am

Guess I shouldn't have taken my figures from that blog.

"The average monthly Social Security benefit is $1,335 ($16,020 per
year)" - LINK From "Here's What the Average Baby
Boomer Has Saved for Retirement" and I've seen similar
amounts other places since I first posted.

So if Social Security is cut even more will then go on
government assistance which I believe includes a cell phone.
We really can't afford it.

I really wasn't too keen on the blog but it did make you think.
In answer to one of your questions, "Seems like an oxymoron
that social security doesn't really provide security. Should it?"

Yes.  Or they should have named it something else when
they started it.  Nothing fancy but security.
Three meals a day and a warm dry place to sleep at least.
According to the Geneva Convention, we are bound to
supply that to prisoners of war.

Not too good when it is less than being on welfare.

The government owes the money.  If they didn't put enough in
the trust fund to cover their liability it's their fault.
Like putting up a deposit on a rental, it doesn't limit your
liability to just the deposit.
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PostSubject: Re: Don't Reduce Social Security   Sun Mar 27, 2016 12:59 pm

I agree with the poorly worded naming of it. Should have been something like "Social Preservation".
I also agree it should never be cut and in fact raised. I would be for raising the cap on income to a higher level and perhaps even raising taxes to preserve it on one condition.. It truly is kept from the general fund so Congress doesn't spend it on something else.

I'll have to stick with my initial thinking on it's intention. FDR would have probably used the "3 legged stool" analogy if he had thought of it.

STATEMENT BY PRESIDENT FRANKLIN ROOSEVELT ON SIGNING THE SOCIAL SECURITY ACT -- August 14,1935 (This is FDR's most famous one-line summary of the intent of Social Security.)
"Because it has become increasingly difficult for individuals to build their own security single-handed, Government must now step in and help them lay the foundation stones .

The Act does not offer anyone, either individually or collectively, an easy life--nor was it ever intended so to do. None of the sums of money paid out to individuals in assistance or in insurance will spell anything approaching abundance. But they will furnish that minimum necessity to keep a foothold; and that is the kind of protection Americans want. . ."
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PostSubject: Re: Don't Reduce Social Security   Sun Mar 27, 2016 5:04 pm

Glad to hear it. Forgive me if I continue on, I can't sit down
long enough to write and article so I'll just post a few things
at a time.

One example:
Sophia’s story is typical. She worked for 25 years as a clerk in
a factory and doing odd jobs for wages that averaged about
$9 (above minimum wage - Thump) per hour (about $18,000
a year). When she retired at age 66 last January, she was
entitled to a yearly Social Security benefit of $9,794 — a
benefit that falls beneath the federal poverty guideline of
$11,670 for a single person - LINK (AARP)

I don't know how much it would be for someone making
minimum wage. No longer a set minimum benefit for
Social Security. Wonder what J R gets.
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PostSubject: Re: Don't Reduce Social Security   Mon Mar 28, 2016 9:32 am

A little pause to address something you said in your first
post rockhump.  It's off the Social Security topic a little
but still relevant.

rockhump said:
"I'm generally stunned by the number of friends I have that make good money and seem proud that they are putting in the minimum to get employee matching."

Yes, I think it's letting feelings and emotions get in  the
way.  Those who seem to be prospering now and living
a good life tend to be overconfident about the future
and just feel everything will stay the same later.
It prevents them from seeing reality.  If you want a
good life after retirement don't just rely on survival from
Social Security and the minimum retirement savings.

I have met a few that are a little modest and will say that
even if they are maxing out their retirement savings just to
let others know that they should at least get the matching.
Thant's the most important part.  They are the exceptions.
People change jobs much more often now and once you're
vested you can roll it over into an IRA when you leave.

Some have other savings accounts.  The tax deferred
accounts are generally better but not always if you're
locked into a 401k with high fees and a sorry selection
of high fee mutual funds.

I do not want to trust someone else to invest any of
my money or pay their high fees.  If I was married and
filed jointly and made less together than $183,000
I would put the max in an IRA even if I had to
reduce my contribution to a 401k to do so.

My advice to someone in their 20's or 30's would be,
after the matching put the remainder of what you
can invest into a ROTH IRA and buy VOO using a
discount online broker.  Damn the deducfion, 30 or so
years should handily overpower that,the deduction
will just be spent and tax free withdrawals of
principal and earnings are wonderful.  I put mine in
individual stocks but I had the time to do the research,
most people either don't or won't.
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