I get to opt out of Social Security - is that fair?

Discussion in 'Politics' started by OohPooPahDoo, Mar 9, 2012.

  1. OohPooPahDoo
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    OohPooPahDoo Gold Member

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    As an employee of the state of Lousiana, I am allowed to opt out of Social Security.
    I'm a temporary (2 years or less) employee, therefore my FICA contribution - instead of going to Social Security - goes to a deferred compensation fund. I get to choose from a list of investments (and I would note the selection of low risk funds was much smaller than the selection of higher risk funds).

    (Permanent employees of the state pay into the state retirement system instead of social security, temporary employees get the deferre compensation fund)

    The employer match also goes into this fund. I pay 7.5%, state pays 6.2%, for a total of 13.8% of pre-tax income.

    Is that fair? This means Social Security has less $$$$ to pay current beneficiaries. It also means I could lose the investment through bad luck or poor management - then what happens if I need disability from social security after? It would come out of the not contributor paid welfare disability instead of the contributor paid disability insurance program.
     
    Last edited: Mar 9, 2012
  2. Zander
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    Zander Platinum Member

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    If you are worried- don't opt out. I wish we all had that choice..
     
  3. OohPooPahDoo
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    OohPooPahDoo Gold Member

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    I'm not worried - if I opt out and there is a negative consequence past the loss of the investment, it will mostly be born by the U.S. taxpayers. THe positiive consequences of opting out (investment return) will be mine to keep, though.

    I've not paid into social security since 2004. For some reason, graduate assistantship income is completely exempt from all retirement taxation - federal or otherwise. If this post-doc gig lasts 2 years, that's 10 years of working, receiving earned income - and NOT paying FICA.
     
  4. g5000
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    g5000 Diamond Member

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    Welcome back to 1934.
     
  5. healthmyths
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    healthmyths Gold Member Supporting Member

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    SUGGESTION!!!

    Why don't you direct your investments into the SAME US treasuries that Social Security invests in?
    Then you don't have to worry about the safety!
     
  6. Vel
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    Vel Gold Member

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    You say that like it makes a difference or something? Surely it must not otherwise Obama wouldn't being using a lower FICA contribution for employees in order to try to buy votes.
     
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  7. AVG-JOE
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    AVG-JOE American Mutt Staff Member Gold Supporting Member

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    Just don't be one of the people whining at the Social Security Office when they tell you that at 62 your benefit is only worth $740 a month. And make sure you save some of that difference, because the SSI paupers guarantee after age 65 is only $698.
     
  8. DiamondDave
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    DiamondDave Army Vet

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    Wish I had the choice to opt out and invest for myself... even now being in my 40's I would be better off
     
  9. MikeK
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    MikeK Gold Member

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    I don't know how old you are but I've noticed that until they reach fifty (that seems to be the magic number) most people never truly believe they will ever get old. This is why so many young people resent the FICA deductions from their paychecks and expediently accept the propagandized notion that Social Security will be bankrupt by the time they reach eligibility (which they don't believe they ever will).

    I understand this syndrome because I was affected by it. The reality that I would someday be a tired old man was beyond my ability to accept. But I'm seventy-five now, soon to be seventy-six, and I have a firm grip on that reality. I've been collecting Social Security for ten years and let me assure you it is a very welcome (and necessary) supplement to my civil service pension. On the first of every month when the Government makes that direct deposit in my checking account I say thanks to FDR from the bottom of my heart. Because I know that so long as the U.S. Government remains solvent that monthly deposit will keep coming.

    But what if George Bush had his way and was able to privatize Social Security. How many more of today's seniors would be looking for work as Wal-Mart Greeters after the Market took its infamous second dive and wiped out thousands of 401 accounts, corporate pensions and stock portfolios? Keep in mind that Social Security was created to protect retired people against the kind of disaster that brought on the Great Depression -- and it is doing just that today. So take my advice and keep pumping money into FICA. It's the best investment you can possibly make.

    And take my word for it that you will get old someday. It happens to the best of us.
     
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  10. DaGoose
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    DaGoose Gold Member

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    And your post is precisely what these "Social Security Nay-Sayers" seem to miss. But I don't hear that as much during the bear market performance lately.

    And just how much savings would you need?

    How Much Retirement Savings Do You Need? - CBS News

    So to collect a mere $20,000 for 20 years one would need $400,000? Or if you expect to live another 33 years you would need $660,000?

    Now $20,000 a year would allow you to exist but not much more than that. And God forbid that the wingnuts succeed in doing away with Medicare. Because you just lost that $20,000 and that probably would not cover pre-existing conditions.

    Ya....life for the average American would go downhill quick if we allowed the wingnuts to have their way.
     

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