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

[OohPooPahDoo]

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.

 

[Zander]

As an employee of the state of Lousiana, I am allowed to opt out of Social Security.
Permanent employees of the state pay into the state retirement system instead. 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).

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.

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

 

[OohPooPahDoo]

As an employee of the state of Lousiana, I am allowed to opt out of Social Security.
Permanent employees of the state pay into the state retirement system instead. 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).

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.

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

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.

 

[g5000]

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.

Welcome back to 1934.

 

[healthmyths]

As an employee of the state of Lousiana, I am allowed to opt out of Social Security.
Permanent employees of the state pay into the state retirement system instead. 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).

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.

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

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.

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!

 

[Vel]

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.

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.

 

[AVG-JOE]

As an employee of the state of Lousiana, I am allowed to opt out of Social Security.
Permanent employees of the state pay into the state retirement system instead. 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).

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.

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

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.

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.

 

[DiamondDave]

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

 

[MikeK]

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.

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.

 

[DaGoose]

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.

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.

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?

For instance, suppose you need to generate a pre-tax annual retirement income of $20,000, in addition to your other retirement income. You'll need retirement savings of:

$400,000 using the 20 multiplier
$500,000 using the 25 multiplier
$660,000 using the 33 multiplier

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.

 

[Care4all]

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.

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.

uhhh, no vel....

the SS tax break is part of the stimulus and this money comes from federal income taxes sooooo, SS IS NOT being shorted with this tax break....not on the books....

 

[OohPooPahDoo]

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

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.

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!

The vast majority of FICA contributions aren't invested in anything, they are spent on current beneficiaries.

You are confused about what social security does. It is not equivalent to investing your contributions in treasuries. Social Security is an insurance program - and like all insurance programs, for an individual, its payout to payin ratio can vary wildly. You could, for instance, pay the max SS contribution per year all your life until the day you hit retirement age, and then next day you and your wife get hit by a bus and die - meaning you get $0 out of your investment. Or you might live to be 110 - which means your return will be far greater than the equivalent invested in Treasuries. There is no way to mimic the return of Social Security for an individual by investing in Treasuries. The closest you can get would be some sort of annuity by a private insurer, but even then, the kind that match the attributes of social security are hard to find.

 

[OohPooPahDoo]

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.

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.

If Obama raises taxes - he's an evil tax and spend liberal commie

If he lowers them - he's trying to buy votes.

Either way, we know he's up to no good, don't we?

In other words - he's black.

 

[OohPooPahDoo]

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

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.

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.

The statement they send out regulary tells you what your benefit would be.

SS was never meant to be the be all and end all of retirement. Its an insurance program that provides some income to those too old or too disabled to work. If all of your other investments fail, you can count on it (and if you can't, the whole nation is fucked anyway).

 

[OohPooPahDoo]

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.

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.

I agree with everything you say except that I should personally pump money into FICA. As an individual, to me - and since this job is temporary and I expect to be able to earn enough quarters to collect Social Seucirty by the time I retire anyway - NOT diverting it into deffered compensation means I lose a $13,700 tax protected retirement investment account that I would otherwise have - yet either way, I'll still get SS in the end.