Question for all about Social Security.

[Care4all]

what i don't get, is why oh why, if the banks need money, they don't raise the interest yields on CD'S and savings accounts so that it is an incentive to save?

Isn't THAT what is suppose to happen when money is short?

care

 

[American Horse]

From what it sounds like Obama is trying to make universal healthcare optional. That said, if Social Security was optional would you still participate and why?

Personally I would not. I would rather have my money in a 401k.

Back when I had some lead time I would've definitely gone along with making a part of it optional but private; that was the only option that was ever politically proposed. As time went on the necessary lead time evaporated, becoming too short for recovery from market blips and would've foresworn that option when that threshold was crossed.

It's pretty clear that someone qualified for a 401k, or self employed people with their IRAs are much better off if they invested in them sufficiently prior to retirement and in addition to S.S. The risk in those would've been pretty much eliminated if they were invested in bank Certificates of Deposit. Twenty years ago you might easily have gotten 7% (just guessing), a year ago 5% (know for a fact) and now 3-4%, all of which would've been more advantageous than money paid into the Soc Sec System.

But now, having learned how the government can damage the private investment system for saving, we have to look at it as being much more risky. The government has recently abrogated rules we all thought were iron-clad and which would've been protected by the government agencies or the rule of law. We should all have grave doubts about that now since the secured bond-holders of Chrysler were reduced to unsecured status behind those who were unsecured (unions) or came later (US govt).

 

[Skull Pilot]

what i don't get, is why oh why, if the banks need money, they don't raise the interest yields on CD'S and savings accounts so that it is an incentive to save?

Isn't THAT what is suppose to happen when money is short?

care

The government is in a tizzy that people ARE actually saving more.

The government wats you to spend not save. God forbid you save enough so that you don't need a government hand out.

 

[Oddball]

what i don't get, is why oh why, if the banks need money, they don't raise the interest yields on CD'S and savings accounts so that it is an incentive to save?

Isn't THAT what is suppose to happen when money is short?

care

Because Fed easy money policy is artificially keeping interest rates below the level that organic market forces would cause them to rise.

 

[Valerie]

Hello!!!!! People... use your head...

YOU WILL GET LESS OUT OF SOCIAL SECURITY THEN WHAT YOU PUT INTO IT. Do you not understand this????? If you put $50000 into Social Security during your lifetime you will get less than $50000back when you retire plus being that the average life expectancy is 77.

FASTSTATS - Life Expectancy

You are only going to collect Social Security for 10-15 years!!!!

With a 401k your are averaging about a 10% return each year over the last 30 years... Plus you can give this money to your kids when you die.... or give it to the ACLU, or ACORN,etc...

My employer matches 100% of my FICA plus I get 13% of my gross set into an SEP IRA, so for me it works fine...Still I am not happy about seeing those projected SS income/disability numbers decrease. We need to do SOMEthing NOW before it's too late for many people. I don't claim to know all the answers, I just see what's happening and I know it is EXTREMELY serious.

 

[Skull Pilot]

Hello!!!!! People... use your head...

YOU WILL GET LESS OUT OF SOCIAL SECURITY THEN WHAT YOU PUT INTO IT. Do you not understand this????? If you put $50000 into Social Security during your lifetime you will get less than $50000back when you retire plus being that the average life expectancy is 77.

FASTSTATS - Life Expectancy

You are only going to collect Social Security for 10-15 years!!!!

With a 401k your are averaging about a 10% return each year over the last 30 years... Plus you can give this money to your kids when you die.... or give it to the ACLU, or ACORN,etc...

My employer matches 100% of my FICA plus I get 13% of my gross set into an SEP IRA, so for me it works fine...Still I am not happy about seeing those projected SS income/disability numbers decrease. We need to do SOMEthing NOW before it's too late for many people. I don't claim to know all the answers, I just see what's happening and I know it is EXTREMELY serious.

ALL employers pay half of SS taxes. It's the law

 

[Valerie]

Hello!!!!! People... use your head...

YOU WILL GET LESS OUT OF SOCIAL SECURITY THEN WHAT YOU PUT INTO IT. Do you not understand this????? If you put $50000 into Social Security during your lifetime you will get less than $50000back when you retire plus being that the average life expectancy is 77.

FASTSTATS - Life Expectancy

You are only going to collect Social Security for 10-15 years!!!!

With a 401k your are averaging about a 10% return each year over the last 30 years... Plus you can give this money to your kids when you die.... or give it to the ACLU, or ACORN,etc...

My employer matches 100% of my FICA plus I get 13% of my gross set into an SEP IRA, so for me it works fine...Still I am not happy about seeing those projected SS income/disability numbers decrease. We need to do SOMEthing NOW before it's too late for many people. I don't claim to know all the answers, I just see what's happening and I know it is EXTREMELY serious.

ALL employers pay half of SS taxes. It's the law

Mine pays double the required amount.

 

[Oddball]

ALL employers pay half of SS taxes. It's the law

Urban myth.

Do you think that employers would be sending the money they "contribute" to your FICA taxes, if they didn't have that money to pay you in the first place??

The employee pays it all.

 

[Valerie]

ALL employers pay half of SS taxes. It's the law

Urban myth.

Do you think that employers would be sending the money they "contribute" to your FICA taxes, if they didn't have that money to pay you in the first place??

The employee pays it all.

The Federal Insurance Contributions Act (FICA) tax (pronounced /ˈfаɪkə/) is a United States payroll (or employment) tax[1] imposed by the federal government on both employees and employers to fund Social Security and Medicare [2] —federal programs that provide benefits for retirees, the disabled, and children of deceased workers. Social Security benefits include old-age, survivors, and disability insurance (OASDI); Medicare provides hospital insurance benefits. The amount that one pays in payroll taxes throughout one's working career is indirectly tied to the social security benefits annuity that one receives as a retiree.[citation needed] This has led some to claim that the payroll tax is not a tax because its collection is tied to a benefit.[3] The United States Supreme Court decided in Flemming v. Nestor (1960) that no one has an accrued property right to benefits from Social Security.

The Federal Insurance Contributions Act is currently codified at Title 26, Subtitle C, Chapter 21 of the United States Code.[4]

Federal Insurance Contributions Act tax - Wikipedia, the free encyclopedia

 

[Care4all]

last banking crisis , when they needed money in the 80's, banks had to pay 13%-21% interest on CD's....my parents, became millionaires because of this high interest yield period...they took everything they had scratched to save at that point and put the money in these high yielding CD's and let it ride for nearly 10 years! My mother never worked and my father was just an enlisted lifer in the Air Force, then worked for the FAA... not a doctor, lawyer or indian chief....

what was so different then?

 

[Valerie]

ALL employers pay half of SS taxes. It's the law

Urban myth.

Do you think that employers would be sending the money they "contribute" to your FICA taxes, if they didn't have that money to pay you in the first place??

The employee pays it all.

Just a matter of how you shuffle the paperwork, so to speak.

 

[Oddball]

ALL employers pay half of SS taxes. It's the law

Urban myth.

Do you think that employers would be sending the money they "contribute" to your FICA taxes, if they didn't have that money to pay you in the first place??

The employee pays it all.

The Federal Insurance Contributions Act (FICA) tax (pronounced /ˈfаɪkə/) is a United States payroll (or employment) tax[1] imposed by the federal government on both employees and employers to fund Social Security and Medicare [2] —federal programs that provide benefits for retirees, the disabled, and children of deceased workers. Social Security benefits include old-age, survivors, and disability insurance (OASDI); Medicare provides hospital insurance benefits. The amount that one pays in payroll taxes throughout one's working career is indirectly tied to the social security benefits annuity that one receives as a retiree.[citation needed] This has led some to claim that the payroll tax is not a tax because its collection is tied to a benefit.[3] The United States Supreme Court decided in Flemming v. Nestor (1960) that no one has an accrued property right to benefits from Social Security.

The Federal Insurance Contributions Act is currently codified at Title 26, Subtitle C, Chapter 21 of the United States Code.[4]

Federal Insurance Contributions Act tax - Wikipedia, the free encyclopedia

Doesn't matter what Wiki sez....This is basic accounting.

The money that employers supposedly pay to FICA comes out of the total pool of money that is available for employees.

 

[KMAN]

Let's say you make $100000 per year.. The current SS tax is 6.2%

What is the Social Security tax rate for 2008? | AccountingCoach.com Q&A

Let's say you work from age 25 - 65 ( 40 years)

$100000 per year for 40 years = $4,000,000 X 6.2% = $248,000

I know you probably get raises but the percentage stays the same but will probably increase being that the program is failing...

So $248,000 has been paid for Social security over 40 years.

Your expected Social Security check when you retire can be somewhat calculated here.

Estimate Your Retirement Benefits

Your return would be $9000 per month after cost of living increases... It would take 27 months to break even... So once you are 68 years old you will start making money on what you put in... Congratulations.

Now 401k... Put 6% per year into a 401k.

What is your monthly salary? $8333
What percent of your salary are you contributing to your 401(k) plan? 6%
What rate of return do you expect on your investment? 8% (conservative estiment)
How many years until you retire? 40
The amount in your 401(k) plan at retirement: $ 1,745,434.10

You take your $9000 a month when you retire and I'll take my 1.7 million....

 

[Valerie]

what i don't get, is why oh why, if the banks need money, they don't raise the interest yields on CD'S and savings accounts so that it is an incentive to save?

Isn't THAT what is suppose to happen when money is short?

care

Yes, I have been wondering this too. I think the answer is they screwed up so badly with their defaults, now they can barely afford to pay even the lowest yields. {YET}

 

[amrchaos]

Let's say you make $100000 per year.. The current SS tax is 6.2%

What is the Social Security tax rate for 2008? | AccountingCoach.com Q&A

Let's say you work from age 25 - 65 ( 40 years)

$100000 per year for 40 years = $4,000,000 X 6.2% = $248,000

I know you probably get raises but the percentage stays the same but will probably increase being that the program is failing...

So $248,000 has been paid for Social security over 40 years.

Your expected Social Security check when you retire can be somewhat calculated here.

Estimate Your Retirement Benefits

Your return would be $9000 per month after cost of living increases... It would take 27 months to break even... So once you are 68 years old you will start making money on what you put in... Congratulations.

Now 401k... Put 6% per year into a 401k.

What is your monthly salary? $8333
What percent of your salary are you contributing to your 401(k) plan? 6%
What rate of return do you expect on your investment? 8% (conservative estiment)
How many years until you retire? 40
The amount in your 401(k) plan at retirement: $ 1,745,434.10

You take your $9000 a month when you retire and I'll take my 1.7 million....

Tell me--what are you investing in that gives an 8% return in this market??
GIVE ME YOUR SECRET!!

 

[Care4all]

Urban myth.

Do you think that employers would be sending the money they "contribute" to your FICA taxes, if they didn't have that money to pay you in the first place??

The employee pays it all.

The Federal Insurance Contributions Act (FICA) tax (pronounced /ˈfаɪkə/) is a United States payroll (or employment) tax[1] imposed by the federal government on both employees and employers to fund Social Security and Medicare [2] —federal programs that provide benefits for retirees, the disabled, and children of deceased workers. Social Security benefits include old-age, survivors, and disability insurance (OASDI); Medicare provides hospital insurance benefits. The amount that one pays in payroll taxes throughout one's working career is indirectly tied to the social security benefits annuity that one receives as a retiree.[citation needed] This has led some to claim that the payroll tax is not a tax because its collection is tied to a benefit.[3] The United States Supreme Court decided in Flemming v. Nestor (1960) that no one has an accrued property right to benefits from Social Security.

The Federal Insurance Contributions Act is currently codified at Title 26, Subtitle C, Chapter 21 of the United States Code.[4]

Federal Insurance Contributions Act tax - Wikipedia, the free encyclopedia

Doesn't matter what Wiki sez....This is basic accounting.

The money that employers supposedly pay to FICA comes out of the total pool of money that is available for employees.

I agree that the money the employer matches for ones SS is actual employee compensation that they would get otherwise....all statistics show such, as well.

Plus, when i did work, the corporations that employed me sent me a recap of my total compensation and it always included what they paid in SS in my name, alomg with bonus, salary, 401k match, life insurance policy, their share of my health care policy etc...all included as part of my total compensation package.

care

 

[Skull Pilot]

My employer matches 100% of my FICA plus I get 13% of my gross set into an SEP IRA, so for me it works fine...Still I am not happy about seeing those projected SS income/disability numbers decrease. We need to do SOMEthing NOW before it's too late for many people. I don't claim to know all the answers, I just see what's happening and I know it is EXTREMELY serious.

ALL employers pay half of SS taxes. It's the law

Mine pays double the required amount.

Excuse me, but no employer voluntarily pays more money to the government than they have to.

7.5% your pay is taken from your check and 7.5% is contributed, by law, by your employer. For a total of 15% of your total income that goes to SS and medicare.

 

[Skull Pilot]

ALL employers pay half of SS taxes. It's the law

Urban myth.

Do you think that employers would be sending the money they "contribute" to your FICA taxes, if they didn't have that money to pay you in the first place??

The employee pays it all.

tell that to my accountant. I send a check to the feds for the employer share of payroll taxes twice a month.

You can call it a 100% employee funded tax but that assumes the employer would pay that additional 7.5% to the employee if SS was abolished. That might or moght not be true.

 

[Valerie]

ALL employers pay half of SS taxes. It's the law

Mine pays double the required amount.

Excuse me, but no employer voluntarily pays more money to the government than they have to.

7.5% your pay is taken from your check and 7.5% is contributed, by law, by your employer. For a total of 15% of your total income that goes to SS and medicare.

I mean to say they pay both up front, but as you point out, half is really my own compensation in the first place. My employer also pays 100% of my health benefits above and beyond my taxable income and they provide an SEP IRA as well so I don't need to opt out of SS, is my point. My husband has opted out of paying into SS at all and he has been investing it on his own for ten years now.

 

[Valerie]

ALL employers pay half of SS taxes. It's the law

Urban myth.

Do you think that employers would be sending the money they "contribute" to your FICA taxes, if they didn't have that money to pay you in the first place??

The employee pays it all.

tell that to my accountant. I send a check to the feds for the employer share of payroll taxes twice a month.

You can call it a 100% employee funded tax but that assumes the employer would pay that additional 7.5% to the employee if SS was abolished. That might or moght not be true.

He means even though you're paying it, it is really your employees earnings that you are paying to the IRS instead of to your employee...However you want to look at the paperwork shuffle, it is what it is.