Retirement Savings Accounts Draw U.S. Consumer Bureau Attention

[BillyV]

Apparently not that basic. You seem to have misunderstood. The investment will cover only the difference between benefits due and FICA collections. That will amount to less than 30% of the total.

Yes, but those new collections are also invested on a daily basis. The benefits will still be paid from those investments.

Only the difference between collections and current benefits, the surplus, is invested. That surplus was created precisely because of the shortfall the actuaries predicted.

No, all collections are invested immediately in special issue government securities, and all benefits are paid through the sale of those securities.

If all the income is invested, how do benefits get paid each month?

Money to cover expenditures (mainly benefit payments) from the trust funds comes from the redemption or sale of securities held by the trust funds. When "special-issue" securities are redeemed, interest is paid. In fact, the principal amount of special issues redeemed, plus the corresponding interest, is just enough to cover an expenditure.

The amount bought in 2011 was $1,015 billion, while the amount sold was $946 billion. See investment transactions for more detail and earlier years.

Trust Fund FAQs

 

[MHunterB]

In case this hadn't become obvious: We are successful investors - and will fight tooth, nail, and whatever to prevent our assets from being seized and tossed into a common pool so that the fools and idiots who never bothered to plan for retirement can mooch off of us.

Folks, we really need that 'patch' from Congress - the rule that says whatever they afflict J.Q. Public with, is what they have to take for themselves. No more Congressional exemptions!

 

[boedicca]

It is if you don't have financial background.

And the average 401(k) owner doesn't. He might drive a truck or install heating and air conditioning or do anyone of a million of other things which don't give him much time to study market trends and share offerings.

I have an engineering background, and Im usually terrible with money. They even have funds that do the transition FOR you.

It takes a few hours a quarter to handle your investment.

Anybody of normal intelligence can learn the basics of investing with an hour of teaching. You don't have to be an expert at it to learn how to read the ratings and risk level of any particular stock and, if you don't want to have to follow it all closely, mutual funds are the safest and easiest way to go.

And if you don't want any risk then go savings bonds, interest bearing savings, or CDs.

One thing is for sure, if you start young and put away 10% of your take home pay into a tax deferred retirement account, most especially if your employer will match some or all of your contributions, you will retire a millionaire. If you depend in social security alone you will retire a pauper well below the poverty line.

And importantly, one's private investments can't be spent by the government and replaced with IOUs to be paid by future taxpayers.

 

[boedicca]

And 40k per year when you are 65 will be worth what then?
3 months living expenses?

Maybe our government should quit debasing our currency and destroying the value of savings.

 

[martybegan]

In case this hadn't become obvious: We are successful investors - and will fight tooth, nail, and whatever to prevent our assets from being seized and tossed into a common pool so that the fools and idiots who never bothered to plan for retirement can mooch off of us.

Folks, we really need that 'patch' from Congress - the rule that says whatever they afflict J.Q. Public with, is what they have to take for themselves. No more Congressional exemptions!

I started contributing at 25, as soon as I was elegible and working full time. Never contributed below 8% and some years up to 12%.

Company matches 1st 3%.

That money is mine, no one elses.

 

[Foxfyre]

The most important fact to remember is that whatever taxpayer money for whatever purpose the government takes, it spends immediately and borrows against future tax revenues. And when they finally manage to effectively bankrupt the treasury and America unfriend places like China are no longer willing to underwrite our excessive spending, the Congress and President can end Social Security and Medicare with a simple majority vote. If they print enough money to keep it up, those dollars will be worth no more than a Mexican peso -currently worth about 7.5 cents to the American dollar.

Because they are spent the minute they hit the treasury, Social Security and Medicare contributions don't even earn a tiny bit of interest. Certain they aren't invested so that they can grow. Instead they drain vitality from the economy--every dollar taken in taxes is a dollar not invested in the private sector to hire people, increase wages and benefits, and expand the economy.

Depending on the government to take care of you in your old age is a pretty risky business these days. Far more risky than investing your own money in solid investments.