Can Trump Be Trusted With Social Security?

[Couchpotato]

Bullshit

Just some quick numbers.

If someone gets a job at 18 making 25k a year and invests just what the government takes in SS from him and his employer at 6% return which is pretty conservative. When he’s 65 that money will pay him about 50k a year without touching the principle. He can then pass that money on to help the next generation get a head start. That’s assuming he never gets a raise in 47 years.

 

[initforme]

People need SS because wages have been too low.

 

[Toddsterpatriot]

People need SS because wages have been too low.

15.3% of their salary taken out of every paycheck has made take home pay lower.

 

[Robert W]

That's the way it works. My aunt drew her ex-husband's after they had been divorced for many years.

Thinking back, word got to me from family that my sister was profitable for members of the family. They got the added cash for her support.

 

[Couchpotato]

People need SS because wages have been too low.

See post 461.

 

[Marener]

Just some quick numbers.

If someone gets a job at 18 making 25k a year and invests just what the government takes in SS from him and his employer at 6% return which is pretty conservative. When he’s 65 that money will pay him about 50k a year without touching the principle. He can then pass that money on to help the next generation get a head start. That’s assuming he never gets a raise in 47 years.

I’m not getting anything that generous. Total savings at retirement would be $780k and safe withdrawal of 4% would be $31k. Due to inflation, that’s equivalent to $12k.

 

[Couchpotato]

I’m not getting anything that generous. Total savings at retirement would be $780k and safe withdrawal of 4% would be $31k. Due to inflation, that’s equivalent to $12k.

Anything under 10% is considered a conservative return. The interest on 780k even at 4% is 31k. So this hypothetical person could take 31k out before touching the principle. And he can pass that money on when he’s gone. How much SS can you pass to your kids again?

 

[Marener]

Anything under 10% is considered a conservative return. The interest on 780k even at 4% is 31k. So this hypothetical person could take 31k out before touching the principle. And he can pass that money on when he’s gone. How much SS can you pass to your kids again?

This is not sound advice. No one should expect 10% annual gains in perpetuity. Especially not in retirement when you are much less exposed to equities.

4% withdrawal rate is considered safe because it reduces sequence of return risk. The market sometimes goes down a lot and you need to account for this risk.

The value of social security is that it’s safe. You don’t need to worry about the market. The money will come in. It will adjust for inflation. It won’t run out.

 

[Couchpotato]

This is not sound advice. No one should expect 10% annual gains in perpetuity. Especially not in retirement when you are much less exposed to equities.

4% withdrawal rate is considered safe because it reduces sequence of return risk. The market sometimes goes down a lot and you need to account for this risk.

The value of social security is that it’s safe. You don’t need to worry about the market. The money will come in. It will adjust for inflation. It won’t run out.

I disnt use 10%. I used 6%. This person wouldn’t have to withdrawl any money from his account as the interest on his investment would be more than he made while working. SS is a wealth thief.

 

[Marener]

I disnt use 10%. I used 6%. This person wouldn’t have to withdrawl any money from his account as the interest on his investment would be more than he made while working. SS is a wealth thief.

The interest might be more, or the account could drop 20% in a year. That happens from time to time. Also, inflation means you need a little more each year. By the end of retirement, you’d need to pull out twice as much to maintain the same living standard if inflation is still only 2%.

 

[Couchpotato]

The interest might be more, or the account could drop 20% in a year. That happens from time to time. Also, inflation means you need a little more each year. By the end of retirement, you’d need to pull out twice as much to maintain the same living standard if inflation is still only 2%.

Yes but in my example the person made only 25k a year and never got a raise which is far less likely than not earning an average of at least 6% on your investment.

 

[jc456]

15.3% of their salary taken out of every paycheck has made take home pay lower.

for every paycheck. Over 50 years is quite a total

 

[Marener]

Yes but in my example the person made only 25k a year and never got a raise which is far less likely than not earning an average of at least 6% on your investment.

I'm not saying social security is the greatest deal in the world, but the value of social security is not just strictly based on what you pay in versus what you get out.

It's not a retirement account. It's a guaranteed pension. It's disability insurance. Hell, it's even a little life insurance too.

These factors raise the value of social security beyond just what you could have gotten in the market otherwise.

 

[Couchpotato]

I'm not saying social security is the greatest deal in the world, but the value of social security is not just strictly based on what you pay in versus what you get out.

It's not a retirement account. It's a guaranteed pension. It's disability insurance. Hell, it's even a little life insurance too.

These factors raise the value of social security beyond just what you could have gotten in the market otherwise.

The math just isn't on your side on this subject. Even at 4% interest which is less than a savings account right now you end up with 500k. The interest on 500k is 20k a year. The SS benefit for someone making 25k a year is 20k per year. Even if you take the 500k out and stuff your mattress with it you would be 90 before you ran out of money if you took the SS equivalent. SS is just another tax one the government is hoping they don't have to pay back with the old people welfare benefit you get at the end. It also keeps you beholden to the Government individually and generationally. It's not just not the greatest deal in the world it's one of the worst.

 

[Marener]

The math just isn't on your side on this subject. Even at 4% interest which is less than a savings account right now you end up with 500k. The interest on 500k is 20k a year. The SS benefit for someone making 25k a year is 20k per year. Even if you take the 500k out and stuff your mattress with it you would be 90 before you ran out of money if you took the SS equivalent. SS is just another tax one the government is hoping they don't have to pay back with the old people welfare benefit you get at the end. It also keeps you beholden to the Government individually and generationally. It's not just not the greatest deal in the world it's one of the worst.

But you’re forgetting inflation. In 30 years, even a low inflation rate of 2% means that everything is twice as expensive.

Thankfully social security indexes with inflation. Your brokerage account does not.

 

[Couchpotato]

But you’re forgetting inflation. In 30 years, even a low inflation rate of 2% means that everything is twice as expensive.

Thankfully social security indexes with inflation. Your brokerage account does not.

In the hypothetical the person makes 12 dollars an hour their entire life you moron, and he still ends up better off than with SS. Those numbers only get worse if you plug in anything close to real earnings and rates of return. SS is a horrible deal, for everyone. Unless you're bilking the system and claiming disability at 25.

 

[Toddsterpatriot]

I’m not getting anything that generous. Total savings at retirement would be $780k and safe withdrawal of 4% would be $31k. Due to inflation, that’s equivalent to $12k.

'
I show over $950K.
How much does the same guy get today from Social Security?

 

[jc456]

I'm not saying social security is the greatest deal in the world, but the value of social security is not just strictly based on what you pay in versus what you get out.

It's not a retirement account. It's a guaranteed pension. It's disability insurance. Hell, it's even a little life insurance too.

These factors raise the value of social security beyond just what you could have gotten in the market otherwise.

 

[Toddsterpatriot]

A guaranteed annuity is nice, especially for people who didn't save much.

 

[Lakhota]