Question for all about Social Security.

[Valerie]

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 might not be true.

Oh, OK I see what you mean!

 

[sealybobo]

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....

Good luck getting 8%. So really, it might be a million at best. And then the economy tanks because the GOP and Wallstreet bankers get greedy again in 40 years and your portfolio gets cut in half. So its only $500K. That won't be much in 40 years.

And can the health insurance companies take your $ if you get a sickness that isn't covered? Your health might eat up all your savings.

Anyways, you can do this and get social security.

And many people won't be able to save $1 mill.

And if everyone does, a mill won't be worth shit. So what about that?

 

[Oddball]

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.

But that money you send in for "your share" of FICA still comes from the overall percentage of money in your business model allotted for labor.

While you're right that if the employer didn't have to send that 7.5% in, that they could just pocket it. Of course, they could price their products more competitively or hire an additional employee, as well. In any case, it still drives down the total value of the compensation paid to the employee, whether in terms of less take home pay or in higher prices they have to pay for the things they buy.

 

[sealybobo]

Advocates of privatization are using the financial stress of the baby boomers' retirement to undo the advances that Social Security has brought. Relieving the financial pressures, however, has become a phony excuse for privatization.

We too believe that Social Security pension reform belongs on the national agenda. But what is the core problem to be reformed? Is there a financial crisis that demands not only urgent action, but major revamping of the system? Must we "privatize" Social Security in order to save it? Or are circumstances that might warrant relatively minor adjustments in finance being used as a pretext for a more fundamental shift in national commitments?

We think Social Security finance requires prudent adjustment, but not major revision. Proposals to "privatize" substantial portions of the pension package have no relationship to solving financing problems. The real issues involve profoundly political choices, not technical ones: Do Americans want a society that insures all workers and their families against the dual risks of dying too young and outliving their private retirement savings? If so, we can "socialize" these risks only through collective social insurance. Or, do Americans want a society that merely mandates savings and investment for retirement, while leaving the ultimate security of workers and their families to be determined by their market success? If so, privatization is an appropriate response. But proponents of privatization are not practicing full disclosure. Privatization has much more to do with ideological preferences and economic interests than with the solvency of Social Security.

On the other hand, Peterson's assertion that something very like the current system cannot be financed is nonsense. Indeed, by gradually shifting to a partially funded system that invests in equity securities, there are ways to close this projected gap in future funding with no tax increases and extremely modest changes in current benefit levels.

For example, under the Social Security Advisory Council's option proposed by Ball and five other members, the total 75-year deficit can be eliminated, and then some, by six modest adjustments:

extend Social Security coverage to currently excluded state and local employees;
increase the length of the computation period for workers' average earnings from 35 to 38 years;
tax Social Security benefits that exceed already-taxed contributions, as with private-defined benefit retirement plans;
correct the current overstatement of the consumer price index used to calculate cost of living increases in accordance with the Bureau of Labor Statistics March 1996 proposal;
credit income taxes on Social Security pensions to the pension rather than to the Medicare trust fund;
shift approximately 40 percent of the Social Security trust funds, now invested in Treasury securities, into equity securities.

 

[midcan5]

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

I think the secret is in jail right now.

Actually social security - if you and your spouse or even just one of you live - can be better than savings. Of course it depends on your ability to save also live. SS is also insurance and helps your fellow citizens in need.

I think the best system is/was the corporate pension plans, they had the resources and the income to grow and provide for everyone. Today's 401k come with lots of hidden charges and lots of risk. I have both but the 401 can fluctuate badly.

In this example SS beat the market, which given the recent collapse isn't hard to believe. It took from 1929 to 1956 to recover the market value of 29.

One man's retirement math: Social Security wins | csmonitor.com

I really want these boys handling my 401k life savings?

The End of Wall Street's Boom - National Business News - Portfolio.com


[ame]http://www.amazon.com/Great-401-Hoax-Financial-Security/dp/0738208523/[/ame]

 

[Skull Pilot]

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.

if your husband is someone's employee, he cannot opt out of SS. the exception being if he is a state or municipal employee who pays into a pension

 

[Skull Pilot]

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

I think the secret is in jail right now.

Actually social security - if you and your spouse or even just one of you live - can be better than savings. Of course it depends on your ability to save also live. SS is also insurance and helps your fellow citizens in need.

I think the best system is/was the corporate pension plans, they had the resources and the income to grow and provide for everyone. Today's 401k come with lots of hidden charges and lots of risk. I have both but the 401 can fluctuate badly.

In this example SS beat the market, which given the recent collapse isn't hard to believe. It took from 1929 to 1956 to recover the market value of 29.

One man's retirement math: Social Security wins | csmonitor.com

I really want these boys handling my 401k life savings?

The End of Wall Street's Boom - National Business News - Portfolio.com

an 8% return over a 40 year working lifetime is NOT impossible even with the ups and downs of the market today.

you might not be getting 8% today but averaged out over 40 years, 8% is a conservative estimate.

 

[Oddball]

if your husband is someone's employee, he cannot opt out of SS. the exception being if he is a state or municipal employee who pays into a pension

You can if you're a 1099 employee, put your pay into one of several corporate entities and take your end compensation in the form of dividends.

 

[sealybobo]

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

I think the secret is in jail right now.

Actually social security - if you and your spouse or even just one of you live - can be better than savings. Of course it depends on your ability to save also live. SS is also insurance and helps your fellow citizens in need.

I think the best system is/was the corporate pension plans, they had the resources and the income to grow and provide for everyone. Today's 401k come with lots of hidden charges and lots of risk. I have both but the 401 can fluctuate badly.

In this example SS beat the market, which given the recent collapse isn't hard to believe. It took from 1929 to 1956 to recover the market value of 29.

One man's retirement math: Social Security wins | csmonitor.com

I really want these boys handling my 401k life savings?

The End of Wall Street's Boom - National Business News - Portfolio.com

I remember the GOP in 2003 or 2003 passed a law that allowed companies to rape their pension funds to help them get out of the recession we were in back then.

The GOP were smart about naming bills. I think it was called the Pension Protection Act.

But I believe they knew EVEN BACK THEN that a lot of companies were going to go bankrupt and renig on their pensions and so they spent up all the money they had tucked away.

I can't prove it was on purpose, but come on. Just like the bankers fucked up and then asked us for $750 billion at the end of Bush's administration. And now we find out they gave themselves an additional $9 trillion without even asking.

So why did they ask for the $750 billion? I'll tell you why. It was to make the Dems sign on and take the blame for shady bailouts. That's why Bush asked for it and the GOP didn't sign on. They made the Dems own it.

 

[Skull Pilot]

if your husband is someone's employee, he cannot opt out of SS. the exception being if he is a state or municipal employee who pays into a pension

You can if you're a 1099 employee, put your pay into one of several corporate entities and take your end compensation in the form of dividends.

If you get all your income reported on a 1099, you are not considered an employee but a contractor no? at least that's how i always interpreted it.

And if you are a shareholder or a partner in an LLC, you can collect a large portion of income in dividends but really you're not someone's employee if that's the case. that's an owner/self employed type of position

 

[Oddball]

if your husband is someone's employee, he cannot opt out of SS. the exception being if he is a state or municipal employee who pays into a pension

You can if you're a 1099 employee, put your pay into one of several corporate entities and take your end compensation in the form of dividends.

If you get all your income reported on a 1099, you are not considered an employee but a contractor no? at least that's how i always interpreted it.

And if you are a shareholder or a partner in an LLC, you can collect a large portion of income in dividends but really you're not someone's employee if that's the case. that's an owner/self employed type of position

Well, technically you are a contractor rather than a W-4 per-hour or salaried employee..

My point is that there's more than one way to skin a cat and how one can legally work in America with no SSN.

 

[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....

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

Sheesh... Use your head a little... The 8% is an average over the last 30 or so years.... Obviously it is hard to get 8% right now I thought that was pretty obvious but I guess not...

 

[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....

Good luck getting 8%. So really, it might be a million at best. And then the economy tanks because the GOP and Wallstreet bankers get greedy again in 40 years and your portfolio gets cut in half. So its only $500K. That won't be much in 40 years.

And can the health insurance companies take your $ if you get a sickness that isn't covered? Your health might eat up all your savings.

Anyways, you can do this and get social security.

And many people won't be able to save $1 mill.

And if everyone does, a mill won't be worth shit. So what about that?

sealy - You just don't listen do you.. Once again ... When you get close to retirement you put your money in a less risky account.... Do yourself a favor and talk to a retirement planner...

 

[Valerie]

You can if you're a 1099 employee, put your pay into one of several corporate entities and take your end compensation in the form of dividends.

If you get all your income reported on a 1099, you are not considered an employee but a contractor no? at least that's how i always interpreted it.

And if you are a shareholder or a partner in an LLC, you can collect a large portion of income in dividends but really you're not someone's employee if that's the case. that's an owner/self employed type of position

Well, technically you are a contractor rather than a W-4 per-hour or salaried employee..

My point is that there's more than one way to skin a cat and how one can legally work in America with no SSN.

You know, I have to say I'm all wet with what I said earlier about my husband's SS. I've always done our own tax returns until we started the business and now we file differently. I still do my own, but for the business I get it all together on the Quickbooks and then send his return out to be done by an accountant. I remember we decided for him not to take a W-2 income and thus he has no FICA payments, which is what I had in mind with what I said earlier. Of course now, upon thinking about it at dinner, I realize of course the schedule SE is for the purpose of figuring the Social Security tax.