{ "media_type": "text", "post_content": "If Social Security gets repealed/ reduced / changed, can I get a refund for the tax I've already paid? Or is this whole thing just a scam...", "post_id": "58731481fab572001642c29f", "reply_count": 76, "vote_count": 14, "bowl_id": "552d1d24dc1c586b09d2d051", "bowl_name": "Consulting", "feed_type": "crowd" }

If Social Security gets repealed/ reduced / changed, can I get a refund for the tax I've already paid? Or is this whole thing just a scam...

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What exactly is wrong with Social Security? It is slowly drawing down on the trust fund. Even in perpetuity with no changes, it can still pay ~75% of promised benefits. Why round that down to zero? Relatively small changes can resolve that gap. Raise the cap on earnings, tweak the benefit formula, tinker with COLA, you're there. And if we actually experience the level of GDP growth Trump has promised, we might not need any of it!

As for the claims of it being a Ponzi scheme: All annuities have the features frequently cited as making it a Ponzi scheme: Lots of payers in the beginning and few beneficiaries, followed by a mature stage where many more beneficiaries start drawing. And beneficiaries receive their benefits from a combination of asset liquidation and current income. The difference is that Social Security's income and benefits are changeable over time to allow the program to survive whereas an annuity contract is fixed at inception.

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@DD1, Libertarians want to end the system because they don't agree with the idea of the government intervening to ensure citizens can't become destitute and live their final years in poverty. They believe such a government program is by-definition "inefficient" and a "waste of money."

However, if you look at the actual activities SSA performs, such as administering claims, it does them quite efficiently. As for investment returns, it is mandated by law to invest only in US Government securities to achieve two things: (1) avoid investment risk as much as possible as it is meant to be an absolute backstop, and (2) prevent the government from having to make asset allocation decisions that would serve to benefit some private companies over others.

As for vesting at 26: You "vest" (not the technical term) when you achieve 40 quarters of covered employment. So this suggests you started working when you were 16. That's quite admirable. However, it doesn't mean you had to earn a lot in that period. So modest means isn't really a part of it.

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Lol if the politicians in 1935 knew that SS would spiral out of control into another safety net (with very real solvency concerns), they would have never let FDR go through with it. Even in its 1935 state there was already a lot of controversy and opposition because some politicians thought it was socialist and anti-constitutional

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It's currently still there though. I'm not planning on it. Just saying.

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A lot of old people vote.. it appears they like free money.

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@ PwC1, the beneficiaries PAID for their benefits. They aren't getting "free money."

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Clearly they didn't pay enough.. also, paying money in isn't a requirement, so many are getting free money.

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There is no trust fund- they are T bills, getting the T Bill interest rate payable by the general fund. The number of payers is shrinking. BTW - annuities do not function by taking in current funds and paying previous payers. They invest in things that get returns without requiring additional investment (even if the do get them)

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"They didn't pay enough"... what, did something happen to you to make you believe that the fund doesn't exist? Did it run out? Or did Republicans just tell you there's not enough and so it's never going to work??

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Money in < obligations... the issue transcends partisan politics, imo.

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@DD1, you're not allowed out because if you experience a financial catastrophe, we won't let you die a destitute 70 year old in the street

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@DD1, yes, there is a trust fund. It's a complicated accounting system, but it's there.

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OW1 I'm good, thanks. I don't need your charity now or ever. I've got a family and children (and money). D4 - my bloodline has received the actuarial short end of the stick here- my people worked too hard and died young. These programs should be private and transferable wealth generating mechanisms or not exist at all.

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OW1 you must be a financial consultant

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DD1, That's wonderful for you. I hope your moral superiority comforts you.

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Thanks OW1 - I think it comes down to the numbers. Perhaps one of our consulting firms can lay out the options for the country 😁

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@OP, if you want to play with the numbers, the Society of Actuaries has an online game you can play where you pick different reforms and see which combos get you back to solvency: http://www.actuary.org/content/try-your-hand-social-security-reform

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As for the discussion about the intention behind Social Security. It was born out of the Depression, but wasn't meant to be the immediate fix to it. Other New Deal programs like the Works Progress Administration were meant to do that. SSA was passed in 1935 but didn't pay its first claim until 1940. Even then it only paid to people who were employed and therefore paid SSA taxes. So it couldn't help those who were suffering most from the Depression.

The point was to make sure people would be taken care of in a future Depression, and more generally to keep SENIORS who worked all their lives out of poverty. (Not to keep people in general out of poverty.) And indeed, during the Great Recession, seniors lost a lot of money in their private investments, but Social Security provided a safety net.

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To P1's point, it appears that Obamacare is going to get repealed before the implementation of the death panels. All these broken promises.

So The actuaries overestimated inputs but didn't blow it? You realize that makes no sense right? That is the definition of failure and why these large programs shouldn't exist - nobody will get it right

Hope they had kids, served their country, or made a bunch of money OP. that's how it has worked in the past. Otherwise it's not our problem.

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