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Chief
In my ideal world, social security would turn into a 401k style scheme (more specifically, just an expansion of the existing Thrift Savings Plan) where the government backstops your contributions (e.g. if you contributed $400k over your career, then the feds would guarantee $400k in your payout, a la FDIC insurance). There are no real downsides compared to the existing scheme as far as I'm concerned, only upsides, either for individuals or for the government. Individuals would be in control of their retirement funds and be able to direct their investments and the feds would be off the hook for payouts unless there's a severe market downturn when retirees start drawing on the annuity.
Ok, and a market crash that hits a bunch of really really crappy investors about to hit forcible retirees? I mean, the system isn't there to be efficient. It's there to address the problem of old people dying on the streets after getting too old/feeble to continue working. This isn't a bad idea, but it is a bad idea for the true problem statement. Unless we really do expect that the average American understands how to manage a 401k. (No, we don't. We can't even convince college-educated Americans that crypto is just speculation and have people "investing" in that)
It seems many are missing some of the other benefits of social security. Given there are no other inflation indexed annuities available it is the best longevity insurance available. The survivors and disability benefits are also important to retirement planning for a couple. Retirement planning would be a lot harder without the core social security income. It also isn’t going away. If nothing is done, benefits will be cut 24%. This is a highly unlikely outcome though. My wife and I will be able to spend significantly more knowing we’ll have 68k as a couple or $40+k in todays $s available if we are lucky enough to live to 110.
Oh boy. Big 4 really always picks the brightest and smartest. What you are proposing is „everyone for themselves“, with mandatory savings. Which misses the point of social security - protection for everyone, financed by taxing ppl by how much they can contribute, rather than based on how much they might get out of it. Sure- sounds unfair at first, but gives you a whole society to live in. But hey, if you wish for it… also very classy to ask for it on Christmas - maybe study up on what you are celebrating there
BCG2 - fully agree. I get the point that social security systems can be inefficient, but is sooooo much better for everyone if they exist. What people always forget is that social security really really drives the economy - because otherwise everyone has to save themselves for emergency instead of investing or just take risks like start a company - which also helps the economy
Enthusiast
What makes the program successful is the fact that it’s for everyone, rich and poor. So what you’re proposing would really hurt it
People were far less selfish when it was passed. We couldn’t recreate a program like that now.
Pro
There are people like me who don’t even get back the Social Security amount that we pay being a non immigrant in the US as the pathway to GC/Citizenship is next to impossible for people from South Asia 🥲
Pro
If it makes you feel any better I’m a born and raised American citizen and pay SS tax and likely won’t get anything back either given I’m 25 and SS is likely gonna go bust by late 2030s
I agree there should be some individual/self managed alternative to social security, but if you let people opt out, the Ponzi scheme collapses. If social security becomes insolvent, they either have to reduce benefits (and possibility write an IOU for the remainder) or get a cash infusion from the federal government
Enthusiast
I agree. It’s unfair that someone who’s worked hard and been disciplined their entire life can’t benefit from their contributions while someone who may have made bad choices gets to reap all the benefits.
This is such a terrible take. Do you directly benefit from every tax dollar you spend? No, but you indirectly benefit from most of them. Should childless people not have to pay the portion of taxes that funds schools? Should agoraphobes not have to pay the portion of taxes that fund roads? Should criminals not have to pay the portion of taxes that fund police? We’ve decided that there are some costs that come with living in a society
Enthusiast
I can understand why you’d want this. You think it should be our own responsibility to take care of ourselves when we retire. Why stop at this social program? Should we stop providing Medicare/Medicaid so only people who have employer-paid insurance can go to the doctor? Or we should stop providing federal grants as saving up for college should be our own responsibility.
You’ve been contributing to social security all your life, and now you’re trying to opt out of receiving that money?
Social Security annual report says it’ll be depleted in 2034. OP likely recognizes this and recognizes the resolution is to phase out SS benefits by income, meaning higher income people eventually get benefits phased out. So we’re contributing to a fund where we will not receive benefits. Would be nice to contribute to a fund where we will see the benefits (eg 401K) Social security annual report where my claims that it’s running out in 2034 are verified: https://www.ssa.gov/OACT/TR/2021/tr2021.pdf Proposals to fix SS where my statement that it can be phased out by income level are verified: https://www.ssa.gov/OACT/solvency/ It’s like getting $0.25 on the dollar of expected benefits.