The Affordable HealthCare Decision

[Ed in Tampa]

Now wait one minute! If congress would pay back the money they borrowed from social security with the interest the fund was getting at the time they took it, social security would be fully funded for a long time to come.

All these stats on Social Security forget about the IOU's that congress has placed in the Socialk Security fund all these years. Money you and I paid in that is now being called an ENTITLEMENT. What a crock!!

Social Security was sitting fat dumb and happy until one day congress noticed all the money sitting there. The rest of the story is now being played out.

[pennview]

You got it right, Ed. The payback for the squandered Social Security Trust Fund will come from Congress through increased taxes on us, our children and grandchildren, and their children too.

[dusty]

You got it right, Ed. The payback for the squandered Social Security Trust Fund will come from Congress through increased taxes on us, our children and grandchildren, and their children too.

It was "borrowed" and has not been paid back but was the Social Security Trust Fund squandered? How was it actually spent?

[swampgator]

[quote=" Moreover, federal employees have the option in their IRA-like accounts to invest in U.S. Government Treasury Bills, which means they'll never lose their investments as long as the government can pay its bills. If you think about this, you might wonder why the government sells Treasury Bills to the Chinese, Japanese, British, etc., when you and I can't buy them.[/QUOTE"]

Not quiet accurate. For those hired from 1921 until 1982, we contributed 7 cents for every dollar earned. No exceptions as under Social Security. If you earn more than the current cap annually, you don't pay any Social Security payments. However, federal employees under the old plan never reached that and because we had our own retirement system, we did not qualify for Social Security. Our agency was to contribute an equal share toward our retirement which they never did although it was law in the 1960's. So, we now have what is known as an annuity. And, if we had 35+ years and age 55 or more, you could start with an annual retirement income about 55% of your highest high three. With all the downgrades in the 1980's and 1990's due to the 10 year BRAC, many folks retired as GS-7 and GS-5 which makes them below the poverty line. And, yes, if we qualify for Social Security, SSA contacts OPM to check if we were federal service. If the answer is yes, OPM then deducts the amount you QUALIFY for from SS. That's the way it was set up in 1982. Then in 1996, SS will reduce federal workers Qualified Amount by 2/3's. That's the way it works. Even though we can refuse the Social Security payments, they still reduce our retirement by the amount of SS we should get. So, if I qualify for $1000 per month from SS, OPM takes $1000 from my monthly retirement. Then SS sends me a check for $330, therefore, loosing $660 per month. Vaseline, anyone?:D

For those hired after Oct 1, 1982, they paid the normal 6.25 per cent toward Social Security, plus .75 percent into a Federal Employees Retirement System (FERS). In addition, they could pay an additional 5% or 10 % (nothing in between - 5 and 10 being the only options) in a variety of funds. Some of it can be common stock, others can be government securities. Those of us under the old system could invest in this program, but you could loose your shirt. In the past 9 years, it has lost an average of 20% of contribuitions. Those who participated also have to start retrieving funds at age 59 1/2. So, hypothetically, one who is making $35000 per year is giving $2188 to Social Security, plus $262.5 for retirement, plus at 5% $1750 or 10% for $3500 out of their pay checks to plan for retirement.

Now, starting in Jan 2013, all new hires plus those who have been working fewer than 5 years will begin paying 10% into a combination of Social Security and FERS. I can't remember the breakout, but I'll look it up.

On opting out of the health insurance, yes that was a possibility, but at age 55, there is no one who would offer me anything close to the coverage for that amount of money. On my meager retirement, every dollar counts. I have checked. Now, the kicker is that insurance companies are pushing all of us who are near or over age 65 into Medicare. The insurance companies don't want to pay for our expenses. My wife has Multiple Sclerosis and Lupus. Absolutely, no one will insure her. It's about the 3rd question on every application. If you put a yes by that question, it is an automatic refusal of coverage. I've spent many hours searching the internet, interviewing insurance reps who were certain they could get insurance on her. They have been almost as frustrated as me. And, that's the reason for keeping our insurance. Before Reagan forced us to pay into Medicare in 1982, federal workers had no access to Medicare coverage. For those who worked 20 years after that ruling, they do have Medicare coverage as everyone else. For those who worked up to 19 year and 11 months, they did not get Medicare unless they could go to work and pay into Medicare to get their coverage. So, yes, either way those folks went, they needed a big tube of jelly.
Sorry this is so long, but this is just the beginning. You're welcome to pick my brain about this as I worked in this field for 9 years.

[pennview]

Steve, the IRA-like retirement plan I was referring to was the FERS (Federal Employees Retirement System) and specifically the G Fund option that is available to employees under the Thrift Savings Plan (TSP).

This is what the site for that plan says today: "The payment of G Fund principal and interest is guaranteed by the U.S. Government. This means that the U.S. Government will always make the required payments. In other words, your G Fund investment is not subject to credit (default) risk."

The site further states: "Consider investing in the G Fund if you would like to have all or a portion of your TSP account completely protected from loss. If you choose to invest in the G Fund, you are placing a higher priority on the stability and preservation of your money than on the opportunity to potentially achieve greater long-term growth in your account through investment in the other TSP funds."

As I understand it, folks under the Civil Service Retirement System could put savings into the various funds available under FERS, but didn't get matching funds from the government going into their retirement accounts. The government only matched a portion of what an employee saved that was part of the FERS plan.

Folks can go to the TSP web page and see the various options available to federal employees -- https://www.tsp.gov/investmentfunds/fun ... Perf.shtml --

No employee investing exclusively in the G Fund has lost a dime. In fact the average annual return since inception of the funds is 5.86 percent. Last year's return was 2.45 percent. According to the web site, $100 invested in this fund since inception in April 1987 is now worth $410.

You can look at the other funds available and how they've performed by visiting the web site I mentioned above. If you've invested in stocks, the C Fund, you can lose money. If you take the average performance over the past five years of the C Fund, investors lost an average of .2 percent per year. Just looking at the last three years though, they averaged a gain of 14.17 percent. Over the last 10 years, the fund has returned on average 2.94 percent. 2008 was a really, really bad year for stocks and that's why the five year average is so bad. According to the web site, $100 invested at the inception of the C Fund in 1988 would now be worth $832.

And the federal employees have a variety of other options. In addition, the FERS employees pay into Social Security. Participation in the Thrift Savings Plan is voluntary. If someone doesn't want to save for retirement beyond Social Security, they don't have to.

[pennview]

Dusty, "squandered" is what it seems to me. Workers (and employers) payed into Social Security and there should be some 2.5 trillion dollars in that account. Instead, the federal government spent that money on other things unrelated to Social Security, and the Trust Fund now consists of paper backed only by the good faith and credit of the U.S. Treasury. To me that's squandering the money. Besides, the federal government can't pay back that money because the Treasury gets it's money from the people mainly through taxes. So the only way to get the money back is to raise taxes. Alternatively, benefits can be cut. Our kids and grandkids, and generations further down the line will suffer because of this.

The so-called Social Security Trustees Report for 2012 can be found here -- http://www.ssa.gov/oact/trsum/index.html -- After reading this tripe, one has to wonder if Bernie Madoff learned from these folks or the other way round.

[judaspre1982]

=====================================

[pennview]

Dave, the actual retirement plan for members of congress is explained here in general terms -- http://www.senate.gov/reference/common/ ... bers.shtml -- While quiet lenient regarding retirement, the information on the senate site doesn't square with what is contained in your post.

[pennview]

P.S.

According to the Congressional Research Service, 413 retired Members of Congress were receiving federal pensions based fully or in part on their congressional service as of Oct. 1, 2006. Of this number, 290 had retired under CSRS and were receiving an average annual pension of $60,972. A total of 123 Members had retired with service under both CSRS and FERS or with service under FERS only. Their average annual pension was $35,952 in 2006.

I found the above at this site -- http://usgovinfo.about.com/od/uscongres ... esspay.htm

[desonier93]

The Affordable Health Care Act is a giant step in the right direction for healthcare access for women and families. And it allows us at the local level to focus our attention on pressing needs here at home.

Empower Network