Social Security Funds

fredsheldon · Post by **fredsheldon** » Fri Jan 11, 2013 9:04 am

paulmcohen wrote:Three cities allowed their employees to skip SS and instead invest in the Stock Market. Every retiree is a millionaire, and they are immune from what happens to SS. The market over the past 100+ years always does better than SS over 20 years and it does not matter which year you start with. Even people who lost 1/2 of their funds during the crash are close to break even today unless they left the market or invested against common practice (too much money in one stock, risky derivatives...). Even putting your SS money in an insurance annuity would have done much better. SS is a pyramid scheme where politicians can use our money to buy votes knowing they will never be around when the bill comes due.

Paul, I agree with you on this. The problem is most common folks are not good at managing their own investments in the stock market and stand the risk of losing much of their money. It sure would be nice if there were mutual funds available that didn't have management fees or front end loads in which workers could invest to lower their investment expenses. I still have 8 shares of stock that I have been holding on to from my original oil company job for 30 years. Today, that stock is worth $53.98 per share which is $2.34 lower that what I paid for it. Had I left all my 401K in that fund, which is what the company forced us to invest in, I would be in the hole today. But, I invested all my money in Fidelity High Income Bond Funds and my investments have more than doubled in the last 10 years. Would the common worker have made the same wise investment decision? At least SS will provide them with something no matter how bad of an investor they may be.

heathicus · Post by **heathicus** » Fri Jan 11, 2013 10:01 am

fredsheldon wrote:Paul, I agree with you on this. The problem is most common folks are not good at managing their own investments in the stock market and stand the risk of losing much of their money.

That idea of "we can't let people keep their money because they might not make the right decisions with it" is another concept that should be soundly rejected.

So what if I don't manage my investments wisely, or even invest my money at all? Who is anybody else to say I shouldn't get to keep my money to begin with because of that? I'm not their child being given an allowance and needing decisions made for me. I am a sovereign individual and can make my own decisions about what I do with my money. And so is everybody else reading this post.

As Paul pointed out, the stock market outperforms Social Security over time - even with the ups and downs of the market. So if the "wisdom" of the "common folks" is the real concern, then take half the money spent on just administering the SS program and put that toward free financial education programs and then let people invest their money (or not) how ever they see fit.

pennview · Post by **pennview** » Fri Jan 11, 2013 10:03 am

When "W" was talking about privatization of Social Security, the operative word was "optional." If you wanted to stay with Social Security, you could. If you wanted to invest in your future yourself, you could. Nothing could be fairer for younger workers, especially if they weren't interested in making investment decisions on their own.

Social Security will not be able to meet its obligations in about 20 years as things stand today. Read the trustees' report, but remember that the so-called assets referenced therein are merely pieces of paper obliging taxpayers to pay more than the 6.2 percent they've already contributed.

fredsheldon · Post by **fredsheldon** » Fri Jan 11, 2013 11:22 am

In order to realize a dividend payment from an IRA invested in a high income mutual fund equal to what you would receive from SS each month you would need a principle of at least 1/2 million dollars. Do you believe most low or middle income workers would have the discipline to accumulate and hold on to that much cash on their own? Now if the government forced them to not touch it that might work.

pennview · Post by **pennview** » Fri Jan 11, 2013 11:38 am

For folks who can't discipline themselves, there would be the Social Security option. For those who can, being forced to participate in a Ponzi Scheme that gets 12.4 percent of one's earnings is criminal, especially with the forecast from the Social Security trustees themselves that current benefits cannot be sustained without Congressional action, the sooner, the better.

My children have no expectation of getting anything from Social Security in their golden years, despite the fact that an amount equal to about 1/8 of their wages in paid into Social Security.

Another thing to remember is that you can pay into Social Security all your life and get hit by a truck while walking across the street to sign up for benefits and you're estate will get a couple of hundred dollars in funeral benefits.

dusty · Post by **dusty** » Fri Jan 11, 2013 11:54 am

fredsheldon wrote:Paul, I agree with you on this. The problem is most common folks are not good at managing their own investments in the stock market and stand the risk of losing much of their money.

So the common folks should just put their faith and money with some guy who will manage it for you. Someone like Bernie Madoff. He wasn't common folk and he knew how to handle your money.

dusty · Post by **dusty** » Fri Jan 11, 2013 11:57 am

fredsheldon wrote:In order to realize a dividend payment from an IRA invested in a high income mutual fund equal to what you would receive from SS each month you would need a principle of at least 1/2 million dollars. Do you believe most low or middle income workers would have the discipline to accumulate and hold on to that much cash on their own? Now if the government forced them to not touch it that might work.

There are those "common folk" again.

heathicus · Post by **heathicus** » Fri Jan 11, 2013 12:00 pm

fredsheldon wrote:In order to realize a dividend payment from an IRA invested in a high income mutual fund equal to what you would receive from SS each month you would need a principle of at least 1/2 million dollars. Do you believe most low or middle income workers would have the discipline to accumulate and hold on to that much cash on their own?

Do you believe your money belongs to the government and they decide how much of it you can have?

Do you believe that because someone else can make a smarter decision than you, you should be robbed of that decision?

Do you believe that you are someone else's responsibility? Government property to be cared for and coddled with no personal responsibility or personal liberty?

fredsheldon wrote:Now if the government forced them to not touch it that might work.

The government shouldn't be forcing anybody to do or not do anything except to not hurt other people.

fredsheldon · Post by **fredsheldon** » Fri Jan 11, 2013 12:08 pm

dusty wrote:So the common folks should just put their faith and money with some guy who will manage it for you. Someone like Bernie Madoff. He wasn't common folk and he knew how to handle your money.

Dusty, I think you just made the case for Social Security. Who do you trust the most to manage your retirement money, the Bernies of the world or the government? Not sure there is a easy answer.

heathicus · Post by **heathicus** » Fri Jan 11, 2013 12:11 pm

fredsheldon wrote:Dusty, I think you just made the case for Social Security. Who do you trust the most to manage your retirement money, the Bernies of the world or the government? Not sure there is a easy answer.

No, he made the case for personal responsibility. What Bernie Madoff was doing is no different than what the Social Security Administration is doing. Both are pyramid schemes. But, you know, we have smarter people making decisions for us dumb old "common folks", so everything is OK.