Is there a legit argument for privatization of social security?

@Roadsterrider Defined benefit plans are almost always underfunded. I worked for a company that had one for some of their employees. Then they defaulted on the plan with the concurrence of the regulatory board and paid out about half of what was promised. I knew someone who worked there for over 40 years to ensure a good retirement, and two weeks after they retired, found out they were getting a little under 50% of what they had worked their life for. Too bad. They had to take part time jobs to supplement their wonderful retirement.

The risk of non-governmental retirement is too high for most people. And when it fails, like it would have ten years ago, it fails spectacularly. As a taxpayer, I don't want to be put in the position of having to pay for their decision when they can no longer live on what they make.

Happens all the time. I am being forced to live under an EPA that works for businesses, not for public health. And a Department of Interior that believes that public lands are for private gain, while stripping away land protections.

@windinhishair If there are economic problems, that is one thing, just poorly managing something is something else. taking money for one thing and spending it on something else is fraud, if you or I did it, we would be in jail. The average social security payment equals about $17,600 a year, $25K or less is below the poverty level, we are already paying for people with poorly managed retirements via SS. If not through public assistance, then through SSDI and Medicaid. The better off retirees are, the less they cost society.

@Roadsterrider Which is why we cannot afford to let Wall Street rip off retirees and leave people hopeless during major recessions.

@Roadsterrider I never said that Social Security should remain as it is. In fact, I believe it needs an overhaul to ensure that it continues to function as a social safety net for those that need it. In particular, it needs two major fixes: a means test for being able to receive it, and eliminating the ceiling on the income on which SS is paid. Those two changes will make it solvent long into the future, and return it to its original purpose.

Have you given any thought to what your numbers would be if you retired in 2009 when the market was at 6600? Try reducing your $3300 by a factor of 4. Think you could live comfortably with $825 a month?

It might be possible to require SS to invest at least partially in the market, but remember how this works--people receiving payments are being paid by people paying into the system right now. There isn't a pot of money sitting around to be invested.

@windinhishair I agree that wealthy people don't need it, but how to force them to pay for it when they have no access to it is the problem.

As far as stock prices falling, it really isn't a big deal. For example, if I own 100 shares of a stock worth $1 each, I have a value of $100, if the market tanks and the price drops to 1 cent a share, I still have 100 shares, but they are now worth only $10, as soon as the market corrects, the price will come back. In 2008 and 2009, I watched my portfolio drop by about 60%. My wife was in a panic and wanted me to pull it all out and buy bonds. I wouldn't do it and a year later, it was worth 30% more than it was at the initial downturn. Friends that changed things around when the price was low, lost by doing it. On average stocks have made about 8% a year, that factors in recessions and even the great depression. A recession unless very poorly managed in a 1-2 year deal, an honest to God depression, 10 years for the great depression. So, in 2026 when I plan to retire at 60, if there is a recession going on, I will work another 2 years until the recovery is in full swing to retire. Without investing myself I would be working till I was 67 or 70. There is no way to argue that I personally wouldn't be better off having that money invested in something other than social security. Combine that with the fact that our elected officials spend social security on everything but social security and there is the problem. A blip in the market will take a year or so to get over, social security has been abused since its inception and it is going to be painful to some when it is fixed, the alternative is to let it ride till it collapses and then pick up the pieces when everyone involved has been hurt.

@Roadsterrider Social Security can't be invested in the market and subject to extreme fluctuation in their benefits, because many people wouldn't be able to survive in downturns. And if most people are able to opt out of SS, it wouldn't exist, because payments in wouldn't cover the benefits. Yes, you would likely to be able to do better investing your own money, but that is true for you, and not for many people who draw from Social Security, because if they didn't pay in, they wouldn't save that money, and we would be back to the situation that led to its creation in the first place. The better alternative is to fix it now, make it solvent, and carry a positive balance to ensure the ability to pay future benefits. I'd be ok with allowing some of that money to be invested in the market, which could increase the value of the fund.

As far as forcing people to pay for it when they have no access to it, that shouldn't be an issue at all. You already pay for many things that you don't have access to, such as federal highway funds for Interstate 37 from San Antonio to Corpus Christi, or federal funding for the Water Reclamation Facility in Billings, Montana. Paying taxes for the benefit of others is a cornerstone of society. In some areas, you will give more than you take, and in other areas, it will be the opposite.

@Roadsterrider Except it is NOT a pension. And, calling it one because you think that is an "adequate" thing to do is part of the problem. It would be like you calling water, food, and then complaining that water was not giving you the nutrients you expect to get from food.

Originally, you claimed social security was intended to be a pension for those who were not getting an employer-provided pension. NO! That's not what it is... or ever was.

If you are too lazy to understand the program in the first place, you don't really have an entitled right to discuss what you think is wrong with it.

@MarkPaul I am required to pay into it and receive a benefit when I retire. They may not call it a pension but that is the bill it fills.

As far as being lazy, you don't know the first thing about me, wouldn't recognize me if you saw me so your opinion of me personally is of no great value. This is still America where a different opinion is allowed, liberals are trying to change that but have not achieved that goal yet. If you must resort to name calling instead of an adult discussion I will consider that we disagree on the subject and it is closed.

@Roadsterrider Calm down, tough guy. When you don't take the time to research your feelings and instead, present your feelings as fact, that is laziness. You can choose to be insulted by that diagnosis, you can't rant and rave, and/or you can shut down, childishly. But, you can't make up your facts in a fantasy world of one and expect the rest of the world to follow along. You just can't.

@PicturesOfABetterTomorrowThat is hilarious, yes. I think I have never seen anything so funny in my life! ha ha ha ha ha!

@PicturesOfABetterTomorrow Corruption, like poverty, will always be an issue with mankind. If part of the money going to social security could be included in my own investments, the government would have to find money elsewhere. I do have some recourse if my portfolio is mismanaged, that's why Bernie Madoff is in jail. There is no way nor one particular individual to prosecute in government. It is much easier to see a problem with what I manage than it is to watch over what they manage, so in that sense, corruption would be less.

@Roadsterrider Last I checked they have not abolished democracy yet. And Madoff was decades ago. Name one person who was jailed for tanking the entire world economy. I will save you the trouble there were exactly zero. And even having a portfolio is for the most part a sign of someone who is well off enough that this is just an academic discussion they don't need to worry about. Suggesting you have any recourse for corruption in business is as silly as saying having voting a single voting share makes you a decision maker in a corporation and the same as a vote in an election.

@Roadsterrider Until the present administration arrived and started kicking over the rocks and flushing out the vermin

@sunsporter1649

@sunsporter1649

@QuixoticSoul Even the wealthy often don't plan for their own retirement and rely on family fortunes to always be there.

@PicturesOfABetterTomorrow Well, actually, I did it the hard way, I worked for it, instead of running to the government every time I wanted a new cell phone

@sunsporter1649 Yeah, okay Horatio Alger. The fact that you were also born to a generation who had much better economic circumstances didn't hurt. A high school drop out could get good union jobs and make more money then and MBA today.

@Roadsterrider And yet the ONLY TWO consistent safe performers in ANY investment period are either Government Bonds or National savings.

Interest rate is never 'high' but it does secure your money.

Monkeying around in the stock market, again, ASSUMES the investor on your behalf knows what they're doing and when to withdraw and re-invest elsewhere.

If they were sat at a Blackjack table would you still trust them with it ?

@Roadsterrider Assuming the companies invested in don't go bust in the meantime !

@Picklebobble2 No, I wouldn't trust them at a blackjack table, but, that isn't what they are doing with the money either. The history is there for any investment firm for as long as they have been doing business. When the account is set up, the owner of the investment decides how he wants his plan set up initially. I wanted my plan split 50% in stable returns, 25% moderate risk and 25% high risk. My plan is through T. Rowe Price and it has averaged 11% for the last 20 years. I assume it will continue to do the same for the next 7 till I retire. The recession of 2008 caused a loss of about 60% of the cash value to my portfolio, but in 1-2 years, it was back up to previous levels and has continued to grow. If the nation entered a long recession or a depression, do you really think that social security will remain solvent till 2040? The government will be collecting less and dispersing less.

@sarabee1995 With a 401, you have a maximum sustainable rate. If you pull out "X" amount per year, it should regenerate and in theory last as long as you live. There are mandatory withdrawal limits established by the regulations of the government so there may be an problem with what you need to withdrawal and what the government requires you to withdrawal.

Yes, social security lasts until you die, the payments are considerably less than that of a lesser funded 401 though. I ran my numbers through the SS website and for the almost 40 years I have been with working they have pulled 15% of my salary, half from me and half from my employer, and my benefit at 62 will be about $1700 a month. Contributing 12% to a 401 will net me more than twice that amount and I have only contributed to the 401 for 20 years. Twice as long and more of an investment with much less of a return, that was the reason for the initial question.

@RippinKlouds I don't know, that is a math problem too. If I start at 62, lowest payout and live to the average life expectancy for a male in the US of 78.5, my total cashflow from Social Security would be $336,600. If I start at 65 my total would be $324,000 and if I waited till 67, it would be $317,400. It seems that it is a better deal to retire early and draw a lesser amount for a longer period of time. I would rather have a tighter budget but more time than to have more money with less time left to enjoy it.

@pismo I have a bunch of old motorcycles and cars that I will restore, probably sell, then go buy some more. I have been a mechanic all my life and I still love to tinker. I weld, paint, build engines, work on anything mechanical. I am 53, still ride motorcycles, on the road and in the dirt. Hunt, fish, hike and camp. My retirement will have me moving around quite a bit.

@cherokeepatti What could go wrong, just like healthcare, pick a plan and that 15% can go directly to the investors instead of the government. Some people may make poor decisions but it would benefit a great many more. The only people who would really take it in the shorts are people like me getting ready to retire because there would be no social security fund. The next generation would be making more when they retire because of the investment. The numbers don't lie, the government has been getting 15% since I started working, my 401, just for the last 20 years at 12%. So why is social security benefit only half as much as the 401? Had I started paying that 15% into a 401 when I started working, I would be looking at a disbursement of $7000 a month or better when I hit 60. Instead of retiring at a decent age when you can still have some fun, people will wait till they are 67 or 70 to retire to get a better check at the end of the month. Collect very little before they die, then the government gets to keep what they worked their life away for.

@Roadsterrider From a pattern I’ve seen every time something is privatized a big chunk of money ends up in the pockets of people who aren’t supposed to be getting it.