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Social Security

"...About 25 percent of people think they can live on Social Security alone -
even though the program was designed to be supplemental, not the primary form of retirement income."

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(Additional Senior Resources here

Heritage Foundation: - Social Security, MedicareMedicaid.

Social Security Is a Terrible "Investment" - By Gregory Bresiger - ...They argue that mandatory Social Security is a poor investment because it only provides an average annual income of some $17,000. This is a lousy return on the decades of tax payments, critics contend. They say most would obtain superior returns with private investments. "Americans would be better off keeping their payroll tax contributions and putting them into private retirement accounts than having to sacrifice them to the government's broken Social Security system," according to "Is Social Security Worth Its Cost?," a study by the Heritage Foundation. Social Security officials reply that the program provides value because it includes disability as well as retirement income coverage. They question how well the average person would do with a private retirement account.

   ...The Heritage Foundation found that many workers paying into the program end up with a negative annual rate of return, somewhere between minus 0.04 and 14.53 percent depending on one's age. Younger workers with the most years to pay into the system and groups with below-average lifespans are the ones who have the poorest returns, a Heritage Foundation official says. "We are telling young people to put money into this program that guarantees zero or negative returns," says Rachel Greszler, one of the authors of the report. Greszler notes that this is in comparison to a 4.76 percent annual return for those who have conservatively invested: half in large cap (capitalization) stocks, half in government bonds, and assuming an expense ratio of 0.7 percent. Greszler concedes that the long-term results of private investments are likely better than 4.76 percent. "We wanted to use a conservative investing model," she says.

   ...Social Security itself, of course, should never be confused with a real trust fund, or a real saving or investment program, as can be seen in the program's dicey trust fund accounting identified by economist Murray Rothbard about a half century ago: "For the government does not invest the funds it takes in taxes, it simply spends them, giving itself bonds, which must be later cashed when the benefits fall due. How will the cash be then obtained? Only from further taxation and or inflation."

Americans have incredible misconceptions about Social Security - By Brittany De Lea - Published May 08, 2019 - Rep. David Schweikert (R-Ariz.) on the report that Social Security will run out of money by 2035 and that Medicare will become insolvent by 2026.
   ...Older Americans, including current and future retirees, appear to have a meaningful lack of knowledge about Social Security and how it can boost their retirement income streams, according to a new report from the Nationwide Retirement Institute. ...People tend to grossly overestimate the size of their Social Security checks, the results showed.  
   ...Meanwhile, about 25 percent of people think they can live on Social Security alone, even though the program was designed to be supplemental, not the primary form of retirement income. 
Only 30 percent of people know that if they don't work for at least 35 years, their benefit will be reduced. Only a slightly higher percentage of people knew that someone earning $150,000 pays as much in Social Security taxes as a millionaire. Less than half of respondents knew Social Security is protected against inflation, while about one-third of people thought benefits are tax-free.

Social Security Fails - By John Stossel (Video here) - ...Social Security is running out of money. You may not believe that, but it's a fact. That FICA money taken from your paycheck was not saved for you in a "trust fund." Politicians misled us. They spent every penny the moment it came in.
...Social Security isn't the only hard choice ahead of us. Medicare will run out of money in just eight years. At that point, benefits will automatically be cut. Social Security hits its wall in 15 years. Amazingly, as we approach this disaster, Democrats say, spend even more.
..."There isn't enough money, even that the rich would have," she countered (Heritage Foundation budget analyst Romina Boccia.), "to pay for the $200 trillion in unfunded liabilities." One partial solution proposed by Heritage and others is to let younger workers put some of their Social Security money into their own personal retirement accounts. "Imagine being able to own and control your own retirement dollars," urged Boccia, with genuine excitement. "You could invest it in businesses, grow the economy, whatever rocks your boat."
   If history is any guide, private accounts would almost certainly pay retirees more than Social Security will ever pay. "Even a conservative portfolio of stocks and bonds that got you about a 5 percent annual return, you would make many times more," said Boccia. She's right. Money in government hands just sits there or gets spent wastefully; it's rarely invested wisely. Private accounts have been tried in a few countries. In Chile, the investment they created helped make Chile the richest country in Latin America. (Before, Chile was poorer than most.)

Seven Social Security Myths - By Charles Blahous - Among public policy issues, Social Security is especially beset by myths and urban legends. These myths inhibit the enactment of legislation necessary to close its substantial financing shortfall. Press, public and policy makers alike would do well to disabuse themselves of the following widely circulated canards.
(See article for discussionon each bullet.)
...Myth #1: Social Security is not an entitlement.
...Myth #2: Social Security wouldn't be in financial trouble if politicians hadn't stolen and spent its money.
...Myth #3: Participants have paid for their benefits.
...Myth #4: Social Security is solvent until the 2030s, so there is still plenty of time to fix it.
...Myth #5: Because Social Security is self-financing, it doesn't add to the federal budget deficit.
...Myth #6: Taxing rich people more by raising the cap on taxable wages will fix the problem.
...Myth #7: Social Security privatization is a live option.  crisis. 

Chart of the Week: How Social Security Is Contributing to the Spending Crisis ---  Spending on the three entitlement programs could consume one-half of the economy by 2056.

FYI - Congressional Pension Plan - Compare to Social Security, and consider asking your Congressmen to terminate their pension plan and go under Social Security and Medicare instead. Fewer than 4 out of 10 Americans have a pension, with an average fixed pension of $7,500 a year.

  • Members of Congress can have up to $2 million dollar pensions funded by your tax dollars,  2 to 3 times more generous then plans offered by private businesses. Ex-Senator Tom Daschle receives an estimated $96,000 a year.

  • Social Security recipients receive a 2-3% return on their tax dollars.

  • In 2005 Congress raised its pay by $330 a month while Social security COLA was 2.7%, or $25 a month increase - and about half of that will be taken away by higher Medicare premiums.

  • While their is no limit on how much taxpayer money a retired Congressmen can collect, Social Security has no "lock box," just IOUs.

  • Corrupt Congressmen found guilty of a felony or defrauding taxpayers are NOT barred from collecting their pensions. Former Congressman Dan Rostenkowski, convicted of stealing taxpayer funds enjoys a taxpayer funded pension of over $100,000 a year. Former Congressman John Dowdy went to jail for perjury, but since leaving the House in 1970 has received $1 million in a taxpayer funded pension since.

  • While taxpayers are locked into Medicare, Congressmen enjoy a taxpayer funded health care plan they get to keep when they retire.

  • Congress has also voted to give themselves full, guaranteed retirement pensions at age 50 after only 20 years of "service" with a COLA that dwarfs the Social Security COLA.

Additional Social Security Resources

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