'Before SS, workers generally worked themselves to death. Retirement hardly existed.'

you've been watching too many hollywood movies.

Polly, I'm mostly disturbed by the fact that you accepted that you are not "invited" to the meeting. IT IS YOUR MONEY TOO. You have a legal right to know your financial state. Call up the money manager and tell him you need to meet with him. You have every right to see him and get an understanding of your financial status.

Hahaha- people somehow think the stock market will just keep printing money at a steady 8% rate.

If all our social security is invested in the stock market, it would suffer the exact same problem that the current SS suffers. Namely when the baby boomers retire in droves, the stock market would collapse from all these people cashing out. And there is not enough people buying in to float the market.

Besides- our social security money is already invested in the safest form of investment (just go ask any Wall St bond trader) - US government bonds.

My relative: healthy but thin and a bit frail. Teeth in good shape and has regular dental visits. Good appetite. Mind has been steadily going --- suspected Alzheimer's. Relies on only child to be responsible for him. Is now in good nursing home nearby where the minimum cost is $60,000 a year. His wife is deceased (many years ago). Recently had a deep cut from a tussel with aides trying to give him a shower - trip to the emergency room by ambulance: $1000 for the round-trip. That's a thousand dollars and it's not covered by anything and comes out of his or our pocket. We have to change our wills to leave our money to cover his expenses - if we don't take responsibility for him, he gets bounced out of this 'nicer' place and there's no control or choice for the quality of the place that he will go.

Being old is a bitch. This guy was frugal and he was a hard worker all his life. Best thing he ever did was raise a caring loving son.

Martin_Straub:

Obama's plan is to increase taxes to bail out Social Security, which, of course, is in a chronic state of crisis. He's really saying that capitalism is a failure, and that we need to turn to socialism. This statement is somewhat self-contradictory, since a failure of capitalism would deprive socialism of the tax base it needs in order to survive.

I haven't followed the latest twists in campaign proposals, but I assume you're referring to Obama's proposal to eliminate the SS tax cap at around $102,000 of income. I was forwarded an interesting blog post about what the actual consequences would be to a NYC resident earning more than that. The post has links to an excel file intended to allow individuals to calculate what the actual financial impact will be to supporting this proposal. I'm a fan of saving social security but the calculation looks a lot higher than I would ever get back when I qualify for payments.

<link>

Of course, there are arguments that paying this is in the interest of living in a society that is safe and more stable even if the money doesn't come back. (Reduces risk of marauding bands of seniors, etc.) I eagerly welcome anyone to assure me that this is wrong.

And Polly, please have a chat with your beloved about the need for transparency.

To put it in terms he might understand, tell him you need to know what he and the money manager are doing so that you can take up the rifle in the event that your, er, deeply conscientious husband passes on before you. You'd hate to squander his hard work and suffer after all, especially if you're legally competent but simply don't know what to do...

Nice post and discussion. Small warning on the equity returns point. Your math is right or close enough. The problem is that what you are proposing -- a government willingness to mix equity and treasuries to achieve better returns -- is NOT what Pres. Bush has been proposing. Your idea is a good one. Returns are better, money is managed by a small group of highly motivated and professional managers (a la CalPers), etc. There is a real scale issue -- how can such a fund be managed effectively without moving the market -- but still.

What Pres. Bush in his infinite wisdom actually proposed is not the above. He proposed individual retirement accounts. You "get your money" and you invest it. This is basically the same as saying "you're on your own." Point of SS is to provide a social safety net in retirement. What Bush proposes effectively aims at ending the program (in pieces, I'll grant you, but the accounts are the first step in dismantling SS). The people who benefit when individual investors suddenly have a bucket of cash they are untrained to invest and lack the buying power and coordination of a professional manager of the entire fund? Well, it's the investment advisory industry. GW's good pals. They get an enormous new market of untrained customers to fleece with the government's blessing. How long before retirees start the horror stories of being robbed blind by those guys, either literally or through the endless hidden fees and abuses of info the industry routinely practices today? The feeding frenzy will truly be something to behold and by the end of it, you can kiss your 6% real returns goodbye unless you're the provider of financial "planning." Instead, you'll be left with a bunch of folks with negative real returns and a smug Republican lobby telling us about "self-reliance" while the advisory firms' stocks go through the roof.

Nothing wrong with mixing in equities provided they're managed professionally and by educated managers who can squeeze every last penny out of the relevant middlemen. Allows better returns and still the elements of a social safety net. But eviscerating ss with phony arguments to be left in a lurch is hardly that.

'But eviscerating ss with phony arguments to be left in a lurch is hardly that.'

check this out. it seems as if the dems want to keep people poor and dependent.

<link>

Irving, you complete and utter shmuck. Do you actually read the tripe you link to? I just happened to be cruising back and saw this. Linked a 1980's TX alternative to ss based on (actual text):

"Our plan, put together by financial experts, was a “banking model” rather than an “investment model.” To eliminate the risks of the up-and-down stock market, workers’ contributions were put into conservative fixed-rate guaranteed annuities, rather than fluctuating stocks, bonds or mutual funds. Our results have been impressive: We’ve averaged an annual rate of return of about 6.5 percent over 24 years. And we’ve provided substantially better benefits in all three Social Security categories: retirement, survivorship and disability."

Annuities. NOT stocks. Annuities. You disingenuous so-and-so. You'd like us to invest in annuities? And note the fact that it's still centrally run. No hint of individual management of retirement accounts. Just the good folks of the state government in TX managing the whole thing. Not a triumphant elimination of retirement obligations. Just a different way to centrally run them. Oh, and finally, do a little research on the actual pay-outs and mix. The picture is a lot less rosy than this author would like to paint. Why would that be? Oh, yeah, the author CAME UP with the scheme.

So what the hell is your point? Are all your links so goofy?

what exactly has you panties in a wad about the galveston study? the fact that the workers are getting much more money than the ponzi scheme that is SS?

As revrick pointed out, Social Security is insurance. It is not the Beardstown Ladies Investment Club.

You can camplain all you want about not getting your money's worth out of insurance, but people generally won't be very sympathetic when the cause is that your house doesn't burn down, you don't get creamed by a drunk driver, and you aren't forced to retire early due to disability.

'Annuities. NOT stocks. Annuities. You disingenuous so-and-so.'

you do know that an annuity can be invested in the stock market, don't you? the term annuity defines the payout and not the investment. did you know that?

you are ignorant of the free market system, aren't you?

Dude, you're just digging yourself deeper. What? Did you just look up annuities in Wikipedia? Congrats.

Now do some homework on the pay-out model and fee structure for annuities and see if you can figure out how they are different from:

1. Direct investments in equities
2. The distinction between a centrally (government) managed retirement plan and personal retirement accounts

I'll grade what you write, but I have to warn you -- you'll need to do a lot of extra credit at this point to even pass.

Seriously, though, you have no idea what you're talking about do you? You actually thought you were rebutting me, right?

hey stupid. if you hit the lottery and decide to take a payment over 20 or 30 years instead of a lump sum, what do they call it?

that's right!!!! an annuity!!

dumbass.

if you have a car accident and sue for damages and the insurance company pays you every year until you die, what is it called?

that's right! an annuity!

if you save money in a retirement account that is structured that you receive a percentage of the money efvery year, what is that called?

that's right!!!

an annuity!!

you don't know jack shit about the free market system, do you?