Author Topic: How do people retire if they live paycheck to paycheck?  (Read 24244 times)

Aggie1999

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Re: How do people retire if they live paycheck to paycheck?
« Reply #50 on: April 01, 2017, 09:16:23 AM »
There are certain scenarios where people will get more in benefits from SS & Medicare than they paid in. This is especially true with Medicare expenditures rising dramatically these last several decades.

http://www.politifact.com/truth-o-meter/article/2013/feb/01/medicare-and-social-security-what-you-paid-what-yo/

An article showing how SS is mainly just another form of forced wealth distribution (i.e. welfare). Very little attention paid to how SS is a losing proposition to the above average pay worker. Heck, the SS portion is even a negative return on most of the average earner statistics they provide. The government needs to can SS. Continue to pay the benefits to those getting SS and those X years from SS. For everyone else refund the contributed money plus inflation. Never happen but at some point you gotta cut losses on a losing investment...

Your conclusion does not remotely follow from your premise.

How so? To make the conclusion work taxes will have to be raised/diverted until enough people die off that SS payouts decrease to zero. It's basically the same thing that keeps being proposed with raising the SS age except those plans don't want to eliminate SS.

Tabaxus

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Re: How do people retire if they live paycheck to paycheck?
« Reply #51 on: April 01, 2017, 09:47:16 AM »
There are certain scenarios where people will get more in benefits from SS & Medicare than they paid in. This is especially true with Medicare expenditures rising dramatically these last several decades.

http://www.politifact.com/truth-o-meter/article/2013/feb/01/medicare-and-social-security-what-you-paid-what-yo/

An article showing how SS is mainly just another form of forced wealth distribution (i.e. welfare). Very little attention paid to how SS is a losing proposition to the above average pay worker. Heck, the SS portion is even a negative return on most of the average earner statistics they provide. The government needs to can SS. Continue to pay the benefits to those getting SS and those X years from SS. For everyone else refund the contributed money plus inflation. Never happen but at some point you gotta cut losses on a losing investment...

Your conclusion does not remotely follow from your premise.

How so? To make the conclusion work taxes will have to be raised/diverted until enough people die off that SS payouts decrease to zero. It's basically the same thing that keeps being proposed with raising the SS age except those plans don't want to eliminate SS.

Your conclusion that we should kill SS appears to follow from your premise that big bad SS is, oh no, a welfare program, that disproportionately helps people that are not "above average pay" workers.  The horror, helping those who are less fortunate.

God, the Ayn Rand stuff around here gets old.

nancyjnelson

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Re: How do people retire if they live paycheck to paycheck?
« Reply #52 on: April 01, 2017, 10:07:01 AM »

"God, the Ayn Rand stuff around here gets old."

Actually, I've read that Ayn Rand applied for and received SS benefits.  https://www.thomhartmann.com/users/canuckistanian/blog/2011/01/ayn-rand-received-social-security-medicare 

I have not seen the FOIA response myself and snopes.com has nothing about Ayn Rand so I can't confirm.

wenchsenior

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Re: How do people retire if they live paycheck to paycheck?
« Reply #53 on: April 01, 2017, 11:05:40 AM »

"God, the Ayn Rand stuff around here gets old."

Actually, I've read that Ayn Rand applied for and received SS benefits.  https://www.thomhartmann.com/users/canuckistanian/blog/2011/01/ayn-rand-received-social-security-medicare 

I have not seen the FOIA response myself and snopes.com has nothing about Ayn Rand so I can't confirm.

I read a bio of her about 10 years ago, and I believe that's correct. She also used Medicare, IIRC. Her justification was that she should use it because she was forced to pay in.  I can't really argue that logic.  In other news, my opinion of her after reading that bio was that she was a seriously psychologically fucked up and pretty revolting human being.  Reading about her made me feel like I needed to take a shower.   Still, I kind of enjoyed Anthem and The Fountainhead, despite her juvenile philosophy. (Slight thread hijack...move along nothing to see.)

MrsPete

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Re: How do people retire if they live paycheck to paycheck?
« Reply #54 on: April 01, 2017, 05:43:39 PM »
I read a bio of her about 10 years ago, and I believe that's correct. She also used Medicare, IIRC. Her justification was that she should use it because she was forced to pay in.  I can't really argue that logic.  In other news, my opinion of her after reading that bio was that she was a seriously psychologically fucked up and pretty revolting human being.  Reading about her made me feel like I needed to take a shower.   Still, I kind of enjoyed Anthem and The Fountainhead, despite her juvenile philosophy. (Slight thread hijack...move along nothing to see.)
Yeah, what you're describing is a hypocrite. 

Even though she's dead, she continues to be a revolting human being.  Her -- what's the right word?  Fans?  Lackeys?  Admirers?  -- have formed a group that gives her novels (for free) to high schools in an attempt to spread her weird philosophies, especially atheism, to a new generation.  Lots of high schools love receiving free books.  Also, the group sponsors several scholarship competitions, which require reading her novels and buying into her drivel. 


wenchsenior

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Re: How do people retire if they live paycheck to paycheck?
« Reply #55 on: April 01, 2017, 07:13:04 PM »
Well, I'm happy to spread atheism, but not in concert with Rand's sociopathic crap.  Hopefully people come to atheism on their own.

prognastat

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Re: How do people retire if they live paycheck to paycheck?
« Reply #56 on: April 03, 2017, 09:49:07 AM »
I read a bio of her about 10 years ago, and I believe that's correct. She also used Medicare, IIRC. Her justification was that she should use it because she was forced to pay in.  I can't really argue that logic.  In other news, my opinion of her after reading that bio was that she was a seriously psychologically fucked up and pretty revolting human being.  Reading about her made me feel like I needed to take a shower.   Still, I kind of enjoyed Anthem and The Fountainhead, despite her juvenile philosophy. (Slight thread hijack...move along nothing to see.)
Yeah, what you're describing is a hypocrite. 

Even though she's dead, she continues to be a revolting human being.  Her -- what's the right word?  Fans?  Lackeys?  Admirers?  -- have formed a group that gives her novels (for free) to high schools in an attempt to spread her weird philosophies, especially atheism, to a new generation.  Lots of high schools love receiving free books.  Also, the group sponsors several scholarship competitions, which require reading her novels and buying into her drivel.

Despite me not agreeing with much of her philosophy I have trouble seeing how groups giving her books for free to schools or sponsoring scholarships that come with the requirement of reading her novels to be some massive insidious act. Also your especially atheism comment seems weird calling that out loosely in a comment about scholarships and needing to buy in to her philosophy which I guess is especially atheism when their are countless religious scholarships that require you to practice the right faith...

MrsPete

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Re: How do people retire if they live paycheck to paycheck?
« Reply #57 on: April 03, 2017, 11:08:34 AM »
Well, I'm happy to spread atheism, but not in concert with Rand's sociopathic crap.  Hopefully people come to atheism on their own.
Hopefully not, but everyone is free to make his or her own mistakes.  No matter how strongly you believe in atheism, I doubt you're trying to indoctrinate the school system. 

Despite me not agreeing with much of her philosophy I have trouble seeing how groups giving her books for free to schools or sponsoring scholarships that come with the requirement of reading her novels to be some massive insidious act. Also your especially atheism comment seems weird calling that out loosely in a comment about scholarships and needing to buy in to her philosophy which I guess is especially atheism when their are countless religious scholarships that require you to practice the right faith...
Massive is too strong a word, but giving out the books to needy schools is a way of spreading a philosophy that most people consider a bit odd.  As a comparison, Christian literature (or literature from other religions) cannot be distributed during the school day. 

As for scholarships, yes, churches do sponsor scholarships, but they offer them to people who are already believers.  I'm not aware of any groups who advertise, "Read this literature on Catholicism, and you'll be eligible for a scholarship!"  No, religious scholarships, though few in number, are aimed at the kids who've grown up in the church and whose families are already active in the church. 

GetItRight

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Re: How do people retire if they live paycheck to paycheck?
« Reply #58 on: April 03, 2017, 07:01:43 PM »
An article showing how SS is mainly just another form of forced wealth distribution (i.e. welfare). Very little attention paid to how SS is a losing proposition to the above average pay worker. Heck, the SS portion is even a negative return on most of the average earner statistics they provide. The government needs to can SS. Continue to pay the benefits to those getting SS and those X years from SS. For everyone else refund the contributed money plus inflation. Never happen but at some point you gotta cut losses on a losing investment...

It's not an investment, it's theft. The real beneficiaries are the those employed by this make-work program. May as well pay them to dig ditches and fill them in. I would be content for government to stop stealing money from me for SS and never receive a penny from it, forget about the refund there is no money to refund. It's all been given to those that didn't earn it and those moving the dirt around.

I don't understand why so many people here, or at least a vocal minority, are so opposed to charity and voluntary interactions.

Hargrove

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Re: How do people retire if they live paycheck to paycheck?
« Reply #59 on: April 03, 2017, 07:54:08 PM »
It's not an investment, it's theft. The real beneficiaries are the those employed by this make-work program. May as well pay them to dig ditches and fill them in. I would be content for government to stop stealing money from me for SS and never receive a penny from it, forget about the refund there is no money to refund. It's all been given to those that didn't earn it and those moving the dirt around.

I don't understand why so many people here, or at least a vocal minority, are so opposed to charity and voluntary interactions.

Well... "opposition to x" is not the same as "seeing the shortcomings of x."

The "charity system" is dandy except that it has never solved poverty anywhere, ever. It doesn't solve the problem of old people starving to death and going without medical care besides. It also didn't solve the problem of when someone doesn't have or know someone else who feels 1) capable and 2) obligated or interested in caring for them when they lose their senses, health, strength...

We voluntarily leave our own in pretty terrible conditions. The people who support SS aren't worried about charity and voluntary interactions. They're worried about those who get left behind in spite of them.

Aggie1999

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Re: How do people retire if they live paycheck to paycheck?
« Reply #60 on: April 04, 2017, 08:30:12 PM »
An article showing how SS is mainly just another form of forced wealth distribution (i.e. welfare). Very little attention paid to how SS is a losing proposition to the above average pay worker. Heck, the SS portion is even a negative return on most of the average earner statistics they provide. The government needs to can SS. Continue to pay the benefits to those getting SS and those X years from SS. For everyone else refund the contributed money plus inflation. Never happen but at some point you gotta cut losses on a losing investment...



I don't understand why so many people here, or at least a vocal minority, are so opposed to charity and voluntary interactions.

I have to wonder if someone with your philosophy has any loved ones with serious disabilities. Because if you do, you may or may not be able to take care of them, but even if you can care for them , you could predecease them and leave them vulnerable to the whims of others, charitable or not.

I have no doubt there are cases where social security disability is very justified. What gets many mad are the ample cases of people that could work simply choose to go the SS disability route because they are lazy. Any system that has lawyers advertising on TV to fight for someone's right to SS disability should be suspect...

Hargrove

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Re: How do people retire if they live paycheck to paycheck?
« Reply #61 on: April 05, 2017, 05:11:33 AM »
I have no doubt there are cases where social security disability is very justified. What gets many mad are the ample cases of people that could work simply choose to go the SS disability route because they are lazy. Any system that has lawyers advertising on TV to fight for someone's right to SS disability should be suspect...

Every system can be abused. I do not call the entire system into question simply because it's abused. This is a race to the bottom approach where the fact that "thing helps x people" is completely ignored because somebody decided "so and so doesn't deserve thing!"

Either the system doesn't work, or it does and there's graft. Why that doesn't prompt calls to clean up the graft instead of just blow the whole thing up, I don't understand.

Abe

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Re: How do people retire if they live paycheck to paycheck?
« Reply #62 on: April 05, 2017, 07:13:25 PM »
I have no doubt there are cases where social security disability is very justified. What gets many mad are the ample cases of people that could work simply choose to go the SS disability route because they are lazy. Any system that has lawyers advertising on TV to fight for someone's right to SS disability should be suspect...

Every system can be abused. I do not call the entire system into question simply because it's abused. This is a race to the bottom approach where the fact that "thing helps x people" is completely ignored because somebody decided "so and so doesn't deserve thing!"

Either the system doesn't work, or it does and there's graft. Why that doesn't prompt calls to clean up the graft instead of just blow the whole thing up, I don't understand.

Because fixing something is harder than blowing it up and saying "well, that didn't work!". Also there can be a tinge of lack of compassion for the people who are honest and get help from something.

Padonak

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Re: How do people retire if they live paycheck to paycheck?
« Reply #63 on: April 05, 2017, 09:24:57 PM »
Well written article about the growing presence of disability in american society, particularly in poor rural areas.  Probably very relevant to this thread, and an insightful read. 

http://www.washingtonpost.com/sf/local/2017/03/30/disabled-or-just-desperate/?utm_term=.c7c15b922e47

Is SSDI means tested? If so, are the primary residence and tax advantaged account included in the means test?

For example, if somebody retires with a paid off house and let's say 500K in retirement accounts + 200K in taxable and then experiences severe back pain, will they qualify for SSDI?

MntnFIRE

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Re: How do people retire if they live paycheck to paycheck?
« Reply #64 on: April 06, 2017, 03:30:57 PM »
SSDI is not means tested. You need to have paid into Social Security for some number of years (depends on your age) and you need to have "recently" worked - 5 out of 10 years I believe. When you turn 65 your SSDI converts to your social security payment. Apparently it is often confused with SSI (for very low income people), which has no work requirement but allows maximum assets of only $2000.

I have family members who collect SSDI who I don't believe are truly disabled but I also have some who really can't work but refuse to apply. So I guess maybe it all works out.

Given the current uncertainty in the future of health insurance, what may be more important is that after 2 years on SSDI you qualify for Medicare. My stepmother was 15yrs younger than my dad but became disabled around 40 due to a congenital condition. She had worked and paid into SS since she was 16. She did not apply for SSDI because she was optimistic about recovering and going back to work and they didn't "need" the money. By the time it became clear that she would never be able to work again, too much time had passed since her last employment for her to qualify. She had health insurance through my dad's retiree insurance but it had a relatively low annual maximum. This was pre-ACA days so there was no out of pocket maximum. My dad was in his mid 70s and was paying more than $55k a year on her uncovered expenses, which was more than his SS and pension combined. She died at 61. If she had lived 2 or 3 years longer my dad would have completely depleted his assets, including his home.

If you are truly disabled and qualify, apply.

nazar

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Re: How do people retire if they live paycheck to paycheck?
« Reply #65 on: April 06, 2017, 10:29:04 PM »
Golddigging.  Before he remarried, my father would get all sorts of creepy attention from older women who liked the idea of a widower with a house.  We aren't talking about a mansion, just a ordinary 3 BR family home. I know there are a lot more single women than men among seniors, and poverty is a very real problem, but the extent of shameless behavior exhibited  by desperate women for the secuity the home represents was sad.

coppertop

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Re: How do people retire if they live paycheck to paycheck?
« Reply #66 on: April 07, 2017, 11:28:24 AM »
Golddigging.  Before he remarried, my father would get all sorts of creepy attention from older women who liked the idea of a widower with a house.  We aren't talking about a mansion, just a ordinary 3 BR family home. I know there are a lot more single women than men among seniors, and poverty is a very real problem, but the extent of shameless behavior exhibited  by desperate women for the secuity the home represents was sad.
I hate to disparage my own gender - but my mother died at age 50.  My father joined a single parents' group and was immediately surrounded by breathless, panting women at the first event he attended.  He looked around the room and spotted a nice lady talking with her friend, just minding her own business.  He went over and talked to her; they began dating and they were married about a year later.  They have had a very nice life together for the past 36 years.  Predatory women are not attractive to most men, I believe. 

StarBright

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Re: How do people retire if they live paycheck to paycheck?
« Reply #67 on: April 07, 2017, 01:39:12 PM »
[
I have no doubt there are cases where social security disability is very justified. What gets many mad are the ample cases of people that could work simply choose to go the SS disability route because they are lazy. Any system that has lawyers advertising on TV to fight for someone's right to SS disability should be suspect...

meh - It can be really hard to get SSDI. I have a friend who had a freak eye accident and is almost totally blind. She has been turned down for SSD at least twice. She had to figure out how to get a job that didn't require vision at all (there aren't many). The only way she gets to the low-paying job that she found is relying on a network of friends and family who provide transportation. If anyone moves away or dies (or even if schedules change so that they can't drive her anymore) she would be up a creek. I feel like she is a clear case of someone who should be getting SSDI.

She has definitely thought about hiring one of those lawyers but is afraid that they are scheisters so she hasn't pulled the trigger yet.
« Last Edit: April 07, 2017, 01:41:38 PM by StarBright »

hucktard

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Re: How do people retire if they live paycheck to paycheck?
« Reply #68 on: April 07, 2017, 01:42:33 PM »
Here is what my own parents are doing:

Mother (61) is living off of social security disability, even though she really has no disability and is totally capable of working. Her boyfriend who is in his mid forties and completely able bodied also lives off disability. They also get free housing and food stamps. They also sell random junk (some of it stolen) for a couple hundred bucks a month.

My father and his wife have no retirement savings but have maybe $150K in equity in their $300K house. They are selling it, and buying a mobile home in AZ outright so that they will have no mortgage. Then they will be able to afford to live off SS (Hopefully). I don't have confidence that they will make smart financial choices.

I have not had to give significant financial help to either parent yet. But it is only a matter of time before my wife and I will have to pay in some way for my parents complete lack of financial intelligence. I love my parents, but I am not going to completely screw myself or my own children financially because of my parents. Eventually they will get whatever nursing home the government will pay for.

hucktard

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Re: How do people retire if they live paycheck to paycheck?
« Reply #69 on: April 07, 2017, 01:46:46 PM »
[
I have no doubt there are cases where social security disability is very justified. What gets many mad are the ample cases of people that could work simply choose to go the SS disability route because they are lazy. Any system that has lawyers advertising on TV to fight for someone's right to SS disability should be suspect...

meh - It can be really hard to get SSDI. I have a friend who had a freak eye accident and is almost totally blind. She has been turned down for SSD at least twice. She had to figure out how to get a job that didn't require vision at all (there aren't many). The only way she gets to the low-paying job that she found is relying on a network of friends and family who provide transportation. If anyone moves away or dies (or even if schedules change so that they can't drive her anymore) she would be up a creek. I feel like she is a clear case of someone who should be getting SSDI.

She has definitely thought about hiring one of those lawyers but is afraid that they are scheisters so she hasn't pulled the trigger yet.

Weird. My mom and her boyfriend are both on SSDI and are completely able bodied, especially her boyfriend. I am not sure how they were able to get on SSDI so easily. There are definitely a large number of people on it who shouldn't be.

StarBright

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Re: How do people retire if they live paycheck to paycheck?
« Reply #70 on: April 07, 2017, 01:58:12 PM »
[
I have no doubt there are cases where social security disability is very justified. What gets many mad are the ample cases of people that could work simply choose to go the SS disability route because they are lazy. Any system that has lawyers advertising on TV to fight for someone's right to SS disability should be suspect...

meh - It can be really hard to get SSDI. I have a friend who had a freak eye accident and is almost totally blind. She has been turned down for SSD at least twice. She had to figure out how to get a job that didn't require vision at all (there aren't many). The only way she gets to the low-paying job that she found is relying on a network of friends and family who provide transportation. If anyone moves away or dies (or even if schedules change so that they can't drive her anymore) she would be up a creek. I feel like she is a clear case of someone who should be getting SSDI.

She has definitely thought about hiring one of those lawyers but is afraid that they are scheisters so she hasn't pulled the trigger yet.

Weird. My mom and her boyfriend are both on SSDI and are completely able bodied, especially her boyfriend. I am not sure how they were able to get on SSDI so easily. There are definitely a large number of people on it who shouldn't be.

In my friend's case she became disabled too young. According to what her caseworker told her you are more likely to qualify if you are older because you've paid into the system longer and if you are young you are considered "able bodied" in many cases.  She was told to reapply again when she hit her mid 30s (unless something major happened in the mean time) and she would likely be approved.

twbird18

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Re: How do people retire if they live paycheck to paycheck?
« Reply #71 on: April 07, 2017, 02:11:37 PM »
[
I have no doubt there are cases where social security disability is very justified. What gets many mad are the ample cases of people that could work simply choose to go the SS disability route because they are lazy. Any system that has lawyers advertising on TV to fight for someone's right to SS disability should be suspect...

meh - It can be really hard to get SSDI. I have a friend who had a freak eye accident and is almost totally blind. She has been turned down for SSD at least twice. She had to figure out how to get a job that didn't require vision at all (there aren't many). The only way she gets to the low-paying job that she found is relying on a network of friends and family who provide transportation. If anyone moves away or dies (or even if schedules change so that they can't drive her anymore) she would be up a creek. I feel like she is a clear case of someone who should be getting SSDI.

She has definitely thought about hiring one of those lawyers but is afraid that they are scheisters so she hasn't pulled the trigger yet.

Weird. My mom and her boyfriend are both on SSDI and are completely able bodied, especially her boyfriend. I am not sure how they were able to get on SSDI so easily. There are definitely a large number of people on it who shouldn't be.

There are ways to get the necessary documents even if nothing is seriously wrong with you - some doctors will fill out the forms just to stop you from coming in repeatedly, of course then you have to get through the entire process...some places like where I'm originally from have a >50% approval rate though so it's not insanely difficult if you're willing to put in the work (my one nurse sister talks about this all the time at the clinic she works at in a poor rural area). Also, some people are completely able bodied, but unable to work due to another issue.

MisterTwoForty

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Re: How do people retire if they live paycheck to paycheck?
« Reply #72 on: April 07, 2017, 02:26:39 PM »
This maybe goes against the original intent of the question, but after thinking on this for a while myself I came up with a possible conclusion.

If said person had some future foresight, they may have been contributing to a 401k, company pension, or IRA.  Simultaneously they would be paying down the principal balance on their house, even while living paycheck to paycheck.  If they kept all of that on auto-pilot, even while living check to check, its possible that they could have a decent retirement account balance, company pension, some equity in their house, and have access to social security payments when they retire. 

Case

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Re: How do people retire if they live paycheck to paycheck?
« Reply #73 on: July 06, 2017, 09:38:39 AM »
OK - so this is a board with primarily a young to middle age membership, a nice percentage even well to do. But, really, in what universe do you live? I ask that in all sincerity, wondering in which gated community or sheltered environment you might live.

Rant:
Government Program makes Social Security sound like a hand out, it is not a hand out! That is nothing but current political rhetoric and clueless Millenial spin. 

SS was originally touted as a retirement program for all citizens. There was no 401K and only the big companies had pension plans. It was and is forced participation.
So how is this a hand out???

Millions of people including myself have paid into SS during their long working lives - often 30-40 even 50 working years and you would deny us or make it sound like a hand out? The hell!
If I could I would take it in one lump sum, with interest if you please. Instead I've loaned my money to the government for years, so they could fund other programs with no personal access to my own money, not even in an emergency. I feel cheated and I am, when I see that the monthly payments remained at zero percent living increase or at a paltry 0.03% - which by the way is the exact amount my Medicare insurance premium went up by. Result - zero increase for me.

Letting the program languish at zero percent increase is an effective political measure to throttle the program. According to my fiendishly clever uber Republican nephew, the program will be phased out altogether in seven to eight years. I noticed on CNN this morning that they were actually sawing on Medicare in one of their concessions to the Conservative hold outs while debating the Health Care Bill .....
So perhaps he is right on.

SS is a good and much needed program as evidenced by just about every response given here - only a fool would deny that. Entitlement? Hell yes - I am entitled to the money I paid in and if it were you and your own money, you'd see it the same way.
You want a new system or nothing at all? Then give me back the money I paid into SS, but you can't, can you?, because you already pulled it out of SS and funded God knows what. This is no different than a private pension plan going bust due to mismanagement.
End of rant .....

@Jrr85 - I don't think we have to worry about 80% SS payments too much, people will be glad to get anything at all. The ultimate goal is to get rid of SS altogether and maybe they will. They have in essence begun looking for ways to defund it and the current political regime will not hesitate to gut it, if they get a chance. It will create another ever widening chasm between the have and the have nots. Interesting times we live in, in every sense of the word.

@Dicey - I agree - FU money is essential, but so is rock solid medical coverage and living healthy with plenty of pro-active preventative care - not to mention enjoying your life and living a little, 'cause you never know what tomorrow will bring.

You have a very passionate argument, and I see where you are coming from.   anyone who is working is paying into SS and feeling the burn.  I agree and disagree with you.

You (and all of us that pay in to SS) 'deserve' the eventual pay out because we paid in.  The older generations who already paid in deserve it to.  Due to the design of the system, higher earners by far support lower earners.  And people that work longer support people who don't work as long.  We'd have to really dig into the details to say whether or not the FIRE community is screwed or abused to SS; they tend to be higher earners but pay into the system longer. 

The big concern is whether or not SS is sustainable; whether or not enough money goes in to support what is 'owed' to people.  And further, whether or not the eventual pay out is equivalently fair to all generations.  This is complicated because of inflation, cost of living, how they change with time, etc...  Probably we need a PhD economist to even begin to answer those questions (and I guess some research must be out there already on this).

With all that said, millenials tend to think of SS as being an unreliable system that will eventually go bust, and thus they think they are paying in but wont receive a pay out like older generations have/will.  Probably this is false, but I don't really know.  If it does go bust, or if the pay outs do get worse, then it absolutely is true that the millenials (or whatever younger generations) are footing the bills for older generations.

Here's something from the SS govt website:
"The concepts of solvency, sustainability, and budget impact are common in discussions of Social Security, but are not well understood. Currently, the Social Security Board of Trustees projects program cost to rise by 2035 so that taxes will be enough to pay for only 75 percent of scheduled benefits. This increase in cost results from population aging, not because we are living longer, but because birth rates dropped from three to two children per woman. Importantly, this shortfall is basically stable after 2035; adjustments to taxes or benefits that offset the effects of the lower birth rate may restore solvency for the Social Security program on a sustainable basis for the foreseeable future. Finally, as Treasury debt securities (trust fund assets) are redeemed in the future, they will just be replaced with public debt. If trust fund assets are exhausted without reform, benefits will necessarily be lowered with no effect on budget deficits."

So one possibility is that taxes are increased in the future so that the younger generations can continue to receive their full payout.  However, if this is what happens, then the future younger generations will be paying more in taxes then the older ones.  And if this is the case, then the older generations had their bill footed by the younger generations.


With that said, it's tempting to think that we should just do away with SS.  I don't think this is necessarily the right reason either.  The reason is because people are stupid.  A good portion of the population doesn't know how to take care of their finances (or themselves in general sometimes), and therefore govt intervention i needed.  SS forces people to save for their future (somewhat indirectly).  And it also effectively taxes the higher earners to support the lower earners.  Without SS, presumably older people would have shorter lifespans and such due to not having enough money in old age.

On the other hand, all of these social systems make things really fucking complicated and they are definitely not a well-oiled-machine.

Part of me thinks that we should just let people who don't know how to take care of themselves die off.... survival of the fittest or whatever.  Of course, there are some people that have more complicated situations (e.g. not entirely their fault).  But on the whole, I think it's better for the welfare of the people to support older people financially.  If I was old and hadn't saved money, I can't imagine how terrifying it would be to be too old to work and not have money to support myself.

That said, it enrages me when older people make stupid money decisions with their limited resources... but that's what happens in a free society.

meatface

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Re: How do people retire if they live paycheck to paycheck?
« Reply #74 on: July 06, 2017, 10:11:08 AM »
The US needs to just choose between full-blown libertarianism or full-blown democratic socialism already. This in-between crap is killing me. ;)

Anyway, to answer the OP, I think the answer is that they don't retire very happily. They live off of their SS, little savings, family generosity, eligible govt benefits (medicare/caid, etc), etc.

My dad moved to the cheapest part of the country that he still liked and that had nearby parks, libraries, and other free things to enjoy. That works as long as you're flexible with where you're willing to live.

cloudsail

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Re: How do people retire if they live paycheck to paycheck?
« Reply #75 on: July 06, 2017, 10:46:51 AM »
There seems to be a very large social safety net for the very old or very young, especially if you are low/no income. My grandmother lives pretty comfortably in senior housing largely supported by the government. She lives independently, but the apartment complex is staffed 24/7 and someone comes to clean for her once a week. My uncle probably contributes somewhat to her finances but she assured me that her living expenses are well covered by her government check every month. She's just not supposed to have any assets.

I feel like a huge part of the challenge is applying for and getting on these programs. I've heard of parents of autistic children struggling to get them into the regional center. I never had any issues, but another mom whose son is much lower functioning than mine actually was denied services. It makes no sense, and really seems to depend on luck a lot of the time.

Jrr85

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Re: How do people retire if they live paycheck to paycheck?
« Reply #76 on: July 06, 2017, 11:20:31 AM »
...

You (and all of us that pay in to SS) 'deserve' the eventual pay out because we paid in.  The older generations who already paid in deserve it to.  Due to the design of the system, higher earners by far support lower earners.  And people that work longer support people who don't work as long.  We'd have to really dig into the details to say whether or not the FIRE community is screwed or abused to SS; they tend to be higher earners but pay into the system longer. 

I'm not sure 'deserve' is a useful concept when talking about SS (which I assume you maybe sort of agree with by putting it in quotes').   

...
With all that said, millenials tend to think of SS as being an unreliable system that will eventually go bust, and thus they think they are paying in but wont receive a pay out like older generations have/will.  Probably this is false, but I don't really know.  If it does go bust, or if the pay outs do get worse, then it absolutely is true that the millenials (or whatever younger generations) are footing the bills for older generations.
  It doesn't matter whether it goes bust or not.  Younger people (or at least workers) are absolutely paying for older people.  That's how the program works. 

Here's something from the SS govt website:
"The concepts of solvency, sustainability, and budget impact are common in discussions of Social Security, but are not well understood. Currently, the Social Security Board of Trustees projects program cost to rise by 2035 so that taxes will be enough to pay for only 75 percent of scheduled benefits. This increase in cost results from population aging, not because we are living longer, but because birth rates dropped from three to two children per woman. Importantly, this shortfall is basically stable after 2035; adjustments to taxes or benefits that offset the effects of the lower birth rate may restore solvency for the Social Security program on a sustainable basis for the foreseeable future. Finally, as Treasury debt securities (trust fund assets) are redeemed in the future, they will just be replaced with public debt. If trust fund assets are exhausted without reform, benefits will necessarily be lowered with no effect on budget deficits."

So one possibility is that taxes are increased in the future so that the younger generations can continue to receive their full payout.  However, if this is what happens, then the future younger generations will be paying more in taxes then the older ones.  And if this is the case, then the older generations had their bill footed by the younger generations.

Again, the entire program is a redistribution program from workers to older people.  But you have hit on what is particularly unfair about SS and the likely "fix".  Almost the entire SS crunch comes from baby boomers choosing to have fewer kids on average than the generations before them.  So they simultaneously got to avoid a lot of childcare expenses while not saving extra to account for the fact that there would be fewer young people for them to tax to pay for SS benefits.
 And they also failed to save while enjoying the greatest economy in the history of the world over most of their working careers.  This has allowed them to have much higher consumption than any generation in the history of the world, and the likely solution to the SS shortfall?  Raise FICA taxes on the younger generations to a much higher rate than the boomers were willing to pay. 

So Baby Boomers will have simultaneously enjoyed fewer childcare expenses, lower taxes, and a better economy than the people who are going to get stuck with much higher taxes because of their irresponsibility.  And the people who get hit with the extra taxes are going to be on average much poorer than the SS recipients that they are being forced to send their money too. 

A Definite Beta Guy

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Re: How do people retire if they live paycheck to paycheck?
« Reply #77 on: July 06, 2017, 03:28:18 PM »
There are certain scenarios where people will get more in benefits from SS & Medicare than they paid in. This is especially true with Medicare expenditures rising dramatically these last several decades.

http://www.politifact.com/truth-o-meter/article/2013/feb/01/medicare-and-social-security-what-you-paid-what-yo/

An article showing how SS is mainly just another form of forced wealth distribution (i.e. welfare). Very little attention paid to how SS is a losing proposition to the above average pay worker. Heck, the SS portion is even a negative return on most of the average earner statistics they provide. The government needs to can SS. Continue to pay the benefits to those getting SS and those X years from SS. For everyone else refund the contributed money plus inflation. Never happen but at some point you gotta cut losses on a losing investment...

Your conclusion does not remotely follow from your premise.

How so? To make the conclusion work taxes will have to be raised/diverted until enough people die off that SS payouts decrease to zero. It's basically the same thing that keeps being proposed with raising the SS age except those plans don't want to eliminate SS.

Your conclusion that we should kill SS appears to follow from your premise that big bad SS is, oh no, a welfare program, that disproportionately helps people that are not "above average pay" workers.  The horror, helping those who are less fortunate.

God, the Ayn Rand stuff around here gets old.

The argument is that Social Security is actually a welfare program masquerading as a retirement security program, which means Social Security should be killed: it's dishonestly packaged. Which means it enjoys more support than it probably should.

That's not Ayn Rand philosophy, though.

mm1970

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Re: How do people retire if they live paycheck to paycheck?
« Reply #78 on: July 06, 2017, 05:50:10 PM »
Actually, social security was originally set up to prevent widows and their children from living in poverty.  Over time it became touted as a "retirement program" - you pay in, but you get back too!

Quote
Again, the entire program is a redistribution program from workers to older people.  But you have hit on what is particularly unfair about SS and the likely "fix".  Almost the entire SS crunch comes from baby boomers choosing to have fewer kids on average than the generations before them.  So they simultaneously got to avoid a lot of childcare expenses while not saving extra to account for the fact that there would be fewer young people for them to tax to pay for SS benefits.
 And they also failed to save while enjoying the greatest economy in the history of the world over most of their working careers.  This has allowed them to have much higher consumption than any generation in the history of the world, and the likely solution to the SS shortfall?  Raise FICA taxes on the younger generations to a much higher rate than the boomers were willing to pay. 

So Baby Boomers will have simultaneously enjoyed fewer childcare expenses, lower taxes, and a better economy than the people who are going to get stuck with much higher taxes because of their irresponsibility.  And the people who get hit with the extra taxes are going to be on average much poorer than the SS recipients that they are being forced to send their money too. 

Also, remember that when SS was created, people died a long younger.  The average # of years you collected was lower.  The system is certainly not helped by the fact that people are living longer.

Guide2003

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Re: How do people retire if they live paycheck to paycheck?
« Reply #79 on: July 06, 2017, 07:05:22 PM »
1.  Sell house, move to low COLA
2.  Drastically downgrade life and/or subsist on pension/SS/401k
3.  Don't
I live in a relatively low COLA area in a neighborhood with a decent amount of retirees. I'd add to this list a final lifestyle adjustment that is forced by monthly income. It seems like there is a substantial percentage of the population that, while unable to do the advanced planning of forecasting lifetime contributions and investing for a self-funded retirement, is still smart enough not to spend money they don't have coming in. I see my neighbors living a pretty throttle-back lifestyle than what they describe from their younger days, and I think while part of it is attributable to physical ability and ambition, a lot has to do with what they can afford. My next-door neighbor struggled to work until he could collect SS, and then retired into his modest house and now his only hobbies seem to be activities that save him money (hunting, cleaning out and selling possessions, tinkering with his vehicles).