The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: Emilyngh on November 17, 2013, 05:21:57 AM
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Assume that your ER is going as planned (so no emergencies where you are running out of money), which of the above would you feel comfortable doing?
For any that you would not be comfortable with yourself, does it bother you if others do them? Do you find them unethical or just would prefer not to for some other reason?
If you are comfortable doing some, but not others, what is the dividing line that makes some okay to you, but not others?
I ask just because I'm curious. I, personally, am comfortable with some, but not others, and am wondering really what the difference is. I also am personally questioning ER and the good of it for the individual vs good for society. For example, are the ethics of ER different for two people where one does it when just barely able to scrape by collecting max benefits available through the above, and the other does it not when she does not need to collect any benefits and even is able to dedicate money/time to charity? I just don't know.
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I'd be fine with #3 or #4. I've already paid $30,000 - $40,000 in federal income taxes per year for the last four years in a row building up to ER. I wouldn't see anything wrong receiving a couple thousand of that back in a pell grant or eic
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I'd be fine with #3 or #4. I've already paid $30,000 - $40,000 in federal income taxes per year for the last four years in a row building up to ER. I wouldn't see anything wrong receiving a couple thousand of that back in a pell grant or eic
What if you had $0 federal tax liability (let's say due to maxing out pre-tax investments and having a family a moderate income), would this change anything?
Why is getting tax-payer money through EIC different than through food stamps? (I feel similarly, but don't have a logical reason for it, so I'm trying to figure it out).
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Why are all but one of your options assuming that kids are involved? That might skew your results for the people who will FIRE after they kids leave the nest, or those who don't and won't have them.
I answered none of the above because I would be uncomfortable using welfare and none of the others apply.
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Why are all but one of your options assuming that kids are involved?
Because those were the benefit plans that I could think of. Although, I don't think that one has to have kids to qualify for food stamps or SNAP in all states, or the EIC (so about half of the options were kid-related and half not).
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I'm comfortable with any of them. When the government gives incentives to certain people, those incentives should be exposed. That's why crony capitalism runs rampant with corporations, and truthfully, it all needs to end.
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I'd be fine with them, I didn't grow up rich, single mother raising two kids.... I can see the need for them for people that need them. But for people to use them because they don't want to spend their own money first? I'm a bit iffy on that. While ER people can pull low enough to qualify each year, I don't feel like they should base their retirement off of it. I mean, the entire reason for us on here is to be financially independent, which means also being independent from needing government money/assistance. Sure, use them since they are there but to make the entire retirement work because you are counting on them? Not so much.
It's like, I plan to draw from SS if it's still around in 40 years (I'm fairly young) but do I count on it for retirement? No, but I'll draw more on the principle that I paid into it. But I'd probably just donate it to something I like, since I don't plan on needing it to actually survive on. If it changes, then sure I'll use it but I don't make plans on needing it. I see this the same for the rest of the things.
Sure, I don't like it when the "rich" (subjective) use them, I don't see a problem with them taking advantage of it. I have a problem more with how the laws are written so that they can take advantage of it. Sad part is that the rich are the ones writing the laws so they knowingly put in loopholes for themselves. I'd like to see qualifications based on total networth over just annul income. If someone's living in a 1m+ house but can't make the food bills each month? Make them sell the house first and live off that before giving them food stamps is how I feel about it.
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I'm comfortable with some of them but not others, but I think that's an irrational position based on how we stigmatize some forms of assistance/transfers but not others.
I'd like to see qualifications based on total networth over just annul income.
The federal government has been giving states the authority to eliminate asset tests for SNAP and TANF because it makes administration much faster and cheaper. I don't have the numbers, but I'd guess that the number of people with very high assets who apply for and qualify for these programs is probably not large enough to make the added program costs worthwhile. And the old (in some states existing) asset tests were (are) so low that they could discourage saving in low-income people. I could be persuaded that some level of asset test is appropriate, but I think it should be higher than the old tests.
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I'd be fine with #3 or #4. I've already paid $30,000 - $40,000 in federal income taxes per year for the last four years in a row building up to ER. I wouldn't see anything wrong receiving a couple thousand of that back in a pell grant or eic
What if you had $0 federal tax liability (let's say due to maxing out pre-tax investments and having a family a moderate income), would this change anything?
Why is getting tax-payer money through EIC different than through food stamps? (I feel similarly, but don't have a logical reason for it, so I'm trying to figure it out).
I picked Pell Grants and EIC although I don't see how we could qualify for EIC if we are indeed retired. You have to actually work for a living to get the earned-income tax credit. If I were working for someone else for fun very part-time and thus earned little enough to qualify for the EIC, but didn't need it, I would take it and probably use it for charitable donations to causes I support and/or to support worthy things that don't count as charitable donations--for instance, buying artwork from an up-and-coming artist to help keep them on their feet or helping single moms I know with educational or similarly important one-time expenses (for instance, I've already given several hundred bucks to friends to (1) help pay for their kid's school trip to Europe and (2) help a woman afford to take maternity leave because the very, very worthy nonprofit she worked for can't afford to offer paid maternity leave--a bunch of friends and family, including me, subsidized her leave).
I have no problem redirecting tax dollars away from wars and oil-company subsidies that I disagree with, and towards things I support. If the feds tell me I qualify for a credit, that's exactly what I'll do.
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The college money is in a different category because it's for your young adult, who has not had time to build up assets. Likewise, I have no problem with Social Security because that's an earned benefit. If you've paid in, you should be able to receive benefits.
The others, however, I would not use, nor would I accept the closely-related free health care for the poor (in its numerous names) or reduced-cost public housing or school-clothes-for-kids programs. Why? Because a person should support himself, if he is able to do so. If you need help to make ends meet, you should continue working. Living off the public doll, if you're able to work, makes you no better than the crooks in Congress -- and I would like to think of myself as more moral than that bunch.
Taking these unearned payments, if you are able to work, will continue to drive up the national debt, which is a huge problem that will affect us . . . But will really be our children's problem.
If you can, through a combination of hard work and frugal living, quit working, good for you! But looking to collect from others is nothing short of dishonest.
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The college money is in a different category because it's for your young adult, who has not had time to build up assets. Likewise, I have no problem with Social Security because that's an earned benefit. If you've paid in, you should be able to receive benefits.
The others, however, I would not use, nor would I accept the closely-related free health care for the poor (in its numerous names) or reduced-cost public housing or school-clothes-for-kids programs. Why? Because a person should support himself, if he is able to do so. If you need help to make ends meet, you should continue working. Living off the public doll, if you're able to work, makes you no better than the crooks in Congress -- and I would like to think of myself as more moral than that bunch.
Taking these unearned payments, if you are able to work, will continue to drive up the national debt, which is a huge problem that will affect us . . . But will really be our children's problem.
If you can, through a combination of hard work and frugal living, quit working, good for you! But looking to collect from others is nothing short of dishonest.
+1
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Taking these unearned payments, if you are able to work, will continue to drive up the national debt, which is a huge problem that will affect us . . . But will really be our children's problem.
By exiting the workforce, you are allowing another individual to be employed. So if the total sum of benefits you receive are less than the cost of supporting an unemployed non financially independent individual then the cost to the government is lower (no additional debt required).
However I agree with the rest of your statement.
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My take is that if you retire on a pension that is for military service or something else similar that is cool. I do not believe in taking any money from the government apart that I haven't earned.
I do think though it is cool for my kids to utilise government sponsored education for instance however I would not expect any extra benefits.
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I agree with steveo. Things that you earn, or are social insurance programs like Social Security are good. Programs designed to help those who otherwise can't afford food or other necessities? I'm not sorry, I consider it wrong to take those benefits when they're not needed. And voluntarily retiring earlier because of those benefits means they're not needed.
The results of this poll are shocking to me.
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Philosophically, I'd be in favor of getting rid of all of these programs.
That being said, the programs are carefully and intentionally crafted by our government to provide social support to people that qualify. I voted that I would be comfortable taking all four of the benefits in ER. If I qualify, the program is intended for me. But it's doubtful I'll ever qualify for most of these programs and remain ER.
Welfare/SNAP has a very strict asset test, so I wouldn't be ER if I could get food stamps. I'd be broke but not quite homeless (I recall they exclude a house and a car).
Reduced price lunch I might qualify for eventually, and I would take it if I qualify. It would benefit me slightly, but benefit our kids' school greatly. They get large subsidies for each qualifying free/reduced priced kid, and the school needs all the help it can get. I help the school out however I can, and this would be another way. Our kids already get free breakfast due to the very high free/reduced student population (80-90%), but they rarely partake since our food at home is better (and normally healthier). They currently buy lunch at school, and might buy it for the $0.40 at the reduced rates, but might also pack lunch from home (up to them).
Claiming the EIC - our eligibility phases out quickly since we have significant dividend and interest income. Otherwise we would qualify for thousands of dollars of benefits if we carefully crafted our income stream and had a little side earned income coming in. In 2014, we would qualify for the EIC but for our dividend income. We aren't eligible, which is a good outcome. I would take the EIC if I were entitled to it, but I am totally happy with the rules being drafted correctly to prevent people like me from receiving these benefits (those with decent investment income).
Pell grant or other need based grant for college - I'd take it if I qualified. We have to fill out the FAFSA just like everyone else, and if they determine we're in need, then hey, I'll back the money truck up. No hard feelings if I'm too "wealthy" - I'd rather be wealthy than not.
Our system of taxation and subsidies is so convoluted that ethics went out the window a long time ago.
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Reduced price lunch I might qualify for eventually, and I would take it if I qualify. It would benefit me slightly, but benefit our kids' school greatly. They get large subsidies for each qualifying free/reduced priced kid, and the school needs all the help it can get. I help the school out however I can, and this would be another way.
Your kids school actually profits on reduced price lunches?
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I don't think having my kids get reduced lunches while I deliberately not work would be good for their psyche.
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Philosophically, I'd be in favor of getting rid of all of these programs.
That being said, the programs are carefully and intentionally crafted by our government to provide social support to people that qualify. I voted that I would be comfortable taking all four of the benefits in ER. If I qualify, the program is intended for me. But it's doubtful I'll ever qualify for most of these programs and remain ER.
Well thats not the question. I think the question is you would stay ER and take advantage of those programs.
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Your kids school actually profits on reduced price lunches?
I'm no expert on school funding, but our local schools get Title I money for each free/reduced kid. $1000+ per capita IIRC. My understanding is that is a nationwide funding formula, but it might only be certain states that participate in certain fed programs.
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Interesting topic. Beltim what are your thoughts on someone who has retired early, limiting their income so they don't lose out on subsidies on our new ACA? While personally there are some things I would not take advantage of just because my earned income was kept low purposefully I don't see why one manipulation is better than any other. Our government establishes these programs based on certain requirements. You meet those requirements, you qualify. If things were truly pure of heart maybe I would agree on certain ones but that is not the case in most things. I have paid a lot of taxes over the years subsidizing these programs and regardless of why I qualify, if I did and felt the need to make use of them I would with no guilt.
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Well thats not the question. I think the question is you would stay ER and take advantage of those programs.
Sorry if I didn't answer the question. Yes, I would stay ER'd and participate in these programs if I qualified, and the burden of applying for and receiving benefits wasn't great.
This isn't merely hypothetical, as I am retired and intend to apply for reduced price lunches if we qualify in 2015 or 2016 (when the wife quits working). I don't place this action in any different category than availing myself of child tax credits (which I get) or energy efficiency credits (I don't get) or mortgage interest deductions (I don't get). Same with Obamacare subsidies. I'll get those in a big way in 2015 or 2016.
There seems to be a societal push to reward those with children through our subsidies and tax breaks, and I happen to have 3 of them. I'll accept with open arms all benefits munificently bestowed upon me in exchange for my careful and diligent upbringing of my own children.
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Interesting topic. Beltim what are your thoughts on someone who has retired early, limiting their income so they don't lose out on subsidies on our new ACA? While personally there are some things I would not take advantage of just because my earned income was kept low purposefully I don't see why one manipulation is better than any other. Our government establishes these programs based on certain requirements. You meet those requirements, you qualify. If things were truly pure of heart maybe I would agree on certain ones but that is not the case in most things. I have paid a lot of taxes over the years subsidizing these programs and regardless of why I qualify, if I did and felt the need to make use of them I would with no guilt.
Honestly I think subsidies under the ACA should have an asset test as well, just as there are for food stamps.
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But it doesn't so therefore is it ethical? How about income manipulation or investments that reduce tax liability?
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But it doesn't so therefore is it ethical? How about income manipulation or investments that reduce tax liability?
I didn't say that. Honestly, I'm not sure how I feel about retiring early and taking ACA subsidies. It's something I'm thinking about, and I'm not ready to say that it is or isn't ethical.
I'm not sure what you mean by "income manipulation," but choosing to buy, say municipal bonds instead of corporate or treasury bonds is absolutely and obviously ethical. Different products are taxed differently.
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How about income manipulation or investments that reduce tax liability?
I find this interesting. It seems to me that lots of people are fine with things that reduce one's tax liability, but not with any rebates or subsidies that bring one's liability into the negative. Emotionally, I tend to have a similar gut reaction.
But, logically, I'm not sure that this makes sense. A person with $0 tax liability still uses tax-funded services, and as such, if they're not paying in anything, they're a "taker" and the $0 tax liability is arbitrary. And if we change the metric to someone using no more than they pay in taxes, then suddenly all credits and deductions can become questionable (not to mention, how does one really figure the cost of what one exact ?).
The other argument I see is that it depends on the intention of the program. But, if a program eligibility is based on income, it seems to me that whoever set it up decided that it was for anyone who is low income, otherwise it would be asset-based.
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So, it's ok to put money in a Roth IRA and let it grow tax-free until retirement age, denying the IRS of many thousands of dollars it "could" have received. But get a few hundred a month for a bit in food stamps, and you're evil?
If a billionaire moves some funds around and saves $50 million, he/she's very savvy with finances. But if you decide to reduce your retirement income by $5/mo so you'll qualify for a few hundred dollars worth of benefits (food stamps, free lunches, ACA subsidy, whatever)...you're morally bankrupt?
Hello??!!
If I qualify for a program, I'll have no moral issue with taking advantage of it. Even if I have to do some juggling of finances to qualify (i.e. I want a $5k cushion but food stamps has a limit of $2k in assets...dump just over $3k in a Roth IRA that I can easily withdraw the principle from, and boom, I qualify!). I only see it as morally wrong if you're lying to get benefits (this would include having $10k in cash that you don't report, getting paid "under the table", etc.).
So, I'll have no problem taking advantage of such programs in retirement. What I (hope I) won't do is depend on any program (except maybe ACA), or lie to get enrolled.
I also think they should drop the asset test, or at least make it a bit more reasonable. Keeping the asset limit low discourages saving (I've got $1,900 in the bank, just got paid $500, if my liquid assets go over $2,000 I'll lose $300+/mo in food stamps...hello $1,500 3D LED television!). Now, if someone has $750,000 in retirement accounts and has a 4% SWR of $30,000/yr...ok, maybe they don't need food stamps. So I may not have the answer...but I'm pretty sure it's somewhere between $2k and $750k in assets :)
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So, it's ok to put money in a Roth IRA and let it grow tax-free until retirement age, denying the IRS of many thousands of dollars it "could" have received. But get a few hundred a month for a bit in food stamps, and you're evil?
A Roth IRA is designed to encourage saving for retirement. Food stamps are designed to make sure that hungry people are fed. Each program has its own income limits.
I also think they should drop the asset test, or at least make it a bit more reasonable. Keeping the asset limit low discourages saving (I've got $1,900 in the bank, just got paid $500, if my liquid assets go over $2,000 I'll lose $300+/mo in food stamps...hello $1,500 3D LED television!). Now, if someone has $750,000 in retirement accounts and has a 4% SWR of $30,000/yr...ok, maybe they don't need food stamps. So I may not have the answer...but I'm pretty sure it's somewhere between $2k and $750k in assets :)
I agree that an asset test shouldn't discourage saving. I don't see why one similar to college aid gets implemented: there's an "expected contribution" from your savings, and at a certain point you have enough assets to disqualify you from aid. I think this model would work for ACA subsidies, too.
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Regarding income manipulation, what I was trying to say was that if I only need $30k a year to live so decide not to generate more than $30k in income from my investments to live and letvthe rest grow and that qualifies me for ACA subsidies or anything else I qualify for and feel the need to take advantage of I dont see a problem with that. If the government decides to use an asset test to rule things out I am good with that too.
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Honestly I think subsidies under the ACA should have an asset test as well, just as there are for food stamps.
oh agreed, it's ridiculous that there is not test, but I understand it's supposed to be impossible to do on a cost/benefit ratio. I plan to take advantage of ACA subsidies, I can get my income down to whatever I need to get it to to maximize benefits. Thank you U.S. taxpayers!
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The only one I would be comfortable with is the Pell Grant. Though I am curious how that could be. We have two in college next year. An income around 60k. We have over 250k in cash assets(earmarked for rentals, in process of first one), right under 60k in retirement and paid of real estate. We contributed 21k to retirement for 2013. We have been told to expect no college help because of assets and college savings. If it was strictly income maybe.
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Voted yes to 1, 3, and 4. I don't really think of the welfare/SNAP system as being any different than the EIC or Pell Grant systems. They're all systems that society has put into place to funnel income toward people who can jump through the right set of hoops. Objections based on "the spirit of the law" don't really resonate with me; a law is by its very nature nothing more than its letter. That said, I agree with iris lily, beltim et al. of that all of these programs should be means-tested in a reasonable way. I think the better solution to the problem of shoddily-drafted welfare laws is to shore up the language so that it accurately reflects the intent, rather than for lone conscientious objectors to try to protect the public fisc by declining benefits.
Vote no to 2 only because of the social stigma attached to free and reduced lunch in public schools. I would have no problem absorbing the judgmental gaze of the supermarket cashier if I were to pay for my groceries with a SNAP card, but I remember my friends being teased mercilessly about their free lunches, and I wouldn't want to impose that humiliation on my school-age child. On the other hand, I might actually explode with pride and joy if my child voluntarily asked me to put him/her on free or reduced lunch and funnel the money we'd otherwise spend on his lunches toward his own savings, agreeing to withstand the taunts of his classmates in order to grow his own wealth at a tender age.
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Well thats not the question. I think the question is you would stay ER and take advantage of those programs.
This isn't merely hypothetical, as I am retired and intend to apply for reduced price lunches if we qualify in 2015 or 2016 (when the wife quits working).
So rather than work, your plan is to have the taxpayers feed your kids lunch? My parents had a LOT of children and never once did they expect the government to feed us, clothe us, or put a roof over our heads. They worked and saved and taught us to do the same.
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If I were making the rules, I would change it so that no one like me would ever qualify for any of these.
But I don't, and I will never feel even the slightest bit bad about playing within the rules. No matter how absurd they might be.
I would take advantage of all of these programs and would go out of my way to plan for the if that's what's best for me.
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By exiting the workforce, you are allowing another individual to be employed. So if the total sum of benefits you receive are less than the cost of supporting an unemployed non financially independent individual then the cost to the government is lower (no additional debt required).
That sounds like rationalization.
Reduced price lunch I might qualify for eventually, and I would take it if I qualify. It would benefit me slightly, but benefit our kids' school greatly. They get large subsidies for each qualifying free/reduced priced kid, and the school needs all the help it can get. I help the school out however I can, and this would be another way.
Not true. At least, not true in the way you've presented it. If X number of kids get free lunch, the school does get extra funding . . . but they are required to use it to provide specific remediation programs, etc. It requires more work from the school, takes effort away from basic classes, and the school is not free to use the money in the spots they believe it's most needed. It means greater federal control within the school.
You are NOT "helping" your child's school by having them take free lunch.
So, it's ok to put money in a Roth IRA and let it grow tax-free until retirement age, denying the IRS of many thousands of dollars it "could" have received. But get a few hundred a month for a bit in food stamps, and you're evil?
Putting money you've earned into an account and avoiding taxes is a smart way of saving for your future. You're going to pay the taxes eventually when you withdraw the money, though hopefully at a lower rate. The key is that it's YOUR money.
Taking food money from the government, when you're capable of earning that money yourself, is laziness. The key is that it's NOT YOUR money.
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Well thats not the question. I think the question is you would stay ER and take advantage of those programs.
Sorry if I didn't answer the question. Yes, I would stay ER'd and participate in these programs if I qualified, and the burden of applying for and receiving benefits wasn't great.
This isn't merely hypothetical, as I am retired and intend to apply for reduced price lunches if we qualify in 2015 or 2016 (when the wife quits working). I don't place this action in any different category than availing myself of child tax credits (which I get) or energy efficiency credits (I don't get) or mortgage interest deductions (I don't get). Same with Obamacare subsidies. I'll get those in a big way in 2015 or 2016.
There seems to be a societal push to reward those with children through our subsidies and tax breaks, and I happen to have 3 of them. I'll accept with open arms all benefits munificently bestowed upon me in exchange for my careful and diligent upbringing of my own children.
Yeah, our system is just fucked up beyond reproach. We got serious problems. I'm trying not to get worked up at you in particular, as you are just playing the system in which you find yourself, but the system is just broken.
We need to get away from deductions. People should not get a deduction for doing the right thing, like saving money, and taking care of their own fucking kids, you know, doing things like buying them food. People should pay the same taxes on income, all income, not just wages. I wonder what taxes rates could be if all income were considered and there were no deductions...
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By exiting the workforce, you are allowing another individual to be employed. So if the total sum of benefits you receive are less than the cost of supporting an unemployed non financially independent individual then the cost to the government is lower (no additional debt required).
That sounds like rationalization.
Reduced price lunch I might qualify for eventually, and I would take it if I qualify. It would benefit me slightly, but benefit our kids' school greatly. They get large subsidies for each qualifying free/reduced priced kid, and the school needs all the help it can get. I help the school out however I can, and this would be another way.
Not true. At least, not true in the way you've presented it. If X number of kids get free lunch, the school does get extra funding . . . but they are required to use it to provide specific remediation programs, etc. It requires more work from the school, takes effort away from basic classes, and the school is not free to use the money in the spots they believe it's most needed. It means greater federal control within the school.
You are NOT "helping" your child's school by having them take free lunch.
So, it's ok to put money in a Roth IRA and let it grow tax-free until retirement age, denying the IRS of many thousands of dollars it "could" have received. But get a few hundred a month for a bit in food stamps, and you're evil?
Putting money you've earned into an account and avoiding taxes is a smart way of saving for your future. You're going to pay the taxes eventually when you withdraw the money, though hopefully at a lower rate. The key is that it's YOUR money.
Taking food money from the government, when you're capable of earning that money yourself, is laziness. The key is that it's NOT YOUR money.
this++
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If the government gives it to me, and I didn't lie or cheat for it, then it is, in fact, MY money. Argue all you want about the morality of the governments decision to give it to me, but accepting something willingly given is never immoral in my mind.
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My parents had a LOT of children and never once did they expect the government to feed us, clothe us, or put a roof over our heads. They worked and saved and taught us to do the same.
So you're sure then they didn't use the Child tax credit? Or mortgage deduction? B/c if they did, the gov't helped to care for you and house you. Or, for that matter, if any of the children ever bought school lunch, even at "full" price, the gov't helped feed them b/c those are subsidized. ....
I would not count on free school lunch (althoug my kids won't be eating that crap anyway) or SNAP for ER, but I find the outrage of others about lines like this probably hypocritical.
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Putting money you've earned into an account and avoiding taxes is a smart way of saving for your future. You're going to pay the taxes eventually when you withdraw the money, though hopefully at a lower rate.....Taking food money from the government, when you're capable of earning that money yourself, is laziness. The key is that it's NOT YOUR money.
Well if it's a Roth, no they will not pay taxes on it later. Even if it's a traditional, they may never pay taxes on it.
As far as using SNAP being laziness, this is an odd statement (well, not odd if one considers the stereotypes associated with SNAP), but the idea that saving money through one gov't program is okay, but another is "lazy" is unsupported.
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All of the emotion behind school lunch program has to do with, I believe, the reality that food is the lowest provision on the totem poll of child-raising. If you cannot feed your child without government help, you are indeed in a bad place. If you are there for a long time, you are not a responsible parent. Seriously, how much food do little kids eat? Not much (teenage boys, another story.) Sure, I ascribe to this thought, I admit it.
The other things like a college education that Pell grants help you with and similar high-end things--well, a lot of decently paid Americans who are careful with their money have trouble with that.
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Great discussion, love this topic - thanks, Emilyngh.
For those folks who would decline these benefits or who, like MrsPete hvgotcodes, et al., believe it would be in some way morally reprehensible to do so - do you also intend never to claim social security benefits in retirement? If you do intend to do so, is there a principled distinction you can make between that and this?
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If you cannot feed your child without government help, you are indeed in a bad place. If you are there for a long time, you are not a responsible parent.The other things like a college education that Pell grants help you with and similar high-end things--well, a lot of decently paid Americans who are careful with their money have trouble with that.
Excellent point. I really think this line of thinking influences us at least subconsciously (myself included) and thus should be dragged to the light to make sure we're bahaving rationally What type of person uses financial aid and IRAs?-good, hard-working people. What kind of people are on welfare.....
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You are very welcome, LRS. I'm enjoying it too.
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Great discussion, love this topic - thanks, Emilyngh.
For those folks who would decline these benefits or who, like MrsPete hvgotcodes, et al., believe it would be in some way morally reprehensible to do so - do you also intend never to claim social security benefits in retirement? If you do intend to do so, is there a principled distinction you can make between that and this?
I would decline free meals for my kid if I didn't need it. I would accept if I did, but I would work my hardest to avoid it. And I certainly wouldn't call myself FI if I were bilking the system like that.
The difference between SS and the school lunch thing is that SS is a system that has been in place for a long time, with the express purpose of providing retirement funds. It is not supposed to be a welfare system; there is no means testing for SS (yet). You get SS if you pay into the system, not if you need it or don't.
That said, I don't believe I will get what I pay in back, perhaps nothing at all, by the time I retire. If I do get something, I would donate it to charity if I hit my retirement goal.
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Reduced price lunch I might qualify for eventually, and I would take it if I qualify. It would benefit me slightly, but benefit our kids' school greatly. They get large subsidies for each qualifying free/reduced priced kid, and the school needs all the help it can get. I help the school out however I can, and this would be another way.
Not true. At least, not true in the way you've presented it. If X number of kids get free lunch, the school does get extra funding . . . but they are required to use it to provide specific remediation programs, etc. It requires more work from the school, takes effort away from basic classes, and the school is not free to use the money in the spots they believe it's most needed. It means greater federal control within the school.
You are NOT "helping" your child's school by having them take free lunch.
Pretty sure I am. These things work differently in different districts. So I wouldn't assume too much about the different funding structures and flexibility of using funds in your school or your district and extrapolating them to other districts.
The remedial help my children receive or don't receive is based on assessments by their teachers and fairly objective tests. My kids can get straight 4's on their assessments (like an A or A+ for those not familiar) and receive zero remedial help. But if I check the box for free/reduced lunch, the school gets money. You may say it has to be spent in certain areas. Sure, maybe in some cases, and I am familiar with a few cases. But it isn't generally true. We definitely get the option for certain programs if we are Economically Disadvantaged (free after school tutoring being one program).
It's like this: the school has to hire X number of literacy and math coaches and remedial teachers and ESL teachers. The administration might decide they need a couple extra to get the job done. They lose the music teacher and art teacher to provide the extra remedial teachers (the administration wants to hit their growth targets after all). In steps the root of good family, and checks a few boxes and the school gets a few thousand bucks. Boom! A little closer to rehiring that music or art teacher.
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So rather than work, your plan is to have the taxpayers feed your kids lunch? My parents had a LOT of children and never once did they expect the government to feed us, clothe us, or put a roof over our heads. They worked and saved and taught us to do the same.
I teach my kids to be smart. Understand how the government and the taxation system works. Be cynical. Don't get ripped off. They know about taxes and how burdensome they are. You can't avoid the taxation system completely. If they legally qualify for a benefit, then they shouldn't feel ethical shame at participating in that particular governmental program. They are helping pay for it after all.
This isn't directed at you because I have no idea your employment situation. But I wonder how the government employees here can justify the extortionist contributions that the taxpayers must make to fund their cushy government pensions. I guess some here might have to delete "collect a government pension" from their retirement plans due to ethical concerns. Why take it if you don't need it, right?
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Yeah, our system is just fucked up beyond reproach. We got serious problems. I'm trying not to get worked up at you in particular, as you are just playing the system in which you find yourself, but the system is just broken.
We need to get away from deductions. People should not get a deduction for doing the right thing, like saving money, and taking care of their own fucking kids, you know, doing things like buying them food. People should pay the same taxes on income, all income, not just wages. I wonder what taxes rates could be if all income were considered and there were no deductions...
I think we agree on the state of things today.
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This is an interesting topic!
I decided that I'm not comfortable w/ taking welfare/SNAP, but the others are OK. To be honest, I am not ER yet, but we use reduced lunches, EIC, and Pell grants right now.
EIC is a no-brainer to me; it is a tax credit, no different than the retirement saver's credit or adoption credits or tuition credits or whatever. If I qualify, I get it. If I don't, then no credit.
Given the cost of college, I'll take any grants, scholarships, loans, & work study that is offered for my kids. The college my oldest attended was more per year than DH and I earn!
The reduced lunches is a more complicated issue. We don't need the lunches; the kids have plenty to eat and would never go hungry w/o it. Reduced lunches is actually important for college aid. If the family is eligible for free or reduced lunches, and our AGI is below certain thresholds, the college kids are eligible for the simplified needs test (no asset test) for AGI under $50k, or possibly an EFC = 0 if AGI is under $23k. That is the main reason that we apply for free/reduced lunches: it is thousands of dollars in financial aid.
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This isn't directed at you because I have no idea your employment situation. But I wonder how the government employees here can justify the extortionist contributions that the taxpayers must make to fund their cushy government pensions. I guess some here might have to delete "collect a government pension" from their retirement plans due to ethical concerns. Why take it if you don't need it, right?
This is nonsense, and I think you know it's nonsense. Why would taking compensation given to you by your employer be unethical?
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Wow. There are some cranky people here.
I wouldn't take SNAP or welfare because, Hello, they are HARDER to get than a job. I have accompanied friends to help them fill out paperwork for these things. 6 hours later we were still sitting there in a waiting room overflowing with bored children. My personal vision of Hell. And WIC is crazy! All those monthly meetings, to be taught amazing things like "Don't feed your newborn honey, use a car seat, breast feeding is best" just to get a couple gallons of Apple juice, formula, and milk? I don't know what the hourly return on using those programs are, but I am too lazy to use them! They are just an elaborate form of subsidizing Monsanto and Archer Daniels Midland, anyway.
Free lunch? Why not. Another farm subsidy. Oh, you thought that was for children? Have you seen what food is on those trays? Not designed to nourish children! Designed to most quickly use up corn/wheat/soy/dairy. My kid went to an elementary school that offered every kid a free breakfast every day, regardless of economic status. Of course, my little guy wouldn't eat it because he wasn't wiling to stand in line when he could be playing before school. But should I have told him not to eat, because it was free?
I will choose not to RE until I don't need these programs, but I will use any that I believe are advantageous to me. But most of these kind of programs aren't - they are a pain in the neck to actually use.
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Great discussion, love this topic - thanks, Emilyngh.
For those folks who would decline these benefits or who, like MrsPete hvgotcodes, et al., believe it would be in some way morally reprehensible to do so - do you also intend never to claim social security benefits in retirement? If you do intend to do so, is there a principled distinction you can make between that and this?
I would decline free meals for my kid if I didn't need it. I would accept if I did, but I would work my hardest to avoid it. And I certainly wouldn't call myself FI if I were bilking the system like that.
Hey, appreciate the response. Love talking through this stuff.
I would agree that someone whose retired lifestyle would crumble but for subsidized meals for their children is not truly financially independent. But I don't think that's really the scenario we're contemplating here. I don't think many of us would choose to live on such a thin razor's edge in retirement that an extra $2 every school day would force us back to work for The Man. What we're talking about is being able to afford and sustain a retired lifestyle even without the subsidy, but choosing to take the subsidy anyway. Would you disagree that someone in those circumstances is "financially independent?"
The difference between SS and the school lunch thing is that SS is a system that has been in place for a long time, with the express purpose of providing retirement funds. It is not supposed to be a welfare system; there is no means testing for SS (yet). You get SS if you pay into the system, not if you need it or don't.
I don't understand how the key underlying principle is any different. The law says that, under certain circumstances, you have to surrender a certain number of dollars to the federal government, and that under other circumstances, you can ask for a certain number of dollars from the federal government and the government will give them to you. The law create legal rights to benefits for citizens who meet certain criteria. Why does the morality of exercising a legal right under the law depend on how long the system has been in place, or whether there's a means test?
I understand what you're saying about the "express purpose" of the law - welfare isn't really FOR early retirees. Those weren't the people Congress had in mind when it passed the law. But do you think social security is really FOR financially independent people? Was Congress really thinking about people who had saved conscientiously and accumulated their own wealth when it enacted social security? I don't think so, and consequently I don't really see the difference in the two scenarios.
That said, I don't believe I will get what I pay in back, perhaps nothing at all, by the time I retire. If I do get something, I would donate it to charity if I hit my retirement goal.
I'm also pretty pessimistic about social security. But actually, my original question was whether, given your apparent stance that taking government money you don't need is immoral (correct me if I'm misunderstanding or mischaracterizing), you would choose to make a claim at all. Unless I'm badly mistaken, you have the option of just never filing for social security benefits, even after you hit age 70. You could forget that you're even entitled to social security and let your 70th birthday whiz past without filing a claim. Will you do that?
The donate-to-charity option is really fascinating too. How would you feel about someone who's financially independent and doesn't need any more money, yet still claims the maximum welfare/SNAP/free lunch/EIC/Pell Grant benefits he can get...but then donates it to charity? Still immoral?
Thinking about this further and reading some of the responses from the other camp, I'm starting to see where they're coming from, and I'm teetering on the verge of changing my mind. I feel like poorly drafted laws and regulations that allow wealthy people to claim public assistance are essentially loopholes. I feel a sense of disgust and contempt when, for example, hugely profitable multinational corporations abuse analogous loopholes to avoid paying taxes or to collect corporate welfare. So maybe I really ought to feel the same disgust and contempt for individuals who do basically the same thing. But it's so much easier to condemn a faceless corporation than it is to condemn, say, a financially savvy mom who worked hard for her stash, sat down and read the law, figured out that there was more money, free for the taking, and jumped on it. I even hesitate to stick the "immoral" label on the hyperrich who engage in complex wealth-sheltering, because I feel like it's a "don't hate the player, hate the game"-type scenario where people are just responding to the incentives that the government is putting in front of them, for better or for worse. But maybe the hyperrich ARE bad people, and maybe that mom IS a bad person, for taking money that obviously wasn't MEANT for them.
Very thought-provoking topic!
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Great discussion, love this topic - thanks, Emilyngh.
For those folks who would decline these benefits or who, like MrsPete hvgotcodes, et al., believe it would be in some way morally reprehensible to do so - do you also intend never to claim social security benefits in retirement? If you do intend to do so, is there a principled distinction you can make between that and this?
My income was taken from against my will to fund Social Security. Give me a choice 35 years ago, in or out, and I would opt out. But I had no choice, so now sure I'll be taking that which you took from me, Nanny G.
But that said, SS should be means tested as well and I will gripe and moan when it happens because likely I'll test out, but still--it should happen.
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The retirement benefits under Social Security are not and have never been intended to be only for those who "need it." The retirement portion of Social Security is simply a mandatory pension. That's why the benefit depends on how long you work and how much money you made, and why there is a cap on the amount of wages subject to the tax.
http://en.wikipedia.org/wiki/Retirement_Insurance_Benefits
Subsidies like food stamps, pell grants, etc. are and are intended to be for those who need it. That's why those programs have income limits.
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Right or wrong the way I see it is that the more the government sticks there nose into our lives and pockets the more anyone of its citizens have a right to take advantage of government programs if they qualify. Here's a scenario for you. Two identical families making same money. One forgoes our commercialism and saves enough to be FI. The other one spends like there is no tomorrow. Should the family that saved not have the same rights as the family that didn't care? It is sad to say but more and more we dont live in a society of accountability. For some reason our government feels like they know better. That being the case I will agree with them and take any benefit for which I am entitled.
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SSI is not in any way a needs-based program. It is intended for everyone of retirement age, which makes it far different than something like SNAP, which is intended to help those who are struggling and is very specifically-needs based. This is a huge difference.
I would take SSI even if I won the lottery and had a zillion dollars in the bank.
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I would agree that someone whose retired lifestyle would crumble but for subsidized meals for their children is not truly financially independent. But I don't think that's really the scenario we're contemplating here. I don't think many of us would choose to live on such a thin razor's edge in retirement that an extra $2 every school day would force us back to work for The Man. What we're talking about is being able to afford and sustain a retired lifestyle even without the subsidy, but choosing to take the subsidy anyway. Would you disagree that someone in those circumstances is "financially independent?"
Yes. FI means *independent*. If you need or even use a government handout thats not independence according to my understanding of the term.
I don't understand how the key underlying principle is any different. The law says that, under certain circumstances, you have to surrender a certain number of dollars to the federal government, and that under other circumstances, you can ask for a certain number of dollars from the federal government and the government will give them to you. The law create legal rights to benefits for citizens who meet certain criteria. Why does the morality of exercising a legal right under the law depend on how long the system has been in place, or whether there's a means test?
I understand what you're saying about the "express purpose" of the law - welfare isn't really FOR early retirees. Those weren't the people Congress had in mind when it passed the law. But do you think social security is really FOR financially independent people? Was Congress really thinking about people who had saved conscientiously and accumulated their own wealth when it enacted social security? I don't think so, and consequently I don't really see the difference in the two scenarios.
The difference is the philosophy of SS is "you pay into the system now, to take care of current retirees, and in the future, workers will pay into the system to take care of you". It's not a welfare system where only those who qualify based on need get a benefit. That said, that's where I think we are heading, which is a shame.
I'm also pretty pessimistic about social security. But actually, my original question was whether, given your apparent stance that taking government money you don't need is immoral (correct me if I'm misunderstanding or mischaracterizing), you would choose to make a claim at all. Unless I'm badly mistaken, you have the option of just never filing for social security benefits, even after you hit age 70. You could forget that you're even entitled to social security and let your 70th birthday whiz past without filing a claim. Will you do that?
I am not against taking money from the government. I am against bilking a system; i.e. I would not FIRE, then claim I'm so poor I need welfare/foodstamps/free school lunches. Those programs are for truly poor people. Not people who by choice wanted to retire early and are on a strict budget to achieve it. Its pretty much the same in my mind as faking disability, getting SSDI, and continuing to work. It's fraud.
The donate-to-charity option is really fascinating too. How would you feel about someone who's financially independent and doesn't need any more money, yet still claims the maximum welfare/SNAP/free lunch/EIC/Pell Grant benefits he can get...but then donates it to charity? Still immoral?
Robbing Peter to pay Paul? Yes, still immoral. Donating to charity while robbing a system to get food? There are some serious contradictions there.
Thinking about this further and reading some of the responses from the other camp, I'm starting to see where they're coming from, and I'm teetering on the verge of changing my mind. I feel like poorly drafted laws and regulations that allow wealthy people to claim public assistance are essentially loopholes. I feel a sense of disgust and contempt when, for example, hugely profitable multinational corporations abuse analogous loopholes to avoid paying taxes or to collect corporate welfare. So maybe I really ought to feel the same disgust and contempt for individuals who do basically the same thing. But it's so much easier to condemn a faceless corporation than it is to condemn, say, a financially savvy mom who worked hard for her stash, sat down and read the law, figured out that there was more money, free for the taking, and jumped on it. I even hesitate to stick the "immoral" label on the hyperrich who engage in complex wealth-sheltering, because I feel like it's a "don't hate the player, hate the game"-type scenario where people are just responding to the incentives that the government is putting in front of them, for better or for worse. But maybe the hyperrich ARE bad people, and maybe that mom IS a bad person, for taking money that obviously wasn't MEANT for them.
Very thought-provoking topic!
Yes, I agree the problem is primarily with the system. I think that it makes no sense to incentivize people thru the tax code to do things they should be doing anyway, things that are in their best interest to begin with. Deductions for children, for saving, for buying a house? You should save because its in your best interest. You should only have kids if you can afford them (although having kids, if I was poor I would be desperate since they are so awesome). Same for the house. Plus, lots of very wealthy people pay comparatively little tax since we treat wages different investment income. If we treated all income the same and got rid of all deductions, I bet rates could be exceptionally low.
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If the government gives it to me, and I didn't lie or cheat for it, then it is, in fact, MY money. Argue all you want about the morality of the governments decision to give it to me, but accepting something willingly given is never immoral in my mind.
Disagree. The government may hand it to you, but if you didn't earn it, it is still charity. NOT your own money.
As far as using SNAP being laziness, this is an odd statement (well, not odd if one considers the stereotypes associated with SNAP), but the idea that saving money through one gov't program is okay, but another is "lazy" is unsupported.
Food stamps might be laziness, might not be laziness . . . but in the course of this discussion, we're talking about people who could work but would -- given the chance -- take taxpayer's money to feed themselves and their children. We're not talking about the factory-worker mother who sets out to have one baby and instead finds herself with triplets, or the grandparents who unexpectedly find themselves raising their daughter's children; we're talking about the person who voluntarily retires early, yet takes free lunch to feed his kids. In that scenario, it is laziness.
Great discussion, love this topic - thanks, Emilyngh.
For those folks who would decline these benefits or who, like MrsPete hvgotcodes, et al., believe it would be in some way morally reprehensible to do so - do you also intend never to claim social security benefits in retirement? If you do intend to do so, is there a principled distinction you can make between that and this?
I already addressed this idea. I have no problem with EARNED benefits -- military pensions, Social Security. . . to take it a step further, using public schools to educate your children. Earned benefit programs are a form of saving. When a person has paid into a system for years and receives a benefit later, that's just fairness. My problem is with people taking from programs meant for the poor and unable to work, when they themselves have the option of working.
Reduced price lunch I might qualify for eventually, and I would take it if I qualify. It would benefit me slightly, but benefit our kids' school greatly. They get large subsidies for each qualifying free/reduced priced kid, and the school needs all the help it can get. I help the school out however I can, and this would be another way.
Not true. At least, not true in the way you've presented it. If X number of kids get free lunch, the school does get extra funding . . . but they are required to use it to provide specific remediation programs, etc. It requires more work from the school, takes effort away from basic classes, and the school is not free to use the money in the spots they believe it's most needed. It means greater federal control within the school.
You are NOT "helping" your child's school by having them take free lunch.
Pretty sure I am. These things work differently in different districts. So I wouldn't assume too much about the different funding structures and flexibility of using funds in your school or your district and extrapolating them to other districts.
The remedial help my children receive or don't receive is based on assessments by their teachers and fairly objective tests. My kids can get straight 4's on their assessments (like an A or A+ for those not familiar) and receive zero remedial help. But if I check the box for free/reduced lunch, the school gets money. You may say it has to be spent in certain areas. Sure, maybe in some cases, and I am familiar with a few cases. But it isn't generally true. We definitely get the option for certain programs if we are Economically Disadvantaged (free after school tutoring being one program).
It's like this: the school has to hire X number of literacy and math coaches and remedial teachers and ESL teachers. The administration might decide they need a couple extra to get the job done. They lose the music teacher and art teacher to provide the extra remedial teachers (the administration wants to hit their growth targets after all). In steps the root of good family, and checks a few boxes and the school gets a few thousand bucks. Boom! A little closer to rehiring that music or art teacher.
I see that you're convinced, but your facts are just plain wrong. No, the extra money doesn't result in extra art teachers, etc., and, no, the National Lunch Program is not administered differently in different districts. What it really means is that the money must be spent on specific types of programs, and the federal government oversees them. It results in less autonomy for the school, fewer choices for the administration. I teach in a Title 1 school, so I do know of what I speak.
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Yes. FI means *independent*. If you need or even use a government handout thats not independence according to my understanding of the term.
You're not independent if you use it but don't need it? I like eating pomegranates but I'm not dependent on them to live.
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This is an interesting topic!
Agreed! Always interesting to see the diversity of opinions on a divisive subject like entitlements.
The reduced lunches is a more complicated issue. We don't need the lunches; the kids have plenty to eat and would never go hungry w/o it. Reduced lunches is actually important for college aid. If the family is eligible for free or reduced lunches, and our AGI is below certain thresholds, the college kids are eligible for the simplified needs test (no asset test) for AGI under $50k, or possibly an EFC = 0 if AGI is under $23k. That is the main reason that we apply for free/reduced lunches: it is thousands of dollars in financial aid.
Thanks for sharing! I had never heard of free/reduced lunch qualifying kids for simplified needs test (no asset test).
I'll have to look into this as my kids get closer to college age. They are so many interlinking contingencies with these social programs that it can be hard to optimize benefits. Our AGI will be low-ish, but our assets will most likely not be low.
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Wow. There are some cranky people here.
I wouldn't take SNAP or welfare because, Hello, they are HARDER to get than a job. I have accompanied friends to help them fill out paperwork for these things. 6 hours later we were still sitting there in a waiting room overflowing with bored children. My personal vision of Hell. And WIC is crazy! All those monthly meetings, to be taught amazing things like "Don't feed your newborn honey, use a car seat, breast feeding is best" just to get a couple gallons of Apple juice, formula, and milk? I don't know what the hourly return on using those programs are, but I am too lazy to use them! They are just an elaborate form of subsidizing Monsanto and Archer Daniels Midland, anyway.
Free lunch? Why not. Another farm subsidy. Oh, you thought that was for children? Have you seen what food is on those trays? Not designed to nourish children! Designed to most quickly use up corn/wheat/soy/dairy. My kid went to an elementary school that offered every kid a free breakfast every day, regardless of economic status. Of course, my little guy wouldn't eat it because he wasn't wiling to stand in line when he could be playing before school. But should I have told him not to eat, because it was free?
I will choose not to RE until I don't need these programs, but I will use any that I believe are advantageous to me. But most of these kind of programs aren't - they are a pain in the neck to actually use.
Exactly my sentiments. I think I said something along the lines of "I'd do it if I qualified and the burden of applying to the program and complying with the program weren't onerous".
I've helped my in-laws apply for some benefits like SNAP and medicare extra help. We gobbled up the easy stuff and bypassed the other programs that required excessive reams (literally) of paperwork. No wonder poor people can't get jobs - they are knee deep in paperwork and compliance. That isn't only personal anecdotal opinion; it's also been recorded in the academic literature. See, for example, Cheating Welfare: Public Assistance and the Criminalization of Poverty - Kaaryn Gustafson.
+1 on the free lunch = farm subsidy. Ever wonder why the Dept. of Agriculture is funding the free/reduced lunch program?
Our kids go to a school where everyone gets free breakfast, but they rarely eat it. It's only milk and cereal and fruit (on good days) or junky plastic wrapped muffins or waffles served cold on bad days. We have that at home and often better quality and variety. I have no ethical problem if they eat the free breakfast (I told them to do it this morning since they didn't eat at home).
I feel the same way about lunches - we will probably qualify for reduced lunches, but they won't eat at school every day. These aren't "low income" programs by any means. We could earn $51,000 per year and qualify for reduced price lunches. When did $51k/yr become "low income"? $35,800 per year equals free lunch. Eligibility chart: http://www.fns.usda.gov/cnd/governance/notices/iegs/iegs.htm
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This isn't directed at you because I have no idea your employment situation. But I wonder how the government employees here can justify the extortionist contributions that the taxpayers must make to fund their cushy government pensions. I guess some here might have to delete "collect a government pension" from their retirement plans due to ethical concerns. Why take it if you don't need it, right?
This is nonsense, and I think you know it's nonsense. Why would taking compensation given to you by your employer be unethical?
I honestly don't think it is nonsense. I'd throw collecting government pensions in there with the other government handouts. I mean if you don't really "need" the government pension, should you take it and deplete the funds of the pension plan? Part of the pension funding comes straight out of the public treasury (ie taxpayers' pockets). Why not withdraw your contributions (plus interest) and forfeit your pension if you are highly principled? I see no one opting for that choice.
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Pretty sure I am. These things work differently in different districts. So I wouldn't assume too much about the different funding structures and flexibility of using funds in your school or your district and extrapolating them to other districts.
The remedial help my children receive or don't receive is based on assessments by their teachers and fairly objective tests. My kids can get straight 4's on their assessments (like an A or A+ for those not familiar) and receive zero remedial help. But if I check the box for free/reduced lunch, the school gets money. You may say it has to be spent in certain areas. Sure, maybe in some cases, and I am familiar with a few cases. But it isn't generally true. We definitely get the option for certain programs if we are Economically Disadvantaged (free after school tutoring being one program).
It's like this: the school has to hire X number of literacy and math coaches and remedial teachers and ESL teachers. The administration might decide they need a couple extra to get the job done. They lose the music teacher and art teacher to provide the extra remedial teachers (the administration wants to hit their growth targets after all). In steps the root of good family, and checks a few boxes and the school gets a few thousand bucks. Boom! A little closer to rehiring that music or art teacher. [/quote]
I see that you're convinced, but your facts are just plain wrong. No, the extra money doesn't result in extra art teachers, etc., and, no, the National Lunch Program is not administered differently in different districts. What it really means is that the money must be spent on specific types of programs, and the federal government oversees them. It results in less autonomy for the school, fewer choices for the administration. I teach in a Title 1 school, so I do know of what I speak.
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I guess the teachers, principals, and staff at my kids school, as well as the district superintendent, chief business officer, chief financial officer, and elected school board members have all made a concerted effort to mislead me in how school funding works, and what additional funds they receive for each kid that checks the box on the free/reduced lunch form. I'm an appointed official at a policy level, and frequently talk with administrators, elected officials, and district executive leadership. Granted, it's "only" a volunteer position, but one that interests me to a great degree, and one in which I have been effective at bringing about positive change for my kids' school and the district over all.
I could be totally wrong on this point. I'm not referring to the funding that pays for the actual free/reduced lunches - I think virtually all of that goes to offset the provision of the meals themselves, and covers some administrative costs of Child Nutrition Services at the local and state level (but we are talking pennies per lunch really).
I'll throw out an example of general education funding being tied to free/reduced lunch pupil counts: http://www.marketplace.org/topics/wealth-poverty/education/how-free-lunches-pay-schools
From the article:
“We get approximately $5,000 per child in state aid for every free and reduced student that we can identify as of October 31 each year,” says Walker. This year that adds up to more than $323 million.
I'm not saying my kids' school gets $5,000 extra per pupil that is free/reduced lunch, because I think the number is closer to $1,000-2,000. But this phenomena certainly exists in my district, and other places all across the country. It's just a fact.
Now we can argue policy - is it the right way to fund schools? Or fairness - should my kids who come from a millionaire household qualify their school for thousands in extra funding, even though they get top scores at school and don't need any extra assistance (other than enrichment/academically gifted support)?
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This is an interesting topic!
Agreed! Always interesting to see the diversity of opinions on a divisive subject like entitlements.
The reduced lunches is a more complicated issue. We don't need the lunches; the kids have plenty to eat and would never go hungry w/o it. Reduced lunches is actually important for college aid. If the family is eligible for free or reduced lunches, and our AGI is below certain thresholds, the college kids are eligible for the simplified needs test (no asset test) for AGI under $50k, or possibly an EFC = 0 if AGI is under $23k. That is the main reason that we apply for free/reduced lunches: it is thousands of dollars in financial aid.
Thanks for sharing! I had never heard of free/reduced lunch qualifying kids for simplified needs test (no asset test).
I'll have to look into this as my kids get closer to college age. They are so many interlinking contingencies with these social programs that it can be hard to optimize benefits. Our AGI will be low-ish, but our assets will most likely not be low.
Just beware that they change the rules all the time! A few years ago, the cutoff for EFC = 0 was at $31k, they raised it to $32k and then retroactively lowered it to $23k. With 401k contributions, we were under $31k or so, but $23k is out of reach. If you don't make the cutoff and calculations are continued, the formula adds back in all your 401k, etc. contributions. For some reason, they only calculate the FICA as paid on the AGI, though.
There are other ways to qualify, such as being eligible to file a 1040EZ or 1040A. Alas, we have an HSA, and that alone requires that we file 1040. As you said, interlocking contingencies.
If you'd like to examine the (current) formulas to see what affects the calculation of EFC, here is the link:http://www.ifap.ed.gov/efcformulaguide/attachments/091913EFCFormulaGuide1415.pdf (http://www.ifap.ed.gov/efcformulaguide/attachments/091913EFCFormulaGuide1415.pdf)
You have to put plans into place earlier than you'd think. My DD3 just started college this fall. We filled out the FAFSA in January, and it is based on a snapshot of our account balances at the time we filled it out (if assets are included) and on our 2012 taxes. IOW, for a student graduating HS in 2013, changes needed to be in place by the end of 2011.
I see that I misspoke about the $23k threshold. It is now $24k.
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This is such an interesting topic to me because it's something that I'm 100% sure I'm right and can't make myself consider on any level the opposing view (which many people have been espousing passionately). I've worked very hard in life to always be able to see the other side of an argument, but I don't see it at all here.
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This isn't directed at you because I have no idea your employment situation. But I wonder how the government employees here can justify the extortionist contributions that the taxpayers must make to fund their cushy government pensions. I guess some here might have to delete "collect a government pension" from their retirement plans due to ethical concerns. Why take it if you don't need it, right?
This is nonsense, and I think you know it's nonsense. Why would taking compensation given to you by your employer be unethical?
I honestly don't think it is nonsense. I'd throw collecting government pensions in there with the other government handouts. I mean if you don't really "need" the government pension, should you take it and deplete the funds of the pension plan? Part of the pension funding comes straight out of the public treasury (ie taxpayers' pockets). Why not withdraw your contributions (plus interest) and forfeit your pension if you are highly principled? I see no one opting for that choice.
I don't doubt that you're capable of being honest with yourself and making a decision that is both financially beneficial to you and ethically uncomfortable. You don't need to justify the ethics of the decision in order to make it. If it's important for you that the decision also be ethical, then the widespread condemnation by others may require you to closely test your ethical consideration. In my view, you're just being cute with the portion of this consideration (and your consideration of your student loan situation) that you've shared.
Some benefit programs are intended to address specific needs. That they are adopted reflects some sufficient agreement that a particular need---or some less than ideal mix of needs, from each necessary supporter's view---should be met. The eligibility test for such a benefit may imperfectly reflect the status of having the targeted need as it was intended by any necessary supporter. While perfectly legal to accept the benefit by meeting the eligibility test, if you don't believe you have the intended need, taking the benefit is unethical, and others may reasonably conclude that you are acting exploitatively. Social security, work-based retirement pensions and similar don't even purport to be addressing specific, rather than general, needs (i.e., completing the required contribution, whether of taxes or service, entitles all who have done so to take the benefit, regardless of further contributions or any type of need). I think that food assistance programs and other programs traditionally regarded as "welfare" in the U.S. reflect a general expectation that the recipients need the assistance regardless of making some reasonable efforts to avoid it, and that's the major difference between your intended receipt of the aid and an ethical receipt of it, in my view.
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This isn't directed at you because I have no idea your employment situation. But I wonder how the government employees here can justify the extortionist contributions that the taxpayers must make to fund their cushy government pensions. I guess some here might have to delete "collect a government pension" from their retirement plans due to ethical concerns. Why take it if you don't need it, right?
This is nonsense, and I think you know it's nonsense. Why would taking compensation given to you by your employer be unethical?
I honestly don't think it is nonsense. I'd throw collecting government pensions in there with the other government handouts. I mean if you don't really "need" the government pension, should you take it and deplete the funds of the pension plan? Part of the pension funding comes straight out of the public treasury (ie taxpayers' pockets). Why not withdraw your contributions (plus interest) and forfeit your pension if you are highly principled? I see no one opting for that choice.
The taxpayers fund it, but it's part of your compensation. There's no difference here between a government pension and a private pension - its a benefit earned by the employee for work performed. I cannot fathom what you're thinking here. It would be like giving back all of the contributions in a 401k that your employer made because you "don't need it.". There's simply no ethical basis to require this.
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This isn't directed at you because I have no idea your employment situation. But I wonder how the government employees here can justify the extortionist contributions that the taxpayers must make to fund their cushy government pensions. I guess some here might have to delete "collect a government pension" from their retirement plans due to ethical concerns. Why take it if you don't need it, right?
This is nonsense, and I think you know it's nonsense. Why would taking compensation given to you by your employer be unethical?
I honestly don't think it is nonsense. I'd throw collecting government pensions in there with the other government handouts. I mean if you don't really "need" the government pension, should you take it and deplete the funds of the pension plan? Part of the pension funding comes straight out of the public treasury (ie taxpayers' pockets). Why not withdraw your contributions (plus interest) and forfeit your pension if you are highly principled? I see no one opting for that choice.
The taxpayers fund it, but it's part of your compensation. There's no difference here between a government pension and a private pension - its a benefit earned by the employee for work performed. I cannot fathom what you're thinking here. It would be like giving back all of the contributions in a 401k that your employer made because you "don't need it.". There's simply no ethical basis to require this.
Companies are privately owned and funded. Governments are publicly "owned" and funded by people like you and I (we, the taxpayers).
Companies can pay whatever they want. When the government starts asking me to pay for the cushy pensions of others, it bugs me. Our state, for example, pays over 13% of each employee's salary into the pension fund. That's way more than most private employers chip in. And that's 13% in good times and bad.
I "earn" the ability to participate in government provided handouts by virtue of meeting eligibility requirements. I'm subject to the government's system of taxation, so I might as well avail myself of the benefits extended by the same government. I can't feasibly opt out of either system (short of giving up citizenship, which isn't an option).
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I'm subject to the government's system of taxation, so I might as well avail myself of the benefits extended by the same government. I can't feasibly opt out of either system (short of giving up citizenship, which isn't an option).
If "I might as well" is your standard of ethics, than I'm sure your conscience will be clear.
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This isn't directed at you because I have no idea your employment situation. But I wonder how the government employees here can justify the extortionist contributions that the taxpayers must make to fund their cushy government pensions. I guess some here might have to delete "collect a government pension" from their retirement plans due to ethical concerns. Why take it if you don't need it, right?
This is nonsense, and I think you know it's nonsense. Why would taking compensation given to you by your employer be unethical?
I honestly don't think it is nonsense. I'd throw collecting government pensions in there with the other government handouts. I mean if you don't really "need" the government pension, should you take it and deplete the funds of the pension plan? Part of the pension funding comes straight out of the public treasury (ie taxpayers' pockets). Why not withdraw your contributions (plus interest) and forfeit your pension if you are highly principled? I see no one opting for that choice.
The taxpayers fund it, but it's part of your compensation. There's no difference here between a government pension and a private pension - its a benefit earned by the employee for work performed. I cannot fathom what you're thinking here. It would be like giving back all of the contributions in a 401k that your employer made because you "don't need it.". There's simply no ethical basis to require this.
Companies are privately owned and funded. Governments are publicly "owned" and funded by people like you and I (we, the taxpayers).
Companies can pay whatever they want. When the government starts asking me to pay for the cushy pensions of others, it bugs me. Our state, for example, pays over 13% of each employee's salary into the pension fund. That's way more than most private employers chip in. And that's 13% in good times and bad.
Even with benefits, government pays highly qualified employees far less than the private sector. The "cushy pensions" are one of those benefits that partly (but only partly) ameliorates the much lower salary. You're already getting a bargain (paying less than private employees), and now you want to dictate in what form that compensation is paid?
Again, nonsense.
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Even with benefits, government pays highly qualified employees far less than the private sector. The "cushy pensions" are one of those benefits that partly (but only partly) ameliorates the much lower salary. You're already getting a bargain (paying less than private employees), and now you want to dictate in what form that compensation is paid?
Again, nonsense.
Yes and no. In my experience the mid-level employees are paid more than the private sector and are usually not qualified. That's my experience with only a handful of employees, so not exactly a large sample size.
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It's too bad we can't form a society of only MMM'ers. With 59% to 92% of you deciding to forgo the various listed government subsidies in the poll, and extrapolating that into other areas of government subsidies, our social spending as a society could be virtually zero!
And discussions here are never dull to boot.
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Even with benefits, government pays highly qualified employees far less than the private sector. The "cushy pensions" are one of those benefits that partly (but only partly) ameliorates the much lower salary. You're already getting a bargain (paying less than private employees), and now you want to dictate in what form that compensation is paid?
Again, nonsense.
Yes and no. In my experience the mid-level employees are paid more than the private sector and are usually not qualified. That's my experience with only a handful of employees, so not exactly a large sample size.
The relative compensation of government employees is only a minor point here, and I don't want it to distract from the larger point that government pensions are compensation, and thus not even remotely comparable to government subsidies that use income as a qualifier.
However, for your edification, there's a really good CBO survey at http://www.cbo.gov/sites/default/files/cbofiles/attachments/01-30-FedPay.pdf
I particularly like the distribution figures on pages 8 and 9. Of course, this study only used educational attainment, not experience, and the average age of the federal workers surveyed was significantly higher than those of the private sectors, so it's not a perfect comparison. But it nonetheless quite interesting!
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However, for your edification, there's a really good CBO survey at http://www.cbo.gov/sites/default/files/cbofiles/attachments/01-30-FedPay.pdf
I particularly like the distribution figures on pages 8 and 9. Of course, this study only used educational attainment, not experience, and the average age of the federal workers surveyed was significantly higher than those of the private sectors, so it's not a perfect comparison. But it nonetheless quite interesting!
Agreed, that's interesting. With respect to regulatory functions, the government should really think about whether (perhaps) overpaying its lowest-level workers and (perhaps) underpaying its leaders and policy makers makes for the most effective regulator.
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I'm quite shocked to see so many willing to use the EIC contrary to its purpose.
the EIC was put into place to encourage people to work and support themselves and in turn the government will also help you out.
Being an Early retiree(choosing not to work) clearly takes you out of that category and puts you in the morally dubious category.
taking the EIC while being retired is not ethical.
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I'm quite shocked to see so many willing to use the EIC contrary to its purpose.
the EIC was put into place to encourage people to work and support themselves and in turn the government will also help you out.
Being an Early retiree(choosing not to work) clearly takes you out of that category and puts you in the morally dubious category.
taking the EIC while being retired is not ethical.
I have no moral or ethical qualms with claiming any tax credit that I am eligible for. I won't lie on my taxes to qualify for a credit, but if I honestly qualify I'm more than happy to take that money.
That said, I find it unlikely that many early retirees will find themselves in a position where they would be eligible for the EIC in the first place. The requirements for this credit (in a nutshell) are:
1) You need to have some income from work.
2) Your total income has to be below a certain level (that depends on your filing status and number of children).
3) Your total investment income (defined as the sum of interest, dividends, and capital gains) must be below $3,200.
I think part (3) is what will disqualify most early retirees. I know I expect to have a fairly sizable amount of money invested in index funds in taxable accounts before I retire. Most index funds pay dividends in the 1-3% range. Suppose your index funds have a weighted average yield of 2%. Having $115k invested in a taxable account will disqualify you from the EIC because of dividends alone, before any capital gains from selling shares is even considered.
I suppose you can imagine an early retiree who has a low-paying part-time job they do for fun, and tries very hard to qualify for the EIC by specifically choosing taxable investments that pay no dividends, and paying most of their living expenses out of a Roth IRA. I expect the vast majority of early retirees will find that such a strategy is not worth their time at best, and actually counterproductive to maintaining their wealth at worst.
Of all the programs mentioned here, I think the EIC has the best overall balance. It provides a good benefit for those who need it. It has a means test that uses investment income as a proxy to exclude most moderately wealthy people from qualifying. The means test level is high enough that it doesn't create large disincentives for poor people to save their money. Finally, the administrative burden of applying for and receiving this benefit is quite low.
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Some benefit programs are intended to address specific needs. That they are adopted reflects some sufficient agreement that a particular need---or some less than ideal mix of needs, from each necessary supporter's view---should be met. The eligibility test for such a benefit may imperfectly reflect the status of having the targeted need as it was intended by any necessary supporter. While perfectly legal to accept the benefit by meeting the eligibility test, if you don't believe you have the intended need, taking the benefit is unethical, and others may reasonably conclude that you are acting exploitatively. Social security, work-based retirement pensions and similar don't even purport to be addressing specific, rather than general, needs (i.e., completing the required contribution, whether of taxes or service, entitles all who have done so to take the benefit, regardless of further contributions or any type of need). I think that food assistance programs and other programs traditionally regarded as "welfare" in the U.S. reflect a general expectation that the recipients need the assistance regardless of making some reasonable efforts to avoid it, and that's the major difference between your intended receipt of the aid and an ethical receipt of it, in my view.
Contemplating this point has changed my mind on this question. While I retain an appreciation for the low cunning it takes to hack the bureaucracy and lay claim to benefits that would otherwise be left on the table, I can no longer avoid the conclusion that doing so, in light of the social context and the legislature's clear intent in enacting welfare programs, is, at best, ethically dubious, if not flat-out unethical. It subverts the good will of society in attempting to provide a safety net for its least fortunate citizens, and siphons into the already-swollen coffers of the rich from the meager pool of funds society has managed to allocate to aid the poor.
Just because something is legal doesn't mean it's necessarily right. When I remembered and meditated on this, I began to drift away from my initial instinct on this topic.
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I suppose you can imagine an early retiree who has a low-paying part-time job they do for fun, and tries very hard to qualify for the EIC by specifically choosing taxable investments that pay no dividends, and paying most of their living expenses out of a Roth IRA. I expect the vast majority of early retirees will find that such a strategy is not worth their time at best, and actually counterproductive to maintaining their wealth at worst.
What about an early retiree living completely off of their Roth with no taxable investments at all? Is this that unusual (it's my plan, I have no taxable investments). I would not be "trying very hard" to use the EIC (don't know if I'd claim it at all), but I think there's a good chance we'd qualify. I don't see how a tax credit would be not worth one's time nor couterproductive to maintaining wealth. I also don't know if it would really be so hard for a ER with a family and investments in 401ks, Roths, and traditional IRAs to qualify.
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I'm not saying my kids' school gets $5,000 extra per pupil that is free/reduced lunch, because I think the number is closer to $1,000-2,000. But this phenomena certainly exists in my district, and other places all across the country. It's just a fact.
Wow, $1,000-2,000 per student? Our school gets a little under $300/year per student for our Title 1 allocation.
If my school had that kind of an allocation we could be getting over $1,000,000 a year in extra funding.
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I'm childfree, so none of the child stuff applies to me! I would feel comfortable taking the EIC, if we were eligible. Since my husband is still working, that would not apply until he is retired. And even then, our income will likely surpass the maximum. Plus it's only $475 if you don't have kids, so not like it would make a difference.
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Free lunch? Why not. Another farm subsidy. Oh, you thought that was for children? Have you seen what food is on those trays? Not designed to nourish children! Designed to most quickly use up corn/wheat/soy/dairy.
QFT.
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the EIC was put into place to encourage people to work and support themselves and in turn the government will also help you out.
Being an Early retiree(choosing not to work) clearly takes you out of that category and puts you in the morally dubious category.
Yeah, there's the question of intent. Just because the EIC, etc., can be gamed by FIRE millionaires doesn't mean that it's moral. It may be legal and even ethical but it's certainly morally dubious. The intent of other government largesse mentioned is different. Social security or a tax credit for buying a Leaf (or a government pension) is not meant exclusively for people struggling to feed their children or pay the bills.
As far as the "they would've built in an asset test" argument, that was explained above. The likelihood of abuse is so small that it's not worth it to actually do a test (get bank statements, get IRS returns, maybe a lifestyle check). However, public outrage is evident when abuse is discovered.
http://www.dispatch.com/content/stories/national_world/2012/04/17/big-lottery-winner-charged-welfare-fraud.html
http://www.cbsnews.com/8301-201_162-57337957/couple-on-welfare-had-$1.2m-house-traveled-globe/
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Bacchi- both of those articles are cases of fraud where people did not report assets they are required to. No one is talking about fraud.
Also, asking for assets to reported does not require stringent verification. If assets are asked for and misreported, that is fraud. My state has low asset levels allowed for welfare eligibility, and while I doubt they triple verify things, lying about assets would be fraud.
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Bacchi- both of those articles are cases of fraud where people did not report assets they are required to. No one is atlking about fraud.
Yes and they relate to the "they would've built in an asset test" argument. It's so rare (actual fraud by millionaires) that an asset test would cost more than it saves.
In any case, the claim stands: It's certainly legal, and apparently ethical in some circles, but using a program meant for the impoverished is morally dubious at best (even if you think that you "earned it" by paying $75,000 in taxes each year for the past 10 years.)
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I have a question for any who think it's immoral for anyone in ER to claim the EIC on the grounds that it's using the tax code in a way not intended: is using the Roth pipeline immoral?
Arguably, the point of 401ks and other tax deferred acounts as they were designed is to defer taxes, not to avoid paying them. If one uses loopholes (like the Roth pipeline) to not pay taxes on huge amounts of contributions and gains (although these accounts were made for tax deferral, not avoidance), is that use of the tax code in a way not intended just as immoral?
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I have a question for any who think it's immoral for anyone in ER to claim the EIC on the grounds that it's using the tax code in a way not intended: is using the Roth pipeline immoral?
Arguably, the point of 401ks and other tax deferred acounts as they were designed is to defer taxes, not to avoid paying them. If one uses loopholes (like the Roth pipeline) to not pay taxes on huge amounts of contributions and gains (although these accounts were made for tax deferral, not avoidance), is that use of the tax code in a way not intended just as immoral?
Interesting question. I would not use a nondeductible IRA to get around the Roth income limits, because it clearly circumvents the intended purpose of the program. A deductible IRA rolled over to a Roth, however, is still a way to access funds intended to be tax-advantaged for retirement. So it seems like that kind of rollover is still in the spirit of the law. I'd be interested to hear counter arguments, though.
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A deductible IRA rolled over to a Roth, however, is still a way to access funds intended to be tax-advantaged for retirement. So it seems like that kind of rollover is still in the spirit of the law. I'd be interested to hear counter arguments, though.
Isn't the spirit of the law on a deductible IRA that taxes will be deferred (but then paid)? If one rolls money from an ira into a roth slowly enough after already ER to not pay a penny of taxes on the money, the original money contributed to the IRA (plus all gains) is tax-free, not tax-deferred.
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A deductible IRA rolled over to a Roth, however, is still a way to access funds intended to be tax-advantaged for retirement. So it seems like that kind of rollover is still in the spirit of the law. I'd be interested to hear counter arguments, though.
Isn't the spirit of the law on a deductible IRA that taxes will be deferred (but then paid)? If one rolls money from an ira into a roth slowly enough after already ER to not pay a penny of taxes on the money, the original money contributed to the IRA (plus all gains) is tax-free, not tax-deferred.
Thats a reasonable interpretation, although its not necessarily that taxes are deferred, it's that income is deferred. Appropriate tax is then levied on the withdrawn amount at ordinary income tax rates. There's no ethical problem with withdrawing income from a traditional IRA at lower tax rates than you saved when you paid in - that is part of the design and appeal.
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A deductible IRA rolled over to a Roth, however, is still a way to access funds intended to be tax-advantaged for retirement. So it seems like that kind of rollover is still in the spirit of the law. I'd be interested to hear counter arguments, though.
Isn't the spirit of the law on a deductible IRA that taxes will be deferred (but then paid)? If one rolls money from an ira into a roth slowly enough after already ER to not pay a penny of taxes on the money, the original money contributed to the IRA (plus all gains) is tax-free, not tax-deferred.
The spirit of the law is not just to defer taxation, but also to impose tax at only whatever rate applies at the taxable event. I think it's clear that Congress understood that in many cases the tax rate at withdrawl would be lower than at the deferral (that's a widely recognized benefit). While I think your post highlights some of the distortion that can be created by a system that treats each separate year as a completely independent tax period for the vast majority of persons, it doesn't seem much different to me than if you weren't funneling the money into a Roth before 59.5, but were instead taking 72(t) withdrawals equal to or less than your annual deductions, which wouldn't be taxed either, and doesn't seem to be outside of any intent of the law.
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There's no ethical problem with withdrawing income from a traditional IRA at lower tax rates than you saved when you paid in - that is part of the design and appeal.
Eh, I don't think this is any more morally justifiable than saying "There's no ethical problem with claiming a tax credit for low income families when one is low-income -that is part of the design."
The reality is that just as crafters of EIC probably did not have those who ER but have large savings in mind when writing it, I don't think using the Roth pipeline to pay $0 on all contributions and gains was the purpose of allowing rollovers to Roths. If using one part of the tax law in a way that it was probably not specifically designed for is immoral, then I don't see why this standard would not apply across the board.
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it doesn't seem much different to me than if you weren't funneling the money into a Roth before 59.5, but were instead taking 72(t) withdrawals equal to or less than your annual deductions, which wouldn't be taxed either, and doesn't seem to be outside of any intent of the law.
It seems different to me, keeping in mind the best guess of the purpose of deductible accounts. These accounts are sometimes even called "retirement accounts," presumably because they are intended for saving for retirement at a traditional retirement age. So, I would say that getting tax benefits by withdrawing from the account after 72 is not the same as getting tax benefits by withdrawing the money before retirement through a roth pipeline. If the tax code were intending to treat these withdrawals (those before and after traditional retirement age) equally, there would be no early withdrawal penalty.
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There's no ethical problem with withdrawing income from a traditional IRA at lower tax rates than you saved when you paid in - that is part of the design and appeal.
Eh, I don't think this is any more morally justifiable than saying "There's no ethical problem with claiming a tax credit for low income families when one is low-income -that is part of the design."
The reality is that just as crafters of EIC probably did not have those who ER but have large savings in mind when writing it, I don't think using the Roth pipeline to pay $0 on all contributions and gains was the purpose of allowing rollovers to Roths. If using one part of the tax law in a way that it was probably not specifically designed for is immoral, then I don't see why this standard would not apply across the board.
I don't see it---as with my example above, I don't think the possibility of withdrawals into the 0 percent tax bracket is outside the expectations of what one might do with a traditional IRA anyway. Beyond that, with the right mix of MAGI and taxable income, can't one make contributions to a Roth without paying any tax on the contribution in the first place? With the IRAs, I think you're assigning different intents than are obvious to me. For the record, the Roth pipeline isn't part of my retirement strategy, so I don't have an "interest" in defending it.
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it doesn't seem much different to me than if you weren't funneling the money into a Roth before 59.5, but were instead taking 72(t) withdrawals equal to or less than your annual deductions, which wouldn't be taxed either, and doesn't seem to be outside of any intent of the law.
It seems different to me, keeping in mind the best guess of the purpose of deductible accounts. These accounts are sometimes even called "retirement accounts," presumably because they are intended for saving for retirement at a traditional retirement age. So, I would say that getting tax benefits by withdrawing from the account after 72 is not the same as getting tax benefits by withdrawing the money before retirement through a roth pipeline. If the tax code were intending to treat these withdrawals (those before and after traditional retirement age) equally, there would be no early withdrawal penalty.
So you think the "intent" would permit 72(t) withdrawals in a situation where no tax was imposed on that (e.g., otherwise living off of returns of capital and 0% capital gains and wages equal to your deductions), where you then contributed the permitted amount to a Roth IRA, having paid no taxes on that contribution. But not a pipeline rollover? Like I said while you were posting this, I think the possibility of 0% withdrawals is pretty clearly recognized for the "deferred" tax vehicles. I don't claim to know exactly what Congress intended, but I don't think these things would offend Congress.
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There's no ethical problem with withdrawing income from a traditional IRA at lower tax rates than you saved when you paid in - that is part of the design and appeal.
Eh, I don't think this is any more morally justifiable than saying "There's no ethical problem with claiming a tax credit for low income families when one is low-income -that is part of the design."
The reality is that just as crafters of EIC probably did not have those who ER but have large savings in mind when writing it, I don't think using the Roth pipeline to pay $0 on all contributions and gains was the purpose of allowing rollovers to Roths. If using one part of the tax law in a way that it was probably not specifically designed for is immoral, then I don't see why this standard would not apply across the board.
When I said that, I was talking about traditional IRAs. I don't think there's any doubt that people intended withdrawals from an IRA to be subject to progressive income tax.
As for a Roth pipeline, I still don't know. It gives me a queasy feeling, and I don't plan on ever using it. It doesn't give me an immediate sense of revulsion that using food stamps while in early retirement would, but I can't say it's obviously ethical either.
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it doesn't seem much different to me than if you weren't funneling the money into a Roth before 59.5, but were instead taking 72(t) withdrawals equal to or less than your annual deductions, which wouldn't be taxed either, and doesn't seem to be outside of any intent of the law.
It seems different to me, keeping in mind the best guess of the purpose of deductible accounts. These accounts are sometimes even called "retirement accounts," presumably because they are intended for saving for retirement at a traditional retirement age. So, I would say that getting tax benefits by withdrawing from the account after 72 is not the same as getting tax benefits by withdrawing the money before retirement through a roth pipeline. If the tax code were intending to treat these withdrawals (those before and after traditional retirement age) equally, there would be no early withdrawal penalty.
72(t) payments are absolutely intended for early retirement.
Edit: That's why 72(t) distributions aren't subject to the 10% penalty.
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it doesn't seem much different to me than if you weren't funneling the money into a Roth before 59.5, but were instead taking 72(t) withdrawals equal to or less than your annual deductions, which wouldn't be taxed either, and doesn't seem to be outside of any intent of the law.
It seems different to me, keeping in mind the best guess of the purpose of deductible accounts. These accounts are sometimes even called "retirement accounts," presumably because they are intended for saving for retirement at a traditional retirement age. So, I would say that getting tax benefits by withdrawing from the account after 72 is not the same as getting tax benefits by withdrawing the money before retirement through a roth pipeline. If the tax code were intending to treat these withdrawals (those before and after traditional retirement age) equally, there would be no early withdrawal penalty.
72(t) payments are absolutely intended for early retirement.
Edit: That's why 72(t) distributions aren't subject to the 10% penalty.
Retreading Emilyngh's response, we may have mistakenly assumed she knows what a 72(t) withdrawal is, and if not, what we've said on this point might make not the most sense.
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While trying to make equivalencies, we shouldn't forget that food stamps and NSLP are budgetary programs. That is, there might be (and often is) a wait list for getting SNAP. A 35 year old FIRE millionaire taking food stamps is legitimately taking the spot of someone else.
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Retreading Emilyngh's response, we may have mistakenly assumed she knows what a 72(t) withdrawal is, and if not, what we've said on this point might make not the most sense.
You are correct. I am sorry, I made an assumption about what was meant, but going back and looking it up, I did not know what a 72(t) withdrawal was and responded poorly based on this.
Although, in just my quick reading into what it is, I noticed something about having to be at least 55 to do one. Is this correct? If it is, I do not consider over 55 really retiring before a traditional retirement age and do not see how allowing one to withdraw after 55 through a 72(t) is really evidence that the drafters of the tax code intend for ER to be able to use Roth pipelines to pay no tax on investments.
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While trying to make equivalencies, we shouldn't forget that food stamps and NSLP are budgetary programs. That is, there might be (and often is) a wait list for getting SNAP. A 35 year old FIRE millionaire taking food stamps is legitimately taking the spot of someone else.
I think this is a good point. I, personally would not be comfortable using SNAP or any other program where I might be using resources that someone else could really need. I am more on the fence about EIC, pell brants, etc.
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Retreading Emilyngh's response, we may have mistakenly assumed she knows what a 72(t) withdrawal is, and if not, what we've said on this point might make not the most sense.
You are correct. I am sorry, I made an assumption about what was meant, but going back and looking it up, I did not know what a 72(t) withdrawal was and responded poorly based on this.
Although, in just my quick reading into what it is, I noticed something about having to be at least 55 to do one. Is this correct? If it is, I do not consider over 55 really retiring before a traditional retirement age and do not see how allowing one to withdraw after 55 through a 72(t) is really evidence that the drafters of the tax code intend for ER to be able to use Roth pipelines to pay no tax on investments.
No, no minimum age requirement. But the bigger point stands, that the withdrawals, whether "normal," 72(t) or for a rollover are all clearly just taxed under the standing progressive tax rates, and that some of those will be at zero doesn't seem likely to me to be a surprise to Congress.
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I guess the teachers, principals, and staff at my kids school, as well as the district superintendent, chief business officer, chief financial officer, and elected school board members have all made a concerted effort to mislead me in how school funding works, and what additional funds they receive for each kid that checks the box on the free/reduced lunch form. I'm an appointed official at a policy level, and frequently talk with administrators, elected officials, and district executive leadership. Granted, it's "only" a volunteer position, but one that interests me to a great degree, and one in which I have been effective at bringing about positive change for my kids' school and the district over all . . .
Now we can argue policy - is it the right way to fund schools? Or fairness - should my kids who come from a millionaire household qualify their school for thousands in extra funding, even though they get top scores at school and don't need any extra assistance (other than enrichment/academically gifted support)?
I see that you want to believe this, but having worked in the school system for years, I assure you that you've twisted this into something it isn't. You're comfortable believing this, and you don't want to hear facts. Fine.
Anyone else who wants to know facts, The truth is that if X percentage of the students in a certain school receive free lunch, that school is labeled a "Title 1 School", and the school does get extra funding; however, it cannot be used for anything they please. Its use is limited to very specific things aimed at helping children of poverty "catch up" to other kids. It is all "extra", not anything that will ever hire extra teachers who will provide enrichment or alleviate overcrowding during the school day. The designation "Title 1" also requires the school to jump through quite a few hoops, and it is in no way just an extra check that the principal can use to help the school.
The taxpayers fund it, but it's part of your compensation. There's no difference here between a government pension and a private pension - its a benefit earned by the employee for work performed. I cannot fathom what you're thinking here. It would be like giving back all of the contributions in a 401k that your employer made because you "don't need it.". There's simply no ethical basis to require this.
Yeah, I can't understand how people see social entitlement programs (i.e., Food Stamps) in the same light as benefits for paid employment.
Lots of government jobs include pensions as a portion of the compensation. These jobs tend to pay less than their counterparts in the private sector, but the pension is a part of the deal. Teachers are a perfect example: The job doesn't pay all that well, but the hours are great and the pension make up for the low paycheck. It's the deal that's offered, and it's an earned benefit. The teacher who stays in the job only 3-4 years ends up getting nothing, whereas the teacher who stays a full 30 years gets a nice pension. The teacher who retires with a pension and lives only two years loses big -- he or she cannot leave that pension to children, and it's been a bad investment. On the other hand, the teacher who lives to be 100 will "win" the pension game. When the state hires a 21-year old grad, no one knows whether the state will "win" or "lose". Regardless, it is in no way the same thing as a handout.
Companies can pay whatever they want. When the government starts asking me to pay for the cushy pensions of others, it bugs me . . .
I "earn" the ability to participate in government provided handouts by virtue of meeting eligibility requirements.
If the government chose to do so, they could stop pensions . . . but if that portion of the workers' compensation package were to disappear, salaries would have to rise. People wouldn't stay in the jobs otherwise. Regardless, the state workers earn those benefits by working.
You do not "earn" the right to be a part of a government entitlement program -- you qualify because of low income. If you have voluntarily chosen a low income, when you have the ability to -- for example -- feed yourself, that is a questionable moral choice.
Yeah, there's the question of intent. Just because the EIC, etc., can be gamed by FIRE millionaires doesn't mean that it's moral. It may be legal and even ethical but it's certainly morally dubious.
And that's the root of the issue isn't it? Do you choose to live your life in a moral way or not?
While trying to make equivalencies, we shouldn't forget that food stamps and NSLP are budgetary programs. That is, there might be (and often is) a wait list for getting SNAP. A 35 year old FIRE millionaire taking food stamps is legitimately taking the spot of someone else.
I'm not well-versed in how these programs work, but if the ER millionaire is taking the place of a single mother who genuinely needs food for her kids, I don't see how anyone could defend that position.
I do know that low-income housing is difficult to come by, though I doubt a whole lot of millionaires are anxious to live in ancient shotgun houses in bad neighborhoods.
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I see that you want to believe this, but having worked in the school system for years, I assure you that you've twisted this into something it isn't. You're comfortable believing this, and you don't want to hear facts. Fine.
Anyone else who wants to know facts, The truth is that if X percentage of the students in a certain school receive free lunch, that school is labeled a "Title 1 School", and the school does get extra funding; however, it cannot be used for anything they please. Its use is limited to very specific things aimed at helping children of poverty "catch up" to other kids. It is all "extra", not anything that will ever hire extra teachers who will provide enrichment or alleviate overcrowding during the school day. The designation "Title 1" also requires the school to jump through quite a few hoops, and it is in no way just an extra check that the principal can use to help the school.
This is probably as frustrating for you as it is for me. I figured I might be misinformed, so I did a little digging this morning while I was volunteering at my kids' school. I asked a few teachers how much a free/reduced kid brings the school, if any. Answers varied, and tended to be vague and of low quality. Some said "yes, kids get money for lunch" others said "we get a small amount".
Then I spent about 30 minutes catching up with the principal. Straight from my discussion with him: Schools in our district are Title I when they exceed 30% free/reduced lunch. We are at ~80% free/reduced. Title I schools (in our district) receive funding base on a per pupil rate. In April, they give the school an estimated F/R headcount and an associated budget of Title I funding. They true it up later in the summer and finalize it based on actual headcount of F/R students shortly after school begins. The principal didn't have an exact per student Title I supplement amount, but said around $800 (but it wasn't exactly that), and that it varies each year based on a number of factors. He said the funds resulted in almost $300k extra money for our school, which allowed him to hire five additional teachers above what he was allotted based on state funding formulas and class size requirements.
He said that those extra teachers were placed into classrooms as primary teachers in order to significantly reduce class sizes. Instead of 23-24 kids per class, he brought class size down to 16-17 for grades K-4 (screw 5th grade I guess??). I am almost certain he is telling the truth about this, as each grade has an average of 69 children, which would have been 23 students per teacher with 3 teachers per grade. With 4 teachers per grade K-4 (what we actually have), there is an average of 17.25 students per teacher. I did a quick count in the lunchroom today, and the 2nd and 3rd grades had right around 16 kids per class (probably 1 per class sick on any given day). I also know my kids have 16 and 17 kids in their respective classrooms.
He said he had the flexibility to hire teachers and place them in different roles, but that small class size was the best choice for our population. He could have bought a shit ton of iPads/pods/whatever instead of hiring teachers but we already have tons of tech toys (er, instructional aids).
He's also spending a very small part of Title I funding (I estimate at around $12000) to provide free after school tutoring for students who need extra help. That cost consists of overtime for teachers and snacks/supplies budget.
I did a quick back of the envelope BS check on his numbers and $800/student seems about right given the 5 additional staff and after school tutoring program. I think this number was higher in previous years, but I might be wrong. It may even vary by school, but these were the numbers at my school.
I'm providing this summary to you not to prove I'm right and you're wrong, because it could be that things work differently in different districts within our state. Or K-5 funding works differently than high school. Another alternative is that your administration doesn't want to do what my school's administration did. Or they aren't being transparent with what they are doing. Given the relative lack of knowledge of budgets, funding sources, and school finances among teachers I talked to, it could be that your administration is doing something creative (but totally permissible) with Title I funding and you aren't fully aware of it.
I hope I haven't "twisted this into something it isn't" as you say, since I hold facts and truth in high regard.
Since our school receives $800 per kid that qualifies for free/reduced lunch, when we qualify, I'll sign up for the program mainly to get more money for the school. I can quantify the impact - I'm buying part of an additional teacher or additional after school tutoring for kids in need (not my kids). Given our district's total (local, state, fed) expenditures of under $8,000 per pupil, an additional $800 per pupil is a huge amount of money (over 10% for those who haven't attended school recently). Hey, I'll take it. My kids might take advantage of free lunch, they might not.
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Root, I understand you've convinced yourself, and I'm not going to argue with you, but I have years of experience with this topic.
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Then provide some evidence to support your position!
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Yeah. RootOfGood's kids' principal seems pretty convinced that each free/reduced lunch student in his school causes his budget to go up by about $800, and that he is able to use this additional money to hire more teachers and reduce class sizes. This money may come with strings attached, but he and/or the school board consider it to be a worthwhile trade. Until proven otherwise, I'll assume the principal knows a thing or two about where the budget he manages comes from.
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Here's a paper from the Institute of Education Sciences on the subject
http://nces.ed.gov/fastfacts/display.asp?id=158
Seems to back up much of what RootofGood is saying:
Schools enrolling at least 40 percent of children from low-income families are eligible to use Title I funds for schoolwide programs designed to upgrade their entire educational programs to improve achievement for all students, particularly the lowest-achieving students.
And..
In school year 2009-10, more than 56,000 public schools across the country used Title I funds to provide additional academic support and learning opportunities to help low-achieving children master challenging curricula and meet state standards in core academic subjects. For example, funds support extra instruction in reading and mathematics, as well as special preschool, after-school, and summer programs to extend and reinforce the regular school curriculum
I may not be a fan of Root's student loan re-payment avoidance program either, but he seems to know his facts in this case.
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I agree with thepokercab, seattlecyclone, and grantmeaname: RootOfGood has provided pretty detailed support for his position, and any counterargument needs to provide a similar level of support.
I am, however, still waiting for RootOfGood to elaborate on why he thinks government pensions aren't compensation for employees.
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I may not be a fan of Root's student loan re-payment avoidance program either, but he seems to know his facts in this case.
I'm not a fan of it either. I think the program is stupid and a waste of taxpayer money. In the Ethical Dimensions of Income Based Repayment thread I started, I provided at least six ways the income based repayment program could be modified to cost less taxpayer money.
I just fail to see how participating in a program for which you qualify that has extremely broad eligibility guidelines means you have somehow breached an ethical duty to the taxpayers.
Thanks for providing that link to Title I school funding. I think the free school lunch = a bunch of money for my kids' school is well settled, perhaps with the exception of one individual.
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I agree with thepokercab, seattlecyclone, and grantmeaname: RootOfGood has provided pretty detailed support for his position, and any counterargument needs to provide a similar level of support.
I am, however, still waiting for RootOfGood to elaborate on why he thinks government pensions aren't compensation for employees.
I'm probably biased because I think government pensions tend to retain the worst employees because the best employees leave for greener pastures. The worst employees are unemployable in the private sector due to poor performance, outdated skills, lack of work ethic or creativity, or some combination of those factors. This is an ugly, broad generalization but based on my experience working with a particular governmental employer (from the public side and private side). Good employees got offers for private employment and left. Bad employees had no other recourse beside remain on the government payroll and continue sucking on the Hoover Dam spillway sized stream of government bennies (a fat paycheck and eventually a pension).
The pension system also means there isn't a lot of job mobility between public and private entities. That stifles the information flow and creativity that comes from having different people from different backgrounds coming and going at your organization. In other words, some degree of turnover is good. I could write a book on the subject, so I'll leave it at that since it could be a controversial subject. I might even exempt teachers from the generalization since there may not be enough of a private market to jump to and from (and I don't want to have an argument devoid of facts with certain teachers who post here).
I never stated government pensions aren't compensation for employees. You can call it what you want, but at the end of the day, you're taking money from a public source that is funded by taxpayers. In fact, government pensions are more funded by taxpayers than social security (which is funded solely through contributions of workers into their own system - it's a closed loop). As a taxpayer, I'm funding the general fund that then contributes 13% of the salary of state employees to the pension plan. If very wealthy retirees who don't "need" the pension opted out of the pension plan, then the state could spend less on funding the pension.
Therefore, the ethical question arises "Should you retire early and draw on a pension when you don't really need it?". Unquestionably you are depleting the treasury's coffers by taking a pension when you don't need (need - such a tricky word) it.
Why are food stamps, free lunches, EIC, and Pell Grants similar to government pensions? Your agreement to do your duty as a citizen and in return to avail yourself of the benefits of citizenship and membership in our society.
For men at least, you sign up for the selective service. What I'm about to say is ridiculous today, but horribly relevant to anyone who lived during the Vietnam War era. The government can institute a draft and have your ass stuck in fatigues and shipped off to some god-forsaken wasteland to fight somebody you don't want to fight.
You have to serve on a jury. Try not doing so and getting slapped with contempt of court.
You have to follow the laws. Even ones that are stupid.
You have to pay tax. Of course it is completely encouraged by the IRS to use any part of the tax code to minimize your tax burden. It has to be legal though (tax avoidance ok, tax evasion is bad). Taxes impact you in two ways. You pay them on income you earn, and the onerous nature of taxation can dissuade you from earning more money or working harder.
In return for fulfilling your obligations as a citizen, you have earned the right to avail yourself of the benefits that we, through the government, have decided to offer.
It's up to you whether you call this "compensation" in the same sense as a government pension. But I think it is disingenuous to characterize government programs as "gifts" or "free". To me, it is part of the social contract I implicitly agree to by remaining a citizen. I haven't found a better country yet, so I'm just going to bunker down here as long as possible and make the place as good as I can.
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Two problems I see with this strand of the argument, Root.
One, that response doesn't address the criticism that it may still be unethical to take advantage of a program for which you satisfy the applicable test if you do not believe the test to properly reflect the intent of the program and you do not believe you have a need intended to be served by the program.
Two, I suspect that your comparisons of "earning" some benefits to government pensions are in at least some cases completely false. If you don't register for the selective service, I recall (without checking to confirm) that would disqualify you from receiving federal financial aid for college, but so far as I know your kids could still receive free lunch. Similarly, you could thumb your nose at jury duty and still claim the EIC.
Does that matter?
I tend to agree with the big picture criticism I think you touched on earlier, that the web of taxes and benefits is so messy that it renders meaningless the isolated questions of whether taking an individual benefit is ethical. In other words, I don't actually see those decisions as ethical ones at all. But if some are going to argue one way or the other, I don't think the points you make above are that convincing, on at least the two grounds I mentioned.
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That is a nice, thoughtful response. Thank you for it!
I'm sorry for your experience with government employees, and I agree that it's an ugly, broad generalization (though I don't doubt your experience). My experience with government employees has only been for jobs that do not and cannot exist in the private sector, for which it's pointless to make comparisons.
You have some good points that I completely agree with on the disincentives on job mobility provided by pensions. It'd be great if you could create a portable pension that moved from job to job, whether private or government (local, state, or federal).
I see what you're saying on government pensions, but I see a huge difference among government programs. Sure, there are benefits provided simply by membership in society. There are other programs where your contributions correlate to your benefits, like Social Security. But that's very different from an employer-employee relationship. A pension is a portion of compensation provided by employment. Would you similarly say that you should give back salary or health insurance that you don't "need?"
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You have to serve on a jury. Try not doing so and getting slapped with contempt of court.
That is simply not true. I tried to not serve on a jury and was perfectly allowed. I simply had proof that I had surgery and a chronic illness which would make it difficult.
My brother in law simply tells the truth about his views guns.
My wife simple states she works for attorneys.
All of this is true and in general gets you out of serving on a jury -- and in some cases even having to report to go through the process (why does that word escape me!!!).
As far as the actual issues:
It could be argued that all the services provided to the US by the government you have provided some amount of dollars for so you should be entitled to that percentage of the money back or for your own good. I simply don't believe that is true. As a society, like anything else, we are as strong as our weakest link. I am all for charities, providing a services for the needy, and providing for education of kids without the expectation that I will get in kind. Karma is supposed to have a way of working that out (it doesn't, but hey).
I liken it to the sports analogy of: "If you aren't cheating, then you aren't trying." That isn't about the "sport" that is about "winning". If "life" is about winning, then it is about ego and the self. That does not help society at all. That isn't to say you shouldn't take care of yourself or get what you need, but if you can do more than you should.
I look at what MMM does - he goes around and has helped people put on f'ing ADDITIONS TO HOUSES at no real labor cost (when compared to what actual labor would be). (yes, this is all in a blog but I tend to believe a lot of what he says simply because it would be way to f'ing complicated to make this a lie -- but if he wants to prove it is real, I have a 40+ year old house that could use some major upgrades including solar panel installation, changing the driveway, adding a master bedroom/suite, and modifying the layout of our main floor…. and you can visit historic philadelphia, nyc, washington, DC all while you are here -- I jest;about the proving it not about the fact that work needs to be done, wishing I could do it, and you could really visit those places). He isn't taking advantage of government services (though I think he said he might be using some of the ACA advantages - don't remember).
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Reduced price lunch I might qualify for eventually, and I would take it if I qualify. It would benefit me slightly, but benefit our kids' school greatly. They get large subsidies for each qualifying free/reduced priced kid, and the school needs all the help it can get. I help the school out however I can, and this would be another way.
Not true. At least, not true in the way you've presented it. If X number of kids get free lunch, the school does get extra funding . . . but they are required to use it to provide specific remediation programs, etc. It requires more work from the school, takes effort away from basic classes, and the school is not free to use the money in the spots they believe it's most needed. It means greater federal control within the school.
You are NOT "helping" your child's school by having them take free lunch.
Pretty sure I am. These things work differently in different districts. So I wouldn't assume too much about the different funding structures and flexibility of using funds in your school or your district and extrapolating them to other districts.
The remedial help my children receive or don't receive is based on assessments by their teachers and fairly objective tests. My kids can get straight 4's on their assessments (like an A or A+ for those not familiar) and receive zero remedial help. But if I check the box for free/reduced lunch, the school gets money. You may say it has to be spent in certain areas. Sure, maybe in some cases, and I am familiar with a few cases. But it isn't generally true. We definitely get the option for certain programs if we are Economically Disadvantaged (free after school tutoring being one program).
It's like this: the school has to hire X number of literacy and math coaches and remedial teachers and ESL teachers. The administration might decide they need a couple extra to get the job done. They lose the music teacher and art teacher to provide the extra remedial teachers (the administration wants to hit their growth targets after all). In steps the root of good family, and checks a few boxes and the school gets a few thousand bucks. Boom! A little closer to rehiring that music or art teacher.
just remember, those funds are also taken from somewhere else…. it isn't like just because the number of "kids needing free lunches" went up that other people are paying more in taxes to compensate for it. lord knows there isn't that kind of buffer.
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I just fail to see how participating in a program for which you qualify that has extremely broad eligibility guidelines means you have somehow breached an ethical duty to the taxpayers.
My assumption, at least based on these poll results, is that a lot of us aren't as sure. But, ultimately, I'm in no position to judge. I'm paying student loans right now myself, and I would be lying if I said I never thought of ways I couldn't either lower them or get around them all together.
One of the driving forces behind FIRE, in my mind anyway, seems to be a ruthless pursuit of maximum efficiency. This is what i've been all about since I starting reading MMM- cutting bills, cutting spending, trying to radically make my life more efficient. But- if you take this to its logical conclusion, then its also going to include being as efficient as possible with the taxes you have to pay, the benefits you can receive, the loopholes that you can find. If you're all about rational self-interest, then this makes absolute sense. Of course, it is perfectly ethical to take the free lunches, or the food stamps, or whatever, since you are pursuing what is in your best interest, i.e. increasing your budget's efficiency and getting close or achieving FIRE. However, I guess my worldview isn't so Ayn Randian, so to speak, so this relentless pursuit of efficiency can contradict with other feelings I might have on community, responsibility, etc..
Once again, very interesting topic...
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There used to be something called pride in this country, people felt it when they worked hard and met their duties as parents and neighbors. Pride is earned, it isn't given. There's more important things in life than never missing a meal or scoring a handout, it's the pride I feel knowing I can fend for myself, feed my family and not be dependent on others. My path is hardwork, family, and morals, and I'd rather starve than take a handout. I want to meet people who share my values, that's why I'm typing here, and my path is clear, I hope everyone else can find their path.
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There used to be something called pride in this country, people felt it when they worked hard and met their duties as parents and neighbors. Pride is earned, it isn't given. There's more important things in life than never missing a meal or scoring a handout, it's the pride I feel knowing I can fend for myself, feed my family and not be dependent on others. My path is hardwork, family, and morals, and I'd rather starve than take a handout. I want to meet people who share my values, that's why I'm typing here, and my path is clear, I hope everyone else can find their path.
I'm with you. I stood in a line one time (during college) to get a free brick of government cheese and decided that would be the last time. Short of a life altering catastrophe I'll take care of myself and not look to someone/something else to do it.
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I would only take a hand-out if I needed it to eat. To me ER does not mean rorting the system.
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That is simply not true. I tried to not serve on a jury and was perfectly allowed. I simply had proof that I had surgery and a chronic illness which would make it difficult.
I should say you have to at least show up not lie. If you get to voir dire anyway. I'm a freaking attorney (retired; inactive) and I had to show up, then they didn't need me. Don't show up, you might have sheriffs knocking on the door with handcuffs. At least in some judicial districts I'm familiar with. Not saying that applies to other areas of the country.
Jury duty is a duty, but I'm not saying you can't get out of it. Kinda like paying income taxes. Just do what I do, and you won't pay much if any. Or have a short bus full of children and that'll get you out of most income taxes.
I look at what MMM does - he goes around and has helped people put on f'ing ADDITIONS TO HOUSES at no real labor cost (when compared to what actual labor would be). (yes, this is all in a blog but I tend to believe a lot of what he says simply because it would be way to f'ing complicated to make this a lie -- but if he wants to prove it is real, I have a 40+ year old house that could use some major upgrades including solar panel installation, changing the driveway, adding a master bedroom/suite, and modifying the layout of our main floor…. and you can visit historic philadelphia, nyc, washington, DC all while you are here -- I jest;about the proving it not about the fact that work needs to be done, wishing I could do it, and you could really visit those places). He isn't taking advantage of government services (though I think he said he might be using some of the ACA advantages - don't remember).
Sounds like you need to step into the government handouts line. Get some "energy efficiency tax credits". Although then you might be on the stand here for partaking in a government program that you don't "need" (need - such a slippery word).
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The college money is in a different category because it's for your young adult, who has not had time to build up assets. Likewise, I have no problem with Social Security because that's an earned benefit. If you've paid in, you should be able to receive benefits.
The others, however, I would not use, nor would I accept the closely-related free health care for the poor (in its numerous names) or reduced-cost public housing or school-clothes-for-kids programs. Why? Because a person should support himself, if he is able to do so. If you need help to make ends meet, you should continue working. Living off the public doll, if you're able to work, makes you no better than the crooks in Congress -- and I would like to think of myself as more moral than that bunch.
Taking these unearned payments, if you are able to work, will continue to drive up the national debt, which is a huge problem that will affect us . . . But will really be our children's problem.
If you can, through a combination of hard work and frugal living, quit working, good for you! But looking to collect from others is nothing short of dishonest.
+1
+1
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That is simply not true. I tried to not serve on a jury and was perfectly allowed. I simply had proof that I had surgery and a chronic illness which would make it difficult.
I should say you have to at least show up not lie. If you get to voir dire anyway. I'm a freaking attorney (retired; inactive) and I had to show up, then they didn't need me. Don't show up, you might have sheriffs knocking on the door with handcuffs. At least in some judicial districts I'm familiar with. Not saying that applies to other areas of the country.
Jury duty is a duty, but I'm not saying you can't get out of it. Kinda like paying income taxes. Just do what I do, and you won't pay much if any. Or have a short bus full of children and that'll get you out of most income taxes.
Yes, the duty is just to show up if called, not to actually be empanelled (although in many places, I'm not sure that showing up is a duty on the basis of citizenship alone, since the venire is often drawn from registered voters, or licensed drivers, or some other voluntarily-entered subset of "citizens.") But even disregarding it altogether won't cost you eligibility for the benefits that you were trying to equate to a government pension.
Neither I nor my spouse has ever worked for any governmental or quasi-governmental employer that offered a tax-payer funded pension. Beyond that, we've never worked anywhere that offers any sort of defined-benefit pension, so we wouldn't even have the indirect benefit of a PBGC-backed private pension. So this isn't an interested defense of governmental pensions, just a differentiation of them (as earned compensation) from unearned benefits.
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I don't see food stamps as a handout. Food banks...yes. If you're perfectly capable of buying your own food, feel free to apply for food stamps. But don't go to your nearest church and ask for a handout there.
Same with taking, say, a tax deduction on installing energy efficient windows/appliances/whatever. If you're perfectly capable of paying for your $300/mo electric bill...feel free to spend some money upfront to get that bill lowered, and take a tax credit while you're at it. But don't put out donation cans in local businesses to raise money to get some new windows installed in your house.
How many of us have kids, didn't "need" the $1k tax credit, and refused to cash the check the IRS sent us? Anyone? But...but...that's money you "took" from the government, simply because you have kids. IF YOU CAN'T AFFORD KIDS, YOU SHOULDN'T HAVE THEM! That argument doesn't really work, does it? Then why are we looking down on people who get food stamps because they qualify (no fraud involved), but do not "need" them? To me, the only difference is I HAVE to fill out the IRS paperwork each year, but the SNAP paperwork is optional. Other than that, I'm simply filling out some forms, giving truthful answers to the questions asked, and I (may) get some money out of it.
"But...but...intent! Intent! Food stamps were intended for people who are truly poor and don't want to be poor, not for people who have money in the bank and/or choose to be poor." Ok, who says? When I interpret the intent of a law, I don't look at what random people on the internet think the intent should be; instead, I prefer to go straight to the source. What was the intent of the people who made the law? What do they say?
Well, Tennessee's blurb on food stamps is "The Food Stamp program provides nutritional assistance benefits to children and families, the elderly, the disabled, unemployed and working families." Are you elderly, disabled, unemployed, a child, or part of a family (whether working or not)? If so...sounds like this program's for you! Ok, let's dig a bit deeper and read the actual manual, where it has these blurbs:
The Food Stamp Program is designated to promote the general welfare and to safeguard the health and well being of the Nation's population by raising the levels of nutrition among low-income households.
Section 2 of the Food Stamp Act of 1977 states, in part: Congress hereby finds that the limited food purchasing power of low-income households contributes to hunger and malnutrition among members of such households. To alleviate such hunger and malnutrition, a Food Stamp Program is herein authorized which will permit low-income households to obtain a more nutritious diet through normal channels of trade by increasing food purchasing power to all eligible households who apply for participation.
Ok, so when it was started in 1977, they said that they were worried about the nutrition levels among low-income households. The intent was to "alleviate such hunger and malnutrition" by "increasing food purchasing power to all eligible households who apply for participation."
Edit: The original wording I used was incorrect, it read as though in 1977 they didn't care about assets. In fact there was an asset test, but as with other laws that has been changed over the years. Below posts pointing out my error are 100% justified.
I'll agree, that's the one point where it gets a bit sticky. One side can point to "alleviate such hunger and malnutrition", where the other side can point to "all eligible households". Nowhere does it say they want to only target those who are hungry and malnourished; rather, that many low-income households have an issue with hunger and malnutrition, and they think the best way to fix it is to increase the food purchasing power to all eligible households. They don't think the best way to fix it is to simply give food to those most in need, they think the best way to fix it is to give grocery money to all those who are low-income.
So, it could go either way I guess, just based on that. But dig a bit further...hrm, looks like food stamps is largely a subsidy for farmers. A lot of the rules make sense, such as allowing lots of things that aren't really food to be classified as food (that soda and pack of cookies have lots of high fructose corn syrup which is made from...corn!). Oh, they throw out other reasons, like how it'd insult poor...er...low-income people if they were told what food they could and could not buy (so people on WIC just don't matter?); or how it'd be a logistics nightmare for supermarkets to implement (um...hello...it's me, WIC again).
A few point out that there's only a certain amount of money earmarked for food stamps. Perhaps, but that would only influence my decision if there were long waiting lists, people being denied simply because there's no more money left, or benefits being reduced so much that a truly needy family can't possibly buy enough food to live off of (if the max goes from $600 down to $500 for a family of four, and our family of four only spends $400/mo total, I wouldn't feel bad if I took the benefit; if it went down to $200 though, I may feel differently). I don't see any of those happening. All I see is that it may take a few weeks for benefits to start, and if you're in dire need they can put a rush on that.
In conclusion *applause drowns out the rest of the speech*
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7 USC § 2014
(a) Income and other financial resources as substantial limiting factors in obtaining more nutritious diet; recipients under Social Security Act
Participation in the supplemental nutrition assistance program shall be limited to those households whose incomes and other financial resources, held singly or in joint ownership, are determined to be a substantial limiting factor in permitting them to obtain a more nutritious diet.
from http://www.law.cornell.edu/uscode/text/7/2014
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7 USC § 2014
(a) Income and other financial resources as substantial limiting factors in obtaining more nutritious diet; recipients under Social Security Act
Participation in the supplemental nutrition assistance program shall be limited to those households whose incomes and other financial resources, held singly or in joint ownership, are determined to be a substantial limiting factor in permitting them to obtain a more nutritious diet.
from http://www.law.cornell.edu/uscode/text/7/2014
Do you think the applause died down in time for him to hear that?
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Do you think the applause died down in time for him to hear that?
Ha! Nice one. Actually, I'm pretty pleased with josetann's response, as he directly addresses the issue of intent of the law. My reading is that the intent is pretty clear, but he disagreed, and backed up his reasoning. He's hanging a lot of weight on deriving intent from method, though, when that's not necessary because the intent is earlier in the passage he quoted.
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Do you think the applause died down in time for him to hear that?
Ha! Nice one. Actually, I'm pretty pleased with josetann's response, as he directly addresses the issue of intent of the law. My reading is that the intent is pretty clear, but he disagreed, and backed up his reasoning. He's hanging a lot of weight on deriving intent from method, though, when that's not necessary because the intent is earlier in the passage he quoted.
You're more generous than I am. I would have said he "backed up his reasoning" in a dishonest way. His portrayal of the declaration of policy (which, to be clear to others who may be less familiar with legal interpretation, is just quoting the statement that makes it into the law itself, which is a very narrow slice of "legislative history" when it comes to demonstrating intent, but whatever) is so out-of-context as to be absurd. He claims "that they were worried about the nutrition levels among low-income households (not necessarily low-asset, just low-income)," without acknowledging that that the law they were signing included a strict asset test. To assert some meaning in the fact that the policy statement didn't address assets, without acknowledging that the law being adopted by the Congress making that policy statement itself imposed an asset limit, is seriously misleading in my book. Take a look at Section 5(g) of the Act as it was originally adopted. But since he's gone "straight to the source," there's no way he could have an incomplete understanding, right?
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Do you think the applause died down in time for him to hear that?
Well, everyone cleared out so quickly, I thought I was in the middle of a marathon for a moment. Only a few people got trampled trying to get out, doctors say they should make a full recovery.
You're more generous than I am. I would have said he "backed up his reasoning" in a dishonest way.
....
To assert some meaning in the fact that the policy statement didn't address assets, without acknowledging that the law being adopted by the Congress making that policy statement itself imposed an asset limit, is seriously misleading in my book. Take a look at Section 5(g) of the Act as it was originally adopted.
A fair point. That said, laws have a funny way of changing over time. Should we only look to the original Constitution that was written so long ago, or should we include all the changes that have been made since then?
At one point the law may have said I could drive at any speed that was reasonable and prudent. Today the law may say the speed limit is 70mph. Should I drive 90mph if I believe it's reasonable and prudent, since the law originally stated such? Or accept the fact that laws have changed, and try to keep it under 70-ish?
The law that was written and is still in force, says that they wanted to provide assistance to all "eligible" people. True, the definition of "eligible" may have changed over time, and even today may vary from state to state. Still, when I read it as it stands today, it says something like "This program is meant for all eligible people. To be eligible in Tennessee, you need less than $Y in non-exempt assets, and be making under $X per week/month/year." X and Y may change over the years. Asset test could be taken out altogether. The whole program may eventually be discarded. But that's how it reads right now.
I do admit I could have worded the previous post a bit better. The way I worded it is misleading, I apologize. I edited that part out, and left a note acknowledging my error (else subsequent posts pointing out my error would seem out of place).
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7 USC § 2014
(a) Income and other financial resources as substantial limiting factors in obtaining more nutritious diet; recipients under Social Security Act
Participation in the supplemental nutrition assistance program shall be limited to those households whose incomes and other financial resources, held singly or in joint ownership, are determined to be a substantial limiting factor in permitting them to obtain a more nutritious diet.
from http://www.law.cornell.edu/uscode/text/7/2014
Who's doing the determining though? If the decision lies mainly with the individual, then I will agree 100% (ok, maybe 98%) with you. But all the individual is doing is giving out their information (disclosing assets, income level, information about who's living in your household, etc.).
It's a stretch, but I could see someone's point of view if they say "Well, you determined you needed assistance just by filling out the documentation!" I wouldn't agree, but I'd understand where you're coming from.
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7 USC § 2014
(a) Income and other financial resources as substantial limiting factors in obtaining more nutritious diet; recipients under Social Security Act
Participation in the supplemental nutrition assistance program shall be limited to those households whose incomes and other financial resources, held singly or in joint ownership, are determined to be a substantial limiting factor in permitting them to obtain a more nutritious diet.
from http://www.law.cornell.edu/uscode/text/7/2014
Who's doing the determining though? If the decision lies mainly with the individual, then I will agree 100% (ok, maybe 98%) with you. But all the individual is doing is giving out their information (disclosing assets, income level, information about who's living in your household, etc.).
It's a stretch, but I could see someone's point of view if they say "Well, you determined you needed assistance just by filling out the documentation!" I wouldn't agree, but I'd understand where you're coming from.
Well, you do have to apply for benefits, and then be determined to be eligible, so I think it's both. You have to judge that you deserve the benefits, and then the government has to agree with you.
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I think Undecided's analysis of legislative intent based on the actual language of the statute pretty much refutes the central thrust of josetann's contentions, and I'll defer to him or her to refute josetann's follow-up legal arguments, which I think are even more confused as to the nature of legislation and the interpretation of statutory language. But I'd like to supplement with a little nonlegal, intuition-based argument that gets to what I think is the core of this issue.
By my reading, josetann's position seems essentially to be that, because the legislature specified that the intent of the welfare legislation was to benefit low-income households, a high-wealth low-income household claiming welfare is not actually subverting the intent of the legislature.
I can't agree. I think this a case of the legislature using the term "low-income" as an imprecise and possibly more politically correct proxy for "poor." This false equivalency does hold in most cases, as the vast majority of low-income households are also low-wealth and legitimately poor, and so it is, as they say, good enough for government work. But my intuition is that, if you were to ask the legislature whether they intended the program to cover people with hundreds of thousands of dollars of net worth socked away in tax-advantaged retirement accounts and home equity who have structured their distributions in ways that keep their income relatively low, the legislature's answer would be a resounding no.
That the legislature did a poor job of reducing its intent to statutory language might render welfare claims by high-wealth individuals legal; it does not necessarily render them right. The position articulated by josetann seems to be roughly on the same moral footing as "neener neener, I'm not actually touching you" (people who have spent much time around small children know what I'm talking about).
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By my reading, josetann's position seems essentially to be that, because the legislature specified that the intent of the welfare legislation was to benefit low-income households, a high-wealth low-income household claiming welfare is not actually subverting the intent of the legislature.
I can't agree. I think this a case of the legislature using the term "low-income" as an imprecise and possibly more politically correct proxy for "poor." This false equivalency does hold in most cases, as the vast majority of low-income households are also low-wealth and legitimately poor, and so it is, as they say, good enough for government work.
Yes, I tried, perhaps miserably, to make a similar point above, that the written standard can be an imperfect expression of the actual intent. You've pointed out that the two-sentence written summation of the vast and complex development of a law might also be an imperfect expression of the actual intent. I don't particularly feel any need to further refute josetann's position. Perhaps s/he really thinks that it's important to develop and articulate a portrayal of the intent of STAMP, or a school lunch program, or any other benefit program, that helps a mid-thirties millionaire rest confidently in the believe that he should take the benefit. Like I said, I'm not sure that one's choice to participate in any one program within the vast network of taxes and benefits should be seen as a matter for extensive ethical deliberation. But I don't have to respect wealthy people who choose to take those benefits.
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I can't agree. I think this a case of the legislature using the term "low-income" as an imprecise and possibly more politically correct proxy for "poor." This false equivalency does hold in most cases, as the vast majority of low-income households are also low-wealth and legitimately poor, and so it is, as they say, good enough for government work. But my intuition is that, if you were to ask the legislature whether they intended the program to cover people with hundreds of thousands of dollars of net worth socked away in tax-advantaged retirement accounts and home equity who have structured their distributions in ways that keep their income relatively low, the legislature's answer would be a resounding no.
*Disclaimer, rules vary by state; I've looked up the rules for Tennessee, so please don't scream "YOU'RE AN IDIOT!" if what I say isn't true in your state. Just tell me how it is in your state, and correct me if I got Tennessee's rules wrong.
At one point, retirement assets counted against you when applying for various programs such as Medicaid, food stamps, etc. Now, not so much.
If it's their intent to only provide food stamps to those with low income and low assets, then why would they go to the trouble of specifically excluding assets in retirement accounts (especially when the law as originally written counted those assets)?
I think the main reason they stopped looking at retirement assets, is because a lot of people were getting on food stamps and realizing "Hey, if I keep saving money, I'll go over this $2k asset thingy, and will stop getting food stamps. Then I'll have to use that money to buy food. Then I'll go below $2k and can get food stamps again. Which means I can save more, and go over $2k in assets. Which means I'll get kicked off again...." An obvious solution (from the individual's point of view) is to make sure their assets never go above $2k. If they get a windfall, they better spend it as fast as possible. Which is poor money management.
Now, we don't want people with millions in various investment accounts to qualify for food stamps (I doubt many would bother, but all it takes is one person to make the headlines). But we do want to encourage people to save SOMETHING for their future. Oh hey, there's an idea...feel free to put money in retirement accounts. It's ok, it won't affect present/future eligibility for food stamps (of course it may affect future eligibility because laws change...but let's not point this out). Now Billy Bob who works on and off, feels confident to save money in a Roth IRA when he is working. If he gets laid off, they won't look at his Roth IRA balance to determine eligibility (yes, you must disclose the account, but it won't count against you), so he'll get benefits right away. That Roth can grow and grow during his years of on-again off-again working career. Eventually work dries up, but he's got a hundred thousand or so in retirement accounts. Not enough to live off of, but he's less of a burden on society.
Anyways...let me get to the point before the rest of you fall asleep.
- Food stamp program started to help out poor people.
- Program doesn't work 100% as expected, there's some flaws found that need to be ironed out.
- One issue is that people on food stamps may not be saving as much as they should (could?) be, and may be becoming dependent on the program.
- Changing the program to encourage saving for retirement may help. If we can get low-income people to save for retirement, maybe they won't be as much of a burden now and in the future.
- Lawmakers make changes to the food stamp program, in the hopes of encouraging people to save for retirement.
- A higher percentage of people on food stamps now have retirement savings of varying amounts.
- People are now upset that many on food stamps have money in a retirement account.
Yup, sounds about right.
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A challenge with government programs like the ones listed is that they encourage people to take things from government (the recipients and their neighbors) on the justification that the rules allow it, and also maybe they paid in and deserve some back. This encourages more programs as the politicians and government employees and some recipients benefit, while the community as a whole is worse off.
The concern with this logic and attitude is then so many things can be justified that lead to massive problems for our communities. For example, if the government wants to hire you for a web site because you are friends with the specifier but they don't have a clause requiring it to work for you to get paid why worry if it works - you still get paid?
It's legal to lobby so if you spend $1 million lobbing for a $20 million special tax loophole this may be legal but is it moral?
It's legal to request grant money from the DOE for research and if you spend most of the money on a big salary and travel but your research but turns out nothing useful is that moral? (Per the contract it was legal)
Too many legal but immoral decisions will cause much of society to not work very well.
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Well, you do have to apply for benefits, and then be determined to be eligible, so I think it's both. You have to judge that you deserve the benefits, and then the government has to agree with you.
Just hypothetical here...but what if someone simply hands you the form to fill out, you ask "What's this for?" and they say "Just want to see if you are eligible for XYZ benefits." I don't think I've seen the actual form used, but I have played with the online eligibility calculator for SNAP (food stamps). At no point did it say "Hey, this is only to be used if you're experiencing a financial hardship/inability to properly feed your family." In fact, the only time I've seen anything like that, was in regards to getting IMMEDIATE assistance, vs the weeks it may take otherwise.
Anyways....
It's a very, very slippery slope, that's all. Let's say that food stamps started out as being for everybody. Ok, no one looks down on anyone else using them to buy food. Now, make it just for poor people. There's a stigma attached now, and lots of judging. "Hey, look at that woman buying food using MY money! She's wearing nice clothes and has a newish iphone, that b****! She's stealing from me, I'm outraged and I'm going to confront her!" That's great...except maybe she bought those things before losing a well paying job. Perhaps she could sell the $200 designer clothes on Craigslist for $15, but then she won't look as presentable at the job interviews she goes to (in fact, she just left one; else she would have worn jeans and a t-shirt). The industry she's in requires immediate availability to land a job, so she does need a smart-ish phone with a data plan (when my wife did travel nursing, you had to be quick to get submitted to an opening; wait an hour and you may be #80 and not even looked at). Maybe she's an authorized card user, and an elderly relative is the one with the food stamp benefits (yelling "How dare you do the grocery shopping for your disabled aunt and use her food stamps!" just doesn't have a good ring to it).
Anyways, we judge. Lots of people who could really benefit from the program decide to not apply, because of the stigma. And they look down on others who do apply. Those who are on the program are full of self-loathing. Maybe they get so depressed that things have got this bad, that they lose the will to dig themselves out.
It makes it much easier to judge people for other things, like filing a claim on your insurance. "Whoa now, who said anything about filing claims on insurance, I wouldn't have a problem with that, you're putting words in my mouth!" Oh, ok, I was under the false impression that people who are against non-needy people taking food stamps, might also be against non-needy people filing for Unemployment Insurance. You know, the INSURANCE which has premiums paid (whether by you, your employer, or both), and if a covered event occurs, you can file a claim.
I would absolutely love it if we could try to change the laws themselves, and not attack the people that are following said laws. You think people with $100k in a 401k shouldn't qualify for food stamps? Let your Congressman know! And Senator, tell the people at the state level as well. Start a website. Start a petition. Let your opinion be known and try to rally support. But please don't look down on people who are taking part in the current program, or speak ill of their morals.
I'm not saying I love the current program, don't want a thing to change, etc. I'm only arguing against the way many of us judge people who are following the rules, not lying or cheating, etc. Oh, and it looked like RootofGood could use some backup.
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I'm not saying I love the current program, don't want a thing to change, etc. I'm only arguing against the way many of us judge people who are following the rules, not lying or cheating, etc. Oh, and it looked like RootofGood could use some backup.
Some of what you're saying is reasonable, no doubt, but I think you're arguing against not just "the way" many of us judge people (which of course you don't really know, unless we tell you), but against all judging of people "following the rules." My judgment has been reserved for those who describe their circumstances, boasting of wealth, very early retirement, and the decision to collect, or the consideration of collecting, food assistance benefits. I don't insist that you should share in my judgment, but I'm completely comfortable in making it.
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Well, you do have to apply for benefits, and then be determined to be eligible, so I think it's both. You have to judge that you deserve the benefits, and then the government has to agree with you.
It's a very, very slippery slope, that's all.
No, not really. You need assistance paying for food? I'm sorry about that - we should give you money so that you don't go hungry. Do you not need money to pay for food? Then you probably shouldn't apply for food stamps.
Your point about savings is well taken, but that's not the issue here. The question posed was whether one would take SNAP benefits in early retirement.
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My judgment has been reserved for those who describe their circumstances, boasting of wealth, very early retirement, and the decision to collect, or the consideration of collecting, food assistance benefits.
So the takeaway is, if you have some money stashed away and retired early, don't tell anyone that you qualified for food stamps with the current system in place? Quite the contrary, I think we should applaud these people. Whether it's because they helped me realize I could stretch my retirement dollars further; or because they alerted me to a loophole that countless others (who aren't so forthcoming) are taking advantage of, so now I can petition my representatives to close that loophole stat!
I don't insist that you should share in my judgment, but I'm completely comfortable in making it.
I really want to agree with this statement. If you replace "judgment" with "values", I'm with you 100%. Else...I guess I'm with you 50%?
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No, not really. You need assistance paying for food? I'm sorry about that - we should give you money so that you don't go hungry. Do you not need money to pay for food? Then you probably shouldn't apply for food stamps.
As has been alluded to already..."need" is such a subjective thing. Do I "need" both shelter and food? I mean, if I can scrounge up $500/mo, shouldn't I be paying for food instead of an apartment? Or let's say I have just enough money for food and shelter; I don't "need" electricity or indoor plumbing. I don't "need" to live near family, you can relocate me to the middle of nowhere. I don't "need" phone service, if I need an ambulance I'll just light one of these flares (shouldn't have an ordinance against lighting flares, all the poor people will be moved out of the expensive cities). I don't "need" internet service. I don't "need" an ipad to watch videos and let my kids play educational games. I don't "need"...ok, you get the picture. There's a lot of things that aren't strictly necessary, but our society either considers it a need, or there's at least a decent argument for letting poor people have access to it (I don't mind if a poor person has an ipad, especially if it's taking the place of a desktop, laptop, ebook reader, etc.).
As I read the current legislation, if your income and non-retirement assets are below a certain amount, then you're deemed to be in need of various forms of assistance. I may think a shelter with three walls and a roof is sufficient, but society may think otherwise. I may think peeing on the grass and going #2 in a hole is sufficient, but society may think otherwise. I may think living on $18k/yr is way more than sufficient, but society may think otherwise.
Your point about savings is well taken, but that's not the issue here. The question posed was whether one would take SNAP benefits in early retirement.
That was the ORIGINAL issue (which I answered pages ago; said I thought it'd be ethical to take SNAP and other benefits in retirement, but would not consider one FI if they depended on those programs). But the conversation drifted toward the morality of taking said benefits. In another few pages, we may be discussing the merits of colonizing Mars (fyi, I say let's do it).
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No, not really. You need assistance paying for food? I'm sorry about that - we should give you money so that you don't go hungry. Do you not need money to pay for food? Then you probably shouldn't apply for food stamps.
As has been alluded to already..."need" is such a subjective thing.
Do you think you need food stamps? If you had two million dollars in retirement assets, and considered yourself retired, would you consider yourself to need those benefits? If yes, I'd be interested to hear why.
That was the ORIGINAL issue (which I answered pages ago; said I thought it'd be ethical to take SNAP and other benefits in retirement, but would not consider one FI if they depended on those programs). But the conversation drifted toward the morality of taking said benefits. In another few pages, we may be discussing the merits of colonizing Mars (fyi, I say let's do it).
No thanks.
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Do you think you need food stamps? If you had two million dollars in retirement assets, and considered yourself retired, would you consider yourself to need those benefits? If yes, I'd be interested to hear why.
I may not, but the government might think otherwise.
Family of four, Tennessee, the maximum NET income per month you can make and still qualify for food stamps is $1,963. That's after deductions (such as utility bills, rent payment, etc.). That's nearly $24k/yr in spending (more if you count the deductions). I don't "need" that much, what I "need" would be closer to $12k/yr. That said, if I had $600k in retirement accounts and was drawing about $2k/mo to lead a comfortable lifestyle, and learned that society thought I was in "need" of food stamps, I'd have no issue with applying. Heck, I might drop that $2k/mo down to $1,750, since that coupled with food stamps would be around the $2k I was spending before.
If I had $2 million in retirement assets, that's what...$80k/yr at 4% SWR, and $60k/yr at a 3% SWR. To be perfectly honest, I'd probably let hedonistic adaptation set in and never be able to qualify for food stamps anyways.
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Do you think you need food stamps? If you had two million dollars in retirement assets, and considered yourself retired, would you consider yourself to need those benefits? If yes, I'd be interested to hear why.
I may not, but the government might think otherwise.
Family of four, Tennessee, the maximum NET income per month you can make and still qualify for food stamps is $1,963. That's after deductions (such as utility bills, rent payment, etc.). That's nearly $24k/yr in spending (more if you count the deductions). I don't "need" that much, what I "need" would be closer to $12k/yr. That said, if I had $600k in retirement accounts and was drawing about $2k/mo to lead a comfortable lifestyle, and learned that society thought I was in "need" of food stamps, I'd have no issue with applying. Heck, I might drop that $2k/mo down to $1,750, since that coupled with food stamps would be around the $2k I was spending before.
If I had $2 million in retirement assets, that's what...$80k/yr at 4% SWR, and $60k/yr at a 3% SWR. To be perfectly honest, I'd probably let hedonistic adaptation set in and never be able to qualify for food stamps anyways.
Right, so the question is at the level that you would retire. If you think you have enough money to never have to work again, why would you take benefits intended to feed people who don't have enough money to healthfully feed themselves?
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Right, so the question is at the level that you would retire. If you think you have enough money to never have to work again, why would you take benefits intended to feed people who don't have enough money to healthfully feed themselves?
The same reason I take the $1k per kid tax credit from the IRS, even though I don't need it and frankly think I shouldn't be able to qualify. Or take an energy credit for a new energy efficient appliance that I bought before learning about the tax credit (credit/deduction/refund/whatever).
To get me to give the answer you're wanting, we'd have to make some significant changes to food stamps. #1, there would need to be a set amount of money allocated to food stamps (Congress can't/won't just increase the amount allocated if there were a lot of people signing up; $X is allocated, whether one person or 100 million apply for benefits). Now, if I apply, I am literally taking money from others (whether they're truly in need, or like me and could get by without, is another story). #2, the amount that is currently available would need to be at or below an amount that I think a family of four can reasonably survive on. So...if I'm spending $400/mo, and think that's cutting it close...and benefits are currently $200/mo for a family of four; no, I'm not going to apply. Even if the amount is $450, I probably wouldn't apply (I could cut spending, there's a bit of waste even at $400/mo...but then I have to add in the whole "grocery deserts", and would probably come up with $450 or so as a baseline). But wait, grocery costs should go down during the school year thanks to free/reduced school lunches, food stamp benefits roll over...argh! As it is, the current maximum one could get is $632/mo for a family of four (down from $668 earlier this year, yeah there's been recent cuts).
I guess the only way to know for sure if I'd apply, is to wait and see if I ever end up applying. Otherwise, I might be here ranting and raving "Of COURSE I'd apply," but chicken out if the situation ever arose. I'll still try my best to not judge those who are on food stamps (without getting them fraudulently, of course).
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Right, so the question is at the level that you would retire. If you think you have enough money to never have to work again, why would you take benefits intended to feed people who don't have enough money to healthfully feed themselves?
The same reason I take the $1k per kid tax credit from the IRS, even though I don't need it and frankly think I shouldn't be able to qualify. Or take an energy credit for a new energy efficient appliance that I bought before learning about the tax credit (credit/deduction/refund/whatever).
I'm not sure about the intended purpose of the tax credit for children, but I'd argue that you perfectly meet the intended goal of an energy efficient appliance: to reduce the energy used by installed appliances.
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Right, so the question is at the level that you would retire. If you think you have enough money to never have to work again, why would you take benefits intended to feed people who don't have enough money to healthfully feed themselves?
To get me to give the answer you're wanting, we'd have to make some significant changes to food stamps. #1, there would need to be a set amount of money allocated to food stamps (Congress couldn't just increase the amount allocated if there were a lot of people signing up; $X is allocated, whether one person or 100 million apply for benefits). Now, if I apply, I am literally taking money from others (whether they're truly in need, or like me and could get by without, is another story).
So, assuming your other conditions, you'd be okay with having those who aren't retired, who are paying taxes to pay for this program designed to make sure hungry people are fed, pay higher taxes because you've structured your income in such a way as to be eligible for SNAP?
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I'm not sure about the intended purpose of the tax credit for children, but I'd argue that you perfectly meet the intended goal of an energy efficient appliance: to reduce the energy used by installed appliances.
Right, the intent of a tax credit for installing an energy efficient appliance would be to encourage people to purchase energy efficient appliances (whether to reduce energy used, or as a favor to the energy efficient appliance lobby). I'd argue that the intent of the current food stamp program is to give grocery money to those with a low income, and encourage them to save/preserve retirement funds (or maybe it's just to repay a favor to the high-fructose corn syrup lobby).
The person who bought the appliance before finding out about the credit obviously didn't "need" the tax credit to help pay for the purchase. Just as the person who was surviving on $2k/mo without food stamps didn't "need" food stamps to help pay for their groceries. Or at least, they didn't think they had the need.
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I'm not sure about the intended purpose of the tax credit for children, but I'd argue that you perfectly meet the intended goal of an energy efficient appliance: to reduce the energy used by installed appliances.
Right, the intent of a tax credit for installing an energy efficient appliance would be to encourage people to purchase energy efficient appliances (whether to reduce energy used, or as a favor to the energy efficient appliance lobby). I'd argue that the intent of the current food stamp program is to give grocery money to those with a low income, and encourage them to save/preserve retirement funds (or maybe it's just to repay a favor to the high-fructose corn syrup lobby).
The person who bought the appliance before finding out about the credit obviously didn't "need" the tax credit to help pay for the purchase. Just as the person who was surviving on $2k/mo without food stamps didn't "need" food stamps to help pay for their groceries. Or at least, they didn't think they had the need.
Fine, let's not use need. It seems that "need is nebulous" is the most common refrain here, so let's go back to the text:
7 USC § 2014
(a) Income and other financial resources as substantial limiting factors in obtaining more nutritious diet; recipients under Social Security Act
Participation in the supplemental nutrition assistance program shall be limited to those households whose incomes and other financial resources, held singly or in joint ownership, are determined to be a substantial limiting factor in permitting them to obtain a more nutritious diet.
In the case where you have voluntarily retired, do you think that your income and assets are "a substantial limiting factor in permitting [you] to obtain a more nutritious diet?"
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So, assuming your other conditions, you'd be okay with having those who aren't retired, who are paying taxes to pay for this program designed to make sure hungry people are fed, pay higher taxes because you've structured your income in such a way as to be eligible for SNAP?
I may not agree with all the laws, but I do (try) to follow (most of) them. Some are beneficial to me. Some hinder me. The majority of the people chose the majority of representatives that passed these laws (yes, I know that's not 100% accurate...work with me here). If people don't like the current laws, they need to try to get them changed. Get enough support, you can make a difference.
I'll try to do my part and point out how the current system works. If I'm able to live in a foreign country and still able to get the $1k per child tax credit, even though I never stepped foot in the US or paid a single cent in US taxes for the entire calendar year...I'll point it out. If that's ok with you, then thanks! If not, then see what you can do to get this changed. In the same vein, I may not like the current public school system in my hometown. I can either not say anything and hope it magically changes, homeschool my kids, or try to change the way things run (or find a good school on the other side of the world, but that may be a bit drastic for most).
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Fine, let's not use need. It seems that "need is nebulous" is the most common refrain here, so let's go back to the text:
7 USC § 2014
(a) Income and other financial resources as substantial limiting factors in obtaining more nutritious diet; recipients under Social Security Act
Participation in the supplemental nutrition assistance program shall be limited to those households whose incomes and other financial resources, held singly or in joint ownership, are determined to be a substantial limiting factor in permitting them to obtain a more nutritious diet.
In the case where you have voluntarily retired, do you think that your income and assets are "a substantial limiting factor in permitting [you] to obtain a more nutritious diet?"
That's still "need", just fancied up a bit. So the government determined that my income and financial resources are a substantial limiting factor in permitting me to obtain a more nutritious diet. I disagree with them. They want to give me extra money to "permit" me to obtain a more nutritious diet. Well, I guess that's exactly what they're accomplishing. I may not actually eat a healthier diet, but I am "permitted" to obtain a more nutritious diet (i.e., if I have $400/mo that I didn't have before, I'm sure I can figure out a way to get more nutrition in my diet; I may not exercise that option though).
It's still a bit of double-talk though. On the one hand, they're saying something that really helps make your point. Then they turn around and make my point. So, the program is meant for those truly in need, score one for you! Then they go on to define that need, score one for me!
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So the takeaway is, if you have some money stashed away and retired early, don't tell anyone that you qualified for food stamps with the current system in place? Quite the contrary, I think we should applaud these people. Whether it's because they helped me realize I could stretch my retirement dollars further; or because they alerted me to a loophole that countless others (who aren't so forthcoming) are taking advantage of, so now I can petition my representatives to close that loophole stat!
I'd like to see most of these handouts curtailed, and I'm a little surprised the mustachian community isn't a little more enraged at the extent to which you can do very little and still receive a mint from the helpful government. Particularly if you pop out a few kids.
I think SNAP gets the eligibility rules right for the most part, except I might change the law to exempt only a set amount of retirement assets ($100,000 or some biggish number in the eyes of the common people). Retirement funding is different than it was in '77 when the food stamp law was enacted. Pensions are rare for new employees outside government/union/non-profit employment. Now we have defined contribution plans that are assets on our balance sheets (unlike pension rights). But you don't want to dissuade hungry people from starting or continuing to save for retirement, and maybe you don't want to impoverish them in their old age by requiring a total depletion of their retirement accounts.
I understand that many people are unhappy that someone can participate in the programs even though they don't "need" them. I'm unhappy too because it's a waste of money. But then I realize my unhappiness is focused on the wrong place. The laws themselves are screwed up. The crafters of our laws know how to narrowly tailor eligibility requirements, because they do so for some programs but not all. I assume that was deliberate, given my faith in the competency and impartiality of lawmakers (/sarcasm).
As for arguments that "administrative burden to enforce is too great" - there's already a system in place by means of the EIC or other tests. Figure out the test parameters, and have a central clearinghouse for eligibility determination (just don't hire the Obamacare programmers to develop that platform). Then social workers don't have to sort through literally reams of paperwork to determine whether someone qualifies. They can click a button, pop in your SS or TIN, and get a green light or red light for eligibility for a particular program. The "system" already works this way to a certain extent, as there are tons of cross eligibility classifications for the various social programs out there (if you get SNAP, you get free school lunches for example).
I say publicly over and over that all these handouts are stupid and the tax code is stupid, and here's ways to fix them, but then avail myself of tax breaks and credits and those benefits for which I qualify. I'm not comfortable with the system, but I'm comfortable with the general notion that people should (and will) participate in a program if they will benefit. Warren Buffett has done the same thing - he derides the tax code for allowing him to pay a lower tax rate than his secretary, but sends no additional checks to the Treasury. And he has a team of tax accountants and attorneys and CFO's (for his holdings) to keep his personal and corporate tax liability to a minimum.
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In response to "but if you are early retired and have X million dollars, do you "need" more money from government programs?":
You wouldn't know you need the help from government programs until it might be too late. If I have a million dollars, and the government wants to give me $200 more dollars this year (retirement savings contribution credit, for example), I will take it if I qualify. Having $1,000,200 means more safety and security than having an even million.
By all reasonable measures, my "million dollars" has a 95-99% chance of lasting my lifetime. Even higher if I add "cut spending" or "find a little supplemental income" to my repertoire of wealth management tools. But hey, you never know what you'll end up "needing" down the road. I could work for 10 more years and get 2 million or 3 million dollars saved. It still wouldn't change the fact that more money means more security for myself and my family.
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In response to "but if you are early retired and have X million dollars, do you "need" more money from government programs?":
You wouldn't know you need the help from government programs until it might be too late. If I have a million dollars, and the government wants to give me $200 more dollars this year (retirement savings contribution credit, for example), I will take it if I qualify. Having $1,000,200 means more safety and security than having an even million.
By all reasonable measures, my "million dollars" has a 95-99% chance of lasting my lifetime. Even higher if I add "cut spending" or "find a little supplemental income" to my repertoire of wealth management tools. But hey, you never know what you'll end up "needing" down the road. I could work for 10 more years and get 2 million or 3 million dollars saved. It still wouldn't change the fact that more money means more security for myself and my family.
If a person is confident enough to choose, by that person's own standard, against working, to live off assets they consider sufficient, then these arguments, voiced in defense of such a person's receipt of assistance from these programs, are the thinnest attempts to justify selfishness and exploitation, in my opinion. Such a person could easily point out his or her farcical eligibility, without collecting, if the real point is to encourage legislative reconsideration.
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If a person is confident enough to choose, by that person's own standard, against working, then these arguments, voiced in defense of such a person's receipt of assistance from these programs, are the thinnest attempts to justify selfishness and exploitation, in my opinion. Such a person could easily point out his or her farcical eligibility, without collecting, if the real point is to encourage legislative reconsideration.
Ex post on my deathbed, I could tell you with certainty that I did or did not need a particular benefit that I was eligible for.
Ex ante, which is how us non-time traveling humans make decisions, I couldn't tell you.
And if you are ER like me, it's not necessarily that you choose to not work, it's just that you haven't found the right opportunity that meets your subjective criteria of what you want in a paid job. Maybe I'm picky in what I'm willing to work for and what I'm willing to do. Doesn't mean I'm not willing to work. In fact, through volunteer work, I do work, just not for money. I choose to do what I want today. I would say I am more financially "responsible" than 95% of the population because I have prepared for a rainy day, and then some. And I am producing multiple additional taxpayers that will become productive members of society one day too. In fact, I'm probably laying the groundwork for generations of my progeny to become productive taxpayers! I'm even helping my non-progeny become productive taxpayers (through tutoring and mentoring)!
The reality is that 10 or 15 years down the road, I may be destitute (through no fault of my own). I'm certain I wouldn't garner any additional sympathy (or nickels) if the cardboard sign I held by the side of the road read "Spare some change? I didn't partake of thousands of dollars from the EIC 15 years ago when I could have".
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You would choose not to work if you found your stash quickly depleting and you wanted to spite people who suggested you should decades earlier in an online discussion thread?
You're acting like taking government benefits now in your time of plenty is the only possible way you can keep your family off the streets three decades hence, and it just ain't so!
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You would choose not to work if you found your stash quickly depleting and you wanted to spite people who suggested you should decades earlier in an online discussion thread?
You're acting like taking government benefits now in your time of plenty is the only possible way you can keep your family off the streets three decades hence, and it just ain't so!
Well of course I would try to get some form of work if my stash was shrinking and on its way to depletion! I have said as much here on this very forum. I'm very certain I could find some reasonable occupation to pay me enough to get by (we only spend $32k after all). But there's a chance I couldn't find anything. Or for some reason I may be barred from reactivating all of my professional licenses, thereby reducing my potential for employment (maybe I decided to test the requirement to report for jury duty and I thereby get a criminal record).
A more likely scenario would be some form of serious illness or disability or catastrophically disabling accident that would prevent me or someone in the family from future employment and require additional expenditures to address the disability or illness. I suppose I could insure against this type of event by saving double or triple what I might likely need. But it will never be enough. And once you forgo free money, you can't unforgo it (that's not even a word).
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Good topic, good discussion for the most part but I have a technical nitpick.
The poll numbers add up to 100%. In a poll where you can choose 1 or up to 4 responses, that should probably not be true (unless no one would take more than one benefit which probably isn't the case since I've seen people say they voted for multiple responses, unless there were lying......anyway). The number who said they wouldn't take any benefits plus the number of respondents who elected to take 1+ benefit(s) should add up to 100% to be sure but the way the poll is tallying all the responses together is not accurate and making me question what the actual distribution (or # of voters or if only the first box checked gets counted, etc.) is.
Sorry to distract from the topic but this FERS government worker, who will probably stay long enough (5 years) to be vested in a pension one day, who works in government surveys for a living (and doesn't really have a private counterpart) was doing just fine lurking on this topic until he saw the flaw with the poll. Cheers!
Edit: looking at the number who have voted and the number who not accept benefits at all, (57 out of 207 at this point), I see that the poll is indeed recording multiple responses but the denominator should be different for that category. It should be 57 out of 207, NOT 57 out of all times a box was checked. The real % of people who would not take benefits of any kind should be ~28%.
Likewise, the denominators for all other reasons should be # of respondents and not # of times a box was checked as well. For the real %'s as of this point:
12.1% would collect welfare benefits and/or SNAP
14.5% would have their child get free or reduced lunch
43.5% would claim the EIC
66.7% would have their child use a Pell grant or other income-based funding for college
and
27.5% would do none of the above.
This is out of 207 responses.
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Well of course I would try to get some form of work if my stash was shrinking and on its way to depletion! I have said as much here on this very forum. I'm very certain I could find some reasonable occupation to pay me enough to get by (we only spend $32k after all). But there's a chance I couldn't find anything. Or for some reason I may be barred from reactivating all of my professional licenses, thereby reducing my potential for employment (maybe I decided to test the requirement to report for jury duty and I thereby get a criminal record).
A more likely scenario would be some form of serious illness or disability or catastrophically disabling accident that would prevent me or someone in the family from future employment and require additional expenditures to address the disability or illness. I suppose I could insure against this type of event by saving double or triple what I might likely need. But it will never be enough.
You either have an internal locus of control in this world or you don't. To hear your argument, you live in a world where you have control over things for your very successful career and retirement, and then suddenly lose that personality trait and instead of being an agent affecting the world around you, you're a passive dummy and things happen to you. That's why it's hard for me to imagine you're being serious - you are saying you have control over your circumstances until it's inconvenient for your argument, and then you suddenly have no capacity to change your surroundings, and all you're left with is regrets that you didn't bilk the government out of more money that wasn't meant for you.
And once you forgo free money, you can't unforgo it (that's not even a word).
false (http://www.irs.gov/uac/Nine-Facts-on-filing-an-Amended-Return).
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You either have an internal locus of control in this world or you don't. To hear your argument, you live in a world where you have control over things for your very successful career and retirement, and then suddenly lose that personality trait and instead of being an agent affecting the world around you, you're a passive dummy and things happen to you. That's why it's hard for me to imagine you're being serious - you are saying you have control over your circumstances until it's inconvenient for your argument, and then you suddenly have no capacity to change your surroundings, and all you're left with is regrets that you didn't bilk the government out of more money that wasn't meant for you.
But I can control each year whether I participate in the government programs. Maybe at some point I'll decide, "hey I have more money than I can ever spend, and I'm fatigued from looking at all those zeros." But then I guess I won't be someone who may need any of these handouts (even if I qualify).
I think many here are missing the point of what all these subsidies actually are for.
Food stamps - low income low wealth (other than retirement assets), and you get nutritional support only. How many here would actually qualify for these things? I think if I ever did qualify, I would legitimately need them. Although realistically I would just get a job doing something, thereby making myself ineligible for the program. Theoretically I would take them, but in practice, I would likely never qualify.
Free/reduced lunch - Based on eligibility rules, this is a program intended for low to moderate income people without regard to wealth. Many college educated professionals with a stay at home spouse and a few kids easily qualify ($51,000 income and 3 kids for example). It isn't a low income program. I think many don't really get what the program is about and/or don't have kids so think it's "just for poor people". In addition, it brings resources to your kid's school ($800 per qualifying kid in my case).
EIC - income supplement that encourages working in low to moderate income families with kids (kids magnify the EIC by 10x or some huge number). There is a defacto wealth or means test by virtue of the $3200/yr dividends/interest cap. Our family could have qualified for this if one of us parents remained a stay at home parent. We didn't. We worked hard, saved a bunch of money (including in after tax accounts), and have too much passive income to qualify now. This is a pretty solid program in terms of incentives and getting the right class of people a little help when they have kids. Kudos to the EIC's drafters.
Means based college grants - Assets and income extend into moderate levels for the various programs (I'll throw federal student loans in this category). They want to encourage education because it tends to grow better taxpayers and better participants in our economy. It's not just for poor people.
I think a lot of people voting here are saying "as long as I'm wealthy I won't participate in any of these programs" when the reality is, they very well might not qualify for any of these programs anyway. Or wouldn't gain any personal benefit (reduced price lunches for brown bagging students for example). Or to address the poll question directly - "would you feel comfortable?". Technically, I wouldn't feel comfortable getting SNAP because it means waiting in a long line to get the benefits and hoop jumping to keep them. If I qualified legitimately, I would probably still get them because it means we are near destitution (at least in liquid assets).
And once you forgo free money, you can't unforgo it (that's not even a word).
false (http://www.irs.gov/uac/Nine-Facts-on-filing-an-Amended-Return).
That would get me two or three years of tax credits and exemptions back if I opted not to take them in order to voluntarily increase my tax burden. A much simpler method to achieve the same objective would be to minimize my taxes and then donate back those credits and deductions after 3 years with a check made to "US Treasury - Repayment of the National Debt". But I don't think anyone here is saying you shouldn't take almost all tax deductions and credits (EIC being the exception apparently). So filing amended returns would be of dubious value.
You can't go back in time and reclaim SNAP or free/reduced lunches or any other subsidy provided by these programs. It's use it or lose it month to month. Except TANF which does get exhausted after a number of years.
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Ok, I'm back and ready for more. It's ok RootofGood, I've got your back!
In response to "but if you are early retired and have X million dollars, do you "need" more money from government programs?":
You wouldn't know you need the help from government programs until it might be too late. If I have a million dollars, and the government wants to give me $200 more dollars this year (retirement savings contribution credit, for example), I will take it if I qualify. Having $1,000,200 means more safety and security than having an even million.
By all reasonable measures, my "million dollars" has a 95-99% chance of lasting my lifetime. Even higher if I add "cut spending" or "find a little supplemental income" to my repertoire of wealth management tools. But hey, you never know what you'll end up "needing" down the road. I could work for 10 more years and get 2 million or 3 million dollars saved. It still wouldn't change the fact that more money means more security for myself and my family.
Er, um...I think I forgot to...um, appointment...the stove! I totally left the stove on, I'll be right back.
Oh, just text my wife to check it? I guess I could do that. *sigh*
I don't disagree with your point. I just know what's going to happen next. *reads rest of thread* Yup, nailed it!
Why do the uber-millionaires and billionaires hire people to keep their tax liability as low as possible? Don't they realize that by keeping that "extra" $500k to themselves, they're robbing the food stamp program of funds that could be used to help those in need? Or...or...bailout money for the auto industry (American jobs!). Or...everyone in the postal service could get a (small) raise. I mean, they're robbing from us!
Assuming you do so legitimately, I view taking a $1k deduction the same as getting a $1k payment (food stamps, welfare, whatever). That's $1k the government could have used for something, the government said you could have that $1k, and now that's $1k the government doesn't have. If the government would rather keep that $1k for other uses, then it shouldn't give it to you.
If the government wants to give $1k to every family with a kid, I have no problem taking the money (I might take the government aside and tell it that I don't really need the $1k, nor do I think I deserve it, but thanks all the same). If the government wants to help cover the costs of new energy efficient windows to anyone who is willing to buy new energy efficient windows, that's fine. If the government wants to give grocery money to a family of four making less than $24k/yr with less than $2k in non-exempt assets, ok by me.
So, if someone says "free money to anyone in XYZ category!" I'll have no qualms taking it. If someone says "free food for those who are unable to provide for themselves!" I wouldn't take it unless, you know, the crap hit the fan and I'm truly unable to provide for myself.
I still don't see where food stamps is meant only for people unable to buy themselves food. I just see a lot of legalese-type speak that basically says "Person A (government) saw that people in certain categories weren't eating as healthy as he/she thought they should, and decided to setup a program to give those people extra money for groceries, thereby permitting them to eat more nutritiously." There's nothing stopping the government from saying "Hey, we don't want to just permit you to be able to eat more nutritiously...no, we want to do everything in our power, just short of physically cramming nutritious food down your throat, to make sure you eat more nutritiously. So here's a shipment of super nutritious food (or a voucher for super nutritious foods at Walmart, you can tell what items are eligible due to the TDFWIC [Totally Different From WIC] signs)." We know the government can do these things via CSFP and WIC.
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Food stamps - low income low wealth (other than retirement assets), and you get nutritional support only. How many here would actually qualify for these things? I think if I ever did qualify, I would legitimately need them. Although realistically I would just get a job doing something, thereby making myself ineligible for the program. Theoretically I would take them, but in practice, I would likely never qualify.
All college students, AmeriCorps volunteers, entry-level nonprofit and government employees. Many of us, myself included.[/quote]
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Food stamps - low income low wealth (other than retirement assets), and you get nutritional support only. How many here would actually qualify for these things? I think if I ever did qualify, I would legitimately need them. Although realistically I would just get a job doing something, thereby making myself ineligible for the program. Theoretically I would take them, but in practice, I would likely never qualify.
All college students, AmeriCorps volunteers, entry-level nonprofit and government employees. Many of us, myself included.
Sorry, I meant how many here that fit the OP's hypothetical of being early retired would qualify for these programs? Food stamps appear to be the most difficult given the tight asset tests.
Maybe "early retired" is the pivotal piece of language that isn't well defined? I'm looking at it as a big enough investment portfolio to support a ~3-3.5% withdrawal rate indefinitely. In other words, I would consider someone who is retiring in their 30's with a withdrawal rate over 4% to be undercapitalized and at best marginally "retired". Odds are decent that spending will drop big time or that person will be back at work.
The examples you give are all what I would call working people or people on the path to work. I'm not sure I would deny any of those people food stamps as the program is currently structured. I think the program is ridiculous and a waste of money on a system wide policy basis, but I wouldn't care if these individuals participated in the program on an individual basis (we have decided as a people that this is a critically important government program).
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Assuming you do so legitimately, I view taking a $1k deduction the same as getting a $1k payment (food stamps, welfare, whatever). That's $1k the government could have used for something, the government said you could have that $1k, and now that's $1k the government doesn't have. If the government would rather keep that $1k for other uses, then it shouldn't give it to you.
If the government wants to give $1k to every family with a kid, I have no problem taking the money (I might take the government aside and tell it that I don't really need the $1k, nor do I think I deserve it, but thanks all the same). If the government wants to help cover the costs of new energy efficient windows to anyone who is willing to buy new energy efficient windows, that's fine. If the government wants to give grocery money to a family of four making less than $24k/yr with less than $2k in non-exempt assets, ok by me.
That's how I see it. The government wants to help us provide for our kids. It saves me $5500 per year in federal income tax and even more in state tax. I don't "need" it (I wouldn't die without the tax breaks), but I accept the money with open arms. I fully acknowledge when the kids are out of the house, that even my uber awesome tax strategies won't prevent me from paying taxes for someone else's kids.
Free/reduced lunch is an extension of the "help families with kids" of low to moderate income theme. Same with EIC and really the college grants too. Maybe many are opposed to subsidies for kids and that's the reason so few would feel comfortable if they qualified?
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So, assuming your other conditions, you'd be okay with having those who aren't retired, who are paying taxes to pay for this program designed to make sure hungry people are fed, pay higher taxes because you've structured your income in such a way as to be eligible for SNAP?
I may not agree with all the laws, but I do (try) to follow (most of) them. Some are beneficial to me. Some hinder me. The majority of the people chose the majority of representatives that passed these laws (yes, I know that's not 100% accurate...work with me here). If people don't like the current laws, they need to try to get them changed. Get enough support, you can make a difference.
I'll try to do my part and point out how the current system works. If I'm able to live in a foreign country and still able to get the $1k per child tax credit, even though I never stepped foot in the US or paid a single cent in US taxes for the entire calendar year...I'll point it out. If that's ok with you, then thanks! If not, then see what you can do to get this changed. In the same vein, I may not like the current public school system in my hometown. I can either not say anything and hope it magically changes, homeschool my kids, or try to change the way things run (or find a good school on the other side of the world, but that may be a bit drastic for most).
If you're basing what you consider ethical off of what the government considers legal, then I suspect that's a fundamental difference in ideology we're not going to get past.
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If you're basing what you consider ethical off of what the government considers legal, then I suspect that's a fundamental difference in ideology we're not going to get past.
It's not that simple. In fact, I'm not entirely sure exactly what I'd base my ethics off of. Going by what is/isn't legal may be part of the equation, but it's not the entire formula. It may be legal to shoot a deer during hunting season and just let it rot; I don't think I'd find that ethical. It may be illegal to jaywalk instead of walking 50 feet to the nearest crosswalk, but I doubt I'd see that as unethical.
It's legal, so that's one check in the "might be ethical!" list. If I partake of the program, the person next to me who's in even more need (and likely getting even more in food stamp benefits) will not see a reduction in their benefits. Even if enough people like me sign up and benefits are reduced, the amount given will still be more than enough to sustain a family of four (for example, the max benefits for a family of four was recently reduced from $668 to $632; I view $632 as way more than adequate).
Now, if those truly in need are getting barely enough to survive on, and I would take the place of someone truly in need (such as a food bank; if they have 500 boxes of groceries to give out and I take one, that's only 499 boxes of groceries left), then I would view taking that as unethical (assuming, of course, that I felt I could adequately support my family; if it was either take the groceries or my kids will starve, I'll take the groceries!).
So yeah...if food stamps could only have X number of people on the roll at any time, and me getting on the list keeps someone else from getting benefits, I wouldn't want to take advantage of that.
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The college money is in a different category because it's for your young adult, who has not had time to build up assets. Likewise, I have no problem with Social Security because that's an earned benefit. If you've paid in, you should be able to receive benefits.
The others, however, I would not use, nor would I accept the closely-related free health care for the poor (in its numerous names) or reduced-cost public housing or school-clothes-for-kids programs. Why? Because a person should support himself, if he is able to do so. If you need help to make ends meet, you should continue working. Living off the public doll, if you're able to work, makes you no better than the crooks in Congress -- and I would like to think of myself as more moral than that bunch.
Taking these unearned payments, if you are able to work, will continue to drive up the national debt, which is a huge problem that will affect us . . . But will really be our children's problem.
If you can, through a combination of hard work and frugal living, quit working, good for you! But looking to collect from others is nothing short of dishonest.
+1 to everything you've said.
If you are able bodied and decide to retire early, you should support yourself. If you don't, you may be inside the law but you are outside my moral standards. Earned benefits like social security are fine, because you earned them. Benefits specifically intended to help the poor are not because you are not poor.
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Assuming you do so legitimately, I view taking a $1k deduction the same as getting a $1k payment (food stamps, welfare, whatever). That's $1k the government could have used for something, the government said you could have that $1k, and now that's $1k the government doesn't have. If the government would rather keep that $1k for other uses, then it shouldn't give it to you.
If the government wants to give $1k to every family with a kid, I have no problem taking the money (I might take the government aside and tell it that I don't really need the $1k, nor do I think I deserve it, but thanks all the same). If the government wants to help cover the costs of new energy efficient windows to anyone who is willing to buy new energy efficient windows, that's fine. If the government wants to give grocery money to a family of four making less than $24k/yr with less than $2k in non-exempt assets, ok by me.
That's how I see it. The government wants to help us provide for our kids. It saves me $5500 per year in federal income tax and even more in state tax. I don't "need" it (I wouldn't die without the tax breaks), but I accept the money with open arms. I fully acknowledge when the kids are out of the house, that even my uber awesome tax strategies won't prevent me from paying taxes for someone else's kids.
Free/reduced lunch is an extension of the "help families with kids" of low to moderate income theme. Same with EIC and really the college grants too. Maybe many are opposed to subsidies for kids and that's the reason so few would feel comfortable if they qualified?
While I understand things aren't exactly as nice as I'd lil ether to be, this is just a horrible comparison. There are so many others on here. It is actually very sad to see.
1) When you have kids, you are spending a lot more money overall than $1K. The money is supporting someone's company or someone's income. It could be baby sitting, it could be buying more food, it could be buying more clothes, or school supplies -- meaning the essentials (not the iPhones, $100 dresses, etc).. You aren't "getting $1K" the government is giving you a tax benefit for pushing money into the system. This is the same thing as why businesses get the tax breaks and credits they get. When you spend money, people have jobs, they are not dependent upon
2) The intent of the social services programs is to help those who need help getting off their feet. It isn't supposed to be a long term thing (with the exception of disability) and it isn't supposed to be abused. Yes, there are others who abuse it in other ways. Just because you "can" get away with something doesn't make it right (see: Speeding - yes, I do it - but I still go slower than most other traffic, which is scary).
3) Electrical/Solar tax credits/breaks - this is again, a case of spurring the economy or an industry in order to free money up elsewhere. You are removing the dependency on fossil fuels. Taking a load off the grid, so that others who might need it can get it and there won't be the "rolling brown/black outs".
I certainly couldn't look my children in the eyes and tell them daddy doesn't need to work, but you can still get free lunches because daddy manipulated the system. Woohoo!! Of course, so did Mark McGuire, Jose Canseco, Alex Rodriguez, Lance Armstrong, etc., etc., etc.
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Benefits specifically intended to help the poor are not because you are not poor.
Unless the person handing out the money says "All families of four with an annual income under $24k/yr are poor."
It really doesn't matter what my or your definition of poor is. I could think it's less than $12k/yr, Richie McRicherston might think it's less than $250k/yr. The gov is the one handing out the money, so their definition is the one we use.
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1) When you have kids, you are spending a lot more money overall than $1K. The money is supporting someone's company or someone's income. It could be baby sitting, it could be buying more food, it could be buying more clothes, or school supplies -- meaning the essentials (not the iPhones, $100 dresses, etc).. You aren't "getting $1K" the government is giving you a tax benefit for pushing money into the system. This is the same thing as why businesses get the tax breaks and credits they get. When you spend money, people have jobs, they are not dependent upon
If you're talking about the $1k child tax credit, it's not merely a deduction toward taxes owed. One could owe $0 in taxes and still get the $1k per kid. See http://www.irs.gov/uac/ARRA-and-the-Additional-Child-Tax-Credit . It says that before ARRA came into effect, you would need to have at least $12,550 in earned income in order for the child tax credit to be a refundable credit. Thanks to ARRA, you only need $3,000 in earned income. I can virtually guarantee you that if you're making $3,000 (or even three times that!), you're not going to owe $1k in taxes (in fact, I believe you'd owe exactly $0).
We paid $0 to the IRS last year, and got back $2k in child tax credits. We weren't in the US for even one second last year. The tax program (plus the various documentation I could find) said that we qualified. I don't think we should have...but there you go. Side note, we did have earned income from Australia, reported that income to the IRS, there was tax due on that, but got a credit for the tax already paid (Australia has higher tax rates). Since our forms had earned income showing, we qualified for the child tax credit and were allowed to contribute to a Roth IRA.
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Benefits specifically intended to help the poor are not because you are not poor.
Unless the person handing out the money says "All families of four with an annual income under $24k/yr are poor."
It really doesn't matter what my or your definition of poor is. I could think it's less than $12k/yr, Richie McRicherston might think it's less than $250k/yr. The gov is the one handing out the money, so their definition is the one we use.
Congratulations, you're advocating for a position that is so beyond the bounds of decency that even Congress didn't consider it! Actually, I don't blame Congress, but rather the states that have adopted categorical eligibility standards that would permit it. From what I understand, in my own state, unless an adult applicant is disabled or caring for a young child, the adult will be disqualified from SNAP unless working or looking for work (although I'm sure it's more complex than that). I guess this is how liberals get turned into conservatives.
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If you are able bodied and decide to retire early, you should support yourself. If you don't, you may be inside the law but you are outside my moral standards. Earned benefits like social security are fine, because you earned them. Benefits specifically intended to help the poor are not because you are not poor.
This sums my thoughts nicely.
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This has been quite the discussion. I selected the EIC and Pell Grants as benefits I would accept (though, really, I wouldn't accept a Pell Grant for myself, but I would be OK with my children accepting it. I paid for my own college education with scholarships, grants, and jobs, and I expect my children to do the same). I really can't imagine ever wanting to sign up for food stamps or free/reduced lunch, even though RootofGood gave some compelling reasons for the reduced lunch benefits.
I really don't see any issue with the EIC, though, and I'm surprised that so many came out opposed to it. Seattlecyclone mentioned to me in a thread that I started not too long ago (Optimize Your Taxable Income (https://forum.mrmoneymustache.com/welcome-to-the-forum/optimize-your-taxable-income/msg156362/#msg156362)) that I would probably be eligible for the Additional Child Tax Credit and the Earned Income Credit, meaning that I would end up with negative federal income tax liability. Nobody came out to chastise me for considering taking benefits that I don't "need", even though I clearly would qualify. Would you consider me unethical for taking these benefits? Does it make a difference that I am working and not "retired"? Does it matter that my wife, who is perfectly capable of working, chooses to stay home with our children instead? Would we be more ethical if she chose to ship the kids off to daycare every day so that we could earn too much money to qualify for EIC?
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I certainly couldn't look my children in the eyes and tell them daddy doesn't need to work, but you can still get free lunches because daddy manipulated the system. Woohoo!! Of course, so did Mark McGuire, Jose Canseco, Alex Rodriguez, Lance Armstrong, etc., etc., etc.
Aren't you citing people that actually broke the law or at least broke the rules of the the organizations that govern their respective sports?
That's very different from participating in programs you qualify for.
I think committing fraud or lying to gain any of these benefits is pretty dirty (as all here agree).
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I find this topic very interesting as a thought experiment, although in practice it is mostly hypothetical for me.
Except I plan on participating in the reduced or free school lunch program if we qualify. I think I have justified why I personally intend to participate in the free/reduced lunch program. It earns our socioeconomically depressed school $800 per F/R kid and the school uses the money to hire extra teachers to reduce class sizes to 16-17 students. I also have a different view of the free/reduced lunch program - it isn't for poor people (oh the unwashed masses!) but instead a program for low to moderate income people without any regard to wealth or assets, and it covers a wide swath of the middle class and working class.
Someone pointed out that the $800 per kid my school gets has to come from someone else's school somewhere else in the district, state, or nation (it's federal money given out at the state level which gets allocated to districts and then to schools).
This led me to wonder how far people extend their levels of altruism. Conceptually, I think of altruism as a set of concentric circles. I put immediate family in the first circle in the very middle, then extended family in the next circle. Close friends go in the next circle. People in my neighborhood and casual acquaintances go in the next circle. Then there might be a few more circles that cover residents of my city and county, then my state, and finally my fellow Americans in the next to outermost circle. The rest of the world (even those cooky North Koreans, Cubans, Venezuelans, and Iranians) go in the outermost circle. Here's what this concept looks like in my mind:
(http://rootofgood.com/wp-content/uploads/2013/11/Circles-of-Altruism.png)
My altruistic leanings are greatest in the innermost circle that contains immediate family. As I get farther away from the center of the circle, my altruistic tendencies decline. Any kind of significant altruism extends only as far as the circles containing close friends, neighbors and acquaintances. Beyond that circle, the altruism gets rather thin. Random strangers in my city, state, country and world are still fellow human beings, but there isn't any real strong connection between me and them.
Perhaps my altruistic tendencies are flawed or very different than some posting on this forum? If I can obtain something for those in the inner circles ( for example, $2400 for my kids' school in my neighborhood), it necessarily takes from those in the outer circles. But in my "calculus of altruism", it is internally consistent and makes sense to do so. This view shapes where my volunteering and policy interests are focused as well (at the local level). You can see the beneficiaries and the results of progress.
That's also why I am motivated to take a benefit that I qualify for, even when I may not starve absent the benefit. I can deploy the benefit to those in my inner circles of altruism which I prioritize higher than those in the outer circles of altruism (ie My Fellow Americans that fund all of the programs mentioned by the OP in this thread).
edited to add These circles can turn elliptical when natural disaster strikes. For example, the "rest of the world" circle might get eccentric to the point of it entering the inner circles alongside neighbors and acquaintances like when a typhoon hits the Philippines and causes massive destruction. At least that's how my "charity model" or altruism works on a conceptual level.
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I really don't see any issue with the EIC, though, and I'm surprised that so many came out opposed to it. Seattlecyclone mentioned to me in a thread that I started not too long ago (Optimize Your Taxable Income (https://forum.mrmoneymustache.com/welcome-to-the-forum/optimize-your-taxable-income/msg156362/#msg156362)) that I would probably be eligible for the Additional Child Tax Credit and the Earned Income Credit, meaning that I would end up with negative federal income tax liability. Nobody came out to chastise me for considering taking benefits that I don't "need", even though I clearly would qualify. Would you consider me unethical for taking these benefits? Does it make a difference that I am working and not "retired"? Does it matter that my wife, who is perfectly capable of working, chooses to stay home with our children instead? Would we be more ethical if she chose to ship the kids off to daycare every day so that we could earn too much money to qualify for EIC?
The difference is absolutely that you are working and not retired. I have no problem with people taking these benefits when eligible when they are working – that is, after all, what they are for. I think it's unfortunate that most of the discussion here has focused on "need," when I think the more important ethical consideration is intent or design. The EIC was designed pretty much explicitly for you situation - household member(s) working, income at a certain level (in your case adjusted because of kids) – you exactly fit the bill of who the EIC was designed for. On the other hand, I think it's pretty clear that the EIC was not designed for early retirees.
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Except I plan on participating in the reduced or free school lunch program if we qualify. I think I have justified why I personally intend to participate in the free/reduced lunch program. It earns our socioeconomically depressed school $800 per F/R kid and the school uses the money to hire extra teachers to reduce class sizes to 16-17 students. I also have a different view of the free/reduced lunch program - it isn't for poor people (oh the unwashed masses!) but i
A quibble, but I thought (and I may be mistaken) that you'd shown that your school received the money based on your children qualifying for the school lunch program, not on their participation in the program.
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A quibble, but I thought (and I may be mistaken) that you'd shown that your school received the money based on your children qualifying for the school lunch program, not on their participation in the program.
I have to complete the form and actually have the lunch price assigned as free or reduced. I suppose theoretically I could force my kids to never eat a school lunch or make them wad up $2 or $1.60 (the daily per capita savings if lunch was free or reduced) and toss it on the counter when they received their subsidized lunch each day. Or offset the savings with an additional donation to the school. But I definitely have to fill out the forms stating my income in order for the school to get the extra $800. I don't know if you call filling out the form qualifying or participating - largely semantics I guess.
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I certainly couldn't look my children in the eyes and tell them daddy doesn't need to work, but you can still get free lunches because daddy manipulated the system. Woohoo!! Of course, so did Mark McGuire, Jose Canseco, Alex Rodriguez, Lance Armstrong, etc., etc., etc.
Aren't you citing people that actually broke the law or at least broke the rules of the the organizations that govern their respective sports?
That's very different from participating in programs you qualify for.
I think committing fraud or lying to gain any of these benefits is pretty dirty (as all here agree).
Aren't you lying that you need the free lunches? Aren't you purposefully setting your income up to a level where you acquire them even though you have the ability to get more?
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The EIC was designed pretty much explicitly for you situation - household member(s) working, income at a certain level (in your case adjusted because of kids) – you exactly fit the bill of who the EIC was designed for. On the other hand, I think it's pretty clear that the EIC was not designed for early retirees.
Bold mine. Depends on how you're going to early retire. You can't get the EIC unless you have earned income like wages or self employment income. An early retiree living off of investments won't be eligible in the first place.
If your version of FIRE includes working part-time or a side-hustle, then by definition you are working and have income at a certain level. You still fit who the EIC was designed for.
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I certainly couldn't look my children in the eyes and tell them daddy doesn't need to work, but you can still get free lunches because daddy manipulated the system. Woohoo!! Of course, so did Mark McGuire, Jose Canseco, Alex Rodriguez, Lance Armstrong, etc., etc., etc.
Aren't you citing people that actually broke the law or at least broke the rules of the the organizations that govern their respective sports?
That's very different from participating in programs you qualify for.
I think committing fraud or lying to gain any of these benefits is pretty dirty (as all here agree).
Aren't you lying that you need the free lunches? Aren't you purposefully setting your income up to a level where you acquire them even though you have the ability to get more?
Yes. RoG has his own sense of entitlement and has admitting that many reasons: Congress critters get bloated lifelong pensions, etc etc.
He will do all sorts of contortions to personally justify getting welfare he does not need. There's a word described for people who do that and it isn't "Badass". Genuine need for welfare is one thing, but taking handouts you don't need is just another form of greed.
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Aren't you lying that you need the free lunches? Aren't you purposefully setting your income up to a level where you acquire them even though you have the ability to get more?
I am not lying about my eligibility. They don't ask you to swear or affirm that you are destitute. That isn't even how the program works. We can make $51,000+ per year and still get reduced price lunches. Is that low income? Not in my neighborhood or city. Maybe in NYC or SF.
There is no wealth test or asset threshold that disqualifies you. I sincerely think this program is designed to be broadly available to low to moderate income households. Note I didn't mention wealth. This program is just like so many other child-centric handouts - personal exemptions, child tax credits, dependent care deductions, college/education deductions, EIC. The government thinks it is important for us to go forth and multiply and they want to provide buckets of cash to help with the cost of raising children. I honestly can't view all these different programs in their entirety otherwise. Why go out of their way to have all these different programs that heavily subsidize children unless the intent is to heavily subsidize children?
I don't get what you mean by "purposefully setting your income up to a level where you acquire them even though you have the ability to get more". I intend to craft my income stream to minimize taxes and maximize deductions and credits (like ACA insurance subsidy) over the course of my lifetime. None of these four programs mentioned by OP are constraints in my financial model. They are just not very likely to ever happen, or in the case of free/reduced lunch, the benefits are so tiny it's rounding error in my overall financial model. At a maximum, we would save $288 per kid per year with reduced price lunches. That's $864/yr max for all three kids for a few years when all 3 are in school at the same time. The reality is our kids brown bag occasionally or are absent from school, so the benefit decreases from there.
I would never, for example, give up converting a large amount of trad IRA to Roth IRA in my tax free bracket just to take advantage of the F/R lunch savings. If I qualify, I qualify. Based on my current model, I will qualify for reduced lunches while the 3 kids are dependents and eventually we will not qualify as the kids leave the house (and won't be in K12 schools anyway).
However, today, my wife is still working (at least another 1-2 years) and we don't qualify (she makes a little more than the threshold amount). I don't really care about not qualifying for the F/R subsidy. The system is working the way it should (we have left the realm of "moderate" income).
I think you want to establish a rule that all able bodied adults in a household must work at the highest paid full time job available in order to ethically accept any form of government handout.
Being a stay at home parent, working part time, or working at something you are passionate about or merely interested in (even volunteer work) would all seemingly disqualify one from accepting government handouts. Is that a correct formulation of the rule you expect others to follow? If so, it's pretty far from the rule for many of the government programs (some do require work or searching for work, although not to the highest and best abilities of the person necessarily).
Am I not allowed to pursue volunteer positions that pay nothing or jobs that interest me (even though doing so would make me eligible for some programs)?
Can I not take care of my children? What if it takes 2 of us to care for our children in the manner we see fit?
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A quibble, but I thought (and I may be mistaken) that you'd shown that your school received the money based on your children qualifying for the school lunch program, not on their participation in the program.
I don't know if you call filling out the form qualifying or participating - largely semantics I guess.
Somehow I'd formed the impression that a precisely focused reading of the relevant language was an important part of your evaluation of the ethical component of your consideration of taking these benefits. Semantics, indeed.
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Mom to 5, do your kids agree with the notion that they wdrent learning anything because they were doing well? As a top percentile student I find that logic very odd.
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I really don't see any issue with the EIC, though, and I'm surprised that so many came out opposed to it. Seattlecyclone mentioned to me in a thread that I started not too long ago (Optimize Your Taxable Income (https://forum.mrmoneymustache.com/welcome-to-the-forum/optimize-your-taxable-income/msg156362/#msg156362)) that I would probably be eligible for the Additional Child Tax Credit and the Earned Income Credit, meaning that I would end up with negative federal income tax liability. Nobody came out to chastise me for considering taking benefits that I don't "need", even though I clearly would qualify. Would you consider me unethical for taking these benefits? Does it make a difference that I am working and not "retired"? Does it matter that my wife, who is perfectly capable of working, chooses to stay home with our children instead? Would we be more ethical if she chose to ship the kids off to daycare every day so that we could earn too much money to qualify for EIC?
The difference is absolutely that you are working and not retired. I have no problem with people taking these benefits when eligible when they are working – that is, after all, what they are for. I think it's unfortunate that most of the discussion here has focused on "need," when I think the more important ethical consideration is intent or design. The EIC was designed pretty much explicitly for you situation - household member(s) working, income at a certain level (in your case adjusted because of kids) – you exactly fit the bill of who the EIC was designed for. On the other hand, I think it's pretty clear that the EIC was not designed for early retirees.
What if, instead of completely retiring when I reach FI, I choose to take a less stressful job with a government agency that pays half of what I am earning today? What if I use my real estate license to make a few sales and earn a quarter of what I am earning today? What if, instead of investing in the stock market with my retirement funds, I decide to buy 400 acres of timberland, set up a corporation, and pay myself low wages to manage the timberland? I guess the point I'm trying to make is that I don't really see these things as black and white.
I would say that, personally, I have some internal resistance to taking benefits - e.g., WIC, food stamps, free/reduced lunch - that are specifically designated to provide food. I absolutely do not need any assistance with food, so I can see how accepting these benefits could be ethically wrong. On the other hand, I don't feel the slightest twinge of emotion about accepting any and all income tax credits/deductions for which I am legally eligible, no matter what my circumstances are.
I can't say that there is any particular logic to the way I feel, but I find myself somewhere between the two extremes on this topic. I don't feel "more ethical" than either side. I really don't have a problem with RootofGood accepting whatever benefits for which he is eligible, but I don't see anyone who refuses benefits for which they are eligible to be standing on higher moral ground. Fraud bothers me, utilizing loopholes does not, but we each have to make our own decisions about what we're comfortable with.
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Mom to 5, do your kids agree with the notion that they wdrent learning anything because they were doing well? As a top percentile student I find that logic very odd.
I think she is saying that her kids weren't challenged enough. I'm sure that they were learning something, but they had the capability to learn more. Her kids probably scored well on tests, but the tests were too easy for them.
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I was at a nongraded school for elementary for what that's worth too. I agree that a consistent 98 percent is a sign a student's unchallenged, but I'd say it's far from sufficient. (Not to judge your parenting, of course, and I get that you asked the kid's input - I was just curious about the opposite perspective on these sorts of issues).
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Grant, I can tell that you would be a top student.
Yes, I don't think anybody would disagree with that. :)
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What if, instead of completely retiring when I reach FI, I choose to take a less stressful job with a government agency that pays half of what I am earning today? What if I use my real estate license to make a few sales and earn a quarter of what I am earning today? What if, instead of investing in the stock market with my retirement funds, I decide to buy 400 acres of timberland, set up a corporation, and pay myself low wages to manage the timberland? I guess the point I'm trying to make is that I don't really see these things as black and white.
I would say that, personally, I have some internal resistance to taking benefits - e.g., WIC, food stamps, free/reduced lunch - that are specifically designated to provide food. I absolutely do not need any assistance with food, so I can see how accepting these benefits could be ethically wrong. On the other hand, I don't feel the slightest twinge of emotion about accepting any and all income tax credits/deductions for which I am legally eligible, no matter what my circumstances are.
I can't say that there is any particular logic to the way I feel, but I find myself somewhere between the two extremes on this topic. I don't feel "more ethical" than either side. I really don't have a problem with RootofGood accepting whatever benefits for which he is eligible, but I don't see anyone who refuses benefits for which they are eligible to be standing on higher moral ground. Fraud bothers me, utilizing loopholes does not, but we each have to make our own decisions about what we're comfortable with.
Now this is interesting. Personally, I'm interested in what differentiates one benefit from another. That's what I've been struggling to get people to engage on. Clearly, what is legal is not necessarily ethical, and vice versa. The question is, how do you determine what is ethical?
I think the first answer in this thread, and the one that's been discussed the most, is need. I've tried to move beyond a simple consideration of need, and suggested that we should consider the purpose of laws, or the intent of lawmakers. I still think this is an important consideration, and worth discussing. (As a side note, the primary purpose of the EIC, according to a document from HHS, is "to aid employed workers in achieving and maintaining their independence from welfare by making work more attractive" - https://peerta.acf.hhs.gov/uploadedFiles/EITC%20Newsletter.pdf). The intent of a program (feed the hungry, prevent people from going on welfare), is in my mind more important to ethical considerations than the from that assistance takes - in these cases, tax breaks or refunds.
RootofGood had an excellent post where he attempted to describe his ethical thought process. His approach, at its core, is tribal. He's effectively saying that nearby, specific benefits outweigh the distributed costs to many people who are significantly more removed from his life. Almost everyone lives their life this way to some extent, and I very much appreciate his description.
The more I think about this, the more I think the best ethical basis here is Kant's categorical imperative: Act only according to that maxim whereby you can, at the same time, will that it should become a universal law. In this case, the question is, what if everyone did it? One of MMM's more important posts, to me, deals with the consideration of the ethics of early retirement in this way. This thread, however, is filled with examples of people using what are essentially loopholes in the system - "sure, that benefit may not be intended for people like me, but the tax code allows it and so I should use it." This approach cannot be universal - in a world where everyone sought RootofGood's retirement, there is no way everyone could take advantage of food stamps. This lack of universality, of sustainability, to me makes that approach immoral.
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This approach cannot be universal - in a world where everyone sought RootofGood's retirement, there is no way everyone could take advantage of food stamps. This lack of universality, of sustainability, to me makes that approach immoral.
By this argument, engaging in any activity that uses resources that are anywhere close to the av American lifestyle is immoral. So driving a car, living in an American house or apartment, flying, eating an produce that's not locally grown by a small farmer in season, etc are immoral. The world does not have the resources for every citizen to live similarly. Is this really the argument that you're prepared to make?
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This approach cannot be universal - in a world where everyone sought RootofGood's retirement, there is no way everyone could take advantage of food stamps. This lack of universality, of sustainability, to me makes that approach immoral.
By this argument, engaging in any activity that uses resources that are anywhere close to the av American lifestyle is immoral. So driving a car, living in an American house or apartment, flying, eating an produce that's not locally grown by a small farmer in season, etc are immoral. The world does not have the resources for every citizen to live similarly. Is this really the argument that you're prepared to make?
You're begging the question. For that to be an ethical concern, you'd have to prove your assumptions there first.
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@Root:
It is your decision to make. I never suggested that everyone needs to do able body work. Not at all. I don't have a problem with someone volunteering. If you are choosing to volunteer, but are considering yourself to be "FIRE" while at the same time taking on benefits that are in place for those in "need" (be it moderately or desperately) than you are being hypocritical. This is just my opinion. We can agree to disagree.
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I have a spreadsheet that tracks my FI progress, and one of the columns is a sum of total tax paid over the journey to FI. By the time I hit FI, the government will have accumulated from me an amount equal to approximately 1/3 my net worth at that time.
With that in mind, I have zero moral qualms about fully utilizing any welfare, subsidy, tax break, or other program which I legally qualify for. :)
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I think this whole debate is about our values, right? Ethics are our moral gray area. Once you've drawn your line in the sand it's easy to argue either way.
This is a set of heart-decisions, not necessarily brain-decisions.
So how would you quantify your values (personal code) with regard to social programs and/or tax breaks?
Here are Mine:
1) Be financially self-sufficient. Take care of yourself and your family.
2) Contribute to a social safety net to prevent malnutrition, starvation, and death. Be compassionate.
3) When it comes to the social safety net, take only what you truly need. See #1
As an alternative to more arguments, I suppose I'd be curious what your lists look like. :)
SIS
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I think this whole debate is about our values, right? Ethics are our moral gray area. Once you've drawn your line in the stand it's easy to argue either way.
This is a set of heart-decisions, not necessarily brain-decisions.
So how would you quantify your values (personal code) with regard to social programs and/or tax breaks?
Here are Mine:
1) Be financially self-sufficient. Take care of yourself and your family.
2) Contribute to a social safety net to prevent malnutrition, starvation, and death. Be compassionate.
3) When it comes to the social safety net, take only what you truly need. See #1
As an alternative to more arguments, I suppose I'd be curious what your lists look like. :)
SIS
I like your list, SIS.
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I really like you list as well.
Oddly enough, for me, from a 'brain-decisions' standpoint, I agree with your list 100%.
From a 'heart-decisions' standpoint, I find myself conflicted. I probably got a bit too much of the selfish gene. xD
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Root, do you feel like your kids' school is beneficial to them, or is it another thing that you use because it is free? You mentioned earlier that they have top scores. In my experience with my own kids, this has meant they were not learning much in that setting.
I think their school is beneficial. Ignoring costs, it may not be the absolute best school for them, as I am sure there are boarding schools somewhere in the world that might push them harder. Or I could enroll them in supplemental schooling like Chinese or Japanese school on Saturdays.
Factoring in costs of local private schools and the general lack of quality compared to public schools, I think choosing a local private school would be a waste.
My kids have 16-17 kids in their class, which is smaller than our local private schools. There are lots of opportunities for one on one or small group instruction. The school does a great job with enrichment activities. My kids aren't necessarily the smartest kids in the class, but they are in the top few kids in their respective classes.
We also consider formal schooling as one part of their overall education. We give additional work on top of what the school requires. It's quite an epiphany when you realize you are ultimately responsible for your own kids' education, and school should be used as a part of that education plan.
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Yeah. RootOfGood's kids' principal seems pretty convinced that each free/reduced lunch student in his school causes his budget to go up by about $800, and that he is able to use this additional money to hire more teachers and reduce class sizes. This money may come with strings attached, but he and/or the school board consider it to be a worthwhile trade. Until proven otherwise, I'll assume the principal knows a thing or two about where the budget he manages comes from.
As I said, I've worked in a Title 1 school, and I've worked with the budget personally. Our county is fairly affluent (we have a few industries, but much of our county is a "bedroom community" for a neighboring city with lots of professional jobs), but a couple years ago my school became the first Title 1 high school in the county -- funny thing is, we're not the "poor" end of the county. Wanting to do this right, our principal put together a task force with two members from each of the core departments plus special ed. We were tasked with creating a proposal about how to use the small amount of money we were to receive to help the kids in need. We talked at tremendous length over multiple days about the number of things that could help -- remedial programs, expanded vocational classes, more books for the library, eReaders or other technology -- thinking we had lots of options available to us, we did not reach an agreement easily . . . finally we settled on two goals: 1) Most students who fail EOCs (End of Course tests) are freshmen. Most of those students did fine in middle school, but they failed to make the transition to high school. We would create a later summer "transition camp" to help them ease the gap between middle school and high school and provide them with the skills to start high school strong. This would be available to all incoming freshmen, but the students identified as at-risk by the middle school would be personally invited and encouraged to attend. Teachers would help with the camp in exchange for comp time, so this was going to be a fairly low-cost event. 2) The students who fail EOCs tend to fail multiple EOCs, they are likely to become discipline problems, and they are more likely to drop out. We decided we would add 1/2 a teacher to each of the core departments and would create a "Second chance" class, which would house all these troubled students together (so as not to diminish the other sections), which would be taught at a slower pace, and would be small in number. Where possible, new materials would be used rather than simply repeating what they'd just failed (i.e., all freshman English classes read Romeo & Juliet, so a different title would be on the agenda for the "Second Chance" class). These students would also receive extra help with skills such as note-taking and time management, things that would stand them in good stead for future classes. The principals would visit these classes frequently, even teaching some small lessons here and there, so that these at-risk students would see them as people rather than just administrators who had down punishments. All of us (plus the principal and the county office) were thrilled with these two ideas, thinking they'd really make a difference.
Both proposals, though clearly sound and definitely helpful to the issues at hand, were soundly rejected. After editing the proposals over the course of 4-5 months (the reasons for rejection began to seem random -- can't spend this money before the first day of school, can't identify those who've failed in such a way that other students will know, must be sustainable, cannot hire personnel -- it felt like a game of "gotcha" -- oh, you want this, well, we only allow that to schools whose colors are green and white, sorry -- okay, I exaggerate, but it felt like that), we finally hit up on a concept that none of us liked, but which was acceptable to the Title 1 folks: We have a special computer lab in the school, which is only used by students who have failed classes. They work on "credit recovery software" at their own pace, and they are supervised by a clerical staff member. It is not particularly a helpful addition to the school, and it has had a particularly negative effect on a few of our students: They prefer sitting in this computer lab clicking away at multiple choice questions 'til they find the right answers . . . over writing papers and discussing things in class. So some of them actually just sit through the class, intending all along to fail, knowing that they'll get the chance to knock the class out on the computer software.
Every one of us on the first task force resigned from the process in protest. Like it did any good.
Actually, the younger teachers have benefited financially from being a Title 1 school more than the students, but that's another topic altogether.
I'm probably biased because I think government pensions tend to retain the worst employees because the best employees leave for greener pastures. The worst employees are unemployable in the private sector due to poor performance, outdated skills, lack of work ethic or creativity, or some combination of those factors. This is an ugly, broad generalization
Why would we want a system that encouraged "the best employees" to leave for greener pastures? If we want government to run well, shouldn't we keep the government pastures green so that those employees will not be tempted to stray? The pension is one way of keeping pastures green.
Why would the worst employees be retained? If indeed their performance is poor, their skills are outdated, and so forth, why wouldn't they be fired?
I agree that this is an ugly, broad generalization, and it does not represent the workplace in which I've served for years. I can think of a handful of bad employees with whom I've worked over the years, and they didn't stay. A few have been fired, but most just leave because they're bad at their jobs, because they know the rest of us don't like them, or because they're pressured by admin and choose to leave before they can be fired.
There used to be something called pride in this country, people felt it when they worked hard and met their duties as parents and neighbors. Pride is earned, it isn't given. There's more important things in life than never missing a meal or scoring a handout, it's the pride I feel knowing I can fend for myself, feed my family and not be dependent on others. My path is hardwork, family, and morals, and I'd rather starve than take a handout. I want to meet people who share my values, that's why I'm typing here, and my path is clear, I hope everyone else can find their path.
Couldn't agree more.
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Yeah. RootOfGood's kids' principal seems pretty convinced that each free/reduced lunch student in his school causes his budget to go up by about $800, and that he is able to use this additional money to hire more teachers and reduce class sizes. This money may come with strings attached, but he and/or the school board consider it to be a worthwhile trade. Until proven otherwise, I'll assume the principal knows a thing or two about where the budget he manages comes from.
Both proposals, though clearly sound and definitely helpful to the issues at hand, were soundly rejected. After editing the proposals over the course of 4-5 months (the reasons for rejection began to seem random -- can't spend this money before the first day of school, can't identify those who've failed in such a way that other students will know, must be sustainable, cannot hire personnel -- it felt like a game of "gotcha" -- oh, you want this, well, we only allow that to schools whose colors are green and white, sorry -- okay, I exaggerate, but it felt like that), we finally hit up on a concept that none of us liked, but which was acceptable to the Title 1 folks: We have a special computer lab in the school, which is only used by students who have failed classes. They work on "credit recovery software" at their own pace, and they are supervised by a clerical staff member. It is not particularly a helpful addition to the school, and it has had a particularly negative effect on a few of our students: They prefer sitting in this computer lab clicking away at multiple choice questions 'til they find the right answers . . . over writing papers and discussing things in class. So some of them actually just sit through the class, intending all along to fail, knowing that they'll get the chance to knock the class out on the computer software.
Every one of us on the first task force resigned from the process in protest. Like it did any good.
What you have described - creative ways to fund and innovate education custom tailored to your specific student body and educational needs - is exactly what my school has done very successfully. In speaking with the principal, he specifically mentioned "more technology" as being rejected by the school because they already had way too many ipad/ipod/computers (working wifi is another issue...).
I am sure there are strings attached. From dealing with the exact same local-state-federal funding very extensively in a different field, I know there are certain strings on some pots of money and different strings on other pots of money. All I know is that my school benefited big time from the extra funding from all the free/reduced kids attending. I don't know what happened at your school that blocked a common sense plan to spend the funds efficiently. I do recall while researching that as you increase the % F/R lunch, there are less strings attached and you can "spread the wealth" more evenly, as long as the plan would still benefit the F/R kids. What was/is your F/R ratio? Ours is 80%, so it would be hard to tailor a reasonable program that could avoid benefiting F/R kids at our school.
I'm probably biased because I think government pensions tend to retain the worst employees because the best employees leave for greener pastures. The worst employees are unemployable in the private sector due to poor performance, outdated skills, lack of work ethic or creativity, or some combination of those factors. This is an ugly, broad generalization
Why would we want a system that encouraged "the best employees" to leave for greener pastures? If we want government to run well, shouldn't we keep the government pastures green so that those employees will not be tempted to stray? The pension is one way of keeping pastures green.
Why would the worst employees be retained? If indeed their performance is poor, their skills are outdated, and so forth, why wouldn't they be fired?
We don't want a system that encourages the best employees to leave for greener pastures. That's what I said - pensions do that. I have heard many times "we underpay you but hey you'll get a sweet pension. Try getting that on the private side".
The field I was in had a strong private employment market, and I constantly saw a stream of talent walk out the front door for 20-50% more in salary and frequently better benefits (insurance, 401k match, bonuses, etc). And an expense account and the ability to spend more than $65 on a hotel when you are stuck traveling for business overnight and away from your family.
What you are left with are employees that might not commit gross negligence too often, but "highly competent" isn't a title I would generally give them. But hey, maybe "not committing gross negligence" is good enough for government work?
+1 on the firing incompetent employees thing. I've just never seen it happen in practice. Our school did fire 80% of the faculty when they "rebooted" but those employees mostly found teaching positions elsewhere in the district. Somebody else's problem, right?
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In speaking with the principal, he specifically mentioned "more technology" as being rejected by the school because they already had way too many ipad/ipod/computers (working wifi is another issue...) . . .
I am sure there are strings attached . . . Ours is 80%, so it would be hard to tailor a reasonable program that could avoid benefiting F/R kids at our school.
We don't want a system that encourages the best employees to leave for greener pastures. That's what I said - pensions do that.
employees thing. I've just never seen it happen in practice. Our school did fire 80% of the faculty when they "rebooted" but those employees mostly found teaching positions elsewhere in the district. Somebody else's problem, right?
Well, the technology thing might be easy to explain in that one school might've already had adequate computers, while the other didn't . . . but it wasn't a matter of "strings attached". It was more like, "We've already decided how we want you to spend this money, and we're going to make you continue to guess /resubmit your plans 'til you happen to select the thing that's in our minds."
I don't know our free lunch ratio now. When I was on the task force, I could've given you exact details. I'm sure it's nowhere near 80%.
I don't understand the comment about pensions. Pensions encourage people to STAY in the job, not leave. A person who works in a job only 3-4 years gets essentially nothing; rather, a person must put in significant years to qualify for a pension. So that encourages people to STAY.
I've seen teachers (non-teachers) fired from schools.
I've seen more told, "Look, we're not happy with you, and we're going to start documenting your activities (or lack of activities) with the intention of firing you. If you leave now, voluntarily, you'll leave without a black mark on your record."
And I've seen even more people leave because they realize they just don't fit into the teaching profession. Out of every five brand-new teachers who begin teaching this year, three of them will leave within five years. That's a statistic that's been kicking around education departments for more than a decade, and it seems to remain relatively stable. College programs are putting students into classrooms (and having them teach small, maybe 15 minute lessons) earlier in their college careers, and that's a good thing -- it weeds out some who aren't right for the job. And in teaching -- perhaps all jobs -- having the right personality and the right set of skills is about 70% of success in the job. You can learn the material for any course, but you cannot learn the right personality.
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I don't understand the comment about pensions. Pensions encourage people to STAY in the job, not leave. A person who works in a job only 3-4 years gets essentially nothing; rather, a person must put in significant years to qualify for a pension. So that encourages people to STAY.
It encourages people to either bail early or stay the remainder of their career; if people don't want to stay their entire career in federal government, it encourages them to bail as soon as possible (or as soon as they give serious thought to retirement).
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I don't understand the comment about pensions. Pensions encourage people to STAY in the job, not leave. A person who works in a job only 3-4 years gets essentially nothing; rather, a person must put in significant years to qualify for a pension. So that encourages people to STAY.
It encourages people to either bail early or stay the remainder of their career; if people don't want to stay their entire career in federal government, it encourages them to bail as soon as possible (or as soon as they give serious thought to retirement).
Yep. I started off as a pensioned faculty member of land grant university. I left after 2.5 years, once I realized that I wasn't interested in spending 30-40 years there. I may have stayed longer, but the fact that I had a pension made it more advantageous to leave as soon as I found another job, which I did.
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I don't understand the comment about pensions. Pensions encourage people to STAY in the job, not leave. A person who works in a job only 3-4 years gets essentially nothing; rather, a person must put in significant years to qualify for a pension. So that encourages people to STAY.
It encourages people to either bail early or stay the remainder of their career; if people don't want to stay their entire career in federal government, it encourages them to bail as soon as possible (or as soon as they give serious thought to retirement).
Yes, as you've written it, I agree.
Jobs that include pensions tend to be lower-paying -- it's just the way things work. It makes no sense to accept the lower-paying job and only stay for, say, 4-5 years. Doing that is accepting the short end of the stick . . . twice. You're not being paid well AND you're not staying long enough to get the benefit of the pension.
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Doing that is accepting the short end of the stick . . . twice. You're not being paid well AND you're not staying long enough to get the benefit of the pension.
It's recognizing an issue and dealing with it, rather than sticking it out because of sunk cost bias
http://en.wikipedia.org/wiki/Sunk_costs#Loss_aversion_and_the_sunk_cost_fallacy
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Yes, as you've written it, I agree.
Jobs that include pensions tend to be lower-paying -- it's just the way things work. It makes no sense to accept the lower-paying job and only stay for, say, 4-5 years. Doing that is accepting the short end of the stick . . . twice. You're not being paid well AND you're not staying long enough to get the benefit of the pension.
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I've done exactly that over the past 5 years. I will hit 5 years of service a week from today and will be giving notice a month later. When I took this job, it was one of the few available so it was a case of the prettiest horse in the glue factory. However, 18 to 24 months in I could have hopped to a new place for far higher compensation. If I were contemplating a career of another 20 years, I would have done so with alacrity. It was clear that the place tended to collect career dullards while the brightest and most ambitious either never showed up or did very short tours of duty. IOW, I saw exactly what RootofGood described. Consequently, the place does hugely important work that really needs far better talent than what they usually get, but they struggle to attract and retain good people. I would actually be willing to stick around and help them do what I think is their important work, but there appears to be no way they could make it worth my while.
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I've done exactly that over the past 5 years. I will hit 5 years of service a week from today and will be giving notice a month later. When I took this job, it was one of the few available so it was a case of the prettiest horse in the glue factory. However, 18 to 24 months in I could have hopped to a new place for far higher compensation. If I were contemplating a career of another 20 years, I would have done so with alacrity. It was clear that the place tended to collect career dullards while the brightest and most ambitious either never showed up or did very short tours of duty. IOW, I saw exactly what RootofGood described. Consequently, the place does hugely important work that really needs far better talent than what they usually get, but they struggle to attract and retain good people. I would actually be willing to stick around and help them do what I think is their important work, but there appears to be no way they could make it worth my while.
Gross, pervasive incompetence throughout your organization and systemic antipathy toward doing a good job? Were we coworkers? No one in seniority wants to speak up because, guess what, they are all sucking on the pension teat and are skeered to death to say anything.
Typical day: CFO or one of his directors: "Uh, hey Root, we're going to approve this $26 million transfer of funds. Cool? Our financial trustee says we have to". Me: "Hell no, that's totally incorrect and you are going to blow up our entire financial model and we'll be in default and what will Moody's and S&P and Fitch do to our credit rating? Look, read the bond covenants and fiduciary agreements - it shows exactly what we have to do with our funds" CFO: "Let's take this offline. I don't want this in email". WTF?! How many days can you put up with it? The only reward you get is more work because you are identified as somewhat more competent within the organization, and no one else cares to pay attention to extremely important details.
It was disgusting to watch what people were willing to do (or rather, omit doing) just because they wanted that sweet gubmint pension and didn't want to risk termination for speaking up.
Maybe knowing how much waste and incompetence exists at the top level of government organizations leads me to think these ethical discussions about free lunches or EIC or SNAP benefits are irrelevant drops in the bucket.
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I've done exactly that over the past 5 years. I will hit 5 years of service a week from today and will be giving notice a month later. When I took this job, it was one of the few available so it was a case of the prettiest horse in the glue factory. However, 18 to 24 months in I could have hopped to a new place for far higher compensation. If I were contemplating a career of another 20 years, I would have done so with alacrity. It was clear that the place tended to collect career dullards while the brightest and most ambitious either never showed up or did very short tours of duty. IOW, I saw exactly what RootofGood described. Consequently, the place does hugely important work that really needs far better talent than what they usually get, but they struggle to attract and retain good people. I would actually be willing to stick around and help them do what I think is their important work, but there appears to be no way they could make it worth my while.
Gross, pervasive incompetence throughout your organization and systemic antipathy toward doing a good job? Were we coworkers? No one in seniority wants to speak up because, guess what, they are all sucking on the pension teat and are skeered to death to say anything.
Typical day: CFO or one of his directors: "Uh, hey Root, we're going to approve this $26 million transfer of funds. Cool? Our financial trustee says we have to". Me: "Hell no, that's totally incorrect and you are going to blow up our entire financial model and we'll be in default and what will Moody's and S&P and Fitch do to our credit rating? Look, read the bond covenants and fiduciary agreements - it shows exactly what we have to do with our funds" CFO: "Let's take this offline. I don't want this in email". WTF?! How many days can you put up with it? The only reward you get is more work because you are identified as somewhat more competent within the organization, and no one else cares to pay attention to extremely important details.
It was disgusting to watch what people were willing to do (or rather, omit doing) just because they wanted that sweet gubmint pension and didn't want to risk termination for speaking up.
Maybe knowing how much waste and incompetence exists at the top level of government organizations leads me to think these ethical discussions about free lunches or EIC or SNAP benefits are irrelevant drops in the bucket.
One of my coworkers (who has since moved on) once told me something that turned out to be very wise: "Its not a bad idea to publicly screw up on something minor occasionally. That way you will not be identified as competent and in line for extra work."
He was exactly right, but I could never do it due to my own personal demons/professional pride. Ah well. I vest on Friday and am a month away from bailing, so it is all water under the bridge at this point.
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I've done exactly that over the past 5 years. I will hit 5 years of service a week from today and will be giving notice a month later. When I took this job, it was one of the few available so it was a case of the prettiest horse in the glue factory. However, 18 to 24 months in I could have hopped to a new place for far higher compensation. If I were contemplating a career of another 20 years, I would have done so with alacrity. It was clear that the place tended to collect career dullards while the brightest and most ambitious either never showed up or did very short tours of duty. IOW, I saw exactly what RootofGood described. Consequently, the place does hugely important work that really needs far better talent than what they usually get, but they struggle to attract and retain good people. I would actually be willing to stick around and help them do what I think is their important work, but there appears to be no way they could make it worth my while.
Gross, pervasive incompetence throughout your organization and systemic antipathy toward doing a good job? Were we coworkers? No one in seniority wants to speak up because, guess what, they are all sucking on the pension teat and are skeered to death to say anything.
Typical day: CFO or one of his directors: "Uh, hey Root, we're going to approve this $26 million transfer of funds. Cool? Our financial trustee says we have to". Me: "Hell no, that's totally incorrect and you are going to blow up our entire financial model and we'll be in default and what will Moody's and S&P and Fitch do to our credit rating? Look, read the bond covenants and fiduciary agreements - it shows exactly what we have to do with our funds" CFO: "Let's take this offline. I don't want this in email". WTF?! How many days can you put up with it? The only reward you get is more work because you are identified as somewhat more competent within the organization, and no one else cares to pay attention to extremely important details.
It was disgusting to watch what people were willing to do (or rather, omit doing) just because they wanted that sweet gubmint pension and didn't want to risk termination for speaking up.
Maybe knowing how much waste and incompetence exists at the top level of government organizations leads me to think these ethical discussions about free lunches or EIC or SNAP benefits are irrelevant drops in the bucket.
One of my coworkers (who has since moved on) once told me something that turned out to be very wise: "Its not a bad idea to publicly screw up on something minor occasionally. That way you will not be identified as competent and in line for extra work."
He was exactly right, but I could never do it due to my own personal demons/professional pride. Ah well. I vest on Friday and am a month away from bailing, so it is all water under the bridge at this point.
I had a sticky note on my office wall. "No sea demasiado competente". No one ever noticed my secret note. I wonder if all the other people I worked with were secretly highly competent but had learned long ago to feign ignorance? Maybe they were smarter than me after all. I feel like a sucker now. :) Underwater bridges indeed.
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I've done exactly that over the past 5 years. I will hit 5 years of service a week from today and will be giving notice a month later. When I took this job, it was one of the few available so it was a case of the prettiest horse in the glue factory. However, 18 to 24 months in I could have hopped to a new place for far higher compensation. If I were contemplating a career of another 20 years, I would have done so with alacrity. It was clear that the place tended to collect career dullards while the brightest and most ambitious either never showed up or did very short tours of duty. IOW, I saw exactly what RootofGood described. Consequently, the place does hugely important work that really needs far better talent than what they usually get, but they struggle to attract and retain good people. I would actually be willing to stick around and help them do what I think is their important work, but there appears to be no way they could make it worth my while.
Gross, pervasive incompetence throughout your organization and systemic antipathy toward doing a good job? Were we coworkers? No one in seniority wants to speak up because, guess what, they are all sucking on the pension teat and are skeered to death to say anything.
Typical day: CFO or one of his directors: "Uh, hey Root, we're going to approve this $26 million transfer of funds. Cool? Our financial trustee says we have to". Me: "Hell no, that's totally incorrect and you are going to blow up our entire financial model and we'll be in default and what will Moody's and S&P and Fitch do to our credit rating? Look, read the bond covenants and fiduciary agreements - it shows exactly what we have to do with our funds" CFO: "Let's take this offline. I don't want this in email". WTF?! How many days can you put up with it? The only reward you get is more work because you are identified as somewhat more competent within the organization, and no one else cares to pay attention to extremely important details.
It was disgusting to watch what people were willing to do (or rather, omit doing) just because they wanted that sweet gubmint pension and didn't want to risk termination for speaking up.
Maybe knowing how much waste and incompetence exists at the top level of government organizations leads me to think these ethical discussions about free lunches or EIC or SNAP benefits are irrelevant drops in the bucket.
One of my coworkers (who has since moved on) once told me something that turned out to be very wise: "Its not a bad idea to publicly screw up on something minor occasionally. That way you will not be identified as competent and in line for extra work."
He was exactly right, but I could never do it due to my own personal demons/professional pride. Ah well. I vest on Friday and am a month away from bailing, so it is all water under the bridge at this point.
I had a sticky note on my office wall. "No sea demasiado competente". No one ever noticed my secret note. I wonder if all the other people I worked with were secretly highly competent but had learned long ago to feign ignorance? Maybe they were smarter than me after all. I feel like a sucker now. :) Underwater bridges indeed.
heh, as one of my favorite authors stuck in his books," we've all passed a lot of water since then."
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I honestly don't think it is nonsense. I'd throw collecting government pensions in there with the other government handouts. I mean if you don't really "need" the government pension, should you take it and deplete the funds of the pension plan? Part of the pension funding comes straight out of the public treasury (ie taxpayers' pockets). Why not withdraw your contributions (plus interest) and forfeit your pension if you are highly principled? I see no one opting for that choice.
Yes, it is nonsense. You are only partly right. The old federal retirement system (the Civil Service Retirement System, or CSRS) was a 100% defined benefit plan, and pretty generous (something like 80% of salary benefit), and a portion of that system remains an unfunded liability, until those people and their beneficiaries die off. But CSRS was phased out in 1984, and replaced with the Federal Employees Retirement System, of FERS. FERS is a part defined benefit (pension), part defined contribution (TSP, the Fed's "401k") plan, and FERS employees also contribute to Social Security. The FERS pension system is 100% funded (for at least the next 80 years), by a combination of employee and employer contributions made every two weeks. See for yourself: http://www.fas.org/sgp/crs/misc/R42741.pdf
Now, you can argue about whether federal employees are paid too much for what they do (evidence suggests that in more menial jobs, they are), but the federal workforce is dominated by people with advanced degrees doing high-skill functions like lawyers, scientists (think NASA, CDC, etc), engineers, doctors (VA), etc., many of whom are paid salaries that are well below what their private sector counterparts receive. But the tradeoff for accepting that lower current salary is accepting a portion of their compensation in the form of deferred salary. Calling a deferred benefit earned from one's labor a handout is highly disingenous and patently false.
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Maybe knowing how much waste and incompetence exists at the top level of government organizations leads me to think these ethical discussions about free lunches or EIC or SNAP benefits are irrelevant drops in the bucket.
And if you believe that similar levels of waste and incompetence don't exist in the private sector, I've got a bridge to sell you.
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Could someone briefly explain what SNAP, EIC and a Pell Grant are for us non-US people please so I can covert it into a UK equivalent and vote? Thanks :)
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Could someone briefly explain what SNAP, EIC and a Pell Grant are for us non-US people please so I can covert it into a UK equivalent and vote? Thanks :)
SNAP = food/nutrition assistance for low-income families.
EIC = Earned Income Credit which applies to low income families and generally results in them paying no income tax, or actually receiving a refund on taxes they didn't pay.
Pell Grant = needs-based government higher education grants for students from low-income backgrounds.
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Could someone briefly explain what SNAP, EIC and a Pell Grant are for us non-US people please so I can covert it into a UK equivalent and vote? Thanks :)
SNAP = food/nutrition assistance for low-income families.
EIC = Earned Income Credit which applies to low income families and generally results in them paying no income tax, or actually receiving a refund on taxes they didn't pay.
Pell Grant = needs-based government higher education grants for students from low-income backgrounds.
Awesome, thanks.
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I honestly don't think it is nonsense. I'd throw collecting government pensions in there with the other government handouts. I mean if you don't really "need" the government pension, should you take it and deplete the funds of the pension plan? Part of the pension funding comes straight out of the public treasury (ie taxpayers' pockets). Why not withdraw your contributions (plus interest) and forfeit your pension if you are highly principled? I see no one opting for that choice.
Yes, it is nonsense. You are only partly right. The old federal retirement system (the Civil Service Retirement System, or CSRS) was a 100% defined benefit plan, and pretty generous (something like 80% of salary benefit), and a portion of that system remains an unfunded liability, until those people and their beneficiaries die off. But CSRS was phased out in 1984, and replaced with the Federal Employees Retirement System, of FERS. FERS is a part defined benefit (pension), part defined contribution (TSP, the Fed's "401k") plan, and FERS employees also contribute to Social Security. The FERS pension system is 100% funded (for at least the next 80 years), by a combination of employee and employer contributions made every two weeks. See for yourself: http://www.fas.org/sgp/crs/misc/R42741.pdf
Now, you can argue about whether federal employees are paid too much for what they do (evidence suggests that in more menial jobs, they are), but the federal workforce is dominated by people with advanced degrees doing high-skill functions like lawyers, scientists (think NASA, CDC, etc), engineers, doctors (VA), etc., many of whom are paid salaries that are well below what their private sector counterparts receive. But the tradeoff for accepting that lower current salary is accepting a portion of their compensation in the form of deferred salary. Calling a deferred benefit earned from one's labor a handout is highly disingenous and patently false.
Well said dude. Just a general note about CSRS to those who may not know, to get the full 80% based on your highest paid 1095 calendar days (called hi-3 {years}) that would require 42 years of federal service. Didn't want people to think all those under the CSRS system received an automatic 80% pension, haha.