OK - so this is a board with primarily a young to middle age membership, a nice percentage even well to do. But, really, in what universe do you live? I ask that in all sincerity, wondering in which gated community or sheltered environment you might live.
Rant:
Government Program makes Social Security sound like a hand out, it is not a hand out! That is nothing but current political rhetoric and clueless Millenial spin.
SS was originally touted as a retirement program for all citizens. There was no 401K and only the big companies had pension plans. It was and is forced participation.
So how is this a hand out???
Millions of people including myself have paid into SS during their long working lives - often 30-40 even 50 working years and you would deny us or make it sound like a hand out? The hell!
If I could I would take it in one lump sum, with interest if you please. Instead I've loaned my money to the government for years, so they could fund other programs with no personal access to my own money, not even in an emergency. I feel cheated and I am, when I see that the monthly payments remained at zero percent living increase or at a paltry 0.03% - which by the way is the exact amount my Medicare insurance premium went up by. Result - zero increase for me.
Letting the program languish at zero percent increase is an effective political measure to throttle the program. According to my fiendishly clever uber Republican nephew, the program will be phased out altogether in seven to eight years. I noticed on CNN this morning that they were actually sawing on Medicare in one of their concessions to the Conservative hold outs while debating the Health Care Bill .....
So perhaps he is right on.
SS is a good and much needed program as evidenced by just about every response given here - only a fool would deny that. Entitlement? Hell yes - I am entitled to the money I paid in and if it were you and your own money, you'd see it the same way.
You want a new system or nothing at all? Then give me back the money I paid into SS, but you can't, can you?, because you already pulled it out of SS and funded God knows what. This is no different than a private pension plan going bust due to mismanagement.
End of rant .....
@Jrr85 - I don't think we have to worry about 80% SS payments too much, people will be glad to get anything at all. The ultimate goal is to get rid of SS altogether and maybe they will. They have in essence begun looking for ways to defund it and the current political regime will not hesitate to gut it, if they get a chance. It will create another ever widening chasm between the have and the have nots. Interesting times we live in, in every sense of the word.
@Dicey - I agree - FU money is essential, but so is rock solid medical coverage and living healthy with plenty of pro-active preventative care - not to mention enjoying your life and living a little, 'cause you never know what tomorrow will bring.
You have a very passionate argument, and I see where you are coming from. anyone who is working is paying into SS and feeling the burn. I agree and disagree with you.
You (and all of us that pay in to SS) 'deserve' the eventual pay out because we paid in. The older generations who already paid in deserve it to. Due to the design of the system, higher earners by far support lower earners. And people that work longer support people who don't work as long. We'd have to really dig into the details to say whether or not the FIRE community is screwed or abused to SS; they tend to be higher earners but pay into the system longer.
The big concern is whether or not SS is sustainable; whether or not enough money goes in to support what is 'owed' to people. And further, whether or not the eventual pay out is equivalently fair to all generations. This is complicated because of inflation, cost of living, how they change with time, etc... Probably we need a PhD economist to even begin to answer those questions (and I guess some research must be out there already on this).
With all that said, millenials tend to think of SS as being an unreliable system that will eventually go bust, and thus they think they are paying in but wont receive a pay out like older generations have/will. Probably this is false, but I don't really know. If it does go bust, or if the pay outs do get worse, then it absolutely is true that the millenials (or whatever younger generations) are footing the bills for older generations.
Here's something from the SS govt website:
"The concepts of solvency, sustainability, and budget impact are common in discussions of Social Security, but are not well understood. Currently, the Social Security Board of Trustees projects program cost to rise by 2035 so that taxes will be enough to pay for only 75 percent of scheduled benefits. This increase in cost results from population aging, not because we are living longer, but because birth rates dropped from three to two children per woman. Importantly, this shortfall is basically stable after 2035; adjustments to taxes or benefits that offset the effects of the lower birth rate may restore solvency for the Social Security program on a sustainable basis for the foreseeable future. Finally, as Treasury debt securities (trust fund assets) are redeemed in the future, they will just be replaced with public debt. If trust fund assets are exhausted without reform, benefits will necessarily be lowered with no effect on budget deficits."
So one possibility is that taxes are increased in the future so that the younger generations can continue to receive their full payout. However, if this is what happens, then the future younger generations will be paying more in taxes then the older ones. And if this is the case, then the older generations had their bill footed by the younger generations.
With that said, it's tempting to think that we should just do away with SS. I don't think this is necessarily the right reason either. The reason is because people are stupid. A good portion of the population doesn't know how to take care of their finances (or themselves in general sometimes), and therefore govt intervention i needed. SS forces people to save for their future (somewhat indirectly). And it also effectively taxes the higher earners to support the lower earners. Without SS, presumably older people would have shorter lifespans and such due to not having enough money in old age.
On the other hand, all of these social systems make things really fucking complicated and they are definitely not a well-oiled-machine.
Part of me thinks that we should just let people who don't know how to take care of themselves die off.... survival of the fittest or whatever. Of course, there are some people that have more complicated situations (e.g. not entirely their fault). But on the whole, I think it's better for the welfare of the people to support older people financially. If I was old and hadn't saved money, I can't imagine how terrifying it would be to be too old to work and not have money to support myself.
That said, it enrages me when older people make stupid money decisions with their limited resources... but that's what happens in a free society.