Would you forego Social Security if you could invest in own account instead?

[libertarian4321]

Would you forego Social Security if you could invest in own account instead?

HELL YES!  Social Insecurity is a massive rip off. 

[Curbside Prophet]

Definitely.  They can even keep what I've already put in.  Will never happen though, politicians would lose way too many votes from the greedy baby boomers. 

[mxt0133]

I haven't read through the entire post but I hope some has already pointed this out. Social Security is not an individual savings, investment or retirement system.  It is social safety program.  It is meant to help people that are born disabled, those who become disabled, those who are minors that loose a parent, caretaker, guardian, or those who can no work due to old age.  That is what it was meant for.

For those of you that choose not to participate in Social Security of you had the choice, do you buy life, home owners, auto beyond basic liability, or liability insurance?  If you do then you should cancel your policies immediately because you can get better returns with that money than the expected return you will get on the policy.

[PFHC]

For those of you that choose not to participate in Social Security of you had the choice, do you buy life, home owners, auto beyond basic liability, or liability insurance?

Nope.

And I would chose not to participate. Unfortunately, it is compulsory.

[Rufus.T.Firefly]

For those of you that choose not to participate in Social Security of you had the choice, do you buy life, home owners, auto beyond basic liability, or liability insurance?

Nope.

And I would chose not to participate. Unfortunately, it is compulsory.

Same. I would not participate and I do not buy excessive insurance such a those listed above. Self-insuring is an provides a great ROI.

[pbkmaine]

Not me. I'm 60.

[MoneyCat]

If I could have access to that money to invest as I wish, I would do much better than what the government will provide. However, I have an above average IQ and I am a very talented person. We need to remember that 50% of the American people have an IQ lower than 100. They really aren't capable of handling themselves financially like those of us on this forum. They have to be looked after so they won't end up trying to live off cat food in their old age.

[Drifterrider]

Definitely.  They can even keep what I've already put in.  Will never happen though, politicians would lose way too many votes from the greedy baby boomers.

I find that funny.  The "greedy" baby boomers are the ones who have made is possible for the next generation (I take it yours) to have the cool things that didn't used to exist.

[PFHC]

Definitely.  They can even keep what I've already put in.  Will never happen though, politicians would lose way too many votes from the greedy baby boomers.

I find that funny.  The "greedy" baby boomers are the ones who have made is possible for the next generation (I take it yours) to have the cool things that didn't used to exist.

Like crushing debt, outsourced manufacturing, crumbling infrastructure, college prices that have out paced inflation by 200x, housing prices that have out paced inflation by 6x, food prices by 20x, SS that will be bankrupt, skyrocketing healthcare prices...

Do I need to go on?

All that said, I'm thankful for the lessons that BB generation has taught us. They have been invaluable in driving the next generations to move the world towards a better place.

[Drifterrider]

Definitely.  They can even keep what I've already put in.  Will never happen though, politicians would lose way too many votes from the greedy baby boomers.

I find that funny.  The "greedy" baby boomers are the ones who have made is possible for the next generation (I take it yours) to have the cool things that didn't used to exist.

Like crushing debt, outsourced manufacturing, crumbling infrastructure, college prices that have out paced inflation by 200x, housing prices that have out paced inflation by 6x, food prices by 20x, SS that will be bankrupt, skyrocketing healthcare prices...

Do I need to go on?

All that said, I'm thankful for the lessons that BB generation has taught us. They have been invaluable in driving the next generations to move the world towards a better place.

Medicare, Medicaid, 401K, Roth IRA, safer cars, better medicine, computers, cell phones, etc.  Do I need to go on?

You seem to believe you are "Owed" something. 

Now, get off my lawn.

[PFHC]

 safer cars, better medicine, computers, cell phones, etc.

All done by generation X while the BB fuddies stood by and tried to figure out how their hotmail worked. Don't try to take claim for that which your generation doesn't understand.

You seem to believe you are "Owed" something. 

I am. For the baby boomer generation to stop the social parasitism, shut the fuck up, and get out of the way.

[FrugalToque]

Definitely.  They can even keep what I've already put in.  Will never happen though, politicians would lose way too many votes from the greedy baby boomers.

I find that funny.  The "greedy" baby boomers are the ones who have made is possible for the next generation (I take it yours) to have the cool things that didn't used to exist.

Like crushing debt, outsourced manufacturing, crumbling infrastructure, college prices that have out paced inflation by 200x, housing prices that have out paced inflation by 6x, food prices by 20x, SS that will be bankrupt, skyrocketing healthcare prices...

Do I need to go on?

All that said, I'm thankful for the lessons that BB generation has taught us. They have been invaluable in driving the next generations to move the world towards a better place.

Medicare, Medicaid, 401K, Roth IRA, safer cars, better medicine, computers, cell phones, etc.  Do I need to go on?

You seem to believe you are "Owed" something. 

Now, get off my lawn.

Yeah, I can't stand kids these days.  They think they can quit high school in grade 10, walk into a factory and get a secure, union job with benefits and a solid defined benefits pension plan.

Oh, no, wait ... that's the boomers.

But curse those kids these days for thinking they deserve the same thing their parents and grandparents got.

Toque.

[Bucksandreds]

Definitely.  They can even keep what I've already put in.  Will never happen though, politicians would lose way too many votes from the greedy baby boomers.

I find that funny.  The "greedy" baby boomers are the ones who have made is possible for the next generation (I take it yours) to have the cool things that didn't used to exist.

Like crushing debt, outsourced manufacturing, crumbling infrastructure, college prices that have out paced inflation by 200x, housing prices that have out paced inflation by 6x, food prices by 20x, SS that will be bankrupt, skyrocketing healthcare prices...

Do I need to go on?

All that said, I'm thankful for the lessons that BB generation has taught us. They have been invaluable in driving the next generations to move the world towards a better place.

Medicare, Medicaid, 401K, Roth IRA, safer cars, better medicine, computers, cell phones, etc.  Do I need to go on?

You seem to believe you are "Owed" something. 

Now, get off my lawn.

Yeah, I can't stand kids these days.  They think they can quit high school in grade 10, walk into a factory and get a secure, union job with benefits and a solid defined benefits pension plan.

Oh, no, wait ... that's the boomers.

But curse those kids these days for thinking they deserve the same thing their parents and grandparents got.

Toque.

I stand with the crowd that believes baby boomers were given more opportunity than any generation in the history of time and managed to destroy far more than they fixed. Good riddance to the worst generation.  Sad that it was the one that followed the greatest generation.

[infogoon]

I stand with the crowd that believes baby boomers were given more opportunity than any generation in the history of time and managed to destroy far more than they fixed. Good riddance to the worst generation.  Sad that it was the one that followed the greatest generation.

"Grandpa, like most of the fun-loving gang who built the Plants, just want to die or have his brain turn to oatmeal before it becomes too apparent exactly what a nightmare he and his buddies have saddled their descendants with."

--Douglas Coupland, _Shampoo Planet_

[BoonDogle]

I absolutely would opt out of SS if given the chance.  Alas, the "smart" people in Washington say I am not financially astute enough to make that decision.

People should be given the choice, even if they don't always make the "good decision".  Then they should be held accountable for their choices.  That is the foundation of liberty, something many people only believe in when there is no chance that people will make a "wrong choice".

[Drifterrider]

 safer cars, better medicine, computers, cell phones, etc.

All done by generation X while the BB fuddies stood by and tried to figure out how their hotmail worked. Don't try to take claim for that which your generation doesn't understand.

You seem to believe you are "Owed" something. 

Shut your yap and get back to 10th grade class.  I suggest history.

Salk was Gen X?  Gates? Woz?  BB is from 1945 to 1964. 

You are owed nothing.  Stop blaming others for your failure to launch.

[dignam]

Absof***inglutely I would opt out.  My generation is getting a negative return on our SS contributions starting around 2036.  The whole SS mess just makes my blood boil so I won't get into it...

[Mississippi Mudstache]

I absolutely would opt out of SS if given the chance.  Alas, the "smart" people in Washington say I am not financially astute enough to make that decision.

No, they've concluded that the general populace is incapable of saving for their own retirements (and they're correct). They do not know/care about you personally, so don't take it personally.

[ender]

I absolutely would opt out of SS if given the chance.  Alas, the "smart" people in Washington say I am not financially astute enough to make that decision.

No, they've concluded that the general populace is incapable of saving for their own retirements (and they're correct). They do not know/care about you personally, so don't take it personally.

I think if anything social security should be expanded in such a way that:

• Recognizes most people won't save for retirement
• Allows those that do to opt out, based on their own retirement savings

The first bullet is simply reality. We can argue all we want about whether people should save money or whether the government should let people starve to death, but the reality is many people won't save for retirement themselves.

However, someone saving money into qualified retirement plans and/or pensions should be allowed to slowly reduce their SS obligation proportionally to how much they've saved. I'm not sure what this should be, but call it the ability to opt out of 1.5% of the Dec31st value of your qualified plans worth of SS taxes. So if you have $200k in IRA/401k/403b etc, you can opt out of $3k worth of SS tax for that year.

[Mississippi Mudstache]

I absolutely would opt out of SS if given the chance.  Alas, the "smart" people in Washington say I am not financially astute enough to make that decision.

No, they've concluded that the general populace is incapable of saving for their own retirements (and they're correct). They do not know/care about you personally, so don't take it personally.

I think if anything social security should be expanded in such a way that:

• Recognizes most people won't save for retirement
• Allows those that do to opt out, based on their own retirement savings

The first bullet is simply reality. We can argue all we want about whether people should save money or whether the government should let people starve to death, but the reality is many people won't save for retirement themselves.

However, someone saving money into qualified retirement plans and/or pensions should be allowed to slowly reduce their SS obligation proportionally to how much they've saved. I'm not sure what this should be, but call it the ability to opt out of 1.5% of the Dec31st value of your qualified plans worth of SS taxes. So if you have $200k in IRA/401k/403b etc, you can opt out of $3k worth of SS tax for that year.

No doubt, I would be better off if I could invest my SS money myself. Your suggestion is intriguing, and definitely better than a simple opt-in/opt-out option that the Republicans have been pushing for years. Personally, I'm willing to give up some investment returns to ensure old people don't die in destitution, but it would be nice to have our cake and eat it too. I'm just not sure that SS could stand up under its own weight if (mostly) higher-income people were able to opt out.

[ender]

No doubt, I would be better off if I could invest my SS money myself. Your suggestion is intriguing, and definitely better than a simple opt-in/opt-out option that the Republicans have been pushing for years. Personally, I'm willing to give up some investment returns to ensure old people don't die in destitution, but it would be nice to have our cake and eat it too. I'm just not sure that SS could stand up under its own weight if (mostly) higher-income people were able to opt out.

You could simultaneously remove the income cap for SS, too, similar to medicaid, or at least increase it. Perhaps anything above the current income cap has a lower SS rate - maybe 5% total (2.5/2.5 individual/employer).

Combined with the ability to opt-out of some SS tax, it might result in no effect on income earners who have saved for retirement. While those who haven't pay more into SS.

[Jrr85]

I absolutely would opt out of SS if given the chance.  Alas, the "smart" people in Washington say I am not financially astute enough to make that decision.

No, they've concluded that the general populace is incapable of saving for their own retirements (and they're correct). They do not know/care about you personally, so don't take it personally.

I think if anything social security should be expanded in such a way that:

• Recognizes most people won't save for retirement
• Allows those that do to opt out, based on their own retirement savings

The first bullet is simply reality. We can argue all we want about whether people should save money or whether the government should let people starve to death, but the reality is many people won't save for retirement themselves.

However, someone saving money into qualified retirement plans and/or pensions should be allowed to slowly reduce their SS obligation proportionally to how much they've saved. I'm not sure what this should be, but call it the ability to opt out of 1.5% of the Dec31st value of your qualified plans worth of SS taxes. So if you have $200k in IRA/401k/403b etc, you can opt out of $3k worth of SS tax for that year.

If the government is worried about people starving to death because they don't save, it seems like it would make a lot more sense to do forced savings, rather than enact an ~15% tax on wages and promise workers that the next generation will pay them when they retire. 

[MoneyCat]

Definitely.  They can even keep what I've already put in.  Will never happen though, politicians would lose way too many votes from the greedy baby boomers.

I find that funny.  The "greedy" baby boomers are the ones who have made is possible for the next generation (I take it yours) to have the cool things that didn't used to exist.

Like crushing debt, outsourced manufacturing, crumbling infrastructure, college prices that have out paced inflation by 200x, housing prices that have out paced inflation by 6x, food prices by 20x, SS that will be bankrupt, skyrocketing healthcare prices...

Do I need to go on?

All that said, I'm thankful for the lessons that BB generation has taught us. They have been invaluable in driving the next generations to move the world towards a better place.

Medicare, Medicaid, 401K, Roth IRA, safer cars, better medicine, computers, cell phones, etc.  Do I need to go on?

You seem to believe you are "Owed" something. 

Now, get off my lawn.

Yeah, I can't stand kids these days.  They think they can quit high school in grade 10, walk into a factory and get a secure, union job with benefits and a solid defined benefits pension plan.

Oh, no, wait ... that's the boomers.

But curse those kids these days for thinking they deserve the same thing their parents and grandparents got.

Toque.

I stand with the crowd that believes baby boomers were given more opportunity than any generation in the history of time and managed to destroy far more than they fixed. Good riddance to the worst generation.  Sad that it was the one that followed the greatest generation.

There are some decent baby boomers like Steve Jobs, but the vast majority of them are arrogant, narcissistic, greedy, wasteful, destructive know-it-alls who have flushed the world down the toilet and then lit the bathroom on fire.

They were handed everything on a silver platter by the Greatest Generation and they still managed to screw up.

[ender]

If the government is worried about people starving to death because they don't save, it seems like it would make a lot more sense to do forced savings, rather than enact an ~15% tax on wages and promise workers that the next generation will pay them when they retire.

This attitude is why SS reform will never happen.

The sides are too polarized and neither has any interest in partial solutions. It's all or nothing for both.

[Jrr85]

If the government is worried about people starving to death because they don't save, it seems like it would make a lot more sense to do forced savings, rather than enact an ~15% tax on wages and promise workers that the next generation will pay them when they retire.

This attitude is why SS reform will never happen.

The sides are too polarized and neither has any interest in partial solutions. It's all or nothing for both.

It's not all or nothing for both sides.  People that want to reform it would by and large be thrilled if there was just something to spread the pain around and preferably if it was done before there was an imminent 24% cut to SS benefits to reduce the pain.  It's mainly retirees, baby boomers, and idiot young people who are all in on pixie dust and unicorn shit solving our problem.    The problem is that the pixie dust and unicorn shit faction forms a plurality if not majority of both parties when it comes to social security.  Most people are not willing to face the fact that we promised more than we are willing to pay for.  Even among people willing to face that fact, many still are dishonest about it because they believe (somewhat reasonably by my guess) that delaying doing anything until there is a crisis will maximize the pain shifted to taxpayers. 

[RangerOne]

It is certainly possible to do away with social security. It is also arguable that we would be better off without it. Though I think this is a debate best held by qualified economists. Milton Friedman offers some intelligent perspective on what he believes is the true cost of a program like social security and how and why we would all be better off without it.

I think many people argue for social security on the principle of solidarity and on a philosophical level. But you need to make the case that social security leads to a better outcome than other potential combinations of laws and programs in its absence.

In my mind, especially in its current state, the dismantling of social security needs to be on the table. However such a drastic change would require a non-trivial combination of new laws and potential income sources to fill the wholes the the removal of social security would leave, to have a chance of seeing a better outcome.

 

[zephyr911]

Thinking of just me: in a heartbeat.
Thinking of the system and the others affected: second thoughts.

[FrugalToque]

The issue with dismantling Social Security (or in Canada, the Canada Pension Plan and the Old Age Pension) is that most people aren't good at saving.

Milton Friedman and his ilk can make all the arguments they like.  When we have old people starving on the streets because they were poorly educated on financial reality or conned, then our society will have to deal with it then.

Toque.

[Fastfwd]

I would and I am.


Paying myself dividends from my corporation now I do not pay into social security at all except maybe if some part of corporation taxes goes to that. I get to save more but all those years of reduced income means less social security when I get to 65. Also no employment insurance.

[starguru]

If the government is worried about people starving to death because they don't save, it seems like it would make a lot more sense to do forced savings, rather than enact an ~15% tax on wages and promise workers that the next generation will pay them when they retire.

This.   We need to require people save money.  They do it in Australia and it seems it's worked out for them, and their system has flaws.   We can give people access to the federal TSP funds, auto-enroll them in a 50/50 stock/bond allocation by default.  If they want to manage it themselves, fine.  Most will just keep the default, which will work out fine. 

[Jrr85]

The issue with dismantling Social Security (or in Canada, the Canada Pension Plan and the Old Age Pension) is that most people aren't good at saving.

Milton Friedman and his ilk can make all the arguments they like.  When we have old people starving on the streets because they were poorly educated on financial reality or conned, then our society will have to deal with it then.

Toque.

Again, if you're worried about old people starving in the streets because they were poorly educated on financial reality or conned, then it makes a lot more sense to have a forced savings program rather than taxing workers and giving it to retirees (who are often better off than the workers).  Take 15% and put it in savings/investment accounts, or even use it to fund a nationalized pension fund (although this seems more likely to be catastrophically mismanaged than allowing individuals to have some control, subject to restrictions).  The absolute worst thing seems to be to take 15% of workers wages and then tell them in exchange, future tax payers will pay them. 

[nereo]

This thread keeps being revived, so in the interest of tl/dr I'll reiterate this point:

We already have multiple ways that individuals can invest in their own retirement accounts.  Ergo the subject line is a bit misleading.  What's really at issue here is whether SS should exist as a program at all. If we allow a large percentage of individuals to "opt-out" the system cannot survive, and there's overwhelming evidence that the majority of people in the US are very bad at saving for their own retirements.

As FrugalToque pointed out, should remove SS (or the Canadian Pension Plan/OAS in Canada) we'll have to deal with a massive number of old destitute people, as we did in he first half of the 20th century. I would be happy for society to move towards a savings rate where nearly everyone could comfortably retire on their own investments by the time they were in their early 60s, but currently this is pure fantasy in the United States and Canada.

one additional point: SS pays out even during a financial crisis like the "great recession". As such its value is much different than investments in equities.

[Drifterrider]

Why is everything "in the streets"?

guns....in the streets.

people starving.....in the streets.

I've never seen either of those things...in the streets :)

That is up there with "innocent" bystanders.  Why does no one mention the guilty bystanders and just exactly how do you know the bystanders are innocent.


we now return you to your program .

[FrugalToque]

Why is everything "in the streets"?

guns....in the streets.

people starving.....in the streets.

I've never seen either of those things...in the streets :)

Okay, you're being funny.  But, seriously, there were starving people, literally in the streets, before we created these pension plans.  One of the benefits of a functional society is the lack of bad shit "in the streets".

Toque.

[nereo]

Why is everything "in the streets"?

guns....in the streets.

people starving.....in the streets.

I've never seen either of those things...in the streets :)

Okay, you're being funny.  But, seriously, there were starving people, literally in the streets, before we created these pension plans.  One of the benefits of a functional society is the lack of bad shit "in the streets".

Toque.

Like this:

or this:

or this:

[Drifterrider]

I'd line up for free coffee and doughnuts.

Post Script.  OASDI is a good program and should remain. 

[EnjoyIt]

Social Security is currently a 12.4% tax.  Why not have a mandated 10% savings rate and a 2.4% tax to help those in need so no bad things happen in those streets.  The money can not be withdrawn until full Retirement Age.

Saving 10% for 40 years would provide a relatively reasonable retirement after 40 years.  When the person dies if any money is left over  50% is taxed and the rest goes to heirs.

This plan would slowly have to transition from our current plan over the next 40 years.

[nereo]

Social Security is currently a 12.4% tax.  Why not have a mandated 10% savings rate and a 2.4% tax to help those in need so no bad things happen in those streets.  The money can not be withdrawn until full Retirement Age.

Saving 10% for 40 years would provide a relatively reasonable retirement after 40 years.  When the person dies if any money is left over  50% is taxed and the rest goes to heirs.

This plan would slowly have to transition from our current plan over the next 40 years.

Not an unreasonable idea, though it would be interesting to see how a mandated savings rate would work legally speaking, and how we would determine who needs to be helped with the 2.4% tax (means adjusted need perhaps?)
Also, it's worth noting that for low-income workers a 10% savings rate won't give them a comfortable retirement (est. $300k, and far less if there were gaps in employment), while saving 10% of a doctor's salary could very easily yield an account with over $5MM.  Perhaps those low-income workers would be augmented by the 2.4% tax?

What happens if a mustachian-like person has a high income, saves his 10% but then quits working on his/her 40th birthday... does he/she not get access to that money for another 25 years?  Granted that woulidn't much much different from our current SS payouts.

[Bucksandreds]

 A program would make sense if you could opt of social security (Receive $0) as long as you have a certain amount saved and pay a certain amount of tax, still (say half of what you pay now.) This is not what the right wants.  They want full opt out rights for the haves and force the have nots to fund themselves.  This is untenable and a non starter. They might as well give up. It would never pass even if they had a republican president and both houses with a supermajority and a conservative supreme court. 

[Drifterrider]

Social Security is currently a 12.4% tax.  Why not have a mandated 10% savings rate and a 2.4% tax to help those in need so no bad things happen in those streets.  The money can not be withdrawn until full Retirement Age.

Saving 10% for 40 years would provide a relatively reasonable retirement after 40 years.  When the person dies if any money is left over  50% is taxed and the rest goes to heirs.

This plan would slowly have to transition from our current plan over the next 40 years.

Why not a mandated savings?  Because this is the US and we don't do things like that.  10% over 40 years for a minimum wage worker isn't much.  AND, during that 40 years there is no disability coverage or benefits for surviving children.

Why do you believe the government should have to right to take any savings left over?  That would surly encourage people to either spend their money or hide it.  We don't do that in a free country.

[starguru]

We would have to keep the SS tax in place and require a people to save money on top of that.  If we were starting from scratch it might make sense to not have a SS program (and it might not).  But given that we have it and millions depend on it, we can't really take it away. 

I don't know, it seams like requiring savings a good compromise over the deadlock over the issue we have now.

[Drifterrider]

We would have to keep the SS tax in place and require a people to save money on top of that.  If we were starting from scratch it might make sense to not have a SS program (and it might not).  But given that we have it and millions depend on it, we can't really take it away. 

I don't know, it seams like requiring savings a good compromise over the deadlock over the issue we have now.

Short of a dictatorship, do you really thing the people will vote in a "forced savings" program?  A lot of people have 401Ks now and don't take advantage even to get the free matching.

[starguru]

We would have to keep the SS tax in place and require a people to save money on top of that.  If we were starting from scratch it might make sense to not have a SS program (and it might not).  But given that we have it and millions depend on it, we can't really take it away. 

I don't know, it seams like requiring savings a good compromise over the deadlock over the issue we have now.

Short of a dictatorship, do you really thing the people will vote in a "forced savings" program?  A lot of people have 401Ks now and don't take advantage even to get the free matching.

I think opinions will differ.  There will be the spectrum of outrage/non-compliance -> strong opposition -> opposition -> dont care -> strong support -> fanatic support.  It could be implemented such that if someone doesnt save <agreed upon amount> they pay a federal tax of that amount (or higher).  That way they don't have to save if they don't want to, but it might always make sense to. 

I think once the initial shock of the idea wears off most will agree it's probably a good idea in that it solves the problem (at least partially) and it avoids another government tax.  Even though the government is requiring (strongly encouraging) an action, the money is always in the possession of the person who made it.  I personally don't agree with the above suggestion of taxing these accounts on death; I would sweeten the deal by allowing them to pass between generations tax free, and also protecting them from any sort of lawsuit/bankruptcy confiscation.  But that's just a detail.  First, as a society, we need to agree on a best approach to solve the retirement crisis/SS shortfall.

[nereo]

We would have to keep the SS tax in place and require a people to save money on top of that.  If we were starting from scratch it might make sense to not have a SS program (and it might not).  But given that we have it and millions depend on it, we can't really take it away. 

I don't know, it seams like requiring savings a good compromise over the deadlock over the issue we have now.

Short of a dictatorship, do you really thing the people will vote in a "forced savings" program?  A lot of people have 401Ks now and don't take advantage even to get the free matching.

I think opinions will differ.  There will be the spectrum of outrage/non-compliance -> strong opposition -> opposition -> dont care -> strong support -> fanatic support.  It could be implemented such that if someone doesnt save <agreed upon amount> they pay a federal tax of that amount (or higher).  That way they don't have to save if they don't want to, but it might always make sense to. 

But here's the thing.  We already literally incentivize saving for retirement in a BIG way.  If you don't contribute to your 401(k) or tIRA you pay more in taxes.  Everyone knows they need to save money for retirement. People still don't participate. They opt out in staggering numbers even when their employer will match contributions.  That's fundamentally the same as paying another tax for not saving.
Perhaps structuring it differently would increase participation, but I'm skeptical. 

I think once the initial shock of the idea wears off most will agree it's probably a good idea in that it solves the problem (at least partially) and it avoids another government tax.  Even though the government is requiring (strongly encouraging) an action, the money is always in the possession of the person who made it.  I personally don't agree with the above suggestion of taxing these accounts on death; I would sweeten the deal by allowing them to pass between generations tax free, and also protecting them from any sort of lawsuit/bankruptcy confiscation.  But that's just a detail.  First, as a society, we need to agree on a best approach to solve the retirement crisis/SS shortfall.

How can another tax be considered a win because it "avoids another tax"?  the logic here escapes me.
I agree that we need to address individuals' commitment to retirement.

[starguru]

We would have to keep the SS tax in place and require a people to save money on top of that.  If we were starting from scratch it might make sense to not have a SS program (and it might not).  But given that we have it and millions depend on it, we can't really take it away. 

I don't know, it seams like requiring savings a good compromise over the deadlock over the issue we have now.

Short of a dictatorship, do you really thing the people will vote in a "forced savings" program?  A lot of people have 401Ks now and don't take advantage even to get the free matching.

I think opinions will differ.  There will be the spectrum of outrage/non-compliance -> strong opposition -> opposition -> dont care -> strong support -> fanatic support.  It could be implemented such that if someone doesnt save <agreed upon amount> they pay a federal tax of that amount (or higher).  That way they don't have to save if they don't want to, but it might always make sense to. 

But here's the thing.  We already literally incentivize saving for retirement in a BIG way.  If you don't contribute to your 401(k) or tIRA you pay more in taxes.  Everyone knows they need to save money for retirement. People still don't participate. They opt out in staggering numbers even when their employer will match contributions.  That's fundamentally the same as paying another tax for not saving.
Perhaps structuring it differently would increase participation, but I'm skeptical. 

You make a good point on how the system already encourages it and not enough do it.  That's why I think it should be flat out required.  But if requiring savings is too much for enough people, then another tax seems to be the only alternative (i.e. make it even more painful to avoid saving).

I think once the initial shock of the idea wears off most will agree it's probably a good idea in that it solves the problem (at least partially) and it avoids another government tax.  Even though the government is requiring (strongly encouraging) an action, the money is always in the possession of the person who made it.  I personally don't agree with the above suggestion of taxing these accounts on death; I would sweeten the deal by allowing them to pass between generations tax free, and also protecting them from any sort of lawsuit/bankruptcy confiscation.  But that's just a detail.  First, as a society, we need to agree on a best approach to solve the retirement crisis/SS shortfall.

How can another tax be considered a win because it "avoids another tax"?  the logic here escapes me.
I agree that we need to address individuals' commitment to retirement.

Im not sure where you get the "another tax be considered a win because it "avoids another tax"" thoughts from. 

[Jrr85]

This thread keeps being revived, so in the interest of tl/dr I'll reiterate this point:

We already have multiple ways that individuals can invest in their own retirement accounts.  Ergo the subject line is a bit misleading.  What's really at issue here is whether SS should exist as a program at all. If we allow a large percentage of individuals to "opt-out" the system cannot survive, and there's overwhelming evidence that the majority of people in the US are very bad at saving for their own retirements.

As FrugalToque pointed out, should remove SS (or the Canadian Pension Plan/OAS in Canada) we'll have to deal with a massive number of old destitute people, as we did in he first half of the 20th century. I would be happy for society to move towards a savings rate where nearly everyone could comfortably retire on their own investments by the time they were in their early 60s, but currently this is pure fantasy in the United States and Canada.

one additional point: SS pays out even during a financial crisis like the "great recession". As such its value is much different than investments in equities.

We have a lot of people that don't save after we tax 15% of their labor to pay for retired people and disabled people.  But if we took that 15% and actually used it to fund a retirement system rather than just transfer it to retire people, we could provide essentially a mandatory retirement system that guarantees people a safety net without requiring that they rely on having the political clout to take it from younger (and often poorer) workers.  Of course it would be a difficult transition now that our politicians and voters have squandered the opportunities to move to a funded retirement program while we had a good ratio of workers to retirees, but it would still be better to at least start a transition.   

[Jrr85]

Social Security is currently a 12.4% tax.  Why not have a mandated 10% savings rate and a 2.4% tax to help those in need so no bad things happen in those streets.  The money can not be withdrawn until full Retirement Age.

Saving 10% for 40 years would provide a relatively reasonable retirement after 40 years.  When the person dies if any money is left over  50% is taxed and the rest goes to heirs.

This plan would slowly have to transition from our current plan over the next 40 years.

Why not a mandated savings?  Because this is the US and we don't do things like that.  10% over 40 years for a minimum wage worker isn't much.  AND, during that 40 years there is no disability coverage or benefits for surviving children.

Why do you believe the government should have to right to take any savings left over?  That would surly encourage people to either spend their money or hide it.  We don't do that in a free country.

I'm not sure if my sarcasm meter is broken, but in case it's not, you're saying we don't force 10% of people's savings because this is america, but will take 15% of somebody's savings to give it to elderly people, including wealthy elderly people (and on average relatively well off people)?   

[nereo]

Social Security is currently a 12.4% tax.  Why not have a mandated 10% savings rate and a 2.4% tax to help those in need so no bad things happen in those streets.  The money can not be withdrawn until full Retirement Age.

Saving 10% for 40 years would provide a relatively reasonable retirement after 40 years.  When the person dies if any money is left over  50% is taxed and the rest goes to heirs.

This plan would slowly have to transition from our current plan over the next 40 years.

Why not a mandated savings?  Because this is the US and we don't do things like that.  10% over 40 years for a minimum wage worker isn't much.  AND, during that 40 years there is no disability coverage or benefits for surviving children.

Why do you believe the government should have to right to take any savings left over?  That would surly encourage people to either spend their money or hide it.  We don't do that in a free country.

I'm not sure if my sarcasm meter is broken, but in case it's not, you're saying we don't force 10% of people's savings because this is america, but will take 15% of somebody's savings to give it to elderly people, including wealthy elderly people (and on average relatively well off people)?

where are we getting 15%? SS is 6.2% from the employee and 6.2% from the employer (12.4% total).

[BoonDogle]

Short of a dictatorship, do you really thing the people will vote in a "forced savings" program?

Um.  Isn't that what we have now?  I guess they call it a tax, if that is your distinction.

[nereo]

Short of a dictatorship, do you really thing the people will vote in a "forced savings" program?

Um.  Isn't that what we have now?  I guess they call it a tax, if that is your distinction.

I see this quickly going down the "all taxation is theft" rabbit hole...