Do you believe if you have paid Social Security tax you entire working life you earned the right to collect Social Security payment when you retire?

[KelleyNice]

In other questions, I referred to Social Security as a Ponzi scheme and an unfunded liability. In fact it is neither as I will explain in an update.

Updates

+1 y

@AviatorTom @joeldalton Social Security is NOT an “earned right.” In the 1960 case of Fleming v. Nestor, the U. S. Supreme Court ruled that workers have no legally binding contractual rights to Social Security, and that those benefits can be cut or even eliminated at any time.

Social Security is just another tax. Since congress has no obligation to make social security payments, they have no liability. Without a liability, Social Security cannot be unfunded nor can it be a Ponzi scheme.

[WindAtMyBack]

The word "right" might be a bit too strong. How about "expectation"? I started getting SS as soon as I was eligible at 62.

The court might have ruled that it's not legally biding, and I don't disagree. But as far as I'm concerned the government still has an obligation to pay it.

I know a lot of young people think it won't be around when they reach retirement age. I thought exactly the same thing 30-40 years ago. But here I am getting it. It will continue being paid. Even if the fund itself goes broke, it will continue being paid out of the general budget if nothing else.

On the other hand, people should not rely on it. While it is enough to live on, it's still a real good idea to have a good chunk of savings when it comes to retiring.

SS is NOT a Ponzi scheme. It's more like insurance.

Also, contrary to what a lot of people think, the US government has never stolen a single cent from the SS fund. I don't know how that rumor got started, but it's not true.

[DARKCLOUD1945X]

The government ran the Viet nam police action by borrowing from Social Security fund with expectation that it was to be paid back at the end. It was paid back by the government with 2cents worth of paper saying it was to be considered as billions repayment which had no monitary value. no one is guilty of stealing just creative bookeeping

[WindAtMyBack]

@DARKCLOUD1945X

You are probably talking about the trick that Johnson did to make it APPEAR that the deficit was smaller than it really was. No money has ever been stolen from SS. All they did was combine the accounting of all government assets and deficits.

SS had a ton of money with no debt. By combining the SS assets with the general budget it gave the appearance that the deficit was smaller than it really was. In reality the deficit did not change, nor did the assets in the SS fund change.

The equivalent is if I owe you $100 cash. If I only look at the cash in my wallet, and I don't have any cash, then I have a negative $100. But if I combine my debt to you with my bank account which has $1000 then it APPEARS that I no longer had a negative $100, but have a positive $900. I would still have the $100 debt. I would still have the $1000 in the bank. The only thing that changed was the way I presented it.

What Johnson did was exactly the same thing. It was also undone by Regan. When it was undone and went back to the old way, it didn't change the SS fund or government budget either. The numbers were all exactly what they were before.

Any personal finance software like MS Money or Quicken can do exactly the same thing. You can ONLY look at your checking account, or you can ONLY look at your savings account, or your IRA, or your credit card. Individually each of these will show a different balance. But you can also combine them all to look at your total net worth. It's just a different way of looking at the same numbers.

[MikeInHawaii]

When I was your age, I got into an argument with an eighth grade math teacher…yes, my MATH teacher, who said Socialist Insecurity was a good deal because you got out more than you paid in. I argued that, compared to the compounding of interest with any other investment and factoring in inflation, it was a horrible plan.

If my generation has had 40+ years to change the system and has failed, I don’t know what right we have to bill your generation for our poor planning.

[Aerissa_Jade]

Most people, including me believe that it is... but if congress decides to stop paying it out, which I might actually approve of... since I'm a constitutionalist and it isn't something that should of been put in to begin with.

There will be a great deal of civil unrest, the likes of which no one has ever seen before. Any time people get use to a government hand out of sorts, it causes unrest to take it away and more people on Social security than all the other government benefits combined. Plus it will look really bad if congress decides to do it and tens of thousands of people are now being made homeless and starving and dying.

Although technically if it is just another tax, and not part of income tax... one could argue that is double taxation.

[KelleyNice]

It is highly unlikely that congress would eliminate it. Instead, they will keep nibbling by raising the age limit for new retirees and by counterfeiting money to pay for it. Then lowering the cost of living increased by cooking the books to show there is much lower inflation. People will object less if the dollar buy less rather than cutting the dollar amount.

[KarinMcDonald]

Of course I have earned it. It's not an "entitlement" as one party puts it, it's a contract between me and the government. One party wants to get rid of medicare as well. I just wish those reds would stick up for the middle class instead of just the rich folks.

[peedy]

Ever hear the story about Gordon Kahl he was a farmer in Medina North Dakota backnin the early 80s and the feds wanted him and there was a shoot out he was a bad bad man bla bla bla
You know what the news is in a minute you're going to hear the rest of the story
What the news and the fake internet won't tell you is he was wanted for not pay social security he said "I take care of myself I won't draw on social security, I take the exact amount of money the the government takes out and ill invest it myself and I take care of myself and ill be better off
Well the government could not allow someone not to pay so they went after big shoot out kill bunch of you know the typical government escalation of the problem

[Massageman]

It is a Ponzi scheme.

It"s funny (curious, ironic) . About 5 years ago, a study was done and found that if everyone contributed SS for every dollar earned (rather than stop after hitting the "target amount for the year"), the SS account would stay solvent for dozens of generations. Of course, this concept was never put into practice, more and more reasons for receiving SS added, and the SS fund has now suck even lower!

Specific to your question, absolutely. If this scheme is FORCED on us, we darn well better get the promised proceeds. If we had been able to take the same amounts and invest them in Coca Cola, Amazon, or even mutual funds, etc., we would have fared far better than having OUR money go to pay the previous retirees, since it IS a Ponzi scheme, by any name.

[AFretiredTXn]

Those previous retirees are the ones who paid in what is already in the account. I paid in for over 50 years, and now I am drawing out some of which I paid in. I am 71 and retired. Part of that Soc Acct is Mine, I paid into it. Yes, if I had taken that money and put into Markets and Funds or Stocks; I might have made more, but I could have lost it all too. When the Markets crash, like currently.

[Sixgunsound]

Apparently we don’t actually get anything, unless there are enough people paying into the system to support those taking out of it. We’re running into the same problem that the late Roman empire ran into, such that more people were trying to take money out of the system then were paying into the system and the whole thing collapsed.

[BillyBalls]

Social Security should be modified in a way that allows the contributor to actually own his account. Control his investments as he sees fit.

My father died when he was 64 and a half. Paid into the system all of his life.

My mother received a $250 death benefit when he died... what a scam.

[exitseven]

@billyballs I am determined to live to be at least a hundred just to make sure I become as big a burden on the government as they have been to me.

[MikeInHawaii]

I know someone whose mother died in her sleep the night she retired. He said the $250 death benefit required so much paperwork, he didn’t file for it.

[MikeInHawaii]

One simple modification is to allow an exemption from Socialist Insecurity Taxes if you make a minimum IRA contribution.

[DARKCLOUD1945X]

The last time people suggested the people control their own social security the economy crashed and billions were lost but Social Security was safe because the people were not allowed to invest as they wanted. What would have happened if people had invested their funds in the market and when it crashed lost 90 % where is their money and the government would not have to replace it

[MikeInHawaii]

@DARKCLOUD1945X There has not been a decade in history in which an index fund would have lost money. Warren Buffet said his portfolio has dropped by half three times in his lifetime.

[MikeInHawaii]

@exitseven I don’t think it can be done! I figured out my rate of return under Socialist Insecurity out to the age of 140 and I think it was still only about 2.25%!

[DARKCLOUD1945X]

Social Security would not be under funded if Uncle Sam did not run the Viet Nam conflict by taking surplus monie from S/S and paying back at the end with usless vauleless script thus putting S/S behind the EIGHTBALL. Borrowed billions and paid back with two cents worth of paper

[AviatorTom]

Yes, that's the way it works for the individual. A retiree expects to get money from Social Security based on how much they have contributed over their working career.

Re: your comment, it IS a legal Ponzi scheme. An individual's contributions do not pay them at retirement; that money is coming from younger people's contributions to Social Security.

[KelleyNice]

@AviatorTom @joeldalton In a couple of hours or tomorrow morning, I will explain in an update why Social Security is not a Ponzi scheme.

[joeldalton]

You can explain all you want, but you are wrong.

[AviatorTom]

@kelleynice I look forward to your explanation.

[MikeInHawaii]

You are an incredibly intelligent young lady. You’re wrong on this one, though. It’s a Ponzi scheme.

[KelleyNice]

@MikeInHawaii A tax is not a Ponzi scheme and the Supreme Court that a tax is all social security is. If congress wants to give retirees money they can but there is no obligation to. Congress can stop social security payment anytime and still collect the tax.

[joeldalton]

@kelleynice the government also claimed slavery was legal and that locking yourself in your house would stop the spread of a respiratory virus.

A Ponzi scheme is when people who start the scheme are paid by people underneath them in the pyramid. SS requires younger people to pay in to fund the payments to those of retirement age. You don’t actually get the same physical dollars you put in.

[AviatorTom]

@kelleynice Please let me disagree with you. Social Security is NOT a tax. The Constitution does not give the federal government the power to tax people; that's reserved to each individual state. Legally, Income Tax and Social Security are actually considered contributions.

[KelleyNice]

@AviatorTom I believe you are probably right. However, for all practical purposes they are taxes, not contributions since the courts put people in prison for not paying the tax. Al Capone and Irwin Schiff, are examples.

[Chazmatazz269]

Except that paying into social security is a nearly unmitigated mandate. In as much as people who’ve paid in for a lifetime and received nothing in return and others never pay in, but somehow cash out… it seems to me the system should be ended and payers should have the right to invest that money however they see fit, or not at all.

[Anonymous]

i dont believe in pension. Even if i get pension paid out to me i know almost no one, who said their pension is satisfactory or above. Pay attention when i said Almost.

It can be a social security feature, it can be a rip off, it can be both. Cases have been reported to have the pension funds being stolen but i dont know how and what happened. To me money out of my reach is money i dont have. Simple.

[DWornock]

Obviously, based on the Supreme Court ruling, Social Security is not a right. However, as one person pointed out it is an expectation. Regardless, it will not survive in the present form when I would be old enough to collect. Of course, the USA as we now know it, will not survive the coming socialism.

[MikeInHawaii]

Unfortunately, you’re right!

[Adaeva]

Of course Social Security is not a right. It will fail long before I am of age and should be abolished.

[Dargil]

My guess is at Social Security gone into a lockbox the way it was intended and it was permitted to earn compound interest at about the same as any mutual fund the answer will probably be yes

[Exterminatore]

Yep. I’m pretty sure when our government tells people they don’t have any more Social Security money, and people realize they gave it all away to illegals…. well when this happens the mob will actually hang people on Capital Hill this time around.

[Avicenna]

A right in the ethical/moral sense, definitely. Most people, for whatever the reasons, are 't saving enough money for retirement and not everyone can work until the day they die, so Social Security is a necessity. In all likelihood, SS taxes will be higher after the 2030s, but we should be looking at reducing payments at the top before doing so.

[KelleyNice]

Social security had existed for less than 100 years. Humans have existed for more than 2 million years more than 200,000 times as long and humans didn't go extinct. Therefore, you claim that social security is a necessity if OBVIOUSLY FALSE.

[Avicenna]

That's silly. People were supported by their children or extended families and few lived past their working years. Think that's comparable to today? Definitely not. But you keep making policy for Neanderthals.

[SixFootSexy]

modern problems require modern solutions

[Cherry234]

Yes. Why not? If I paid the tax I believe I should have the right to collect the benefits.

[Juxtapose]

I love social security and safety nets in general, Franklin D Roosevelt did a great job with social security. I have autism and programs like that pay for my medical care.

[KelleyNice]

That is will.

[888theGreat]

That is not the right question. The question is , will there be anything left to pay people. At this point, there won't be. The next question is, how will the people react? Like Sri lanka?

[joeldalton]

Yes, I do. I expect my money back. And yes, it’s a Ponzi scheme.

[MikeInHawaii]

What rate of return? You’re still below 2.5% if you live to be 140.

[joeldalton]

@MikeInHawaii I never claimed it would be a good deal for me. It’s bullshit.

[Snakeyes7]

Yes, but I know I will never see it.

[MikeInHawaii]

https://www.irs.gov/pub/irs-pdf/f4029.pdf

[KelleyNice]

@MikeInHawaii Filing Form 4029 is what most all young people should do.

[MikeInHawaii]

I considered getting a divinity degree so I could sign the forms.

[KelleyNice]

@MikeInHawaii It may not be or at least it shouldn't be necessary to have a divinity degree to be a representative of a church.

[MikeInHawaii]

I think you can actually become a minister with a fairly cheap online ordination.

[blondfrog]

Yes cause that was just money that was yours that you earned anyways in the first place.

[KelleyNice]

So was income tax and sales tax yours but do you expect to get those back? Social Security is just another tax and like the Supreme Court ruled. It is not an earned right. Congress can cut it or pay nothing.

[blondfrog]

So how do you expect people to earn money when they retire? Because you can't be working the rest of your life. Plus do you have any idea how many politicians are stealing tax payer money?

[KelleyNice]

Congress can stop paying but for they next few years that is unlikely. After that, they will start cutting payment or more likely print money to make payment. That will result in very high inflation but congress will not increase the payment. Therefore, in 10 years when prices double the payment will only buy half a much.

[blondfrog]

Everything you said is true but you still didn't answer my question lol.

[MikeInHawaii]

We’re about there now! 40% of the money in circulation was printed in the last year. Or, may e it was two years. I’m too old to trust my memory.

[Danny_dan92]

That’s only fair is it not?

[Fuentes]

You should be able to use it

[Celticwolf78]

Yes that's the point of paying in

[Anonymous]

Yes, why would anyone think otherwise?