Thought On Social Security

[Reagan]

Thought:  Who, 60 or over, and has not yet retired, would take $1,000,000 and never have to pay taxes on this portion, and not take any future Social Security benefits?  This would be a deal with the government.  Pros and cons?

[UT alum]

Would the $1,000,000 be backed by the full faith and credit of the US? FDIC only guarantees $250,000. Market drop won’t affect my social security payment. Investment house bankruptcy won’t affect my social security payment. I’ll take the guaranteed annuity.

[stevenash]

Anything issued by the U.S. Treasury is backed by full faith and credit.  You could also take the money and deposit in 4 different banks at 250,000 per bank.  The no tax benefit that was mentioned has a considerable value.

[baddog]

I’ll take the $million. Heck, I’ll be dead before government bereaucracy can screw that up.

[Ty Cobb]

I agree with baddog.  Give me the million.  I can pay off a few bills and live on the interest and investments.

[WOSdrummer99]

I'm still over 20 years from being eligible to answer. But I would take the money and run. Now or then. By the time in able to retire SS will be empty. My idea... everyone pays to their own SS account and gets back what they've put in.

Edit:  I did a quick survey around the time clock of people over 60. 8 out of 8 wants the million.

Edited August 23, 2019 by WOSdrummer99

[Reagan]

I like the ya'll think.  This could possibly solve the Social Security problem.  Maybe eliminate in sometime in the future.  Social Security was a pyramid scheme instituted by Roosevelt for only one reason:  to endure the people to the Democratic party with their votes.   Let people save what they can and at 60 give them a Million dollars.  This could be easily payed for by cutting a few departments.  And any of other wasteful programs.

[WOSdrummer99]

3 hours ago, Reagan said:

I like the ya'll think.  This could possibly solve the Social Security problem.  Maybe eliminate in sometime in the future.  Social Security was a pyramid scheme instituted by Roosevelt for only one reason:  to endure the people to the Democratic party with their votes.   Let people save what they can and at 60 give them a Million dollars.  This could be easily payed for by cutting a few departments.  And any of other wasteful programs.

Would we the people still be paying into this fund? If so, there has to be some stipulations. Like how much you worked and paid in during your life? Or if you became disabled, could you tap into your fund early and not have to depend on disability check?

It was also brought to my attention that once you gross $132,900 its no longer deducted from your check. Makes me think I'm in the wrong dept.

[UT alum]

23 hours ago, stevenash said:

Anything issued by the U.S. Treasury is backed by full faith and credit.  You could also take the money and deposit in 4 different banks at 250,000 per bank.  The no tax benefit that was mentioned has a considerable value.

Yeah, the bank deal would work, but what are you going to make on a 250,000 cd? 2.5 or 3.0 maybe? Treasury may guarantee all notes when presented for payment, but it doesn’t guarantee that an investment will hold its value. 

[stevenash]

2 hours ago, UT alum said:

Yeah, the bank deal would work, but what are you going to make on a 250,000 cd? 2.5 or 3.0 maybe? Treasury may guarantee all notes when presented for payment, but it doesn’t guarantee that an investment will hold its value. 

You will get no argument from me there.  That is why a diversified portfolio is so critical.   In their search for "guarantees" , many often forget that many fixed income instruments , after taxes and inflation, provide a negative return.  Part of the  portfolio must be dedicated to preservation of purchasing power.  

[Reagan]

15 hours ago, WOSdrummer99 said:

Would we the people still be paying into this fund? If so, there has to be some stipulations. Like how much you worked and paid in during your life? Or if you became disabled, could you tap into your fund early and not have to depend on disability check?

It was also brought to my attention that once you gross $132,900 its no longer deducted from your check. Makes me think I'm in the wrong dept.

Good questions.  Thinking out loud, and have not completely formed an opinion, I would say yes on continuing to pay.  Because you don't have to take the Million dollar offer at or after 60.  This would be optional.  Maybe only optional at first?  Just thinking.   Again, not paying any form of taxes on this Million dollars would the the off-set of paying into the fund through the years.  Haven't really checked into this, but would a middle class person pay into Social Security over a Million dollars, say, working for 40 years?

[tvc184]

Not paying any taxes on the original $1 million as in the OP?

I would take it today with no questions asked. 

[WOSdrummer99]

3 hours ago, Reagan said:

Good questions.  Thinking out loud, and have not completely formed an opinion, I would say yes on continuing to pay.  Because you don't have to take the Million dollar offer at or after 60.  This would be optional.  Maybe only optional at first?  Just thinking.   Again, not paying any form of taxes on this Million dollars would the the off-set of paying into the fund through the years.  Haven't really checked into this, but would a middle class person pay into Social Security over a Million dollars, say, working for 40 years?

Definatly not. That would amount to $25,000 a year. We're on the right track, just still in the slow lane. Making new solutions to old problems is especially difficult for us novices. Maybe a million is too much? Would opinions changed if it was half a mil?

I've always considered a perfect retirement as 1/3 of what you make in a year. Because you work for 40 years and need to make another 20 years without working. The trick is that most people can't make it on 2/3 salary now. Not with insurance rates high as Colorado. As it is now, I'm giving up 30% off the top in taxes and insurance. So I'm basically living off of 2/3 salary already. And without a 401k, I would have to depend on the Gov't for retirement. Not a good forecast for prosperity of the elderly in this the greatest country in the world.

[Hagar]

I think most everyone would take the Million.  Some would regret it later, but it’d be a sweet deal.  

Btw, if they eliminated the cap, SS would be solvent forever.  An easy fix, and why it hasn’t been done is beyond me.

[tvc184]

5 hours ago, Hagar said:

I think most everyone would take the Million.  Some would regret it later, but it’d be a sweet deal.  

Btw, if they eliminated the cap, SS would be solvent forever.  An easy fix, and why it hasn’t been done is beyond me.

If I took SS starting today it shows that I will get $2,100 a month. $1M would be the equivalent of getting that $2,100 until I was 103 years old. Nice thought but I am guessing that I won’t make it that far....

And that is putting it in the bank and not investing with it.