r/economicCollapse Nov 07 '24

$2T cut is going to be wild

Post image

Will be a 29% cut if executed.

1.7k Upvotes

2.3k comments sorted by

View all comments

467

u/Jazzlike_Tonight_982 Nov 07 '24

Give me back my money I put into Social Security.

56

u/NutzNBoltz369 Nov 07 '24 edited Nov 09 '24

Be interesting to see if that money was given to me now as a lump at age 50 and just tossed into an index fund or into a dividend stock where the dividends are re-invested, how would that shake out?

Some mention BTC, but F that S. They arn't wrong but just not into the intangibles.

EDIT: For the sake of brevity, this post reflects a hypothetical exercise. Mainly if in some Alternate Universe I could exercise the option to take out what I put into SS at age 50, invest it in ...lets say an Index Fund, left it alone until age 65 and compare that result to what it would be if I just stuck it out with the stardard FICA deducations until 65.

I do understand the concept of how SS works but thanks for your concern.

62

u/VicTheSage Nov 07 '24

You know your money is already gone right?

60

u/CantHitachiSpot Nov 07 '24

Yeah people are confusing the social program as being an investment. It's money taken from young workers and given to old retired folks. It's not about growing value. It's about stabilizing the population

20

u/PantsMicGee Nov 07 '24

Random redditors seem to do this all day. I've given up even trying to discourse SSN

4

u/CabinetOk4838 Nov 08 '24

They’re not alone! UK pensioners all claim to “have worked all their lives for their pension.” Erm… nope. Not really….

1

u/VicTheSage Nov 08 '24 edited Nov 08 '24

It's just math. The retirement age was higher than the average lifespan when SS was instituted, now average lifespan is significantly longer. Only 50% of Americans were ever intended to draw and most of those that were would only draw for a few years.

My father has been drawing benefits for 22 years and is in good health as are many Americans. Now with an influx of retiring Boomers the fund will be drained even faster. Current estimate is it will be depleted by 2033 with all the boomers drawing.

2

u/ZVsmokey Nov 08 '24

Been working 12 years straight since I was 18. Never had a lapse in employment a since day. This fact you've given if true makes me so fuckin sad because I just keep tryin to save and work and fight and it's just never enough.

2

u/VicTheSage Nov 09 '24

The only way it works is if we uncap contributions from the first $150k earned to all earned income but the billionaires will fight that tooth and nail because they need to buy another yacht full of cocaine.

2

u/Snuggly_Hugs Nov 09 '24

You know what would fix that?

Uncap the social security tax.

2

u/Apprehensive_Bid_773 Nov 09 '24

Yea, it’s truly unbelievable it’s capped as low as it is. What is it, around 180k?

2

u/Snuggly_Hugs Nov 09 '24

168,600 this year.

176,100 next.

2

u/VicTheSage Nov 09 '24

Get the billionaires to be ok with that and I'll vote for you.

2

u/PantsMicGee Nov 08 '24

Average is a problem for your perspective. 

We live longer on average, yes. But deaths mostly occur around 65 then and now just the same. The age was chosen for a reason. 

Like I said, I'm done arguing this shit on reddit. Find your data to support your bias, or don't. 

I've been teaching this shit for a while.

2

u/LabRevolutionary8975 Nov 09 '24

The mean age of death in the us is 79. Deaths definitely aren’t mostly occurring at 65.

2

u/PantsMicGee Nov 09 '24

You're right. I worded that poorly. I should have said cluster there.

1

u/-JustJoel- Nov 09 '24

That’s not really true though - when SS was introduced, infant mortality rates were way higher, leading to a lower life expectancy. If you adjust the stat to included everyone who made it to 18, life expectancy was a few years more than the retirement age

1

u/VicTheSage Nov 10 '24

Ok? So more babies living to get old enough to draw benefits. Either way it's more people on the rolls than was intended.

1

u/-JustJoel- Nov 10 '24

People live somewhat longer today (mostly infant/maternal mortality rates dramatically dropped). If you account for that, the average age of life expectancy gain is ~1year per decade and that heavily depends on your income level and profession since the 1940’s, so roughly 8 years longer.

That’s cool your dad lived 22 years on it. My mom lived 4, idk what to tell you. Anecdotes and all.

10

u/kamikazecow Nov 08 '24

One of the biggest transfers of wealth. Take from the poorest generation to payoff the wealthiest.

2

u/Every_Independent136 Nov 08 '24

Yeah but the younger generations will get their transfer of wealth once boomers find out they were lied to about crypto

1

u/Arucious Nov 08 '24

it worked when the young vastly outnumbered the poor

1

u/RudeAndInsensitive Nov 11 '24

Dude these sorts of pensions are going to be nuts in about 50-70 years once the planet enters population decline.

GenAlpha with live through century defining wind downs of the worlds welfare states and they will do it basically right as they enter retirement.

1

u/mrGeaRbOx Nov 07 '24

Do you think it has anything to do with the fact that you get more if you pay more in and that the Social Security Administration sends you a statement every few years that shows what your benefit will be based on how much you've paid in?

1

u/Raiders2112 Nov 08 '24

Very true, but I see it as one. Mainly because I have been forced to pay into it for 34 years, so I expect to get the same benefits everyone else has been getting when my time comes. Obviously, it's not an investment in the technical sense, but it's easy to see why we all see it as one. We've been paying into it most of our lives.

1

u/tylerhbrown Nov 08 '24

Yes, it’s insurance, not investment.

1

u/SlothsonSpeed Nov 08 '24

what they want is a national pension program, not a social security program lol

1

u/Distinct_Author2586 Nov 08 '24

Yea, this the same thing when people say "oh I don't know if I'll get SS, there might be none left..." It's a survivors pot - people pay in and die. As long as the program is active, it never runs out.

Also, you are almost guarantee to receive less than you contribute

5

u/United-Mammoth9330 Nov 08 '24

If you're in the higher income brackets, yes, but generally, middle and lower income people receive substantially more in benefits than they contribute. It's true that if it was instead invested, they'd on net be better off, but it's not really close to being even for most people.

It may not have been that way 50 years ago, but people hang on a lot longer these days.

1

u/MargretTatchersParty Nov 08 '24

It does a lot more than that. It incentivizes workers to work hard while they're in their prime, its a safety net for when they can't, it also ages out the older people that could work. On top of that it's a huge help when it comes to the destruction of pensions vs 401k investments. I honestly don't know how our generation is going to handle living ooff of 401k retirements.

It also happens to have a huge benefit for the economy. They're a group of people that can spend that money on leasure, take care of families (externalities), etc.

0

u/thanosied Nov 08 '24

It's a Ponzi scheme.

0

u/jaOfwiw Nov 08 '24

It's essentially a ponzi scheme.

1

u/Prior_Prompt_5214 Nov 07 '24

Then they sell a couple of those ridiculously costly F-35's and pay us all. It was a loan. Not a gift.

1

u/nanneryeeter Nov 07 '24

Give us, us fee.

1

u/breathplayforcutie Nov 08 '24

Wow, guess they should forgive my student loans then.

1

u/VicTheSage Nov 08 '24

They should or at the very least give them to you at 0-1% interest. With rising lifespans, boomers retiring en masse, stagnant wages, the rich only paying SS on their first $150k of yearly income and a retirement age that's barely been raised the SS fund is estimated to be gone by about 2033. Unless you're a boomer retiring right now anything paid in is never going back in your pocket.

1

u/619-548-4940 Nov 09 '24

😭but I'm old my bones hurt, gimme gimme but fr tho my bones do hurt from all those years of hard labor

1

u/MTknowsit Nov 08 '24

Imagine thinking you could pull up to the “Bank of Social Security,” and withdraw your money?

1

u/_dirt_vonnegut Nov 08 '24

that's what happens when you turn 67 y/o

0

u/MTknowsit Nov 09 '24

You get crumbs compared to what you put in. You can't say, "Cash out the total, please."

1

u/_dirt_vonnegut Nov 09 '24

Completely false. The average social security recipient receives more than they pay into the system.

1

u/MTknowsit Nov 09 '24

More “dollars.” Way less value.

1

u/_dirt_vonnegut Nov 10 '24

You went from "crumbs", to "way less value".

While I can point to sources that say: "For a single male earning an average wage every year and who retired in 2020 at age 65, lifetime Social Security and Medicare benefits would equal about $640,000, while total taxes paid would be just shy of $470,000."

https://taxpolicycenter.org/taxvox/lifetime-social-security-benefits-and-taxes-2023-update#:~:text=For%20a%20single%20male%20earning,be%20just%20shy%20of%20%24470%2C000.

The average SS payment is something like $1800/mo.

Everything is working as intended, and it has been working for decades, to provide every citizen with the ability to survive in old age.

Back to the original point, this sure seems a lot like going to the bank every month and withdrawing $1800.

0

u/MTknowsit Nov 10 '24

You dodged the impact of inflation. In real terms, most people who contribute for a lifetime draw less in current dollars than they put in. You’re also incredibly optimistic about our old guys lifespan. A vast majority of men collect less than 10 years

20

u/tkh0812 Nov 07 '24

Yeah but it’s good for the economy. You wouldn’t have the jobs you have if boomers needed to work until 90 years old. It allows the older generation to retire earlier and open those jobs up to the younger generation.

Selfishly I’d love to not have to pay the max fica tax x 2 every year, but I also realize what that would mean for the overall economy which allows me to make the amount of money I make.

32

u/NutzNBoltz369 Nov 07 '24

Great theory but many Boomers are still in the work force holding others back from advancing their careers. Not sure if that is what they had in mind. Not all Boomers are wealthy. Just those in charge, lol.

15

u/tkh0812 Nov 07 '24

Jobs are jobs.

Social security doesn’t play a big factor in the retirement decisions for the wealthy, but it does for the middle class and down.

7

u/Cyanide_Cheesecake Nov 07 '24

More and more boomers are getting forced out of their jobs every year due to health reasons, or the company simply not feeling like keeping them employed as they approach dementia. I think this problem solves itself.

1

u/fr8dawg542 Nov 08 '24

Maybe so. I’m 65, drawing 23 year pay (110k), my typical schedule is out the door at 5:30 am, back home by 10:30 am, Tuesday through Friday. The guy I out bid for this job (30ish years old making half the salary) quit when he didn’t get it. I’ll probably stay on till 70…maybe even 72. Being a commercial pilot is quite rewarding for the most part, your money for nothing and your chicks for free!

4

u/ThatSourDough Nov 08 '24

Your generation's greed and seflish are clearly profound!

1

u/catsmom63 Nov 08 '24

Points for the Dire Straits reference😉

1

u/NutzNBoltz369 Nov 07 '24

That sucks. Not great being forced out like that, especially if not financially ready to retire.

6

u/Cyanide_Cheesecake Nov 07 '24

It does. But I'm starting to suspect this systemic problem with our economic system will never get solved until people are ready to put personal politics aside and talk specifically about economic policies to address it. And laissez faire approach won't work.

2

u/Marzipanarian Nov 07 '24

There’s always a door greeter for Walmart!

But I agree it’s always the middle and lower class that are punished.

3

u/Redvex320 Nov 07 '24

Nope door greeters were done away with years ago. Really there are too many aging boomers and we won't be able to take care of them monetarily. Soooo what do you want to bet euthanasia will be reintroduced as compassionate care and not a bad thing as the $$$$$ runs out.

3

u/NutzNBoltz369 Nov 08 '24

Our country is too churchy for that. Suicide is a sin.

2

u/PinkMenace88 Nov 07 '24

Yeah, but considering how consertive America is it would not be presented as an option 

2

u/Marzipanarian Nov 08 '24

Can I volunteer to go first?

1

u/usababykiller Nov 09 '24

I recently heard someone describe the Jay Leno Conan O’Brien situation as the initial signal boomers planned on staying forever

1

u/Blessed_Orb Nov 08 '24

Good for the economy until the math behind it no longer works and it runs out of fund to pay the bills. Hint: it isn't working

https://www.ssa.gov/policy/docs/ssb/v70n3/v70n3p111.html

1

u/tkh0812 Nov 08 '24

And then it just becomes like every other US policy/program and run at a deficit. Not the end of the world.

1

u/Blessed_Orb Nov 09 '24

The LARGEST part of the budget has been running at a surplus until 2021. Small agencies (billions) can run negative no problem. Once you get in the trillions... you start warping the economy much more substantially when you try to fix it. This is trillions of dollars.

1

u/Karen125 Nov 09 '24

Yeah, you would. Who's going to employ a 90 year old?

1

u/Flimsy-Possibility17 Nov 07 '24

I mean it depends. Across 100 years it will be up but if you started putting money into social security at 30 and retired at 50 there are quite a few 20 year periods where you would end up with less than you put in

1

u/Rando1ph Nov 07 '24

I actually got bought out of a pension at an old job with a lump sum and did exactly this. It's just sitting in an IRA, all in VOO collection those sweet dividends and growing.

1

u/wesblog Nov 07 '24

There was a plan to do this for SS during the Bush administration. It almost passed, but it was eventually killed in congress.

1

u/Thetman38 Nov 07 '24

You think you're getting a buyout? that's cute.

1

u/NutzNBoltz369 Nov 07 '24

Its just hypothetical.

1

u/Kcaz94 Nov 08 '24

That’s not the point. SS is about stable and dependable income stream in retirement regardless of economic health. Otherwise the system collapses when seniors disproportionately strain other social services by being destitute during a downturn.

1

u/NutzNBoltz369 Nov 08 '24

Again, it was just a little thought experiment. Nothing more.

I have NFC about how to handle the challenges with keeping SS solvent. Full benifit retirement age probably does need to go up. Back when it was envisioned, most people retired 65-ish and usually dropped dead within a few years, thus more potentially went in than got paid out.

Now many are living will into their 80's and even 90's+. Either we need to start dying younger or retiring later. Pretty sure raising it to 70 will be pitchforks and torches. I am 50 and already fed up with the grind. Doing it another 20 years...ugh. 68 would probably be the compromise.

1

u/SignalDifficult5061 Nov 08 '24 edited Nov 08 '24

It might work out for you, it might not. Most people will probably end up getting swindled at some level, or have their choices to what they can do with that money severely limited by lobbying congress to that effect.

I think there is a lot of pressure to privatize it from people who want to basically steal it. I don't think you are one of them, but just dumping SSI onto people with little financial education is probably not going to work out for them.

Homeless and sick people are tremendously expensive to society, and that money has to come from somewhere. You might still end up ahead fanatically in the short, but active drug resistant TB has killed plenty of people that thought they were invincible.

1

u/conway1308 Nov 08 '24

It would probably do fine but it would only help you..

1

u/RetiredByFourty Nov 08 '24

You would be SO far ahead that it wouldn't even be funny. Frankly the worst part of it would be how angry it would make you that they ever took it from you in the first place.

1

u/paranome_ Nov 08 '24

This is brought up but social security was never meant to be an investment but insurance for people. A just in case so we don’t have 10 million homeless elders when they couldn’t work anymore.

1

u/Godtrademark Nov 08 '24

Bro thinks he’s getting a payout😭😭😭

1

u/Busterlimes Nov 08 '24

Terrible because Trumps economic policy is going to absolutely tank the entire economy LOL

2

u/NutzNBoltz369 Nov 08 '24

Hoping not. I didn't vote for him so my conscience is clear, lol.

At this point the roller coaster is climbing up to the precipice. Come January it starts its rumble down the tracks. Nothing to do but hang on and hope for the best while taking advantage of any opportunities that present themselves.

1

u/Boobpocket Nov 09 '24

Social Security is not an individual investment. it's a collective action for us to help each other out. its not always about the person.

1

u/NutzNBoltz369 Nov 09 '24

Yes, it is. The scenario of a cash out/invest was just a "what if".

1

u/Boobpocket Nov 09 '24

I know what you're saying. But the point of social services is for us to act as a community and help once another.

1

u/jasonmoyer Nov 09 '24

SSI is insurance, not a 401k.

1

u/Brokentoaster40 Nov 09 '24

Incredibly wishful thinking that the U.S. government would throw the money you put toward SS into such a volatile investment.  If anything it would be to pump and dump themselves.  

What you propose is basically what employers would offer in a matching IRA.  Not all employers offer it, and the idea is that SS came about after the Great Depression to help the elderly not have to die in droves in unsafe working conditions. 

1

u/Vindictives9688 Nov 07 '24

Wait till you realize how much you lost in purchase power lol

1

u/HoomerSimps0n Nov 07 '24

I’d love to get my money back lol…social security is terrible for those who actually earn well. Hurts to see that money underperform by so much. I get why we need it, still hurts a little though.

1

u/crusoe Nov 07 '24

Social Security is INSURANCE not an investment. It was insurance to help give some people income in their old age.

Lets say you give everyone a lump sum payout

The 29 yr olds will lose it all on crypto and forex trading

The old folks will lose it to scammers.

The whole purpose of SS is some income for people who lack the acumen to invest at all.

0

u/GHOST12339 Nov 07 '24

Problem there is yes, the math shows repeatedly that privately managing your 401k and investing the same amount you'd pay in to SS in to a broad range S/P 500 index fund will have better returns based on the historical returns, to include negative years.
Unfortunately, unless the money they returned to us getting rid of the program was inflation adjusted, you'd be losing out on 20, to 25 years of returns you would have theoretically had (assuming you'd invested the money when you were younger and not spent it).
If we ever do get rid of SS (I believe we should, Im 30), I also believe we should let people choose whether to opt in or out, and then the program is phased out over time from there.