Should social security be voluntary?

Post Reply New Topic

At the very least, should social security be something that citizens can voluntary opt into? Personally, I am against social security, and I think it needs to be phased out; but, at the least, I think people should be allowed to choose whether or not they want to invest into social security.

Personally, I know I can utilize my money much better than the government, so that I may have a good retirement. Meanwhile, with social security, I will never get my money. I know there's those that support it and want to use it, so fine, they should be allowed to if they really want to; but, personally, I really do not like paying into social security and would rather keep my money.

What are your thoughts on social security? Should it, at the very least, be something that citizens can voluntarily opt-in for? Would you support phasing it out entirely or privatizing it?

On a side note
http://www.usdebtclock.org/

No.

One aspect of social security, an original intent, was to create a "pension" of sorts for working people. The result of such a plan would be the reduction in the of millions of people who wouldn't have otherwise saved money on their own volition being utterly destitute. Elderly beggars on the streets.

I think a good compromise would be for those who could prove that they have no need financially for collecting social security to opt out at some point. That doesn't work either, however. In my experience, people who are very wealthy feel it's important to reap in collecting social security from what they've sown (withholdings) all the years they worked.

No! Next question. We don't live in an anarchist society.

First, my guess is that you listen to someone like Dave Ramsey who has advocated this on his radio show. I have listened to him too and in fact, have followed his baby steps with very good results. If one does follow what he has to say, then social security it redundant. However, I would say only about 5% most of the working population works for him.

Since Social Security is an insurance program (not an entitlement), what exactly does the insurance cover:

Retirement
This is the part most people know about. Once you reach a certain age and have worked enough years (required to work 10 years), you will receive a retirement check each month. The amount depends on your income up to a certain limit and is regardless of what assets you have (although it you get too much income, you will pay income tax on those benefits, even if you already paid income tax on the deductions).

Spousal/Child Support
In the event of your death, Social Security will send to your spouse and those who support your children a check to cover their expenses. The spouse gets a check unless they remarry and the children until they are 18 (or for the rest of their lives if they are disabled). This makes sure that the family is not left destitute from the bread winners death. Note that this is different from SSI which is an entitlement program rather than insurance.

Burial
This is the least known benefit and that is because it is really laughable due to the fact that the amount was set in the 1930s and never indexed to inflation. When you die, your family gets $255 to bury you.

So, without social security, one would have to cover those things themselves. For retirement, you will need to be putting money regularly into the retirement accounts or personal investments. For family support, one will need to get (and be able to get) a reasonable amount of life insurance. For burial, again that would be personal assets or life insurance. Now, many financial people such as Dave Ramsey recommend the above already but remember, only a small portion of the population actually listens to those people.

So would people do what is required to protect themselves and protect their families if they were allowed to opt out of Social Security or would they spend the insurance funds on a brand new car that is lugging a huge payment book? What happens if people do not do the above and opt out? Will they demand that the government uses entitlement programs to take care of them and or their families anyways?

Now, there are issues with the social security system. I will discuss them at a later point. We however need to take into account human nature of a large portion of the population and the fact of the matter is, most Americans cannot delay pleasure. With that in mind, I do not think Social Security should be opt out today.

Thomas Paine first popularized "an old-age pension and basic income or citizen's dividend[,]" which is now known as Social Security https://en.wikipedia.org/wiki/Thomas_Paine#Agrarian_Justice.

Of course, the tax scheme at the time was based on interstate commerce and excise taxes when goods crossed boundaries into other states for sale. So, if every state is playing along, it would work well, especially for states with many residents. Less populous states would simply raise their excise taxes to compensate for any losses that they experienced.

I voted no on the survey because, while the Paine ideas would have worked; and the excise-tax scheme did work until it was scrapped for federally operated income taxes during the U.S. Civil War, and permanently in the early 20th century. Voluntary federal taxation would make the rich and powerful even more rich and powerful leaving little in the federal coffers to pay its bills, let alone the disability and retirement costs.

Nope. It should not be voluntary. It was initiated because someone noticed and cared that much of the population was unable to save, given their salary levels, but that the long term interest on a small biweekly set-aside could provide a decent income in old age.

Of course, it was rigged - the age to qualify for benefits was set well above the average life expectancy at the time! (Edit in: they're trying that one again, inching up the age to qualify for full benefits so that many won't live to collect if they take mainstream advice and wait for the biggest benefit.)

And of course, it didn't keep pace with inflation.

But, to take a homely example, I am now retired. I have a pension, yes I'm lucky - sort of - it's merely 20% of the best I ever earned, which means they designed it to be inadequate to support life. So I also draw from an IRA, and again I'm lucky, because I did get to direct which of several funds to invest in, and I'm cautious so I didn't lose my shirt in '08. And I collect my SocSec, because I can, and because I don't expect to live much past 73.

Please note, I pay Federal income taxes on all of these, and state income taxes on all of them too. So I am hardly a non-contributor, even though retired!

Now - if I didn't have the SocSec, even with 35 years of retirement planning and saving, I'd be living on about 37% of my best earnings. As it is, I live on about 56% of same. So I'm living in a lower-COL area, and I'm budgeted up the wazoo.

I shudder to think what I'd have to live on if Bernie Madoff, or Wells Fargo, had been given access to my life savings by a complicit political posse. As it is, I feel terrible for friends and colleagues who lost huge amounts in the '08 crash, especially the homeowners. Many of them do have to postpone retirement, and some may never retire.

Surely that's not what you'd wish on all of us?

As for the deficit, it's a fabrication. Raising the cap on FICA-taxed income would fix it in ten minutes.