Saving Social Security

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February 17th, 2018 at 12:53:47 PM permalink
OnceDear
Member since: Nov 21, 2017
Threads: 11
Posts: 1504
Quote: odiousgambit
So we want our SS money to be locked away in a vault? That is just not going to happen!
It's my understanding that what you refer to as Social Security money is almost totally what we in the UK call 'State Pension'. Our Social Security is a bit more socialist in that we pay a National Insurance levy ( pretty much a national income tax) that is used to fund SS, and our SS covers all healthcare costs, Jobseekers allowances, subsidised housing and a hell of a lot more besides.

I think what is very similar in both our (state pension) systems is that there is no fund. There is no pool of money. Today's pensioners worked all their lives ( at least some of them ) to pay towards the pensioners that were drawing pension at that time. When today's working generation retire, they will draw a pension that will be funded by the next generation of NI paying workers. It's a huge Ponzi scheme. I see suggestions about your country investing your SS fund pool in the market. But if that pool doesn't actually exist isn't that a moot point?

Incidentally, Our UK government realised that the great Ponzi Scheme which is our State Pension was soon going to reveal itself as unsustainable, so they tackled it in two ways: They started to roll out a later age for starting to draw it ( used to be 60 for women and 65 for men ) and looks like will soon be 68 or more for all. And Secondly, they introduced legislation that made it compulsory for all employers to offer at least a minimal contribution based pension scheme into which employer and employee were strongly pressed to contribute. Thus, just before our Ponzi collapses, there will be other funds for most pensioners to live on.

Our scheme is not perfect. But abject poverty is avoided. And I won't even start harping on about our great, if occasionally stressed Free National Health Service and our generous benefits system which keeps the poorest of society from starvation. Yes, there are parasites. There always are in any societal system.
February 17th, 2018 at 1:27:25 PM permalink
rxwine
Member since: Oct 24, 2012
Threads: 188
Posts: 18629
A safety net fund and investment fund wouldn't be the same thing anyway. I wouldn't even think they should have the same arguments.
You believe in an invisible god, and dismiss people who say they are trans? Really?
February 17th, 2018 at 4:08:03 PM permalink
Fleastiff
Member since: Oct 27, 2012
Threads: 62
Posts: 7831
A query for those across the pond...

Based on that great authority (various episodes of The Bill) do you really take a "pension book' to the post office and get paid your pension in cash and then have all these old folks go walking around with a month's pension in their purses?

I mean I do hope The Bill wasn't lying to me too much.

And do the English still say "I should sit down" when an American would say "You should sit down" or "sit down(imperative)"?

Now for a comment that is at least close to being on topic:
Various IRAs and 401ks to exist but are often depleted by bad investments, fraud, etc.

Many retirement accounts are riddled with fees for management, cashing out, just about anything gets charged a variety of fees so some these "accounts" are rather meaningless in terms of actual retirement.

Also here in the US it is often totally impossible to force a plan administrator to PROVE how he arrived at the base pension. Changes to the base pension can take a lawyer and a CPA (Articled Clerk in the UK) to get supporting data, but getting supporting data for the initial pension payment is often impossible.

Public and union pensions are often triple and quadruple dipped. One commuter railroad had a really major tie up on one union members last trip as an engineer... with all those trains stuck ahead of him, he was on Super Golden Time for hours and it kicked his pension way up. Delayed thousands of passengers for several hours.. but union workers do like their pensions.
February 17th, 2018 at 5:01:20 PM permalink
OnceDear
Member since: Nov 21, 2017
Threads: 11
Posts: 1504
Quote: Fleastiff
A query for those across the pond...
Based on that great authority (various episodes of The Bill) do you really take a "pension book' to the post office and get paid your pension in cash and then have all these old folks go walking around with a month's pension in their purses?

Almost.
Up until 2005, pensioners had a payment book with coupons to sign and stubs, which they took to the local post office weekly on 'pension day' for state pension

https://www.mirror.co.uk/money/personal-finance/death-of-the-pension-book-545131

In 2005, those books were withdrawn and pension payments were to be credited direct to bank accounts. However, to cater for many old folks, set in their ways, a minimal bank card account was introduced which could only accept pension credits and could only be used at a post office. These used chip and pin, and that was a traumatic enough transition. Many oldies would use dates of birth, or write the number on a bit of card, kept in the 'pension purse'. Many would also send a friend to collect their pension, entrusting them with card and pin. Few, maybe 25% actually used proper modern bank accounts.

Fortunately, local post offices were usually common and within walking distance, though many are closed down now. Also, fortunately, we have little crime here and oldies are generally respected enough and left alone to go about their lives.
Quote:
I mean I do hope The Bill wasn't lying to me too much.
That's quite dated now, but apart from showing the dark side to estate living, it was pretty realistic.

Quote:
And do the English still say "I should sit down" when an American would say "You should sit down" or "sit down(imperative)"?
I don't really know what you mean. A parent might scold a fidgeting child and tell him to 'sit down', if say, he was running around a church. It would be considered rude to tell an adult to sit down.
Quote:
Now for a comment that is at least close to being on topic:
Various IRAs and 401ks to exist but are often depleted by bad investments, fraud, etc.

Many retirement accounts are riddled with fees for management, cashing out, just about anything gets charged a variety of fees so some these "accounts" are rather meaningless in terms of actual retirement.

Also here in the US it is often totally impossible to force a plan administrator to PROVE how he arrived at the base pension. Changes to the base pension can take a lawyer and a CPA (Articled Clerk in the UK) to get supporting data, but getting supporting data for the initial pension payment is often impossible.
I've read about your IRAs and 401s. What we have here has changed recently. Till about 15 years ago, many company pensions were 'defined benefit final salary', where employer and employee would each pay in about 3% of salary, free of tax. Upon retiring at 60 ( or more) the pensioner would get a defined level of company pension proportional to his length of service. E.g. work 40 years, and get a lifetime pension of roughly half of your final salary.
But that proved unsustainable, so from early 200x, many company schemes became 'defined contribution' The contributions were similar, and still tax free, but went into a ring-fenced investment fund. Upon retirement, that fund had to be used to buy an annuity which would generate a pension at market rates.
But now, we have a few great enhancements: The DC schemes still build up a fund, but the pensioner can then 'draw down' from that fund as he sees fit, leaving it partially invested in pretty much anything. There are safeguards to stop the young retired just taking their fund and squandering it on a fast car, but still much discretion. I/we can have Self Invested Personal Pensions (SIPP) into which we can put almost all our salaries, free of tax, into stocks or shares or whatever. We can switch investments within the SIPP, but can only draw down the funds after age 55 ( soon to be 57)
All that is in addition to a state pension which kicks in at age 65 to 68 at about £160 per week. A bit less if you haven't worked or made enough NI contributions.
Quote:
Public and union pensions are often triple and quadruple dipped.
Not sure what you mean. Some pensions are tied to the final year salary, and so some oldies would bust a gut on overtime that year. but most now use some sort of career average, so are not so exploitable.
Within pension funds, there are generally some %age admin fees, but we Brits are savvy, and the competition keeps fees low. Only in the last two years has the government made it mandatory for an employer to offer a pension scheme. Before that, they were generally offered as part of an benefit package by decent employers, after maybe 6 month in a job..

http://www.hl.co.uk/partners/search/sipp?theSource=PCHLS&Override=0&adg=G+HLBS+SIP
February 17th, 2018 at 6:59:28 PM permalink
Fleastiff
Member since: Oct 27, 2012
Threads: 62
Posts: 7831
Quote: OnceDear
I don't really know what you mean. A parent might scold a fidgeting child and tell him to 'sit down', if say, he was running around a church. It would be considered rude to tell an adult to sit down.
Cop to suspect standing in a detention room: In America, cop barks a command to sit down but on The Bill cops says "I should sit down" meaning you should sit down.

>>>>>>>>>>Not sure what you mean.
One union member getting three, four or even five pensions.
A business manager for four locals would get a pension for being a union member and a pension for each one of his four union positions.
February 18th, 2018 at 1:55:59 AM permalink
OnceDear
Member since: Nov 21, 2017
Threads: 11
Posts: 1504
Quote: Fleastiff
Cop to suspect standing in a detention room: In America, cop barks a command to sit down but on The Bill cops says "I should sit down" meaning you should sit down.

That sounds like a bad bit of script writing. If there were consequences for not sitting down, there might be an implied 'If I were you' at the end if the 'I should sit down'. . . if I were you. But it's not a notable bit of UK dialect, unless it's a London thing. Across the UK there are many dialects that are only understood locally, though it's one language, just as you Americans have adopted and adapted English, but use some very different expressions.

Quote:
>>>>>>>>>>Not sure what you mean.
One union member getting three, four or even five pensions.
A business manager for four locals would get a pension for being a union member and a pension for each one of his four union positions.
Oh, I never heard of that. Tends to be one pension per employment and one employment at a time. Some scheme's much more generous than others.
August 2nd, 2023 at 4:05:15 AM permalink
odiousgambit
Member since: Oct 28, 2012
Threads: 154
Posts: 5052
looked for and found this old thread [SS discussion can go here]

what I was actually looking for is not here though. Investigating SS I've found a couple of things that surprised me, I need to look it up and save it somewhere. These things are not easy to find! As I remember,

* the cost of living adjustment for around 1950 or so was something way over 50%, which says to me it was way overdue. Was part of the original plan to not have "colas" at all [or insufficient such]? ... so that it could remain solvent while going to a crazy 2-3 workers per retiree eventually, as they must have known. Finally political pressure ruined that idea.

* incompetent administrators did a cola once that was 'too sweet' and arbitrarily cut it off for people born the next year. There is an association of people still complaining about this

I'll have to see if I can find these details again. Searching now, it's not coming up
I'm Still Standing, Yeah, Yeah, Yeah [it's an old guy chant for me]
August 2nd, 2023 at 4:11:54 AM permalink
odiousgambit
Member since: Oct 28, 2012
Threads: 154
Posts: 5052
ah, here is one of them. 77%, unbelievable!

October 1950: Congress authorized the first cost-of-living adjustment (COLA), an increase of 77 percent.

https://www.aarp.org/retirement/social-security/info-2020/social-security-history-timeline.html
I'm Still Standing, Yeah, Yeah, Yeah [it's an old guy chant for me]
August 2nd, 2023 at 7:03:33 AM permalink
rxwine
Member since: Oct 24, 2012
Threads: 188
Posts: 18629
Quote: odiousgambit
ah, here is one of them. 77%, unbelievable!

October 1950: Congress authorized the first cost-of-living adjustment (COLA), an increase of 77 percent.


That change must have decimated the cat food industry.
You believe in an invisible god, and dismiss people who say they are trans? Really?
August 3rd, 2023 at 3:18:05 AM permalink
odiousgambit
Member since: Oct 28, 2012
Threads: 154
Posts: 5052
I finally found the details for the other surprising thing I found out about SS.* The blunder of calculationg a too generous COLA and having to fix it is referred to as “the notch” for some reason. Here is what SS says about it,

Quote:
The term “notch” refers to Social

Security benefits paid to people born

between 1917 and 1921. The notch result-

ed from a 1972 change in the Social

Security law that provided an annual auto-

matic cost-of-living adjustment (COLA)

for benefits. The formula used to calculate

the COLA was flawed, and the benefit lev-

els actually rose faster than the rate of

inflation. Before the Congress corrected

this error in 1977, the benefits for many

people born between 1910 and 1916 were

calculated using the flawed benefit formu-

la, and they received an unintended wind-

fall from Social Security.

When the Congress fixed the mistake, it

wanted to avoid an abrupt change for

those who were about to retire, so it pro-

vided a transition period. Therefore, when

Social Security benefits are calculated for

people born between 1917 and 1921, two

computations are used. One calculation

uses the new (and correct) 1977 formula,

and the other uses a special transition for-

mula. Benefits are based on whichever cal-

culation pays the higher benefit. Benefits

for everyone born in 1922 and later are

calculated using only the new and correct

1977 formula which generally results in

lower benefits than those computed using

the “notch” calculation method


https://www.aarp.org/retirement/social-security/info-2020/social-security-history-timeline.html

So the people born in 1922 felt they got screwed and have never forgotten it. These now very elderly people must be truly few in number at this point, but at least one organization, The Seniors League, still advocates for them. They can sign a petition to get them their money they are due [as they see it]. It says up to $3300 per year is involved, wow. Here it is

Quote:
Petition to Congress: Social Security “Notch” Years

I (and/or my spouse) was born in the Social Security “Notch” years from 1917 through 1926. Notch Victims receive up to $3,300 per year LESS than other Social Security beneficiaries. I hereby PETITION you to vote for and support Notch fairness and thus provide a $5,000 Settlement or an improved monthly benefit for Notch Victims to compensate us for the lower benefit checks we’ve received since the Notch was created. If you are already a co-sponsor of reform legislation, please accept my gratitude — but please continue working to bring it to a vote.

Respectfully signed by this concerned citizen:


https://seniorsleague.salsalabs.org/ssnotch/index.html

https://seniorsleague.org/

* I’ve come to notice most articles use SSA or SSI instead of SS, I guess to avoid the notorious Nazi organization’s initials for comparison. I started with just SS so I guess I’ll stick with that
I'm Still Standing, Yeah, Yeah, Yeah [it's an old guy chant for me]
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