Social Security?

[wmw999 2,600]

In the golden olden days, old widows would take in sewing to make ends meet. Old people often would live with their children, until they died in their 60's. That was generally less than 10 years after they stopped working.

The world has changed. Saving enough to provide a comfortable retirement when you live on minimum wage is impossible in many places. Yes, if you live in rural America you might be able to. But even if you grow your own food to help out, taxes on the house you bought, the cost of drugs you have been prescribed, medical costs for the spouse that none of the children want living with them, insurance for the car -- these all cost money, and can take a big enough chunk that the careful plans are no longer valid, and you don't have the income to make new, valid ones.

It sucks to be old and poor, even more than it sucks to be young and poor. It's easy to say no one has to be poor, as long as you're not the poor one.

How do you think the sackers and checkers at the grocery stores end up? The lifetime mechanic's helpers who were never really smart enough to be full-up mechanics?

Remember that half of the people in the US are below average. Just because you don't actually know any of them doesn't mean they don't exist, or deserve to exist. Heck, if they all died, many of us would then be below average.

Wendy W.

There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

[EricTheRed 0]

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Remember that half of the people in the US are below average. Just because you don't actually know any of them doesn't mean they don't exist, or deserve to exist. Heck, if they all died, many of us would then be below average

Yep. But at least there would be plenty of work available digging holes to put 'em in

illegible usually

[Gravitymaster 0]

The percentage of return on SS over a lifetime is about 1%. Can you honestly say you think thats a good return? If people had the same money taken out for SS and were allowed to invest in a private fund, don't you think there's a good chance they would end up with more money for retirement? We could still fund SS as the safety net it was originally intended to be. Not the retirement plan it has become.

[wmw999 2,600]

T bills return just a little more than that. What we're looking for is absolute safety in SS. The more return, the less safety. Really. I don't really believe in the lockbox, but pension plans have a certain minimum they have to maintain legally and morally -- I'd really like to think that our government was held to a higher standard.

Especially with companies bailing out of their pension plans. Now all those carefully-made plans by those employees are for naught. I guess they were stupid, picked the wrong company to work for .

Wendy W.

There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

[SudsyFist 0]

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I can only speak for myself, but I'd be willing to allow SS to buy me out for a percentage of what I have contributed if I could opt out entirely and invest the annual SS payments I have to make now. I'm sure many would agree with me. Why not keep SS as a safety net and let those of us who know how to invest use at least a percentage of what we were already paying. Heck, I'd be willing to continue paying SS at 50% of my current rate with no benefit.

Great idea! If the numbers work out, I can't see how *anyone* could legitimately complain about such a proposal; it's a compromise, it's flexible, and it gives people choice. I'd be first in line for the forms.

Nice!

[Channman 2]

Wendy,

I agree with much of what you have written, I was only pointing out what appears to be a shift. Corp. i.e. GM have gotten major concessions from the union to cut health benefits and restructuring retirement planning for their employees.

United Airlines, Ford Motors....list goes on & on, corporation forfeiting their Pension programs for 401k accounts, state governments under funding there pension accounts.

With people living longer and the likly hood of one spouse or the other needing some form of long term care or assist. living as you have mentioned will become a huge problem not only for families but the nation.

It is therefore a need to educate those who can and are willing to make financial planning just as important as planning to go to the next boogie.

But I do know alot of the average, I was one of them once. I've been in debt, financial hardship, stuggled to make ends meet. But someone shared a very basic concept with me in 1989 which over time has changed my life and that of my family.

Debt free since 1996 except the morgage, which will be payed off in 2 years. It does'nt take alot of money to gain wealth, but it does take some planning and time.

>Just because you don't actually know any of them doesn't mean they don't exist, or deserve to exist.

I'm realy a very nice guy, not wishing to sound cold or heartless. Hope that sunroof is fixed.

Cheers to ya

[SudsyFist 0]

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Again, you are misunderstanding. If I walked in and said "I want us to restructure our marketing program but any solution must include increasing our Customer Satisfaction reports, I am not pre-determinng what I want to hear. I am simply setting what I feel is a necessary ingredient to the overhaul.

That makes sense; I'm just thinking that the ultimatum the Bush administration brought to the table is more than just an ingredient: it's the basis of the overhaul. Not to mention it's pretty obvious how many would react to that specific ultimatum, a bit different than folks would respond to a requirement of increasing customer satisfaction.

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Out of what kind of draconian leadership book do you operate? FORCE PEOPLE? How about guide, coach, stimulate, etc.?

Kind of hard to do when your political opponents have already pre-determined they are going to demagogue the issue isn't it?

There are many methods of resolving such conflicts, and good leaders know how to do so effectively. Being confrontational, particularly with people who don't have to report to you, is rarely the best solution.

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Leadership? Force people?

Force?? Who said force?

You did! ("You have to force people to break out of a certain mindset.")

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Principled Negotiation. Perhaps you should try Getting To Yes by Fisher and Ury. Here's a quickie.

Not only read it, but have it on CD.

If you've adopted those principles, then you're a good man, Charlie Brown. Wish more folks would hop on that bandwagon.

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They chose to demagogue it instead for political gain. Give me one example of an alternative the Democrats came up with except raise taxes.

I've not spent a lot of time keeping current with these details, so I can't offer you anything there. I'm sure if there were other proposals, someone here will point them out, though.

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Again, I remain unconvinced that ultimatums are a good way to stimulate healthy debate and negotiation, but I'm willing to entertain arguments to the contrary.

And again, you misunderstand. No ultimatum was given, so your whole argument is invalid.

Methinks you're misunderstanding here... my contention wasn't based on the particulars of the social security issue; it was kicked off by what you said here:

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The point is that issuing ultimatums is not conducive to healthy debate or answers.

Sure it is.

And that's what I was wrapping up with.

Sorry it took so long to reply; I was busy being a troublemaker!

[Channman 2]

Safety and Guarantees, such as CD, Savings Accounts and placing large amounts of money into T-Bills exceeding 80% of ones assets is a path to poverty.

One can not out pace inflation and taxes placing their money in such accounts. These accounts are fine for securing a portion of assets from loss but never for gaining financial independance.

Got to go and get some lunch.

[kallend 2,175]

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95% of Americans find themselves either still working or financially unable to make ends meet at retirement. .

If they are still working, how are they at retirement?

...

The only sure way to survive a canopy collision is not to have one.

[wmw999 2,600]

The sunroof is still sitting there in the garage mocking me, but I have some ideas, and no time until Saturday or Sunday to work on it.

I know you're not heartless -- the "you" in my diatribe (and this is generally true of any diatribe of mine by the end) is sort of a general "you." Once I get going, I forget I'm not necessarily talking to a whole audience

Wendy W.

There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

[tso-d_chris 0]

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The sunroof is still sitting there in the garage mocking me, but I have some ideas, and no time until Saturday or Sunday to work on it.

Have you thought about just welding a piece of sheet metal over the hole? That would teach that damn sunroof to mock you!

[ReBirth 0]

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Then what was the point of quoting the first sentence of the Constitution?

Perhaps if people had a little more awareness and fear of what can happen to you when you get old if you don't save. The "Oh, the Govt. will take care of me" mentality would start to disappear.

To show the promoting the general welfare through cooperation is the main reason for gov't to exist.

Perhaps if people could get off their high horses and realilze that more than 35MILLION PEOPLE live in abject poverty in this country, they'd see that the gov't is NOT taking care of anybody, and neither is anyone else. How do you save for retirement when you can't feed yourself?

I wish conservatives could garner some sympathy instead of selfishness. It amazes me how opposed people are to assist people in the basic necessities of life when it is a miniscule part of the budget.

How about focusing fiscal conservation on pork barrell spending where it might actually put money back in your pocket instead of trying to pull food out of the mouths of babies and taking the roofs away from the elderly.

[ReBirth 0]

You might want to take a look at the article on the front of the WSJ today. "How Bush Fumbled Social Security Plan".

Why not do some research about the opposition from REPUBLICANS and CONSERVATIVES to his plan. And read about the mistakes that his SUPPORTERS are claiming he made.

[Channman 2]

They, being the 70 year olds working in Walmart passing out carts, little old ladies working At Wendys picking up trays and cleaning tables i.e. having to work because SS and retirement income is not providing the basic living expenses.

These are just two examples.

[kelpdiver 2]

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And I said I was a contract W2 worker. Not 1099. I don't think SEPs or SIMPLEs apply.

Ahh, that's different. But you were a consultant, I'm assuming. Making a higher hourly wage than a full time employee...right? I've worked that way before too. And the extra pay per hour is to compensate you for not getting all the normal bennies.

But even if that's not the case....as the conservatives are wont to say....go find another job if you don't like the one you have. No one made you take a job that doesn't offer 401k, did they?

If you're not going to stay on subject, why bother posting?

This thread is not about educating you in the realities of the growing consultant W2 workforce. It's about SS and retirement savings.

So why I work where I do isn't the relevent question. The question should be, if we're really concerned about people not saving as they should, why is the IRA at 4k (up from 3 last year) while the 401k is at 14k?

[Channman 2]

>...I was a contract W2 worker.

Not wanting to beat a dead horse here, but does that mean you are self employed or from the word (was) at the time self employed?

A self employed person can qualify for the Simple IRA which allows up to $10,000 of gross compensation to be invested taxed deferred.

There is also the SOLO IRA which allows up to 40,000 taxed deferred investments if you meet a certain income level which I believe is $200,000 dollar income. (Family Run Business)

A SEP plan allows tax defferals on adjusted net income to a maximum of $40,000.00. So you would have to have a net income after taxes of $200.000 dollars. The only down side is if you have employees you have to make contributions to their accounts which can be difficult for up start small businesses.

So being self employeed or running a home business can be very good if your making the money, but far better than traditional IRAs if you are making an average income, because of your ability to withhold more.

Pulled some of that out of memory, I'll check the facts to insure I'm not giving you any BS.

Cheers

[ReBirth 0]

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If you're not going to stay on subject, why bother posting?

because i can

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This thread is not about educating you in the realities of the growing consultant W2 workforce. It's about SS and retirement savings.

I was a W2 consultant for years, thank you very much. Somehow I managed to save money for retirement. Maybe the thread should be about educating you on how to save without a stipend (tax break) from the gov't.

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The question should be, if we're really concerned about people not saving as they should, why is the IRA at 4k (up from 3 last year) while the 401k is at 14k?

Because they are two completely separate vehicles. IRA's are self directed. 401ks are "supposed" to be safer because the theory was managers were supposed to offer plans and advice to keep you diversified. There are a whole slew of rules that go along with 401ks that the avg investor has absolutely no knowledge of or about. It's comparing apples and oranges. The gov't allows you to divert more income into them because there are more contols in place. And once again, if you work for some place that W2s you but won't give you benefits, you have no else to blame. You should have negotiated your salary to take that into effect. Why should the gov't be responsible for making sure you don't screw yourself over? AND you didn't answer the question. Were you paid more as a consultant than you would have been as a normal employee? Yes, I'll bet you were. Why? To compensate you for the lack of benefits.

NOW TO REALLY GET BACK ON TOPIC (hint...you strayed yourself, chum)

How would increasing the IRA limit fix SS?

[kelpdiver 2]

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How would increasing the IRA limit fix SS?

Ask billvon - he's the one that said we have the solution for this thread's problems in the 401k.

That is, the problem of people relying too heavily on SS instead of their own vehicles.

BTW, it's not very accurate to say 401ks are much more closely controlled. Whenever you leave a job, you roll that money right into a self directed IRA (unless you're a fool).

[kelpdiver 2]

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>...I was a contract W2 worker.

Not wanting to beat a dead horse here, but does that mean you are self employed or from the word (was) at the time self employed?

It means you're working contracts while on a W2 (employee) status for an intermediary agency. and that you wasted 2 or 3 minutes of typing.

Thanks to the Microsoft case, contract work is much more likely to be W2 then self employed.

[ReBirth 0]

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BTW, it's not very accurate to say 401ks are much more closely controlled. Whenever you leave a job, you roll that money right into a self directed IRA (unless you're a fool).

True...as i said, it was the intention. They didn't really do a good job with the implementation (go figure, gov't accountants screwing something up). But this line of questioning regarding the differences between different tax deferred investment vehicles can't be answered without a rewrite of the entire tax code. Which, I understand, Bush has received a recommendation from a group he set up to vastly simplify the code without changing the actual cash flow all that much in terms of income for the fed or who pays how much. Hopefully that's true. (let's leave balancing the field to another discussion as well). But from what I understand, it basically gets rid of all the different kinds of tax shelters and puts them under a single plan for everyone. If he does that, I'll finally have something nice to say about the guy

[kelpdiver 2]

from what's come out, those recommendations look like a major shift of taxpaying from Texans to Californians and New Yorkers. Also probably DOA.

[Gravitymaster 0]

http://www.fortwayne.com/mld/newssentinel/news/editorial/12944026.htm

EDITORIAL: Say 'yes' to a simpler tax code

Chicago Tribune Knight Ridder/Tribune Business News


Oct. 19 - Earlier this year President Bush named a panel to come up with bold ideas to overhaul the nation's tax system, and the members took the job to heart. They served up their ideas on Tuesday, and they are big.

The President's Advisory Panel on Federal Tax Reform endorsed ways to make the U.S. tax code simpler and fairer. The revamped code, as envisioned, would reward the savings and investment choices that are critical to the nation's fiscal health.

The endless paperwork involved in calculating deductions, credits and the final amount due would largely disappear. Although the proposed changes are immense, most taxpayers would end up paying about the same as they do now.

Some proposals are already stirring fierce Democratic opposition. There's good reason to think that tax reform will be swallowed up by the same scare-mongering that has doomed Social Security reform. That would be a terrible disservice to Americans.

We need to have this debate. More than that, we need to act on it.

What's in store? Here's what the panel recommends:

--Abolishing the Alternative Minimum Tax. The AMT was concocted in 1969 to make sure millionaires couldn't avoid paying taxes altogether. But it was not indexed for inflation, so each year more middle-income Americans are ensnared by the AMT. It forces taxpayers to calculate their taxes twice--a second time using the AMT--and pay the higher amount.

--Shrinking the number of income tax rates to four from six, a change that would put 75 percent of individuals and families in the lowest, 15 percent bracket.

--Replacing the many personal and family tax breaks with one family tax credit available to all. The Earned Income Tax Credit would be retained for the poorest families. Many families fail to claim the EITC because of its complexity. So the panel recommends that workers be given the option of having the Internal Revenue Service calculate the EITC for them.

--Throwing out the baffling array of retirement, health and education savings tax breaks and replace them with three simple savings accounts. The money put in would be taxed, but the gains and withdrawals would be tax-free.

--Eliminating the federal deduction for state and local taxes, and cap the deductions for home mortgage interest and the cost of health insurance provided by companies.

By and large, these are sound ideas. The tax code has become hopelessly convoluted and confusing, and as a result people spend great sums of money for professional tax preparation. That doesn't have to be the case.

Congress has not shown the guts to take on Social Security, and the cost of such cowardice will be evident in years to come. Here's another chance to step up: Simplify the tax code.

[kelpdiver 2]

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--Eliminating the federal deduction for state and local taxes, and cap the deductions for home mortgage interest and the cost of health insurance provided by companies.

in simpler words- increase the tax burden on those who pay state income taxes and live in an expensive housing market.

[Gravitymaster 0]

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--Eliminating the federal deduction for state and local taxes, and cap the deductions for home mortgage interest and the cost of health insurance provided by companies.

in simpler words- increase the tax burden on those who pay state income taxes and live in an expensive housing market.

Sucks doesn't it? At least they are recommending eliminating the AMT. I'd have gotten ensnared by that one if not for my CPA and Financial Consultants, and some advanced tax planning.

[wmw999 2,600]

Did you pay more to your CPA and financial consultants to avoid the AMT than you would have paid had you gotten "ensnared?"

Wendy W.

There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)