How would you fix Social Security?

2016-11-06T14:44:41-05:00

For those that are unaware members of the Railroad Retirement Board system are exempt from Social Security and use the RRB instead. Currently the RRB rules are more generous than SS and the RRB is allowed to invest surplus funds via a non-profit trust. Currently the RRB has a $25 Billion surplus and allows railroad members with 30 years service to retire at age 60 with full benefits.

Response by LTC Private RallyPoint Member made Nov 6 at 2016 2:47 PM

2016-11-06T14:47:12-05:00

Ask Ben Stein! We have already asked President Reagan, Bush, Slick Willie Clinton, GW Bush and now President Obama and nobody wants to try to address the problem, Bueller, Anybody?

Response by LTC Private RallyPoint Member made Nov 6 at 2016 2:58 PM

2016-11-06T14:58:47-05:00

The RR is a dream retirement situation. I would have to have more info IOT comment on the five choices but I think we all know that SS needs changing. Preferably I'd just opt and and keep my money as I earn it.

Response by LTC Kevin B. made Nov 6 at 2016 3:06 PM

2016-11-06T15:06:46-05:00

I'd do the following:

1. Raise the eligibility age to 70.
2. Index the age of the onset of benefits to life expectancies. When it started, the average life expectancy was ~65, but now it's ~80. If you shift the retirement age to 70, index that 70 to the life expectancy (e.g. eligibility = average life expectancy - 10 years). Thus, as life expectancies increase (decrease), the eligibility age rises (drops).
3. Eliminate the earnings cap on payroll taxes.
4. Index the monthly benefits to a basket of goods/services that more accurately reflects the goods/services that senior citizens face.

Response by LTC Stephen F. made Nov 6 at 2016 3:07 PM

2016-11-06T15:07:42-05:00

SPC Erich Guenther I would allow young people to establish personal social security accounts. They could select from a listing of funds to invest their social security income which would be vested and owned by the worker instead of a promissory note from the government. I would allow people to invest conservatively or more aggressively. They would be able to make adjustments no more often than once a week.
I think up until 30 years old might be a reasonable point to allow people to switch to this system.
If the government had a Sovereign Wealth Fund with audited records, individual contributions could be transferred to personal accounts until say age 50.
Thanks for drawing my attention to the discussion LTC Private RallyPoint Member

Response by Lt Col Jim Coe made Nov 6 at 2016 3:24 PM

2016-11-06T15:24:23-05:00

I think the solution is some of the above, including:
-increase retirement age for people under 40. Probably to 70.
-remove cap on SS contributions so all income is taxed
-means testing for SS recipients. Set a high max income you can have and still get SS. Something like 500K per year.
-starting with workers entering system in 2020, make SS accounts personal. Allow some control of where money is invested.

Response by CAPT Kevin B. made Nov 6 at 2016 3:28 PM

2016-11-06T15:28:22-05:00

OK I'll pull the pin and open it up more. The difference between RRB and SS is there's a firewall on what the funds can be used for with the RRB and much looser on SS. Actually both methodologies are outdated and bloated. The sheer weight of administration, watchers watching the watchers who watch, etc. is essentially nonproductive waste of money. When the RRB says the money "is primarily from" railroad and payroll taxes, that's codespeak for John Q Taxpayer getting shafted for the rest. I'd propose a mandatory ongoing IRA program by everyone. For those who don't want to think, it could be patterned after TSP which has few choices but isn't bloated like the other systems. Maybe a mandatory horizon plan that adjusts with age. BTW everybody pays. If you make more, you'll get more. With the reduction of corporate tax (we need that), a portion would be retained for employer contribution, preferably matching similar to TSP. Overall everyone is an investor with their money working for them. I took a look at what my SS cumulative is compared to what I'll get out. What a waste! I could have made much more by that steering into TSP G Funds my whole life, that's how bad it is. I'll get jumped on by those wanting to ensure everyone has a "minimum" entitlement. Great topic for discussion, but get the first things in order first. Another what if musing, but just looking at the two choices, I think we can do better than that.

Response by Capt Private RallyPoint Member made Nov 6 at 2016 4:38 PM

2016-11-06T16:38:42-05:00

Just return what was taken for other use.

Response by MCPO Roger Collins made Nov 6 at 2016 4:41 PM

2016-11-06T16:41:13-05:00

My question would be if the RRB has any where near the same numbers as SS and SSDI. If they are any way to do this without screwing up the RRB, it would be a winner. Now we can use all that cash secured in Al Gore's lockbox for investments.

Response by Col Dona Marie Iversen made Nov 6 at 2016 5:06 PM

2016-11-06T17:06:08-05:00

Keep the politicians out of it...

Response by PO1 Michael Fullmer made Nov 6 at 2016 6:00 PM

2016-11-06T18:00:25-05:00

I remember after my grandfather died, having worked for the RR for 50 odd yrs, my grand mother's pension from the RRB was most generous right up to the day she passed. If that system worked that well for those retired RR'ers, then why couldn't it work that well for everyone else.

Response by Capt Michael Greene made Nov 6 at 2016 6:55 PM

2016-11-06T18:55:07-05:00

To those who would privatize SS, I give these observations.

A. For many decades, SS has worked pretty well. It's one of the most successful government programs in existence. So make tiny adjustments if you must, but don't change a fundamental aspect of the program.
B. Investing in stocks? Privately managed accounts? I have just three words: 1987, 2000, 2008.
C. Look at who really supports privatization (or whatever they want to call it): The bankers who will profit from it and the senators who profit from them.

Response by SFC George Smith made Nov 6 at 2016 7:52 PM

2016-11-06T19:52:07-05:00

Put the 2 Trillion $$$ Bill Clinton out of the Social security Trust fund and replace ... re establish The social security pay outs, to the People who paid into the Trust fund and Those who never put into it don't get shit...

Response by CPO Amb. Terry Earthwind Nichols made Nov 6 at 2016 8:18 PM

2016-11-06T20:18:21-05:00

Stop stealing from it...

Response by CPT Jack Durish made Nov 6 at 2016 8:22 PM

2016-11-06T20:22:40-05:00

It's going to take a combination of "fixes". Probably including raising the retirement age, cutting back on benefits, and even more. Sadly, there is no SS Trust Fund. The govt tore open the doors on that and robbed it. Sure, they left IOU's to cover what they took but they aren't worth the paper they're printed on.

Response by Col Joseph Lenertz made Nov 7 at 2016 8:17 AM

2016-11-07T08:17:28-05:00

We are living significantly longer than when SS was created, so I would phase in a gradual increase in age to catch up with our increased life span.

Response by SFC Dennis A. made Nov 7 at 2016 8:24 AM

2016-11-07T08:24:18-05:00

If politicians had to participate in the Social Security program like everyone else instead of creating their own special programs Social Security would not be in the shape it is in. They would be protecting it and not trying to label it as an entitlement or a handout.

Response by SSG Gerhard S. made Nov 7 at 2016 9:28 AM

2016-11-07T09:28:20-05:00

Regarding one of the choices... There is no Constitutional basis for SS in the first place. So an amendment for its funding makes little sense.
Social security was only meant to be collected by people who outlived their expected lifespan, and then likely to be collected for a short time. When SS was enacted the average lifespan was 65, the same age as the entitlement began. Also there were about 43 workers for every recipient. Today, there are about 4 workers for every recipient, and people collect for SS for decades. So, either we increase the entitlement age back up to the average lifespan, raise taxes, or phase this unworkable plan out of existence.

Response by SSG Wally Lawver made Nov 7 at 2016 11:01 AM

2016-11-07T11:01:06-05:00

Stop politicians from raiding it, AND STOP LAWYERS and malingerers from raiding it ( I am constantly meeting YOUNG 18-low 20 yr olds who are retired and on SSI, that appear healthy ,maybe work under the table a bit to...( I know I am not a Dr and its not my place to judge) BUT if all the SS money is paid out to 19 yr olds who "hurt my back,knee etc" stop putting in, and expect to draw forever,,,how the hell is that possible? I know a cousin who is blatantly abusing this LEGALLY WITH A LAWYERS help (for a cut).........Our SSI and welfare system are to easy to game. Just my 2cents worth...............

Response by SCPO Jason McLaughlin made Nov 7 at 2016 12:23 PM

2016-11-07T12:23:04-05:00

I would raise the retirement age to 70.
I would remove the cap on contribution.
I would make the program needs based.

Response by PO3 Donald Murphy made Nov 7 at 2016 1:42 PM

2016-11-07T13:42:55-05:00

Do what England did in 1988;

1. Admit that the program is broken. Do not apply blame; not constructive and won't really solve anything.

2. Stop the program.

3. Make everyone accountable for their own retirement using stock investments. A guaranteed minimum pension is set and each person is responsible for contributing to that minimum. The plan is set up so that there is no risk. If the portfolio picked by the citizen does well, their portfolio does well. If it doesn't, they get the guaranteed minimum. No risk. Ever.

4. Refund everyone's contributions two-fold. If you had 1000 in your pot, the government gives you 2000. As a side bonus, when you find a plan to put your money in to, the government then matches your contribution. So if you picked a plan with MetLife and put 2000 in to it, the government would put 2000 in as well. AFTER THAT POINT, THE GOVERNMENT HAS WASHED ITS HANDS OF YOU, CONTRIBUTION-WISE.

5. Give everyone one year to turn over to the new system. Failure to do so and the government cuts off your matching bonus. So if you joined the plan and put 2000 in it, the government puts nothing.

6. Age 65 for pulling your funds out tax-free.

7. Remove Social Security disability. Put in place an AFLAC-type policy that pays out if you're sick/disabled.

Response by CDR Private RallyPoint Member made Nov 7 at 2016 3:47 PM

2016-11-07T15:47:00-05:00

This a challenging question because it depends on what you believe Social Security is meant to do in this day and age. Many decades ago social security was the only program that helped many of those in the lower income brackets survive once they stopped working. It also supplemented a persons pension. The advent of the 401K programs as supposed to alleviate the strain of contributing and maintaining pensions on corporations by allowing workers to fund their retirement. Of course the other part of this program was continual pay raises each year to help workers invest and save what would be the equivalent of a pension. Unfortunately those pay raises never occurred in the manner required and many today will need to rely on social security to ensure ends meet as they retire.

My solution would be as follows:
1. Currently social security contributions top out at $127,200 in 2017. Above that amount the percentage of income that is taken for social security decreases. I would remove this limit. If you make $12 million then you should pay 6.2% on the $12 million.
2. I would also increase the age at which you can start taking withdrawals except if you can prove you need the money.
3. I would have initial payouts smaller and increase as you get older to replace investment income.
4. I would setup the social security in a similar fashion as TSP in that there are funds to invest the contributions in. For instance each year group of workers would be invested in a target date fund and have a target date for when the can start to get withdrawals. so workers born in 1960 would be put into a 2030 target fund. Those born in 1970 would be in a 2040 target fund, and so on. The farther off the date the more risky and more rewarding the investment. The closer to retirement the more cautious the investment portfolio. Basically the funds from younger workers are invested in higher return investments to provide greater growth while older workers contributions are invested in stable return investments to provide regular income for those who are receiving SS checks.
5. As mentioned by others, congress can not touch the program or the money involved.

While a sovereign wealth fund or the RRB sounds like a great idea the issue is that we don't have excess money (RBB) and we don't have a significant source of national income like oil (Sovereign wealth fund).

I would argue that social security was once an entitlement but now it is a necessity. Had corporations keep the pension program around then there could be a significant cutback, but that is not the case.

I've toyed with idea of getting rid of SS and making it into a mandatory 401K like program but that defeats the main purpose of SS which is to help those who need it most live day to day. Without the large single pot of money there would be no checks for the permanently disabled and those who are extremely poor and never had a chance to save. Of for that matter the baby boomers who a screwed thanks to the mistakes they made with the housing market or the kids of the latest generation who may not have SS and will have a crippling national debt to deal with. I suppose a smaller fund for those truly needy and everyone else gets 401K like program could work. Still it would be tough to do, especially since the program has been around for so long, so many people are invested and it is a behemoth. Better to tweak the program at this point.

Of course you will not be able to do anything without a concrete plan that ensures contributors don't suddenly lose money. With out that you are dead in the water on trying to change SS.

Response by CW5 Private RallyPoint Member made Nov 7 at 2016 4:02 PM

2016-11-07T16:02:48-05:00

I would pay back everyone what they paid into it so far and close the program. I checked out my statement. I could quit working today and when I draw it would be only 3 years before I got back my money back. After that it is free money from the Gov't. Makes no sense.

Response by SSgt Robert Marx made Nov 8 at 2016 2:44 PM

2016-11-08T14:44:12-05:00

I would raise the retirement age to 70 and make all income taxable for SS.

Response by LTC Leonard M. Manning, Sr made Nov 8 at 2016 11:27 PM

2016-11-08T23:27:03-05:00

Keep in mind the congress has been raiding the SS funds since as early as the end of WWII - the Marshall Plan was paid for with SS funds through a loan agreement with the Social Security Administration - a loan that the government has neglected to repay. And, every time they need money they raid the surplus finds to fund the bill. Also, 65 years old was selected as the retirement age when SS was established since few people lived to reach their retirement age. There was also a tax payer to retiree ration of 20:1 (?) in the beginning; now we are at 5:1 with the baby boomers retiring. This means that there is not a new baby boom generation behind us to take up the slack and pay the bill.

Response by SGT Mary G. made Nov 10 at 2016 3:13 PM

2016-11-10T15:13:56-05:00

The RRB seems to be a good model for Social Security to apply. However the first order of business is for the "borrowed" funds to be return. They are apparently used as an unaccountable slush fund with no intention of them being returned. Return the funds, invest wisely, and employ people then, as projected, the Social Security fund would replenish and grow.

Response by LTC Joseph Gross made Nov 13 at 2016 10:50 AM

2016-11-13T10:50:40-05:00

We should put the government in charge of the RRB to make them equal! Then they would both suck!

Response by LTC Private RallyPoint Member made Nov 13 at 2016 11:40 AM

2016-11-13T11:40:48-05:00

Make it optional

Response by SSG Private RallyPoint Member made Dec 6 at 2016 7:17 PM

2016-12-06T19:17:26-05:00

I would remove the limitation of Social Security taxes, so that all income would be subject to social security taxes at the current level for earned income under 120K.

Response by SSgt Michael Cox made Jan 3 at 2017 4:00 PM

2017-01-03T16:00:44-05:00

Make it a felony for Congress to remove money from the SSI fund like they did last year when they took 80 Billion out of the fund.

Response by CPT Tom Monahan made Jan 18 at 2017 6:26 AM

2017-01-18T06:26:49-05:00

Raising the age is part of the solution. Let the actuaries do their thing and determine if the SSA "tax" rate needs adjusted. Also need increase the pot for disability. Have Congress return the money narrowed from the trust. Lastly, don't let States, railroads, etc., opt out.

Response by SPC Byron Skinner made Jan 20 at 2017 11:35 PM

2017-01-20T23:35:01-05:00

Sp4 Byron Skinner. I didn't know Social Security was broken. As one of the few on this site that actually draw SS I can't see where anything is broker. The benefits are stingy with about $2.336.00 or some where around that being the max, Which mean for your entire working life you max out your SS every year. No many people can claim that. I think the average before any medicare is taken out is about $1,300 which doesn't even pay the rent. The Social Security tax still takes in more then it pays out. The left over goes into general fund US Bonds at almost zip interest. Social Security is the largest holder of T Bonds.. A couple of years ago a non governmental study was done and the system is good through at least 2050. The algorithm only went that far. Back in the 70's this augment came up that Social Security won't be there in 2020, they were wrong. Benefits could be increased by at least 50% if Congress didn't see the SS Trust Fund as a piggy bank for earmarks and useless spending to pay back campaign contributors. But either way it will be there in 50 years.

Response by SGM Private RallyPoint Member made Jan 24 at 2017 12:22 PM

2017-01-24T12:22:42-05:00

1) Congress raided it. Congress should put it back. Let each side make a list of programs that should be cancelled to put money back into SS. Then swap lists and let the other side cross off 1/2 of the items. Then start cutting programs, dollar for dollar from each list until the deficit is covered.
2) Eliminate Congress' private retirement program. They currently qualify for lifetime payments for as little as two years service. Dump that money into SS and put Congresscritters on it too.
3) Eliminate Congress' private health care system and REQUIRE they use whatever they say is good enough for us.
4) Relock SS (unlocked by LBJ) to keep Congress' grubby mitts out.
5) Require contributions of 15% of payroll into something. Offer 3 alternatives, SS as it is now, an annuity, or a 401k with investments in mutual funds and ETFs. Each person allowed to decide what percentage goes in each, but everyone has to fund their own retirement.

Response by MSgt Wayne Morris made Jan 31 at 2017 8:32 AM

2017-01-31T08:32:43-05:00

First I would insist that SSD be much more difficult to collect. No more "too stressed to work" or non surgical "bad backs". Secondly, no payments to those immigrating into the nation who if 65 or older can draw minimum SSI after 5 years in the country even though they have never worked.
Lock it up and keep Congress out of the fund and insist that they participate along with their staffers.

Response by Maj John Bell made Feb 9 at 2017 5:49 PM

2017-02-09T17:49:11-05:00

Government one size fits all solutions don't fit any.

I would bite the bullet and wean the aging population off it over the next 40-50 years by gradually decreasing contributions, payments, expectations; and participation by attrition. I would tell new workers that they need to educate themselves about savings, investments, and retirement planning and end the program. Retirement is not an unexpected event that takes people by surprise. Those who fail to plan would have to "depend on the kindness of strangers."

People should be able to take care of themselves. If I could have added my and my wives contributions to our private investment portfolios we could have retired at age 52, with an significant increase in monthly post tax income and after providing for our own healthcare insurance tailored to our actual medical history and needs. We would also have a substantially higher net worth that the government could steal upon our death.

Response by Lt Col Robert Canfield made Feb 16 at 2017 11:42 AM

2017-02-16T11:42:53-05:00

Since people are living longer, one thing I would do, is raise the retirement age. On some given effective date, raise the full retirement age (FRA) by one month for every year you are short of the existing FRA. EXAMPLE: if you are now 65 and your current FRA is 66, then your new FRA is is NOW age 66 + 1 month. If you are currently age 26, and your current FRA is 66, then your new FRA is 66+40 months.

Response by PFC Aaron Cox made Feb 23 at 2017 4:50 PM

2017-02-23T16:50:50-05:00

I have been declared by V.A. as 60% Service connected disabled and 40% non-service connected disabled. They also declared me unemployable. This means that I am stuck trying to live on around $1,000 a month and no real means of improving my income status. A few years ago I filed for Social Security. I was turned down for Social Security. I went through the appeals process and had to go to court. Federal Court....where I was treated as though I had committed felony murder. A Hispanic immigrant who had never serviced this Country, never worked a day in their life, never paid taxes was given almost $4,000 in Social Security benefits without having to say a word. I have seen an African American with a brand new Cadillac, right off the lot that day walk out of DHS with $6k in food Stamps. (I was given $65.00). When I asked why this happened I was told that it was because I was Caucasian and if I had been Black, Asian, Hispanic or anything else other than Whit I would have been given more. If you want to yell for equality it should be across the board. If you want to fix Social Security Stop giving it to people who are not life long Citizens and did not pay into it.