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Author: Chipsboss Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 740113  
Subject: Re: Japan cuts pensions Date: 3/29/2000 1:28 PM
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When you got your last statement from SS, how much did it say you "contributed" over the years?
I paid the maximum FICA tax every year from 1963 to 1993. I paid small amounts of FICA from 1960 to 1962 when subsisting on starvation wages in the service.

How much would that contribution be worth today if it was invested only in the S&P 500 index?

Far more. Still, social security doesn't just buy some possible retirement benefits, but also some survivors and disability benefits. All of these benefits are overpriced for more prosperous people and underpriced for the others. That's intentional on the government's part. I don't like it much, but there it is.

Was there a point where you would have exchanged your future benefit in return for being able to own your contribution (like a 401k or IRA)?

Sure, any time prior to about age 45 or 50. I haven't done the precise calculations. I would have supported a switch to privately-owned accounts even if it hurt me financially to some extent. Now that it's much too late for me to take advantage of changed rules, I will be grumpy if the rules are changed to my disadvantage. I worked in the defense industry which is notoriously unstable. I moved from company to company several times in my first 15 years of work (18 years, counting the Navy), losing all retirement benefits from them. My meager non-indexed pension is based only on the last 15 years of work and is less than my promised (not guaranteed) Social Security benefit.

I hope you are around AT LEAST to age 95 to collect all you can.

Thanks for the kind wishes. The men in my family usually die young, between 40 and 60, so I'm bucking the odds already.

Unfortunatly, none of us who have paid in heavily but have not yet collected are assured a single dollar on our "investment".

Sad to say, you are exactly right. Notice how the advocates of government programs claim that the government is moral in its behavior, while private business is not. No private insurance could escape paying legitimate claims on the grounds that the policy-holder doesn't need the payoff or the company would rather use its money some other way. A private insurance company couldn't spend all its reserves either the way Uncle Sam has. Folks need to know that the bonds held as assets by the Social Security Administration are backed solely by the government's promise to pay, not by any assets.

About the only thing that could reconcile me to losing my social security benefits at this late date would be the knowledge that you and other people including my young relatives are no longer required by law to pay into the S. S. Ponzi scheme. I expect that the government will not change its policy of taxing the prudent and productive to reward those who are not.

Chips, who wishes you and yours both longevity and prosperity

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