OT - Social Security

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Swingman wrote:

What makes you say it is a better deal than SS? Did you compare figures for the amount they contribute and receive as compared to SS. SS and Federal retirement are not direct alternatives, they are completely different. Federal retirement is similar to what a corporation pays as a retirement, it is not intended as a back up system like SS is.
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"George E. Cawthon" wrote in message

Read my previouse message with the statistics from the Congressional Reseach Office, then tell me it is NOT a "better deal"

Congress critters got BOTH CSRS and SS.
Again, quoting the CRO:
1. Full coverage under SS and CSRS 2. The "CSRS Offset" plan, which includes both CSRS and SS, but with CSRS contributions and benefits reduced by SS contributions and benefits.
3. FERS plus SS
4. SS alone
"All members pay SS payroll taxes equal to 6.2% of the SS taxable wage base of ($84,900 in 2002). Members covered by FERS pay 1.3% of full salary to the Civil Service Retirement and Disability Fund. [Congress kicks in 11% of the Members' salary as its contribution]. Members covered by CSRS Offset pay 1.8% of the first $84,900 of salary and 8.0% of salary above this amount into the Civil Service Retirement and Disability Fund.
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Swingman wrote:

Some do and some don't. It's not simple. CSRS is just about over since there was a switch to FERS in 1984. Since the retirement change is still in transition it get pretty complicated but all congressmen pay Social Security payroll tax regardless of the retirment plan,i.e., they have 6.2 percent of pay up to 87,900 (2004 maximum)deducted from wages and 1.45 percent deducted for medicare. Since CSRS is 8 percent, if they have CSRS they end up having 14.2 percent deducted for the first $87,900 and 8% on salary above 87,900. That's a lot.
The other percents you stated are correct. Which means that all members are paying at least 1.3 percent more than regular ss for the first 87,900 plus above 87,900 they 8 percent if CSRS offset and 1.3 percent if FERS. FERS also has a 402 plan where the first 5 percent is matched; CSRS also has a 402 but no employer matching.
The numbers you gave are mostly for CSRS retirements, and those Congressmen were contributing a lot of money. The average guy would really scream if he had to contribute 15.65% of his salary; 6.2% for SS, 8% for CSRS, 1.45% for medicare.
The law limits retirements to 80 percent of the high 3 (that's for people that think Congressmen retire at their last salary). This confusion is increase when the term "full retirement" is used. It means that a percon retired at the age and with the number of years served to qualify for the full amount calculated for the number of years served. If a person doesn't meet that qualification then they get a deferred retirement (wait till they are older before the pension starts), or a reduced pension, or both a deferred and reduced pension.
The best site I've seen on this subject is: http://www.senate.gov/reference/resources/pdf/RL30631.pdf
And yeah, Congressmen and Judges seem to get a pretty good deal, a lot better than the regular federal workers.
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George Cawthon writes:

Try self-employment. 15.3% for SS/medicare.
Charlie Self "There is nothing wrong with America that cannot be cured with what is right in America." William J. Clinton
http://hometown.aol.com/charliediy/myhomepage/business.html
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I'd rather have that 15% go into my 401k.

right in

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snipped-for-privacy@aol.comnotforme (Charlie Self) wrote in message

Everyone pays 15.3% FICA tax. It's just that they hide that fact from those of us who collect paychecks by saying it is an "Employer" tax. They can't hide it from the self employed who are both the "employer" and the "employee".
Dave Hall
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Charlie Self wrote:

Yep, the self employed get screwed, you pay twice as much but the benefit stays the same as if you your employer paid half of that. I paid more in one year to SS than I had paid over about 12 previous years. Total tax on the last increment was a little over 51 percent including ss, Federal, and state income taxes (that's not a guess it was the actual percentage).
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Just because I'm not responding to whatever point you are, doesn't mean I've missed the one I'm referring to.

source
much
Fine. You show me the stats on the net worth of congress people when they leave office and then we'll talk. And I never said they wouldn't be happy to get it. I'd be happy if you gave me $1000, but it represents a very small portion of my net worth. If I didn't get it, it wouldn't change my lifestyle.

it
BS. There hasn't been an outcry to change SS in the past 40 years because the seasoned citizens are the most disciplined voting group in the country. You go talking about making sweeping changes to SS as an elected representative and see where that gets you. You tell me when there was a major voter push to modify SS in a substantial way that would bring the cost of the program under control.

and
years
other
to
Well, I figure about $100,000 has been put in on my behalf so far, so I'll charge my emergency room stay to that. And I tell you what...don't worry about me. Maybe you need a nanny state, but I don't.
todd
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"todd" wrote in message

I've
LOL ... say what?
Simply try addressing the point in the thread that _you_ originally jumped in to.

their
Don't look now, but _you_ brought up "net worth" of congressmen, _you_ back up what you brought up.

them
country.
cost
You just missed it, dude ... you were obviously too young to have noticed. There has been an outcry about the SS fund for years and it has been an issue in almost every local campaign for congress since I was in High School ... I even debated it in HS in 1961 ... before you were born. .

that
have
With an attitude like that, live long enough and you _will_ get one.
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Swingman responds:

Yeah. Figure 36 years old, never been hurt, enver been ill, never been out of work. So far, so good. But...bet on things changing as the years add up. He doesn't think so, though.
Charlie Self "There is nothing wrong with America that cannot be cured with what is right in America." William J. Clinton
http://hometown.aol.com/charliediy/myhomepage/business.html
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worry
of
He
right in

Wow, Charlie, you must be amazingly smart and perceptive to know everything that has happened in my life and what I think. I guess I'm different from most people, though, as I make plans for the likely bumps that will occur down the road. From your comments, I'm guessing that you expect the nanny state to take care of you. Good luck with that.
todd
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There was a MAJOR revision of the Social Security Act in the mid-80's. Indexing of earnings, inclusion of federal employees under coverage, gradual increase of the retirement age from 65 to 67, reduction of child's benefits from 21 to18........ it was extensive. It was believed then that the revisions would carry the Act through 2010 to 2040 depending on a multitude of factors, mostly to do with the performance of the economy and population demographics.
Actually, IMHO, those old estimates proved reasonable accurate. However, 2010 is now six years, away. Currently, the estimates are that somewhere between 2010 and 2013, the monthly SSA expediture will, for the first time, ever, exceed the monthly income. Somewhere around 2030, the "Trust Fund" will be completely empty.
The monies collected in FICA taxes/contributions has ALWAYS gone directly into the US Treasury. It's not like they were put into a bank, somewhere. The collected funds were spent to pay for programs of the Federal government. (The Social Security Administration does not collect FICA, the IRS does. SSA operates on Congressional approved appropriations just like every other federal agency).
The Trust Fund(s), (there's a couple of them), are accounting fictions to keep track of the FICA taxes/contributions separate from common taxes. And they always have been.
Analogy. You, and your family, agree to a retirement plan. You have ten kids. Ten percent of everyone's earnings are sent to a designated to a "trust" fund, except the monies are really put into a general household account. When you reach retirement age, you start collecting money from the "trust" fund, except it really comes from the general household account. However, by now, your ten kids have a total of 100 grandkids who are contributing to the "trust fund", too, so you're withdrawals are not noticeable. Your 100 grandkids, produce ten kids each and contribution grows dramatically as 1000 great-grandkids add their contributions to the "trust fund". However, the 1000 great-grandkids, instead of ten kids each, only have three kids each. Now those three thousand great-great grandkids are forced to support well over a thousand retired relatives.
Did that help explain the problems?
The performance of the economy as a whole isn't as important as the sheer number of people paying into the system. Because of the caps on covered earnings, few people paying ever larger contributions isn't the same as many people paying smaller contributions.
The SS Act, is like many federal programs, a monsterous glob. For instance, from the original act with a single beneficiary type...
A- Covered wage earner B- Spouse of a covered wage earner C- Child of a covered wage earner D-Widow of a covered wage earner F-Parent/Grandparent of a covered wage earner HA-Disable covered wage earner DAC- Disabled "adult" child of a covered wage earner W-Disabled widow of a covered wage earner J-Special Payment and coverage provisions
"Wage earner" is a traditional term. The modern term is "beneficiary" Disability payments used to constitute about 1/2 of the monthly SSA disbursment. With the aging "baby boomers", I expect that percentage will decrease and I have no idea what it is currently. However, I do know that 18 months seems to be the disability "magic number" The people that have drawn disability for 18 months and ever get back to work, drops dramatically.
BTW, originally, the Act was specifically targeted for wage earners. Self employed people were not covered. Most, if not all state and federal people were not covered. Over the decades, practically every working (and some non-working) people have been covered by the Act. (See vow-of-poverty cases and the concept of wages-in-kind that extended coverage to various religious orders)
The original intention of the Act was to provide ADDITIONAL funding to lower end wage earners to make their retirements, if not confortable, at least bearable. That's why, all the computations are heavily weighted so that the lower end wage earner receiveds proportionally a greater return on contributions than the higher wage earners. High end earners, really have a poor "return on investment", at least compared to lower income earners. (The benefit computations are convoluted as hell, but basically, the higher a beneficiary's "average monthy wage" over their working life, the lower the percentage of the wage they are likely to collect in monthly benefits. Let's say your Average Monthly Wage, was was 1000 dollars. (Indexed, adjusted for inflation, yada, yada, yada). The compution has "bend" points. You might receive 75% of the first 500 dollars of an "average monthly wage", then 60% of an AMW between 500 and 750 dollars, and the 40% of anything over 750 dollars in AMW.
Modern private pension plans, normally incorporate and anticipate a SS covered entitlement as part of the plan. In other words, the SS Act is so interwoven in the fabric of America, that ANY adjustments, corrections, reforms have to be very carefully considered, least dire and completely unintentional consequences result.
As a knee-jerk conservative, I have a natural inclination towards privatization of Social Secuity...UNTIL one considers the mechanics of such a process. Somewhere along the line, BILLIONS of dollars in investment funds PER MONTH, would end up under the directions of a relatively few bureaucrats/investment counselers. The potentional for corruption internally, and scams externally, will be immense.
My predictions, and IMHO, they are not as wild as they might seem at first glance....are
SS benfits will be "means tested". If you a lottery winner, or a successful and frugal wage earner, you'll never collect a dime in SS benefits.
The covered retirment age will (again) be raised, probably ending up, somewhere around 71 or 72.
The reductions assessed for "early retirment" will be increased.
Some classes of beneficiaries (dependent grandparents????) will be restricted and eventually de-entitled. (De-entitled?? Is there such a word?)
Cost-of-living formulas, (that currently determine rate increases every year) will be re-computed to reflect proportionally smaller increases (Such things as new-housing costs will be excluded from the formula, under the belief that very few 72 year old people buy new houses.) Some portion of an individual's (probably less than 10%) will be "privatized" via 401K-type plans. NOTE: While taxes maybe be delayed, eventually the government WILL collect taxes on those "earnings".
Full-blown, stay at home and never-lift-a-finger retirements, are already decreasing as a percentage of the total population. The trend to part-time and reduced income work for seniors, will continue to increase.
And for a really big prediction. How many people will be able to guess where I worked for 30 years? <Grin>
James... BTW, Civil Service Retirements, Veteran's Retirements (etc) are all in the same catagory.
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"James" wrote in message

the
We debated this very practice 42 years ago, in High School government class. :)

Just like most forms of "insurance", a merry-go-round you can't stop, or get off of.

such
I am with you 100% on all the above. My youngest daughter's college fund, despite careful and professional attention, lost almost 70% of its value in the last four years, just as she needed it ... surprise, surprise!

successful
(Such
part-time
None of which will likely apply to congress critters, Todd. :)
Having been self-employed my entire life, I will continue to "work" until I drop ... but I would do it anyway because my work is, and always has been, things that I take a passionate interest in.

Excellent post! Thank you!
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<snip>

in
Well, I guess your daughter's college fund wasn't handled very carefully or professionally. Anybody who knew what they were doing with money that was needed within 4 years would have begun moving it into less-volatile investments. Of course, unless they were then a total moron and sold at the bottom, the funds would very likely now be about back to where they were.
todd
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"todd" wrote in message

fund,
or
Once again you guess wrong.

the
Most investors have not recouped their losses, many have lost them entirely, many of them because of the slick greed of others, which will not disappear and will always be a looming possibliity for "investors" of any type.
Judging by naivete exhibited in the remarks above, I wouldn't hold out a lot of hope for you investing successfully for your retirement.
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C'mon, that's market 090, not even 101. Out of growth, into income as the time of need grows close. Sounds like you got into greed versus need mentality.

lot
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"George" wrote in message

What's "close", oh prescient one?
The "need", as you put it, is still 18 mos away (2005) ... that will be damn near a span of six years since the market starting falling and her college fund lost much of its value. She is still invested and, while the value is trending up, she may or may not realize the initial investment when the time comes.

Only a pompous ASS would jump to such an erroneous conclusion.
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I can see why you had problems listening to your financial advisor.

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"George" wrote in message

You just keep validating the above with every ill informed conjecture.
George, the FACT is that, even were you qualified, you have absolutely NO idea of what the situation is/was and, as a result, you are inarguably, and patently, talking through your ass.
... nuff said.
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and
You talk pretty big for someone who likes to make a lot of assumptions about my situation.
todd
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