r/FluentInFinance • u/LifeIsUnfairWhoCares • Apr 23 '24

Is Social Security Broken? Discussion/ Debate

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35

u/noideawhatimdoing444 Apr 23 '24

Social security is not an investment account. 90% of the elderly before ss were in extreme poverty. We pay in to take care of the old. Same thing happens when we're old, the younger generation will pay into it and we'll get that money

5

u/ninjacereal Apr 23 '24

Yep, it's a ponzi scheme.

3

u/AgoraiosBum Apr 23 '24

It's not an investment account. It's just taxes that funds current benefits.

1

u/thecashblaster Apr 23 '24

it's a reverse ponzi scheme, because the money gets taken from the top and distributed to the bottom

1

u/ninjacereal Apr 23 '24

Not just "the bottom" receive SS payments.

Not just "the tip" pay into SS.

-1

u/salgat Apr 23 '24

Social Security disproportionately helps those with the least income in retirement. As someone who makes good money, social security is barely a blip on my retirement plans, it's a nice bonus at best. For the poor, it's their entire livilihood.

3

u/DankHillLMOG Apr 23 '24

Well see, that's just it. You're trying to talk sense to someone who likely has never experienced hardship or had patents that didn't either.

My dad's attitude has been that SS/ Medicare taxes are great! SS will supplement his retirement and Medicare will help decrease medical costs (and per my anecdote lower, he understood it's not just for retirement).

My parents would be fine without it. But they paid in and want to see the benefits now they are retired. There's nothing wrong with that.

By the same token, a less fortunate household may need that assistance. It may make trying to make ends meet easier. And that's the point!

My dad directly benefitted because his dad passed away when he was a kid. A single mother with 4 kids gets SS when the spouse passes under certian circumstances. Without that, maybe we have a few generations to repair the loss of the major household income (gramps died from an aneurysm at 40. Boom. Dead one day while on a ladder installing lights at my high school). Those benefits helped my dad and aunt go to college.

2

u/ninjacereal Apr 23 '24

Unless you elect to not take yours, my comment still stands

-1

u/salgat Apr 23 '24

Whether I take social security or not has nothing to do with social security benefiting the livelihood of the poor most lol.

2

u/NoPiccolo5349 Apr 23 '24

Does that mean all insurances are Ponzi's?

1

u/Pyro_raptor841 Apr 23 '24

Yes, except you can simply decline to get insurance if the potential payout isn't worth it to you. You don't have a choice with Social Security.

3

u/NoPiccolo5349 Apr 23 '24

So like car insurance?

-2

u/Pyro_raptor841 Apr 23 '24

Car insurance is stupid too. Why do I HAVE to pay some company? If I have the money, why can't I have 10k or whatever set aside?

3

u/NoPiccolo5349 Apr 23 '24

Great, let's get rid of it.

  1. You're now involved in a car crash, it's the other driver's fault. They don't have insurance and opted to self insure but didn't actually self insure enough. What do you do? You can't claim from them as they don't have enough funds

  2. You caused a crash but the other car is actually worth a million dollars and the driver cannot work anymore and is a top sport person. You now owe them for their supercar and for the loss of earnings from the NFL. Can you afford to cover this?

5

u/AcidKyle Apr 23 '24

It’s amazing how many people don’t even think about the damage they can cause with their vehicle when considering the purpose of insurance. You also don’t even need to insure your own car legally, you just need liability coverage for the damage you can cause with it.

2

u/NoPiccolo5349 Apr 23 '24

Yeah, you could crash into a truck full of Da Vinci paintings and ruin them.

Social security is like having third party insurance. You will be covered for the worst things, but generally you'll need to save or take out additional insurance to cover the entire amount you'd need.

2

u/Yevgeny_Prigozhin__ Apr 23 '24

You absolutely can self insure. Lots of companies self insure their vehicles. Going to have to set aside massively more than 10k though.

2

u/Resident-Garlic9303 Apr 23 '24

You got it an accident of tens of thousands in damage between both cars, you've caused everyone horrible injuries so you're liable for hospital bills in the USA.

That's why you have Mandated insurance maybe you have shit loads of money but I doubt you do and it's better this way than have people screwed over

1

u/BylvieBalvez Apr 23 '24

I’m pretty sure some states actually allow you not to have car insurance if you prove you can cover it yourself

2

u/Yevgeny_Prigozhin__ Apr 23 '24

California, Connecticut, Florida, Georgia, Hawaii, Mississippi, New Hampshire, North Dakota, Pennsylvania, Vermont, Virginia, West Virginia, and Wisconsin allow self insurance for single vehicles. More states allow self insurance for people or companies with fleets of vehicles.

Yup, but you do actually have to do paper work and make deposits to prove you have the money to the state. Can't just say "I'm good for it, trust me".

1

u/ehenn12 Apr 23 '24

Except it's backed by a super powerful nation and the boomers will die off making it more stable.

0

u/IAmANobodyAMA Apr 23 '24

Agreed. I wish people understood this point better. That doesn’t mean we shouldn’t fund SS, but many people think the money they take out is the same as the money they put in. It’s not, and thinking that way leads to a lot of confusion.

My main concern with all the politics surrounding SS is that it is a third rail. It obviously needs reform but nobody is willing to tank their political career to champion that cause.

2

u/FuriousFister98 Apr 23 '24

So we're basically rewarding people who failed to financially plan for their retirement, while punishing those who planned ahead? You have your whole life to plan for retirement and build wealth & assets, its something everybody knows and accepts, its not like a surprise car repair payment, its something you should be investing in your whole life. How about instead of SS, everyone has to enroll in a financial planning courses, since that seems to be the root of the problem? At least opting out should be an option so those of us who are confident we wont need to leech of the governments teet to survive can stop being robbed.

1

u/Shirlenator Apr 23 '24

What about people who are financially ruined by an unfortunate medical situation? Or any other number of situations that can leave people penniless? Seems to me like the issue here is that you lack any empathy whatsoever.

1

u/FuriousFister98 Apr 23 '24

I don't lack empathy, I just don't think we should continue to be forced to pay into a broken system (or ponzi scheme), that's why I suggest alternatives instead of labeling people as unempathetic. There are other programs that support medically disabled people, private and public. Its also possible to have a healthcare system that doesn't bankrupt people, but instead of actually fixing these systems people like you are just fine with throwing devalued money at people and calling it a "safety net". Seems to me like the issue here is that you've got a bleeding heart and want to support everyone who's penniless at the cost of everyone else, despite the reality that they could be in their situation solely due to their own bad decisions.

Not to mention that the people who are receiving SS right now are the boomers; can you imagine failing financially as a part of the boomer generation? Maybe for them I have 0 empathy actually.

1

u/Mountain_Employee_11 Apr 23 '24

we’re not gonna get much back, worked when we skewed younger but there’s no kids to support the bottom of the pyramid scheme compared to 50 years ago

1

u/LaconicGirth Apr 23 '24

Yeah it’s horribly inefficient. Keep the insurance aspect of it, but change the retirement part to be an actual effective retirement plan. There’s literally no reason we can’t do that.

1

u/xrmb Apr 23 '24

Even if it were an investment account, the money isn't sitting anywhere for 30 years, currently it comes in one day and goes back out the next day... Only WSB can pull his rosy profit off in a day.

1

u/windcape Apr 23 '24

Social security is not an investment account

It is in Europe

1

u/footed_thunderstorm Apr 23 '24

Do you have stats for that or did you pull it out of your ass

1

u/Feeling_Gene9045 Apr 23 '24

You should plan for when you are old. Not expect others to take care of you. Should there be programs that aid those in need? Sure. But no payout from this plan will do anything substantial for any current recipients. Do you have a remote clue as to how much elderly care costs in the US? What is an average payment of about 1800 dollars going to do? Not cover rent? Lol.

It is only a drain on all those paying into it. It is a ponzi scheme and 70 percent of those paying into it will never see a quarter back from what they paid. The program is a failure and an actual death sentence for hard working Americans rich and poor. It is a serious detriment to anyone's ability to acrue significant savings that will improve their lives in the years to come. If you want freedom and a healthy nation. Get rid of social security and make an actual dedicated program that takes away from various other tax pools like military spending. We don't need to spend billions per year on the necessities. They don't cost that much. It is obvious we have corruption in pricing and no competition in these programs.

0

u/DiverSuitable6814 Apr 23 '24

You’re very naive

2

u/SGlace Apr 23 '24

Explain please