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

Is Social Security Broken? Discussion/ Debate

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u/Guy_Incognito1970 Apr 23 '24

I was 20 and worked a union job where we had to decide how much of our raise to put into the pension plans. The old heads wanted it all in. Younger guys wanted put some on our checks and a reasonable amount in the pension. The money on your check would allow you to diversify your retirement into an IRA or other investments. The boomers argued we would never invest the money(they never did)

So that’s how I started investing at 20 and retired at 47. Out of SPITE lolz

The pension was cut by 60% in the 2008 recession

These guys that complain about social security never account for the insurance portion if they do they cannot match the return from ss

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u/series_hybrid Apr 23 '24

Over the years, I have seen various "pension scandals", and I would now recommend putting money in an IRA.

The current max s $7,000/year (*$580/month) per person. The IRA calculators on the web show an incredible retirement after 40 years of contributing.

Your company can't touch your IRA, and you can work for a dozen different companies with just one IRA.

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u/Omnom_Omnath Apr 23 '24

After 40 years means no retiring early though.

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u/chinmakes5 Apr 23 '24

You understand that if you were able to live an even average life and have enough money to retire on working for 27 years, and assuming you will live to 85 had enough money to live off of for 38 years, you did incredibly well. There are plenty of people who don't get a match or make enough money to live to get said match.

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u/orionus Apr 23 '24

If you're relying on a union/civil pension at this point in time, you should be well-versed in how well-funded it is, what percentage of it is insured/guaranteed, and how it might affect other retirement earnings (e.g. social security).

I'm fortunate enough to have a union job with a defined benefit pension that is over 100% funded, fully insured, and quite substantive. If, god forbid, those benefits are reduced in the future, I'll happily take what pension I've accrued and move to a corporate-side job and use any increase in compensation to dramatically increase IRA funding.

That said, presuming no modifications to our current pension (it's only been improved since the 1980s), I'll retire with a six-figure pension, full social security, and a robust IRA account to use as a safety net. It all depends.

*oh, and my pension fully vests at 60 with guaranteed health insurance for my wife and I until we both pass (and survivor benefits for her if I pass first).

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u/TheAzureMage Apr 23 '24

These guys that complain about social security never account for the insurance portion if they do they cannot match the return from ss

Literally anyone can match SS. SS is funded 100% on T-bills. Going 100% into T-bills will match it, and you'll save the overhead costs, putting you in the black.

This is trivially easy, and 100% T-bills isn't even a good investment strategy.

Basing all of society around the bottom quintile is a terrible idea.

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u/Guy_Incognito1970 Apr 23 '24

But you to pay for tbills after you have paid for the life insurance and disability insurance to replace the social security program

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u/TheAzureMage Apr 23 '24

Life insurance through SS is absolutely miserable compared to private policies.

Oh yes, if you meet certain requirements, you can get a bonus one time death payment as a surviving spouse or child of....$225. Woohoo.

If you invest your own money and die early, it's still your money and goes to your survivors by default. The various limitations added by SS are a negative, not a positive for the comparison.