Social Security

Why Do 36 Percent of Americans Have No Retirement Savings?

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Here's a story that should scare the bejeezus out of us all:

A third of people (36%) in the U.S. have nothing saved for retirement, a new survey shows.

In fact, 14% of people ages 65 and older have no retirement savings; 26% of those 50 to 64; 33%, 30 to 49; and 69%,18 to 29, according to the survey of 1,003 adults, conducted for Bankrate.com, a personal finance website.

Why aren't people saving for retirement? A Christian Science Monitor story reports

If fewer Americans are planning financially for their long-term futures, it may be because things are getting more expensive in the near term. In another study released Monday, The US Department of Agriculture found that the cost of raising a child born in 2013 to the age of 18 has reached  $245,000. For a high-income family in the urban Northeast, the USDA found, that number could reach $455,000. To boot, those figures don't include college tuition, an expense that continues to balloon. Brian Plain, a financial planner from Oak Park, Ill. said those rising costs and more families living paycheck-to-paycheck that make it harder for families to save for retirement.

Young people discount future needs (at least I did) and everybody feels squeezed all the time. I get why people don't find time or energy to save for way down the road. That said, it's not clear that "fewer" Americans are saving for retirement than in the past (at least no evidence is presented in the story above). 

But there seems to be no question that very few people are saving beyond paying Social Security taxes. Those taxes add up, of course, and really squeeze people's incomes from the first dollar of earnings. Since 1990, the combined employer and employee taxes for Social Security come to 12.4 percent of every dollar earned up through about $117,000 (only about 5 percent of individuals make more than that in a year).

So off the top, folks are forced to kick 12 cents of every dollar into a system that since 2010 has been paying out essentially negative returns to new retirees:

Read more about that sort of unsung warfare here.

I think any explanation of why people don't save for retirement has to account for the massive chunk of off-the-top change taken by Social Security taxes, which not only squeezes income in there and now, but provides a vague, hazy retirement benefit in the future. Never mind that the Supreme Court has ruled that nobody nowhere has a right to such a thing and that Social Security has been paying out more than it brings in now for a few years and that its trust funds will be totally depleted by the early 2030s (if not sooner).

As Veronique de Rugy and I argued in the August-September 2012 issue of Reason, old-age entitlements are no longer viable from a basic accounting standpoint and they make less and less sense in a world in which elderly people have more economic clout than younger, relatively poorer people. They won't survive another 20 or 30 years in anything like their current form, nor should they.

One question I have, though, is whether the lack of savings by Americans makes it easier or harder to reform (read: abolish and replace with a safety net based on need, not age) Social Security. The sooner we have that conversation, the better.

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  1. But there’s no question that very few people are saving beyond paying Social Security taxes.

    Getting robbed doesn’t count as savings, even if the robber says he’ll hook you up later.

  2. Why? Because we have taxed the living fuck out of working people in this country and created as many disincentives to save as possible. And to make up for that, the government has made it clear that any middle class person who owns anything when they retire is obligated to give it up because owning anything is just unfair, racist and sexist. That is why people don’t have retirement savings. Why the fuck save anything when you know the government is just going to steal anything you save and everyone other than the super rich is going to end up retiring with the same standard of living as a life time crack whore.

    1. Not PC, John. Correct, but racist sexist bigot monger! So we should just disregard everything you just said, for the children.

      1. Actually what I said was unfair, crack whores work for a living.

    2. Don’t forget that saving is unamerican. Saving is bad for the economy. We must all play our part in the comsumerocracy.

      1. That, and a Federal Reserve interest policy that has either actively or hyperactively for all but about six months out of the past fifteen years.

        Seriously, when was the last time a savings account paid more than 4%? Even more ridiculous, an after-tax rate greater than the rate of inflation?

        My 24 y.o. son, who is quite sophisticated in these matters, questions whether the time-value of money is any longer a valid concept in the American economy. I have difficulty arguing that it is.

        1. That, and a Federal Reserve interest policy that has either actively or hyperactively, for all but about six months out of the past fifteen years, repressed interest rates.

  3. Because central bank policy is explicitly geared toward devaluing their wealth and driving up prices. The massive regulatory burden also serves to drive up the price of pretty much every good or service they wish to purchase.

  4. John is correct.

    A significant plurality of people who save for “retirement” will see the majority of their “retirement savings” siphoned off to pay for long-term care, before Medicaid kicks in.

    So you can defer consumption now, and pay the associated savings to a long-term care facility (until they reach $0 and Medicaid takes over) –

    Or you can NOT defer consumption now, enjoy all that additional consumption, and let Medicaid pay the long-term care facility.

    1. Exactly. And you will get the same quality of care regardless of whether you kicked in 100K towards that care or kicked in nothing, because allowing someone who worked and saved their whole life to actually benefit from doing that is just racist.

      1. Gone are the days when the kids got the house. EVERYTHING goes to Medicare now. Unless you’re super rich, your kids aren’t getting anything. Nada. Zippo.

        1. My 80-year-old mother in law is so proud that her $250k home is paid for and that all of that money will be split between her three kids.

          Sure. Wait until you go to a home and the spend-down starts.

        2. Rich, or just die suddenly. Some people still have the decency just to have massive heart failure one day.

    2. Sure but it’s a Ponzi scheme. Works great except for the people that haven’t cashed out yet. So…don’t be the last to cash out.

      1. So the solution is to die I guess.

        1. Well, if there’s anything the State excels at, it’s killing people.

          1. I don’t know. See: executions, botched.

            Something so simple only the state could mess it up.

            1. Ok, maybe not so good on a one-at-a-time basis but very good at lots and lots all at once.

              1. Quantity over quality.

          2. I nice plague would help them out immensely.

        2. I’m just saying.

          The trouble is there is zero political will to fix it – no politician is going to risk their career on something that won’t be their problem when the bill comes due. This combined with a massive and growing sense of entitlement by a large number of people, a culture that emphasizes instant gratification, and government policies that penalize work, saving, and investment, and Voila! you have the shitshow to end all shitshows coming down the rails and building up steam every day.

          1. We have know about this problem since the 70’s (actually since social security was created). I have spent my entire working life knowing the system was totally fucked and would explode about the time I turn 65 to 70. How’s that for encouragement.

            1. In my retirement planning, I always enter “$0” for anticipated Social Security…

              1. Do military retirees get social security?

                1. Do military retirees get social security?

                  While military personnel do not pay FICA while they are serving most of them work for another 20+ years after retirement from the service so, yes, in general they do.

                  Unless, that is, they work in one of the except from SS fields, in which case they get a generous pension in addition to their military retirement.

                  1. “except” s/b “excempt”

                    And, of course, by exempt, I mean fields like teaching, public sector employment, police, political office etc, all of which provide much more generous pension benefits than SS.

                  2. While military personnel do not pay FICA while they are serving…

                    I believe you’re mistaken, Isaac. I paid them when I was on active duty years ago.
                    According to this site active duty military have been paying social security taxes since 1957.

                    1. I stand corrected. Thank you for that info.

                      I was using my father’s experience. He served in WWII but resigned his commission in the Navy in 1948. Men who served in WWII but were not eligible for a military pension were given a small SS benefit even if they had never paid FICA. For a number of reasons my father never paid any FICA taxes.

              2. In my retirement planning, I always enter “$0” for anticipated Social Security…

                Same thing here. 20% of my income goes right to my 401(k). Living below my means is easy enough, but the decision to go back to school may be one I come to regret.

                1. At least nobody can take away a good education. If you actually learned something useful or even interesting, it wasn’t a total waste.

            2. The statistic that convinced me decades ago that I would receive nothing is the workers:recipients ratio. What was it when SS was enacted? 10:1? What is it now? 3:1, and the Boomers have only just started to retire? Yup, at some point everyone that’s left gets nothing.

              1. I keep telling my parents (who rail against illegal immigration) that the only way to protect their SSI checks is to open the borders and bring in a flood of workers to drive that ratio back up to 6:1 or better. That message doesn’t really go over well.

                1. Accepting ‘bad’ news never does. Isn’t that kind of immigration the only thing keeping Europe from circling the toilet? Only temporarily of course.

                  1. Europe is currently worse than the US in birth rates. Unfortunately, they bury there immigrants in ghettos where they have extraordinarily high unemployment rates. So I doubt they actually get any real benefit from immigration.

                    I didn’t intend to derail a thread on the cluster fuck that is SSI into another thread on immigration which will bring out a new set of lunatics. But one of things that is exposing the inherent problems in SSI is the declining birthrates and the collapse of the number of people working to support the number of people retiring.

                    It is very rare to see a discussion about the evils of SSI that actually considers importing workers to prop up the systems for a while. Of course, the welfare state fucks up any real opportunities to import unskilled workers and turn them into skilled workers that can support SSI.

                    1. The welfare state eventually just fucks up everyone and everything.

                  2. That and the US subsidizing their defense budgets with military might and their healthcare benefits by sharing medical advances for free and charging marginal cost on drug production.

                    1. And even the “successful” welfare states are unable to maintain the level of benefits they have without running deficits.

                2. the only way to protect their SSI checks is to open the borders and bring in a flood of workers to drive that ratio back up to 6:1 or better

                  If you include the projected payouts for medicare I don’t think that the entire population of Mexico would be enough to make up the difference.

                3. I have also suspected that that is one of the reasons the border is left open.

                  But that fix to the problem created by overspending only works if the new immigrants have a job.

                  Bring in the new young blood won’t work if they also get on the government teat.

                4. And how long would it be before we need everyone in the world’s population paying in to keep up the ratio? It’s a scam – eventually you run out of new suckers.

                  1. The worlds biggest Ponzi scheme.

                5. I keep telling my parents (who rail against illegal immigration) …

                  Are they conservative. Early in the Reagan administration, when they were setting up the Greenspan Committee, the 2:1 ratio of workers/retirees was a hot topic. Until they asked Reagan’s Ass’t Treasury Secretary (Bartlett)

                  He said it was nonsense because the economy could not function with only two workers per retiree. Long before that happened, he said, we’d start increasing immigration. I recall laughing out loud!

                6. Your parents are smarter than you. They understand that flooding the country with people who take more out of the system than they put back in won’t fix the problem.

                7. It isn’t really that simple. I know it’s not libertarian in principal but, I live in CA where we deal with it every day on a scale that most other places do not.

                  Along with those “workers” comes a lot of baggage. They aren’t participating in our system as we know it. They aren’t very skilled. They aren’t well educated. They do take advantage of many “freebies” that are offered. They are being groomed by the pols to be dependent on the government.

                  In relation to the subject at hand, go to any medical facility around here and take a close look at “the help”. That is who is going to be taking care of us in our old age and frankly, it’s scary. Call me racist if you will but I’d rather have the up and coming of only a few years ago than the poor uneducated trash that is showing up as medical tech help these days thanks to all sorts of government programs aimed at helping them “advance” without really developing an understanding of what they are doing.

                  Ditto for construction, air conditioning installation and service or automotive technicians. Or even building Teslas.

          2. “and growing sense of entitlement by a large number of people, a culture that emphasizes instant gratification, and government policies that penalize work, saving, and investment,”

            I work in local government. Public transit to be exact. And, you aren’t lying. The expectation of entitlement knows no limits. Nor is it confined to any one particular subset of the population. Seniors want their own, special service. Former, inner city residents, mostly minorities think they are “owed” free transportation from the government. Schools think that kids should get a customized, free bus service to school. Private medical providers, insist that public bus operators transport their patients like a personal taxi service to fit their needs.

            And, the pols that “oversee” us feed this clientele, in an effort to buy votes.

            It’s all a cluster fuck I say. No end in sight. We’re screwed.

    3. This is why people should just drink and smoke more and not live so long.

      1. I’m doing my part.

        1. I want subsidized cigarettes and tequila.

  5. One question I have, though, is whether the lack of savings by Americans makes it easier or harder to reform (read: abolish and replace with a safety net based on need, not age)

    Harder. People will not be happy if you take their SS, without something to replace it with.

  6. Because we all are paying into our social security account where government keeps our money for us until government tells us we can retire. Everyone knows this.

    1. “Paying into” SS is a myth. It’s all just taxes. The rest is juggling the bookkeeping.

      1. Taxes!? I thought it was just a penalty for working!

    2. Yes, and most people won’t save for retirement, so they need the government to do this for them because government is such a trustworthy and prudent custodian of savings.

  7. A dollar saved today is 30 cents you’ll get to spend when you retire.

  8. But there seems to be no question that very few people are saving beyond paying Social Security taxes.

    Wait what?!

  9. Because they are increasingly being taxed to fucking death, and yes, kiddies and Paulie Krugnumfuck, inflation REALLY DOES exist.

  10. My current plan is to work until about age 67. Then I’ll retire from engineering and start a life of crime. In general, only the dumb criminals get caught, so I should have a reasonablly good chance of not getting caught before I die. And if I do get caught, the state will provide room, board, and medical care during my waning years.

    1. I am pretty sure there is a good living to be made collecting the EIC for various bums whose SS numbers you can obtain in return for a hit of crack or a 40.

      1. The Internet gives one nearly direct connections to millions of stupid people. It should not be that hard to make enough to pay the utility bills and keep the humidor well stocked.

      2. John, thank you. You just gave me an idea to use the Skid Row population for my own side bidniz.

    2. Cops only investigate crimes on television and the movies. So if you can keep your mouth shut, you can get away with just about anything.

      1. As long as you don’t get greedy and make the local DA look bad, you should be pretty safe.

        1. And remember to let the relevant agencies have their cut.

      2. The government tends to get fairly pissed when it is itself a victim of crime.

    3. I’m retiring at 65 and getting the fuck out of the USA as fast as I can. I’ll try to remember not to stuff my life savings into my underwear before I get on the plane.

      1. Retirement at 50 for me (4 yrs) or at least from the work-a day world. My farm will keep me busy for years after.

        1. HAHAHAHAHAHA.

          New to agriculture?

        2. Oh. Wait. You said it will keep you busy.

          Sorry. You’re right. That second job to pay the land taxes will indeed keep your sorry retired ass busy.

    4. Out of curiousity – are you thinking “manager” for high end call girls or something hip like “jewel thief”.

  11. from a sampling of about 300 or so families i’ve worked with as an advisor, i’d also say over 50% WITH retirement savings are severely under-funded, and what IS funded is also, more often than not, poorly invested relative to their goals.

    even my pop, who has as a lifetime investor been very conservative and consistent (kind of a ‘dollar-cost-averaging type guy’), has been hammered by federal policy which punishes income-investors.

    You have no idea how fucking livid i get when i hear idiotic liberal millenials spouting about how we need to punish investors more and tax dividends and capital gains and strip 401ks of tax advantages, and blah blah blah.

    because apparently *no one* except “the 1%” actually relies on investment income.

    1. I don’t blame your father for being conservative. Sure, the math says that being aggressive will work out more times than it doesn’t. But the downside of being one of those times that it doesn’t is being fucking broke and watching an entire life’s work go down the tubes.

      Being risk adverse is not always irrational and when it is your single case, the math isn’t always the smart play even though it is when looked at in the aggregate.

      1. Being aggressive with investments is fine as long as you are either a) young, or b) already rich. Humans are naturally risk averse – more so the older you get.

        1. Yes they are. And actuaries never understand that the individual is not the same as the aggregate and thus don’t understand that being so is, for the individual, perfectly rational.

    2. I’m tapped out for retirement until my kids get through college. That will cost me virtually everything.

      1. I’ve never understood why parents pay for their kids’ college. Just don’t get it. People are more responsible when they pay for something themselves.

      2. I told my kids they were on their own.

        One has completed an associates degree; the other hasn’t bothered. They are both better off than the majority of humanities majors with 5 figures worth of student debt.

      3. That’s not a smart move, Don. They can take loans for college. You can’t take out loans for retirement.

        I’m saving for my kids, but it stops at 18. That freaks the wife-unit out to no end, since her daddy paid for her, we should be paying for ours.

        “Nope. This is what you have. Be smart about it.”

        1. That’s not a smart move, Don. They can take loans for college. You can’t take out loans for retirement.

          Reverse mortgages. The homeowner gets a fixed monthly amount per month, as his equity decreases and debt increases.

    3. I basically stopped being friends with someone because one minute she claimed that I’m only a libertarian because I was privileged, naive, and didn’t understand how everyone else lived. And then when I asked her if she even knew what stocks were, she replied something along lines of “They’re just tools that the rich use to become more wealthy.”

      I was so pissed that I didn’t even bother to explain to her what financial capital was, that rich people don’t put their money under their mattress, and that the large majority of the money goes into buying stock. And there’s really only two reasons why companies offer stock to buy – to pay off debt or to raise funds for expansion. Guess what expansion means? Fucking jobs, so more people can not rely on charity checks and can become financial independent.

      1. I was so pissed that I didn’t even bother to explain to her what financial capital was, that rich people don’t put their money under their mattress, and that the large majority of the money goes into buying stock.

        I’ve found that I can sometimes get liberals to understand this, but after a day or two they go back to hive thinking.

        It’s a waste of time.

        1. I’ve found that most people don’t want to think broadly enough to understand economics. “Profit driven = greed” is much easier to understand.

          Mathematically, it’s difficult for people to understand inflation and buying power of a currency. They can’t conceptualize that inflation is cutting the same size pay into more pieces, while creating real value is increasing the actual size of the pie. It’s difficult to compare two numbers when the definition of the numbers are changing. It’s an extra parameter to account for.

          1. Libertarians understand economics

            1. Some do. Others push for open borders.

        2. I don’t think it’s ever occurred to her that I don’t want to pay into a welfare state because I’m trying to save up for future expenses, i.e. marriage and having kids, buying a home, etc.

          Sure, I make way more than enough to get by at the present moment, but I have no idea what’s going to happen in the next 5 years.

      2. That’s funny. Most of the privileged and naive rich people I know are flaming progressives.

        1. Those are the great, enlightened ones. The champions of the people who have realized they were gifted by fate and condescend to bestow their gifts upon the masses.

          1. They’re the ones that irritate me the most because they see themselves as part of the TOP MEN. They espouse socialism, but see the principles as what other people should be forced to live by.

            1. Yep, because command and control economies open up opportunities for artists and sculptors, definitely not reverting to agricultural subsistence economies.

        2. Right, because they can afford to be.

      3. I was so pissed that I didn’t even bother to explain to her what financial capital was, that rich people don’t put their money under their mattress

        Or simply that pension funds control the stock market, not rich dudes. (over 50%) That will change if and when interest rates and relative risks return to normal.

    4. I’d be fine increasing cap gains and dividends to income tax rates if combined with lowering overall income tax rates (and removal of deductions) and scrapping the corporate income tax altogether.

      1. Scrape the tax on savings interest. Let people save and keep the interest. That alone would create a huge incentive to save. If you are worried about the evil rich not paying taxes, fine, give everyone a million dollar lifetime exemption like they do the estate tax.

        1. Like it fucking matters at this point. I think my savings account is returning something like .003% APR. (I exaggerate, but not much.)

          1. You have money in savings accounts? Why? Try https://prosper.com/ peer-to-peer lending, better returns. Or at least put the funds in CDs.

  12. One question I have, though, is whether the lack of savings by Americans makes it easier or harder to reform (read: abolish and replace with a safety net based on need, not age) Social Security.

    Harder. People who don’t save are know that Uncle Sugar will give them all their SS contributions back, plus lots of interest, when the retire. So DON’T TOUCH IT, YOU WHIPPERSNAPPER!!!!!

    I barely got a rant about SS going bankrupt when the guy I was talking to, a D, interrupted me with with an almost violent, “that’ll never happen!”

    1. Duh! It’s all in a “lock-box” and “invested” in Treasuries!

  13. Why save? Because I don’t have to. All I have to do is deficit spend, and leave the debt to my kids and grandkids. I pay attention to the news, I read.

  14. Well, if you save, you are disrupting the virtuous cycle of non-stop consumption.

  15. Many people live right on the edge of the buying power. There was a recent story in the newspaper of a minister who made $80K(!) a year. Who lived in a 250k house and him and his wife both had brand new cars while carrying a bunch of credit card debt. They essentially had to juggle their finances just to make the payments on all their junk.

    Student loan debt: not such a factor a few years ago, but if you’re fresh out of college – or god forbid, law school – you’re paying a big portion of your income on that loan. Year after year… month after grinding month. Ask me how I know this.

    1. How do you know this?

      1. He polled some Millennials.

  16. Why save dollars up for the future when in the future dollars will have no value?

    1. Well….yes, basically.

    2. you could buy land or gold or bitcoin. I guess you still pay property taxes on land.

    3. Fuck dollars, buy a wheat field.

      1. Fuck dollars, buy a wheatweed field.

        FIFY

    4. This is why 99.9999% of savers/investors do not save dollars. They have stocks, bonds, real estate, etc. When they need dollars, they sell something and have those dollars for a few days at most until they purchase something else.

      1. Isn’t there something like $3T sitting in savings accounts in the US?

        1. Pension Plans and mutual funds exceed #20 trillion.

  17. Well, if you save, you are disrupting the virtuous cycle of non-stop consumption.

    I saw a Krugman piece once that described savings – and retirement itself – as obstacles to perfect system efficiency.

    People who save aren’t consuming.

    People who stop working aren’t producing.

    These twin enemies of the people must be brought to heel. Inflation is a great weapon to use against both.

    1. Which means a Nobel Prize winner is flat out ignoring how capital and wealth is formed, and what role it plays in future growth.

    2. I have no doubt Krugman said that. But wow. I mean rally, wow. Krugman really is an evil person. He is not just wrong or even crazy, though he certainly is wrong and probably crazy, he is fucking evil. I really think the only thing preventing Krugman from being one of history’s great monsters is the ability to make his visions into reality.

      1. He’s just playing to his audience of smug ignoramuses who don’t know the difference between money and wealth, and are too poisoned by envy to care.

      2. The conscience of a liberal.

      3. The stuff he did to get the Nobel was not stupid. He can’t really believe the shit he says now. So I think you are correct. Evil is the only explanation.

        1. I said he was wrong not stupid.

  18. Having interest rates set at rock-bottom for decades has to be a factor. There is no incentive to put money into a bank account, and every incentive to borrow more money. Why are we surprised by the results?

    1. It is one of several factors, and I don’t think everyone is surprised.

  19. This is a feature, not a bug, of mainstream economic thought. Deflation is evil because it encourages saving. Saving is evil because it discourages short term spending. The system is designed to produce inflation and encourage short term spending. What else could they possibly expect?

    1. Deflation favors lenders at the expense of borrowers, which is why the gold standard failed to achieve stable prices for only 125 years or so.

      Inflation favors borrowers at the expense of capital.

      That’s how Friedman won his Nobel, and demolished the gold standard with a simple question, “Do we want a stable money supply or stable prices?”

      We can’t have both unless somebody repeals the Law of Supply and Demand. Not likely.

  20. I’ll give you a reason the U.S. is the greatest nation on earth. I was over in France this summer and was talking to some people there about their equivalent of Social Security. They have the same deal (they take a little more from both the employee and employee) BUT they pay 90% of the average of the persons’ last 5 years of working. I thought we were in trouble but basically the French gov’t is everyone’s pension plan. The person I was talking to acted like it was all going to fall apart very soon. So we may complain about a two income couple who made over 200k their whole working life collecting 42k a year from social security as long as they live but compared to them, we’re to picture of financial virtue.

  21. Maybe because free market charlatans convinced us that we’d be better off without pensions (no Wall Street parasite can skim fees from that system). Also clearly the solution to what is a very huge crisis of people not saving enough for retirement is to eliminate the old-age safety net. That should work out well.

    I’m going to assume you’ve all studied the fairly simple ways SS can be made solvent in perpetuity. Yeah, it involves taking a few painless dollars more from wealthy people. That is not, you might need to be made aware, a worse thing than starving old people.

    1. *Maybe because free market charlatans convinced us that we’d be better off without pensions*

      LOL.

      Maybe it’s because Americans are, in general, not that bright. Hey, no one made you buy the too-large house with money you didn’t have…and then stuff it with a slew of flat panel tv’s, jet skis, boats, F150s, iPads, etc.

      Maybe these numbskulls just plan on running up the credit cards even higher after they stop working.

    2. “(no Wall Street parasite can skim fees from that system). ”

      No, maybe not Wall Street, but the company itself can screw over the pensioner: use an unrealistic earnings rate for projecting future funds available to pay the pensions, underfund the pension and then have the company do a distress termination (where the plan does not have enough money to pay all benefits). The Pension Benefits Guaranty Corp. then steps in and can pay out less than the employees’ were promised or the PBGC can pay a lump sum equal to the present value of the projected benefits, which means you the employee, if you want a stream of future payments, most likely would get an annuity, which would lead you back to playing with Banks, Insurance companies or Wall Street brokerage firms. It happens frequently.

    3. //lso clearly the solution to what is a very huge crisis of people not saving enough for retirement is to eliminate the old-age safety net. That should work out well.

      Oh yeah, sure, but just waiting for SS to go bankrupt, and suddenly cut off huge numbers of beneficiaries is much better.

      //I’m going to assume you’ve all studied the fairly simple ways SS can be made solvent in perpetuity. Yeah, it involves taking a few painless dollars more from wealthy people.

      Only in your fucking dreams. Your stupid, childish, dreams

    4. Tony|8.18.14 @ 6:01PM|#

      I’m going to assume you’ve all studied the fairly simple ways SS can be made solvent in perpetuity

      Or did they get bamboozled as badly as you did?

  22. Not to depress everyone here, but it doesn’t look like it will get any better soon. A friend of mine sent this to me a couple of weeks ago:

    Here is what happened on July 1st 2014:

    Top Income Tax bracket went from 35% to 39.6%
    Top Income Payroll Tax went from 37.4% to 52.2%
    Capital Gains Tax went from 15 % to 28%
    Dividend Tax went from 15% to 39.6%
    Estate Tax went from 0% to 55%
    These taxes were all passed under the Affordable Care Act, otherwise known as obamaCare.
    All these taxes were passed with only Democrat votes.
    Not one Republican voted to do these taxes.

    NO SAVINGS any time in the future!!!

    1. I’m depressed because right-wingers don’t know what their tax rates are. To post such numbers, stevecsd, one must either be astoundingly misinformed or a mendacious liar. Which category do you fall into? Please let me know. I have a thing for the epistemology of morons and liars.

      1. american socialist|8.18.14 @ 11:14PM|#
        …”I have a thing for the epistemology of morons and liars.”

        I do, too, commie-kid. Please tell us what you imagine the tax rates to be.
        Lefty lies and stupidity is always amusing.

        1. No one is paying payroll taxes of 52%. The capital gains tax rate isn’t 28%, it’s 15% for the vast majority and 20% for a few. Taxes on most dividends are treated as capital gains in most cases and are taxed at 15%. If you are paying 40% tax rates on dividends you need to fire your accountant. No one in the country is paying a 55% tax rate on their estate.

          Steve, why don’t you hire me as your accountant? I made around decent money last year and paid around 12% in federal taxes and another 8% or so to the uss of California. Do right-wingers know about itemizing deductions? Maybe you would be happier if you knew how to do your taxes.

    2. A friend of mine sent this to me a couple of weeks ago:

      Has he sent you anything about Obama’s Kenyan origins?

  23. Comrades! There was a time when you could save your money in get anywhere from three to five percent on your return, tax free. People would put their hard earned money in the bank in order to retirement comfortably in their old age. This nefarious idea was quickly eliminated by Dear Leader Franklin Roosevelt. FDR had the right idea. If you are truly to control the people, you must control their money. Comrade Frankie made sure most if not all interest rates were controlled by the wise and enlightened Five Year planners in the Politburo. The result being the unwashed masses only got around one to two percent return on their savings and it considered taxable income. Now the slaves in the People’s Republic of America “contribute” to social security which gives an astounding return of one to two percent. We all now contribute to a tax that has been bankrupt since looney LBJ was in office. We all contribute to a system that further pushes our beloved socialist slave state over the cliff. We all sleep better at night that our benevolent slave masters have taxed and ruined our economy into oblivion. Isn’t socialism wonderful? Isn’t control wonderful? Isn’t FDR’s legacy magnificent?

    1. It’s not only FDR we can thank – Woodrow Wilson’s administration ushered in the Federal Reserve System and the 16th Amendment allowing an income tax – effectively grabbing control of everyone’s money.

  24. There is no excuse for not saving as long as a person has an income,
    It all boils down to personal responsibility,
    I don’t care if a person is making minimum wage-still not an excuse, even if they set aside $25, $50 or $100 a month at least it’s a start, but then again how many of these people just rely and believe that the government will save them?
    The maxim of personal financial responsibility has been eroded by the injection of 100+ years of progressive ideals into the system,
    Most of these people who are saving nothing for retirement are indoctrinated with this government saves all mentality,

    1. I don’t care if a person is making minimum wage-still not an excuse, even if they set aside $25, $50 or $100 a month at least it’s a start,

      WOW. Out of touch much? At least you’re not a libertarian (or libertarian-leaning) politician.

      Might this be why the libertarian label is rejected by 85% of libertarians?

      1. I like how Michael Hihn misconstrues and cherry picks quotes for his trolling purposes

        Dipshit.

        1. I like how Michael Hihn misconstrues and cherry picks quotes for his trolling purposes

          Now I’ll call you out as a liar (also)
          I misconstrued nothing.
          And it’s not “cherry picking” if I cite the exact words I’m ridiculing, instead of your infantile name calling.

          Dipshit

          (laughing)

          1. Hooray, Michael is happy now! he got a response.
            Lol.

            Dipshit.

      2. There is no excuse. Are you saying you would die if you made 10% less? If not then you need to be saving for retirement. Employer sponsored plans are protected from creditors and so are individual IRAs in most states.

  25. american socialist|8.18.14 @ 11:14PM|#
    “I’m depressed because right-wingers don’t know what their tax rates are.’

    Maybe 36% don’t save since they hope to be slimy parasites like commie-kid?
    Maybe they want to be moral cripples like commie-kid?
    Maybe they hope every one else will save their slimy asses like commie-kid?
    Maybe their just stupid like commie-kid.

    1. Nah… My 401k is doing ok. Thanks for your concern

      The condition of my retirement would drastically improve if I just emigrated to Denmark, where they pay retires pretty close to what they were making on the job. There’s a chance for this so keep your fingers crossed that I won’t have to pay for this country’s drug war or it’s DOD. Fuck the assholes that work in the Army and the DEA

      1. Nah… My 401k is doing ok. Thanks

        It helps that the hated 1% is subsidizing 40% of your entire share of the federal income tax. (If $40-99k agi)

        1. Why do libertarians like to post statistics that make a socialists ‘ point? I don’t hate the 1%, I just question why they are paid so much and why their tax rates are so low compared to what rich people in Western Europe pay. The answer as to why rich people pay so much of the federal tax burden (but not social security) is pretty self-evident and doesn’t require much thought– it’s because they have a disproportionate amount of wealth.

          1. Why do you think their tax rates are so low compared to Europe. Very few people in the 1% get a substantial portion of their income from investments. True we do not have a VAT but that hits the poor and middle class more anyways. Our top rates are comparable to top rates throughout Europe.

  26. Social Security has never been any sort of system of saving for retirement. Its superficial resemblance to “saving for retirement” is a political fiction concocted by ideological “capitalists”, and its actuarial imbalance is a product of its inequitable, distributional effects, not changing demographics per se.

    In reality, Social Security is an intergenerational transfer that replaced the tradition of children supporting aging parents who supported them, not a tradition of persons accumulating entitlement to rents to finance their own support in old age or a system of disability benefits based on age. the system is inequitable because it ignores the real, tangible and very substantial investments that parents make in the future labor of their children without establishing any parental equity in this very real and extremely valuable means of production, instead distributing the yield of parental investments to parents and non-parents alike

    http://www.favorati.net/psupp.htm

    Replacing Social Security with a system of disability benefits does not address this inequity or much address the problem at all. Returning to the tradition, even entitling parents to an equitable return on accountable investments, is a much more economically rational approach to the problem, introduces no fundamental imbalance into the system with changing demographics and can be accomplished almost overnight.

  27. The problem with “public education” is similar. We want to pretend that our education in childhood is “free”, so we pretend that our parents and other adults pay for it when we’re children. In reality, a more economically rational accounting for public school taxes treats the cost of public education as a debt being repaid by the educated. After all, if childhood education has no yield, the tax revenue doesn’t exist.

    Actual land rents, reflecting the marginal value of undeveloped, natural resources, aren’t remotely sufficient for this purpose. The idea that impersonal “property taxes” finance childhood education is another political fiction. Libertarians think of “property” as the fruits of labor, and “property taxes” do tax these fruits in reality, but most people don’t think of “property taxes” this way unfortunately.

    Rather than take the political fictions and related wishful thinking for granted, libertarians should emphasize the economic realities.

    1. And when the education, however it is paid for, emphasizes economic realities, then we’d be on to something.

  28. That is an easy question to answer. Most people have never really sacrificed anything for the long term. Most people spend their money on them selves. There is so much out there to spend it on, Cars, Electronics, Houses, going to dinner…. I have heard it many times… I work hard I need to have fun and having fun for most of the population means having “STUFF” and spending money…. Knew I guy once complaining about his bills. Had a big house, big car, and he wondered how he was going to pay for it all… I said get a renter… he said “I don’t want anyone living in my house! OK, how about IO second job… Naw! I work hard already. So many people (Liberals Especially) want to live like Rich people even though they are not… That is why the Liberals are so jealous of the rich.

  29. I have no retirement money because all of my spare cash goes to the IRS.

  30. Social Security has been paying out more than it brings in now for a few years and that its trust funds will be totally depleted by the early 2030s (if not sooner).

    Funny how no one goes around predicting the permanent depletion of the Pentagon’s money. Ask yourself why we this difference.

    Look, Social Security as a program exists separably from the current funding mechanism. Congress could pass a law to pay its benefits from general tax revenues, or even from the U.S. Government’s monopoly as the issuer of the U.S. Dollar. If you want to criticize Social Security, at least acknowledge the obvious fixes to its problems first and then argue why you think they won’t solve the problem.

    1. Congress has already passed a law paying SS benefits from general tax revenue (essentially the progressive income tax). The “trust fund” is only a promise to do precisely that. When the SS administration spends the last dollar of the “trust fund” to pay full SS benefits, it will already be paying 25% of these benefits from general tax revenue, so Congress cannot authorize other expenditure of this revenue until then. Will Congress then declare that the same general revenue stream that paid SS benefits yesterday must buy a new Pentagon boondoggle or another bridge to nowhere tomorrow? That’ll never happen. They’ll go right on using the same general revenue to pay the same benefits, because that was the plan all along. The real question is: what else gets cut in the meantime?

  31. Two Words:

    MORAL HAZARD

  32. I don’t know how the importance of retirement saving from your first paycheck throughout your working life has been impressed on apparently so few people. If you are waiting until you are 30, it is the difference between needing to save 10% vs. 15%. If you are waiting until you are 40, a comfortable retirement at a standard age may well be out of reach.

    When you have kids drill the necessity of saving into their heads. Have them put half of their first paychecks into a Roth and match them dollar for dollar if you can.

    And please don’t let the pols make social security any more expensive. It is by far and away the worst retirement investment you will ever make. If Americans used the SS portion of FICA taxes to by disability insurance and put the rest into an appropriately balanced portfolio, they would not need to put much more away at all, 5% maybe. Instead we need to put away 10-15% of our income on top of FICA and ought to buy disability insurance anyway.

  33. For those people their savings is Social Security. A very poor rate of return with lots of strings attached and zero ownership. Add in that the Government’s own trustees say it is 23% short of money needed to pay promised benefits and it SCREAMS for private accounts, let young people opt out and save for themselves.

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