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Who gets your social security when you die

Dave0626 2012/02/05 09:15:20
I didn't do the math, or check the math on this, but I think
that people really need to stop calling SS an entitlement
like it is a dirty word. I think of it more as repaying a loan
that the government borrowed from us.

KEEP PASSING THIS AROUND UNTIL
EVERY ONE HAS READ IT.....
SOMETHING TO THINK ABOUT!
THE ONLY THING WRONG WITH THIS CALCULATION IS THEY FORGOT TO FIGURE
IN THE PEOPLE WHO DIED BEFORE THEY COLLECTED THEIR SOCIAL SECURITY!!!!
WHERE DID THAT MONEY GO?????????????
This was sent to me, I am forwarding it because it does touch a nerve in me.

This is another example of what Rick Perry called "TREASON in high places" !!! Get angry and pass this on!

Remember, not only did you contribute to Social Security but your employer did too.
It totaled 15% of your income before taxes.
If you averaged only $30K over your working life, that's close to $220,500.

If you calculate the future value of $4,500 per year (yours & your employer's contribution) at a simple 5% (less than what the govt. pays
on the money that it borrows), after 49 years of working you'd have $892,919.98.

If you took out only 3% per year, you'd receive $26,787.60 per year and it would last better than 30 years (until you're 95 if you retire at
age 65) and that's with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you'd
have a lifetime income of $2,976.40 per month.

The folks in Washington have pulled off a bigger Ponzi scheme than Bernie Madhoff ever had.

Entitlement my ass, I paid cash for my social security insurance!!!! Just because they borrowed the money, doesn't make
my benefits some kind of charity or handout!!

Congressional benefits ---- free healthcare, outrageous retirement packages, 67 paid holidays, three weeks paid vacation, unlimited
paid sick days, now that's welfare, and they have the nerve to call my social security retirement entitlements?

We're "broke" and can't help our own Seniors, Veterans, Orphans, Homeless!

In the last months we have provided aid to Haiti, Chile , and Turkey . And now Pakistan......
home of bin Laden. Literally, BILLIONS of DOLLARS!!!

Our retired seniors living on a 'fixed income' receive no aid nor do they get any breaks while our government and religious
organizations pour Hundreds of Billions of $$$$$$'s and Tons of Food to Foreign Countries!

They call Social Security and Medicare an entitlement even though most of us have been paying for it all our working lives and
now when it's time for us to collect, the government is running out of money.
Why did the government borrow from it in the first place? Imagine if the *GOVERNMENT* gave 'US' the same support they give to other countries.

Sad isn't it?


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  • Joe The Economist 2012/02/07 03:12:37
    Joe The Economist
    +1
    Dave, The email above has been floating around the internet for years. It is a collection of bad data and bad math. Social Security is horribly expensive, but this email no more useful than using random numbers from the phone book.

    Whether you die or not, your money goes to pay past promises of past Congress. During the 1950s, Congress added benefits every election year. It was giving dollars of promises for dimes of revenue. In 1983 the system was completely insolvent. That is when taxes were increased. The system did not have a penny, and yet it had promises stemming back to the start of the system.

    Today the system has a shortfall of 17.9 trillion dollars. That shortfall is growing because every dollar that we take from you, DC issues more promises. The Trust Fund exists because we keep all of those costs off-balance sheet in a bucket we call unfunded liabilities.

    What are you going to do about it?
  • Dave0626 Joe The... 2012/02/07 04:05:13
    Dave0626
    +1
    Thanks, Joe...more useful info,,,,So, it's an obsolete email, eh?...Seems i got sapped...gonna delete it ASAP!
  • Joe The... Dave0626 2012/02/12 01:57:59
    Joe The Economist
    +1
    Don't Delete This One : http://news.investors.com/Art...

    "The outlook for Social Security's trust fund has deteriorated to an astonishing degree over the past year, new Congressional Budget Office projections show."

    Drum roll please.....

    NEARLY 1 TRILLION DOLLARS! (Over the past year)
  • All American 2012/02/06 17:19:36
    All American
    +1
    It goes into that lock box Al Gore talked about.
  • Dave0626 All Ame... 2012/02/06 17:54:39
    Dave0626
    +1
    HAHA!...Thanks!
  • Ken 2012/02/05 20:20:33
    Ken
    +1
    Clearly you believe you have/will pay more into social security than you will collect. Is that true for most Americans? How many years do most Americans work? How much do they pay each year in SS Benefits? How many years do they expect to collect benefits?

    Here are a few reference points with citations that may change what you believe about your SS payments and benefits.

    According to the Bureau of Labor Statistics, the average recipient in 2000 started collecting benefits between 62 and 63 years of age. http://www.bls.gov/opub/mlr/2...

    Life expectancy for a woman who turned 62 years old today is 85.5, i.e., 23.5 more years. http://www.ssa.gov/cgi-bin/lo... I used a woman's life expectancy because women life longer and each recipient will collect the higher of their own or their spouses SS benefit.

    In 2004, the median SS income was $12,799 for the 23-24 Million recipients over 65. http://www.ssa.gov/policy/doc...

    So we can conclude the median recipient is expected to collect $12,799 for 23 years.

    Since 1990, the SS tax rate has been 15.3%. http://www.ssa.gov/OACT/ProgD... Prior to 1990, the rate was lower.

    In 2010, median household income for a household with a householder under 65 was $55,276 in 2010. http://www.census.gov/prod/20... In 1989, the median h...



    Clearly you believe you have/will pay more into social security than you will collect. Is that true for most Americans? How many years do most Americans work? How much do they pay each year in SS Benefits? How many years do they expect to collect benefits?

    Here are a few reference points with citations that may change what you believe about your SS payments and benefits.

    According to the Bureau of Labor Statistics, the average recipient in 2000 started collecting benefits between 62 and 63 years of age. http://www.bls.gov/opub/mlr/2...

    Life expectancy for a woman who turned 62 years old today is 85.5, i.e., 23.5 more years. http://www.ssa.gov/cgi-bin/lo... I used a woman's life expectancy because women life longer and each recipient will collect the higher of their own or their spouses SS benefit.

    In 2004, the median SS income was $12,799 for the 23-24 Million recipients over 65. http://www.ssa.gov/policy/doc...

    So we can conclude the median recipient is expected to collect $12,799 for 23 years.

    Since 1990, the SS tax rate has been 15.3%. http://www.ssa.gov/OACT/ProgD... Prior to 1990, the rate was lower.

    In 2010, median household income for a household with a householder under 65 was $55,276 in 2010. http://www.census.gov/prod/20... In 1989, the median household income was 30,000 http://www.demographia.com/db...

    So for the last 22 years, the average SS payments were 66% of the expected benefit, i.e., enough to pay for 14.5 of the expected 23.5 years of retirement. Since income prior to 1990 was lower and the tax rate was lower, paying for the remaining 9 years of retirement is very difficult. Assuming the same tax rate and the 1989 median income for all years prior to 1990, a 62 year old woman retiring today @ 62 year old woman, would need to have started earning 30,000/year when she was 14 years old to pay her expected SS benefits.

    You are entitled to your own opinions but not your own facts....and the fact is Social Security is an entitlement program and indeed a giant ponzi scheme. As long as the work force kept growing it worked magnificently. ... Unless the US allows massive immigration, the workforce will not grow as rapidly as the number of retirees over the next several years and the scheme will fail.
    (more)
  • Dave0626 Ken 2012/02/05 20:56:36
    Dave0626
    +1
    The main issue I have is WHERE does my SS money go if I have no beneficiaries, as is my situation. I would like to think that money gets recirculated into the SS system to help bolster the entire system which appears to be failing. I see no reason for the Gov't to do with it otherwise.
  • Ken Dave0626 2012/02/05 23:33:13
    Ken
    +1
    You SS money goes to the SS Administration when you pay your SS taxes. Under certain conditions, the SS Administration will provide you with a monthly income. This is your only SS money.

    To use pension program language, the SS program is a "defined benefit" program with no option to withdraw your money as a lump sum. The government takes the risk associated with return on investment and inflation. You take the risk associated with a premature death.

    Certain politicians have proposed changes to the SS program that would make it work more like a 401K or similar "defined contribution" pension program. Under such a program, each SS member would have an account. This account would have a value based on the individual's contributions and investment returns. When the SS member reached a specified age, they could begin to withdraw the money from their account. If it was adequate, it could provide them income for the rest of their life. If it wasn't adequate, tough luck. Under such a program, the SS member takes all risk associated with return on investment and inflation. Since each member has "an account", it would be reasonable to discuss "Where your SS money goes."

    Bottom line... if SS is changed to a "defined benefit" program, you won't have to worry about where "your S...
    You SS money goes to the SS Administration when you pay your SS taxes. Under certain conditions, the SS Administration will provide you with a monthly income. This is your only SS money.

    To use pension program language, the SS program is a "defined benefit" program with no option to withdraw your money as a lump sum. The government takes the risk associated with return on investment and inflation. You take the risk associated with a premature death.

    Certain politicians have proposed changes to the SS program that would make it work more like a 401K or similar "defined contribution" pension program. Under such a program, each SS member would have an account. This account would have a value based on the individual's contributions and investment returns. When the SS member reached a specified age, they could begin to withdraw the money from their account. If it was adequate, it could provide them income for the rest of their life. If it wasn't adequate, tough luck. Under such a program, the SS member takes all risk associated with return on investment and inflation. Since each member has "an account", it would be reasonable to discuss "Where your SS money goes."

    Bottom line... if SS is changed to a "defined benefit" program, you won't have to worry about where "your SS money goes" because it will go to the financial advisors who understand the basics of investing and risk. On the other hand, I hope it is changed because I can make a much better return than the Federal Government and so retire with even more money. Although it doesn't really matter since SS will be a neglible part of my retirement income.
    (more)
  • Dave0626 Ken 2012/02/06 03:05:03
    Dave0626
    +1
    Great info, Ken ...Thanks!!
  • Joe The... Ken 2012/02/07 02:59:25
    Joe The Economist
    +1
    Ken,

    The research that I have seen says that immigration will make Social Security less actuarily sound. The problem is that the system has a bias to low-wage workers. Also you will reduce cashflow to Social Security from illegal workers working under fake documentation.

    The email above has any number of problems starting with the wrong FICA rates. While payroll taxes have been 15.3, Social Security Old-age/Retirement has only been 10.6% since 1990(?) the rest is disability and medicare which are two additional programs with similar problems.

    Our site www.FixSSNow.Org seeks to be one-stop shopping for people who are worried about the system. Stop by and tell us where we are wrong.

    Thanks,


    JoeTheEconomist
    www.FixSSNow.Org
  • Ken Joe The... 2012/02/07 05:55:30
    Ken
    +1
    If SS wasn't a Ponzi scheme, your argument against immigration would be correct. Understand that Ponzi schemes are wonderful investments as long as the growth continues. Ponzi schemes are much like musical chairs ... when the growth stops, some of the players are left without chairs. At this point, the Baby Boomers are the ones who will be left without chairs. Since I am a Baby Boomer, I want the music, aka, growth, to continue until I no longer care....and since my generation didn't have enough children, the solution is immigration....preferably illegal since they will never collect SS:-)
  • Joe The... Ken 2012/02/12 02:02:19
    Joe The Economist
    +1
    Ken, I catch a lot of flak for this but.... Social Security isn't a Ponzi scheme. It is theoretically more like Check Kiting. The difference is that in a Ponzi scheme you have to have some capital in the game. With check kiting you write one set of checks to one generation with money that you take in from another check written to a different generation. Check Kiting is a much bigger problem and it goes until one bank (a generation in this case says no). Look at Social Security can tell me that it a Ponzi scheme...

    http://en.wikipedia.org/wiki/...
  • Ken Joe The... 2012/02/12 05:03:44
    Ken
    +1
    We have no real difference on this....the difference between a Ponzi Scheme and Check Kiting is esoteric. Check kiting is more sustainable than a Ponzi Scheme but neither can survive negative growth rates.

    Just today, I described to my daughter how to use credit card payment schedules to create a savings account equivalent to 1 or 2 months income. ... a form of check kiting that is perfectly legal. When your income is growing, such schemes increase your liquidity. They also increase the impact of income shrinkage because they reduce your income by the float amount as well.
  • Dave0626 Ken 2012/02/12 05:21:39
    Dave0626
    +1
    [...use credit card payment schedules to create a savings account equivalent to 1 or 2 months income.]...

    I'm no finance wizard, but that sounds ingenious to me!...lol.
  • Ken Dave0626 2012/02/12 05:46:40
    Ken
    +2
    Dave, ... this isn't rocket science. I make virtually all my purchases with credit cards. The credit card bills me once a month. I have 20 to 30 days from bill reciept until I must pay the bill. If I pay the bill in full when due, there are no fees or interest.

    So let's assume I spend everything I make in January. At the end of January, I have recieved my income for January and a credit card bill for my January spending due at the end of February. At the end of February, when I have my income for January and February, I pay my credit card bill. The day before I pay my Credit Card bill, I have close to 2 months income in my cash account.

    Unlike my daughter, I only spend a fraction of my income each month...and so do not create as much float.
  • Dave0626 Ken 2012/02/12 06:03:28
    Dave0626
    oh OK ...that makes sense now...pretty savvy idea!...Thanks!
  • Ken Dave0626 2012/02/12 06:19:22
    Ken
    +1
    There are "trickier schemes" but these are more chancy....suppose I open a checking account at two different banks. I write a check on my account at bank 1 and deposit it in bank 2. It may take a day or more before the check I deposited in bank 2 clears bank 1. During that day or two the value of that check appears on my balance in both banks. Technically this is check kiting.

    Because the time it takes to clear a check is so small, this makes little sense for the average joe. For individuals and companies with significant balances, this can also increase their net asset value. Remember ... it is all about the "float", i.e., the time from when a transaction is posted in two different locations.
  • Joe The... Ken 2012/02/13 11:54:10
    Joe The Economist
    +1
    There is actually a pretty big difference between them. In a Ponzi scheme you can only lose as much capital as you put in. With check kiting there is no limit. The limit isn't set until a bank refuses to honor a check. This goes to the point about the Trust Fund. Many people tell me it doesn't exist. They think it is worthless. In fact, according to the SSA, it is worth -17.9 trillion dollars. It hasn't been worthless since the ink dried on the first check to Ida Mae.
  • Ken Joe The... 2012/02/13 14:26:08
    Ken
    +1
    Joe I have done both on a small scale and understand the differences. Most people understand that Ponzi schemes are fraud. Very few people understand what check kiting is.

    When the government does check kiting, we call it money supply.
  • Joe The... Ken 2012/02/12 02:04:31
    Joe The Economist
    +1
    "Since I am a Baby Boomer, I want the music, aka, growth, to continue until I no longer care...."

    I would spend some quality time with this article : http://news.investors.com/Art...

    The music is over, and the fat lady is singing. It is time to find a chair.
  • Ken Joe The... 2012/02/12 05:07:45
    Ken
    +1
    We may have a fundamental difference....I consider money to be a figment of human imagination....and so the SS Trust Fund is meaningless. The viability of SS depends on the ability of those working to provide the goods and services those who are not working, aka, retired, will consume. How much money exists in some "trust fund" is meaningless. Money is neither a good nor a service.
  • Joe The... Ken 2012/02/13 12:05:11
    Joe The Economist
    I would agree with you with a couple of minor points.

    Money is a store of value. I work today for something that allows me to buy things tomorrow. The Trust Fund in theory was a way for workers to save for their retirement by over-funding the cost of the system. That theory is a pile of crap ...

    The money in the Trust Fund is not meaningful because it shows only half the score. The government keeps the costs of promises of future benefits off the books. It is terribly misleading because it gives people the impression that the theory has worked. Saying that there is 2.5 trillion dollars is no more meaningful than saying Cardinals 8. It isn't meaningful because there is no context of what that money has been allocated to pay. Here is the context the government would have to put in 17.9 of 2011 dollars for the system to be actuarily sound.

    Some argue that the Trust Fund has no hard assets to which one can only say that it is backed by the printing press of the Federal Reserve. So it is backed by everyone of the dollars in your bank account. That brings us back to meaningless because the value of money only stores value in a world where money supply is constrained.
  • Ken Joe The... 2012/02/13 14:42:16
    Ken
    The idea that money is a store of value and the related concept that money makes money, i.e., interest, works for the individual and the family. When we extend this to the collective, i.e., everyone, the concept begins to fall apart. First, money as a store of value does not consider that anything you produce must be used by someone else to have value. If it is not used, it will decay, i.e., "moths and rust do corrupt, and thieves break in and steal". Secondly, is the idea that the collective money earns interest. If that the item you produced makes others more productive, then indeed the effort represented by this money will continue to produce additional value...provided there are people using the item you produced. If on the other hand, you were paid to produce a factory that nobody operates or a house that no one will live in, then you wasted your time and the money you received not only doesn't earn interest, it is worthless.

    Based on the trade deficit for the last 40 years, it appears the Baby Boomers consumed more than they produced for a lifetime. How can they c;aim a "SS trust fund"?
  • Joe The... Ken 2012/02/15 04:28:58
    Joe The Economist
    +1
    You have a number of good points particularly the last one, which hits on a theme that we hammer home. Future generations will see the Social Security Trust Fund as nothing more but taxes that should have been collected to control the deficits.

    In 2011, the general taxpayer (who is borrowing money from the Trust Fund) made a generous gift to the Trust Fund of $170 billion dollars. This is literally like your parents using your credit card to make contributions to their 401K.
  • Joe The... Ken 2012/02/13 12:08:50
    Joe The Economist
    "The viability of SS depends on the ability of those working to provide the goods and services those who are not working, aka, retired, will consume."

    This is a huge point because today's worker is less able to make those provisions. The growth in the federal debt will place tax demands on future generations such that they will not be able to afford Social Security. This is where Social Security collapses. It will collapses because the working generation will no longer be willing to make that provision. It will be too busy paying down debt.
  • Wanderer 2012/02/05 18:03:03
    Wanderer
    +1
    Being in another country I wasn't sure how to answer this! my own entitlements probably far outwiegh the amount payed during my working life.Am on disability, the cost of my medication alone would cover the cash paid in,tests and the cuts that are allowed in my Doctors bills would push up the numbers too!
  • jacktown kid 2012/02/05 17:24:59
    jacktown kid
    +1
    Yes it is very sad indeed
  • Judy224 2012/02/05 15:02:52
    Judy224
    +1
    Good question Dave. I think it's also a shame that people who have disabilities have to wait approximately 3 years to get on SSDI (Social Security Disability Insurance). Most have worked many years and paid into the system. Yet when they can no longer work, but are still under retirement age, they have to wait, go deeply in debt, just about have to beg, borrow and steal, unitl a judge may or may get give it to them. Sometimes I think the government hopes you die before they have to give you a penny of your social security money.
  • Dave0626 Judy224 2012/02/05 20:46:39
    Dave0626
    +1
    the government hopes you die before they have to give you a penny of your social security money. ]...
    So very true, Judy. And God help you if you owe them money! That is something THEY won't wait 3 yrs. to collect!
  • Linnster 2012/02/05 14:55:47
    Linnster
    +1
    No one gets my money as I'm not married. Therefore, whatever I don't collect remains in the general fund. Social Security is NOT an entitlement. It is NOT a handout - it's money that I contributed towards my retirement much like a 401(k). The difference is that anything left in my 401(k) when I die is part of my estate which goes to family. Not so with Social Security.
  • Dave0626 Linnster 2012/02/05 20:48:12
    Dave0626
    +2
    Gotta wonder ...just where DOES that money go?.....hmmm.
  • Linnster Dave0626 2012/02/05 23:00:29
    Linnster
    +1
    I would like to think it goes back into the pool so it's available for others who are still collecting and will soon collect. I think those of us who have reached retirement age (I'm there but haven't applied) and you (two years away) will be able to collect what was "promised" to us. My fear is for those who are in the 40-50 range where they don't have the ability to put a lot of money away because of home purchases, kids, college tuition, etc. Those starting out will have plenty of time to save for retirement, whether it's Social Security as we know it or some other plan.
  • Dave0626 Linnster 2012/02/05 23:17:54
    Dave0626
    +1
    Thanks, Linnster ...I hope yer right about my collecting ...counting on it.
  • Linnster Dave0626 2012/02/05 23:29:56
    Linnster
    +1
    None of the candidates have suggested that any changes to Social Security would affect those over 40-50. Most people have come to depend on that as their sole source of income. I know that if those monies were invested in other ways, a higher rate of return would be possible. Unfortunately, Americans aren't savers and relying on people to voluntarily save for their retirement on their own would mean that if they didn't, then instead of having income from a source into which they contributed for at least ten years of their lives, they might well have to apply for welfare, into which they contributed nothing, and it would be more costly for the taxpayers in the long run. This doesn't mean that a combination of federal and/or personal plans should not be explored. If you are only saving on your own and the economy is the way it is now when it's time for you to retire, you're going to be in big trouble. I think the average life expectancy now is around 82. If you retire at 66 or 67, you could conceivably blow through your retirement fund in a very short time. Then what?
  • Joe The... Linnster 2012/02/07 03:18:41
    Joe The Economist
    +2
    Our site tracks all of the solutions being discussed for Social Security - www.FixSSNow.Org. Many try to protect those over 55, but they aren't realistic plans. The system is 17.9 trillion dollars short. It will be difficult to protect any large group of people.

    Americans do not have a saving problem. They have a Social Security problem. As tax rates rise, people have less left over to save. Savings rates have declined as pay roll taxes have risen. When someone pays $6,000 or more per year for a retirement plan - it is likely that they will include it as part of their retirement plan. For a high wage worker today, they may get back as little as $0.40 on the dollar pre-tax. Is this any way to save for retirement?
  • Linnster Joe The... 2012/02/07 03:35:00
    Linnster
    +1
    The system needs to be updated to take into account that more people live longer than they did when Soc. Sec. was initiated. The government needs to stop raiding the fund and put back what they took out. Retirement at 62 may no longer be feasible. I'm not a math whiz nor do I understand exactly the way Soc. Sec. works. What I do believe is that if people are left to save on their own for their retirement, most will not do it.
  • Joe The... Linnster 2012/02/12 02:46:33
    Joe The Economist
    +1
    Linnster, People aren't saving for their own retirement. They are paying for the previous generation's failure to save for their own retirement. Payroll taxes have reached levels where people can't save for their own retirement.
  • Linnster Joe The... 2012/02/12 03:10:29
    Linnster
    I am in a unique situation - single, no kids, no debt, full-time employed at a good salary, so I've been able to put away everything the government has allowed me to put in my 401(k), so I'm better able to save for retirement than anyone with kids and a mortgage.

    What you say may be true, but the fact is that even if it wasn't, if the average person didn't have their retirement money taken out of their pay up front, they would likely have nothing at all come retirement. Even if they put money away, once you know you can tap into that money if you need to, it rarely goes back in and, with the economy the way it's been, a lot of people have had to tap into their IRAs and other retirement funds. Depending on your age, you may not have enough time to make it up.
  • Joe The... Linnster 2012/02/13 13:40:06
    Joe The Economist
    +1
    "but the fact is that even if it wasn't, if the average person didn't have their retirement money taken out of their pay up front, they would likely have nothing at all come retirement. "

    It isn't fact. It is theory - one that may well prove to be true, but it is not a fact. We have no idea what people would do absent Social Security - my guess is that they would place a greater emphasis on their children's productivity. That is just another theory.

    What helps you is that you have no debt, other than the passthrough from the government. When you take money out of someone first dollar to pay for someone else's retirement and they use debt to make up the difference, that is an equation for poverty. Credit card debt is the killer not the mortgage.
  • Linnster Joe The... 2012/02/13 14:36:31
    Linnster
    You're right - that is a theory and one about which I hope I'm wrong. If I'm not, what do you think is going to happen to all these people when they retire? They will wind up on welfare or some other public assistance into which no one has contributed which would be a greater burden on the taxpayer than Social Security is now, don't you think?

    Placing greater emphasis on their children's productivity is dependent on jobs being available. No one I know is likely to get rich in a job that pays minimum wage. In fact, depending on their age now, if they don't have jobs themselves, nothing is going into their Social Security accounts either.

    Yes, I realize that I am in a very unique position that I would not be in if I were married and had a family.

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