SS calculator

[Toad]

Originally posted by oboe
So, roughly $214,000-230,000 cash value is not a great deal of money to fund a retirement.

[/b]

How many guys do you know that work a $50K/year job from age 40-62 have more than that? Remember, this is on top of any retirement they have from their company.

So the real question is will SS give them as much from age 62 to death? The answer is probably not on two fronts.

First, average life expectancy is now ~78 from recent news. Will SS pay them $200k in 16 years? That's about $12K/ year; they'll probably get a little more than that from SS but not much. More importantly, when they die there's that $300K face value of the policy to their heirs, since most WH policies go beyond age 78. So the total package is going to be way better than SS. in terms of return.

It'd be higher if you started younger than 40, but I still doubt we've found a secret solution to the SS 'crisis'.

[/b]

It'd be WAAAY higher if you took all premiums a worker paid into SS (including employer contributions) and stuck them in a WH policy from day one in the work force. Surely you won't argue against that?

The insurance company may not be as likely to be around in 50 years as the US government.   Small chance, but still a risk.

The top rated companies are all older than 50 years, with a pretty good future. Yeah, they might fail. But then SS is supposed to "run out of money" too.......... Small chance but still a risk either way.

A significant portion of people would simply choose NOT to do this with their money, and they would survive to be a burden on society in the old age.   Just human nature.    Making it required for everybody through SS is one way to solve that problem.

Make it required to invest in Government-sponsored WH. It's do-able. The Government could still collect the money and pay the insurance provider of your choice for a WH policy in YOUR name, increasing/decreasing the insurance as your wages fluctuate.

It'd be less of a crapshoot than SS is, with a legacy for your heirs. Particularly if you take the case of a spouse that didn't work after the wage earner dies. SS doesn't pay much then, but WH would pay a whopping amount. Which would be better for the survivor?

[oboe]

Well I've been trying to think critically about the idea, find pitfalls, etc, and it seems to me you may have something worth looking into.    I'm no actuary so a signoff by me doesn't mean much, though.

What about the transition?   Current retirees depend on current workers to pay their benefits.   If current workers start instead making payments on their own personal WL policies, what will happen to retiree's incomes?   And what about workers so close to retirement that they have no time to build Cash Value in their Whole Life policies?

SS has a large surplus right now, so I suppose you could start drawing that down immediately, but I don't know if the time before its exhausted will give workers under the new plan time to build sufficient cash values for retirement.

Still, I think your idea has merit.   Float it out to some smart people you know.   I'm interested to hear what they say.

[Martlet]

Originally posted by oboe


What about the transition?   Current retirees depend on current workers to pay their benefits.   If current workers start instead making payments on their own personal WL policies, what will happen to retiree's incomes?   And what about workers so close to retirement that they have no time to build Cash Value in their Whole Life policies?

That's the big issue with any fix.  How do we do it without screwing the people currently collecting, or so close to it they don't have time to switch.

[Silat]

Originally posted by Krusher
ok you win. your facts are non-biased and proof positive that SS is here to stay and nothing should be done at all.  Its a perfect system that we all can live a middle class lifestyle with in our retirement.


I will continue to add my spare change to the stock market and my 401k and live in poverty and despair because I missed the SS boat.

Ummm Bud that statement is from the HERITAGE FOUNDATION site that you linked to. So by your reaction I guess you disagree with the site you linked to.

I invested also.
But the original question was "What will private accounts (at the cost of trillions to convert) do to fix SS?, which you still havent answered.

[Martlet]

Originally posted by Silat
Ummm Bud that statement is from the HERITAGE FOUNDATION site that you linked to. So by your reaction I guess you disagree with the site you linked to.

I invested also.
But the original question was "What will private accounts (at the cost of trillions to convert) do to fix SS?, which you still havent answered.

I did, though.  You just chose to ignore it.

[Toad]

Originally posted by oboe

What about the transition?  
 

Real simple. Initially, it's totally optional. You can stick with what you have now or you can switch to WL.

For some, it just won't make sense to switch, for others it'll be a no-brainer type decision. The folks in the middle will undoubtedly be pitched by the WL companies and they'll have to make a decision. I'm sure the financial advising community will respond. It gives them something to write about in all the magazines.

For people that are just entering the SS system, make the government-sponsored WL program mandatory.

So it takes 100 years to convert everyone... at least it's a plan.

[oboe]

A plan it is, and more appealing than others I have heard.

I'd still expect some actuaries to go over it and run some numbers - what happens to the SS fund if the no-brainer folks and 1/2 the people in the middle opt for the WL plan?    Will there be enough left in the SS pot to meet the benefit guarantees for the people staying traditional?

Still, the idea for making it mandatory and keeping the investments out of stocks.   This should be the most conservative piece of a person's retirement investment portfolio.   Let them go a little crazy with stocks in their IRAs or 401Ks if they want.

[Toad]

Originally posted by oboe
what happens to the SS fund if the no-brainer folks and 1/2 the people in the middle opt for the WL plan?    

What happens when the SS system "runs out of money" under the present setup? They raise taxes and/or cut benefits.

You still have that option open. You can take a bit of Bush's idea too, and make only part of a worker's SS taxes available for the WL plan for the present. A 'blended" program, if you will.

[oboe]

More from the insurance agent who did the initial calcs:

For a 65 year old male, the $235,766 and $142,800 cost basis could be annuitized (single life income, no period certain) as follows:

Monthly Income $1,464.95

For the first 20 years, 40.6% of each payment would be a tax-free return of principle. Any payments after 20.0 years will be fully taxable.

This is I think a much better payout than Social Security would offer for the same input.

Kudos, Toad.

[Toad]

Is he saying that there'd be a 40 year payout of ~$1500 per month with the first 20 years tax free?

AND the family gets $350K insurance coverage throughout?

Maybe I oughta run for office on this one....  

Nah, my parents were married... still are.  

[Del]

Ok, lets start with this,

All of the Baby Boomer Draft Dodgers, NO SS
Convicted Felons, NO SS
Didn't pay child support for 1yr or more after ordered(even a little bit).. NO SS
Hit my hog with his cage,, NO SS

I don't live in a Socialist county,, there for, I don't expect nor am I demanding that the Government give me my retirement. I would Like all the money I have put in to SS back, but that just isn't going to happen in this life time.

I am a dog faced American, I will make my own way and I will make it. I don't need to feed off of the great Democatic Tit. I have saved a bit, invested a bit, and god willing and the river don't rise, I will make it ok. If not, oh well, I will just keep working.

The only thing I have been guaranteed is death and taxes, the rest is Bonus...

Stay Safe

[Toad]

I'm sorta of that mindset myself.

However, when my mother-in-law finally used up all the estate left by her husband and had to rely on SS alone at 89 it made me wonder what those that can't "just keep working" are expected to do.

I'm pretty self-sufficient but I still feel compassion for those who tried and through no fault of their own can't make ends meet.

I think we do need to do something for them.

And, as you point out, SS isn't going to go away so it seems we ought to try to come up with a better system.

[Krusher]

Originally posted by Silat
Ummm Bud that statement is from the HERITAGE FOUNDATION site that you linked to. So by your reaction I guess you disagree with the site you linked to.

I invested also.
But the original question was "What will private accounts (at the cost of trillions to convert) do to fix SS?, which you still havent answered.

I was refering to "That is certainly bipartisan"  like the link you posted was?  


You have the answer, you just dont like it.

[Nash]

I just love rough and tumble Republican-speak.

A dog-faced American, determined to make his own way in the world.

Well.... Y'all aint that tough, hard working, nor bright. Hell... most of ya are prolly in unions or work for the government in some fashion or other. The rest? I bet they're gay. And then there's these guys....

Lets take a peek at where Del calls home.

Mission Viejo, the tiny oasis nestled in a sleepy Californian valley... er... I mean the place where the gritty reality of life is always a hair's breadth away from clutching onto your ankles and dragging you right back down into the stink with it.



Life's a *****, eh?

[Toad]

Nash........ it's tough for the rich guys too.

Just a different kind of tough is all. "Do I take out the GT40 today or just drive the SL600? Man... this is tough!"