Keep in mind that social security is set to run out in 10 years time.
Keep in mind that social security is set to run out in 10 years time.
160 comments
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Those poor millionaires, being asked to contribute to society. How could you?!
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Hey. These hard working millionaires are tricking this money down by buying stocks and investing in real estate and then upping the price of rent to continue to increase their wealth so they can push to the next tier of millionaire".
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Which they've hired accountants to do for them. But I assure you, their work lunches are exhausting
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Reposting from another thread:
Social security has been 10-15 years away from being insolvent for 80 years. It will always be 10-15 years away from being insolvent because of the way it's calculated.
When the CBO or whoever scores it they can predict certain things like the number of recipients, the size of their payments, and inflation. They aren't allowed to take into account things that Congress may (but definitely will) do in the future, like raising the cap on social security taxes roughly with inflation. It went up from $160200 in 2023 to $168600 in 2024. This is a rare bipartisan, uncontroversial thing. Congress almost always follows the SSA recommendation exactly.
It would be more accurate to say "if the social security cap stays at $168600 for 10 years, social security will be insolvent."
The people pushing this bullshit know it's bullshit. They do it to make people think they'll never get social security so they can get enough voters on board with killing it, like they've been trying to do for 88 years.
Don't fall for it.
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Apologies, but your specific example is incorrect. The cap on social security taxes is adjusted every year not by act of congress, but by existing law that indexes the cap to inflation. Therefore, it is already baked into the way it is scored and is not ignored.
You are correct that scoring cannot take into account any actions congress may take.
This time is a little different though than history. From 1984-2020, Social Security took in more in revenue than it paid out on benefits. It is now running at a deficit. Since being formed, it has run at a deficit less than 15 total years, and most of them earlier on. The social security trust fund has never been depleted during that time either. Without any changes to law, it will continue to run at a deficit until the late 2030s when the trust fund would be depleted and taxes alone would cover a projected 80% of benefits.
That 80% is why it's bullshit to your point. There are so many simple, easy ways to solve this and if they do nothing, we could continue to pay out 80% of benefits with no other changes but that'll never happen. It would be political suicide to literally starve our retired population. My favorite way to address it is removing the cap, but there's other small adjustments that make a huge difference. Things like changing the inflation adjustment to a similar but lower index, raising the retirement age, raising the tax by less than a percent, means testing, etc ... and the thing that pisses me off is the sooner we take one of these actions, the more of the trust fund is preserved, and the impact is so much greater. I don't like the other solutions and would strongly prefer raising the cap, but I'd take most of them over inaction, depleting the trust fund, and reducing benefits.
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I was trying to keep it short and simple by skipping a step but yes, the SSA follows a formula to raise the cap. But anything the executive does must be authorized by Congress, including the current formula which was set in a reauthorization bill back in the 80s (I think, maybe the 70s, apologies, but I'm not able to look it up right now). So far, every time a budget is passed and every few years when the SSA needs to be reauthorized, they've left them alone. Despite the occasional bill messing with the SSA getting introduced, they never get out of committee.
As far as the CBO goes I don't recall ever reading about cap increases in their report summaries on the trust fund. Although I have read their reports on the effect of various proposed changes to the way the cap is calculated. I'll have to do some more looking when I have the time, but I was definitely under the impression cap increases were in a category the CBO didn't anticipate future changes to when evaluating the health of the trust fund. I thought normally the COLAs would also fall into this category but that is overridden by them being mandatory spending, as opposed to discretionary, so they have to be taken into account. I'm certainly no expert and wouldn't be surprised to find out I missed something.
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It's still time to scrap the cap of $168,600 income that has to pay in. Pay the full amount on all our income, or GTFO of the US.
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They spend more as they get in, it will run out. No amount of tomfoolery will change that.
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They've been saying that my entire life, my dad's entire life, and when my dad was my age, my grandfather would tell him he's heard the same things his entire life going back to the 40s.
For a couple decades the disingenuous doom -and-gloomers told us no way could social security ever deal with the baby boomers. All through the 80s and 90s they told us we might as well privatize it or kill it all together. The only time wall street shut up about it was when they were too busy jerking off to the thought of getting their hands on that money. Well, the youngest of the boomers turn 60 in '24, they're almost all in and the end times keep getting pushed back, from the 80s to the 90s to the 00s to the 10s to the 20s and now 2035. It's like a doomsday cult that keeps pushing the date when the apocalypse doesn't arrive at the appointed time.
You'll have to excuse me for not getting worked up over the 40th new year I've heard for the sky falling.
And for what it's worth, managing the COLAs, the cap, the percentages, and anything else the SSA has done throughout it's existence isn't "tomfoolery," it's accounting. And damn good accounting so far. The SSA being such a well run government institution probably makes republicans hate them almost as much as the tax itself.
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The current trust fund is > $2T.
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- No.
- "Tomfoolery"? Step away from the idiot box, gramps.
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It is not going to "run out". That is republican talking point and propaganda. God damn that myth is believed by everyone.
The concepts of solvency, sustainability, and budget impact are common in discussions of Social Security, but are not well understood. Currently, the Social Security Board of Trustees projects program cost to rise by 2035 so that taxes will be enough to pay for only 75 percent of scheduled benefits. ^1
75% of benefits will still be paid in even the worse case scenario. The fear mongering is not necessary.
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GenX here. Got some free financial advice in 1993 or so. Asked about Social Security being cancelled because my entire class ('89) said we didn't expect to receive it.
She looked me straight in the eye and said, "No. There will be riots in the streets before Social Security is cancelled. This is a non-issue, you're getting it. Any other concerns?"
GenZ, 30-years later, "We're gonna get cancelled!"
No fuck you won't. Old people vote. Isn't that what they're always bitching about? Think we'll shoot our retirement straight in the skull?!
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Also Gen X, graduated in '96, and was warned by my econ/government teacher that we need to have well funded IRAs, because we won't be getting enough social security benefits to even pay for food, much less rent, medicine, or healthcare.
This is what they mean when they say Social Security is basically bankrupt. It won't pay for shit, and I live with people who currently draw on SS. It already doesn't even pay the 1/3 of their retirement it was supposed to. We don't get the retirement plans (pensions) from the companies we work for that was supposed to cover that last 1/3 of our retirements.
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!remindme 20 years
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They will make laws to change it but grandfather in people born before a certain age
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However we do have the worst case scenario of 75% of planned hanging over our heads. In the next ten years or so, either we’ll take a big hit on income or there will be painful changes to prevent it. I don’t like either of those. Like everything else we can’t seem to do, the best fix is to do it ahead of time to greatly reduce the impact. It is important that Congress get off their asses and address it now so whatever adjustment will hurt less.
Previous adjustments have included raising the cap, taxing more benefits, raising the retirement age, and changes to the formula for cost of living adjustments. We really ought to consider a balance of all those and more so we spread the pain
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I know this is false because I've looked into how it works, and it still makes me feel sick to hear every time. Of course, the truth is bad enough, we don't need to lie.
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"I only robbed you of 25% of your income, what are you complaining about?"
What people mean when they say "run out" is that it won't be able to keep up with its obligations. That is objectively bad. People will get reduced payments. There will be pain.
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What people mean when they say "run out" is that it won't be able to keep up with its obligations.
Huh. Maybe I'm just built diff, but when I hear "run out", I think "run out", as in "none will be left"; "the bucket will be empty"; "there will be nothing left in the coffers".
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You are just changing the definition of words so that your new meaning lines up. Which I guess is one way to approach the argument. But not necessarily a helpful one.
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$168,600
That's the cap. It is clearly and obviously only benefiting the rich. Absolutely insane.
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No, it isn't. That's bullshit, a talking point designed to get you to give up on supporting it politically.
But do you know what would help it in actuarial terms? 2 things:
- raise the federal minimum wage
- remove the cap on income subject to the social security tax
When suppressing wages became a bipartisan affair, it hurt Social Security just as much as it did workers on the low end of the wage scale.
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Also make the SS fund separate from the general fund and make the general fund (aka the military) pay back what they took from SS originally.
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Lazy-ass boomers that paid into SS their entire lives? Those lazy-ass boomers?
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Yup, the same ones that actively were able to benefit from the cap of ss contributions due to their secure jobs paying out more than any of us are proportionally making now. Those same secure jobs they only received because the U.S. got to establish itself as a global hegemony due to being largely unharmed by WW2.
Boomers got to live the good life at the expense of our future, and they didn't do a goddamn thing to deserve it.
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Like millennials, right?
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What happens when social security does run out and the millennials and gen z who have paid into it for years get 0 benefit? Ok, we've helped the boomers retire. But then when we need it it's not going to be there.
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These dumbasses call me a boomer. My parents were boomers.
All you gotta do to score some upvote dopamine is throw that word out there. Score!
And yes, Boomers, GenX, Millennials and GenZ, all of us deserve what we were promised. And we will get it. Won't be enough without some work and planning during one's working years, and won't be as fair a deal as the older folks got, but Social Security is going no where.
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That's exactly right. They did that because they don't need it and don't want to pay into it. Our education system is horrible, imagine if people without kids in school were able to just not pay into the education system? This is the same as that.
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Everything else aside, social security is not going to run out in 10 years, all the doomsday is if we do NOTHING, but we never do nothing on social security. It's not going to end or "go bankrupt", this is all fear mongering BS that doesn't stand up to the smallest dose of objective reality.
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To make SS solvent all they need to do is make higher income earners contribute on the same scale they make lower income earners pay already.
If people making above 140,000ish had to keep contributing at the same rate as everyone UNDER that number does, there would be no issue at all. But a billionaire pays as much into SS as someone making 140k a year, probably LESS because of the Social Security payroll tax income limit.
Tax the rich already!
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Eat them, but ok.
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This never made sense to me. You get out of Social Security more or less what you put into it (with lower income earners actually getting a bit more, proportionately speaking). If you remove the cap, people will be paying more into it now and pumping the fund up. Eventually, we just hit the same problems when those high income earners eventually withdraw, since they'll be pulling that much more, as well.
I get the "tax the rich" idea, but Social Security isn't a tax, at least not in the same way as everything else. It's a retirement fund with mandatory contributions.
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So just to translate for non Americans: Social Security is a kind of guaranteed old age / retirement pension, by the looks of it.
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Yea. 6.2% of each paycheck is taken out for SS and your employer will match it. Then, when you turn 67, you are of retirement age and will start reciecving monthly checks proportional to your income when you were working. There are exceptions but that's generally how it goes
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Yes and no.
It's a social safety net. Yes, it can be used as a retirement plan, but it isn't guaranteed and some pensions/retirement plans preclude collection of social security benefits even though you paid in.
My father was a firefighter, and due to his excellent pension he gets like 12 dollars a month from social security. But he's also doing fine because of his pension.
Meanwhile someone who has a catastrophic event in their life but isn't at retirement age may be able to collect benefits.
The biggest problem with social security (aside from the maximum contribution bullshit alluded to in the OP) is that it is treated as a primary retirement plan by most people. That was not its original purpose.
It was also established with a retirement age of 65 when the average lifespan was 63, so even for those using it for retirement. So on average most people didn't live long enough to collect it AND most that did live long enough didn't collect it anyway, AND for those who did, it was only for a few years in average.
But now a majority of Americans are using it for decades. Of course it's running out of money.
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I don't think as many people as you imagine are choosing "wow I can't wait to barely be able to afford rent and food when I retire on a fixed income" as a PRIMARY retirement plan. I think a lot of people are having a hard time saving for retirement thanks to inflation and a stock market crash every 10 years, and are grateful that with social security they'll at least have SOMETHING. I wouldn't call that "choosing social security as the primary retirement plan" I'd call that "work your whole life and barely afford to survive when you're too old to work anymore"
I'm not sure that's something to blame or resent people over.
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That 63 year average lifespan is a bit misleading since, I assume, it is just the mean age at death. It includes infants who die in the delivery room and people who die of untreatable diseases during childhood. It would be more accurate to put the average lifespan of people who made it to adulthood (since they are the only ones who contribute to social security).
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That's not why it's running out of money tho. In fact it's not running out of money they just took it and used it for other things like the military.
Social security is not its own fund. It used to be. They stole a bunch of money from it when they merged it into the general fund.
The idea that SS is insolvent is simply a lie.
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Can you explain what the person in the OP picture is referring to as "the cap"? What is it? How is it defined?
Is it like, up to $x? Or something? For contributions?
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it's not gonna run out.
it will be far worse, we'll all pay into social security and when we get it back it won't cover the cost of your monthly bread ration.
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not just social security. top income tax bracket is at the begining of 6 figures and of course there is a discount to corporate tax rates and if you don't make your money through labor.
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Yeah why is there a benefit for people who don't make their money from labor? They need to be rewarded for already making more by doing nothing? Nonsense
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Are you legitimately asking?
Because they pay politicians to make it so.
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Stop spreading this BS. SS going bankrupt is misinformation.
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Is it though?
(From Bard) "The Social Security trust funds are projected to run out of money by 2034. This means that the Social Security administration will only be able to pay out 77% of a retiree's full benefits."
Which I get isn't exactly the same as what OP is claiming, but it is still pretty concerning for those of us not close to retirement age
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Read any SS Trustees report. It doesn't have "money", it has debt instruments (bonds), which are essentially a document saying "we the government owe ourselves a thousand dollars". You can print those all day, it's only sourcing that money that has any kind of direct consequence (taxation, inflation, etc.).
And yes, that does raise an interesting question of, what did they do with the actual money we paid into the programs, if the only thing in the trust fund is bonds.
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is still pretty concerning for those of us not close to retirement age
It’s even more concerning for those of us who are close. Even most of us with savings are pretty reliant on that for retirement
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Isn't "exactly" still means the statement "bankrupt" is false. Don't move goalposts in the claims. That's disingenuous and only adds to the misinformation.
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What is the difference between a CEO and Santa Clause?
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At least in principle, social security is a mandatory way of saving for retirement, not simply a tax. In that context, it makes sense that contributions are capped since payouts are capped.
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Then why are CEO's even paying for it?
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Because it's cheaper for them than actual social safety nets.
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Right, but it's not really and hasn't been for a while. It's at best a ponzi scheme and a lot of us have been left holding the bag.
It's time to make it what it always should have been, a little touch of socialism so that people don't die/go hungry/end up homeless when they are too old to work.
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How many years has social security been around? Pretty long running Ponzi scheme. Who's been left holding the bag right now?
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Social Security is not "a mandatory way of saving for retirement," that's a bullshit way of looking at it. You are not putting money into an account, and getting that money back when you retire. It 100% is a tax. Tax is not a bad word. It's a social safety net, payouts should be capped, but contributions should not be (or if they are, it should be much much higher).
That's how functioning societies work. They take care of their old and infirmed.
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SS Works is
A poorly thought out tag
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As someone who hits the cap and lives in a place where even monthly premium payments for our healthcare have been scrapped, I am really sure it's time to open up BOTH of them again.
Sure, it's a cost. Sure, it's less cash in my pocket. But holy hell, we need to keep the cash going into the system so the next right-wing nutters can't gut the services via some "fiscal responsibility" bullshit.
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Could someone explain how it could run out if there are still workers contributing to it every year?
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Ah thanks! This explained everything.
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Because it’s paying out/getting raided faster than people are contributing to it
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Population contraction and major shifts in wages compared to cost of living.
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Who would opt out of SS the most? People living paycheck to paycheck. Who can't save for retirement at all? Those same people.
Allowing an opt out would mean homeless and suffering old people wandering and dying in the streets. Which is why SS was created in the first place.
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Plus you could leave it to your heirs if you don't spend it all, whereas your heirs over age 18 get nothing from SS after you die except a laughable few hundred for funeral expenses.
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Back in the 90s, people were saying the same thing. Al Gore even had an early internet meme made about him saying "lockbox" over and over.
Ten years later I looked into it, and the sense at that time was all the illegal immigrants were contributing in but didn't have a chance of taking the money out, and that saved it.
Did Trump screw us over by changing "catch and release" to "Wait on the other side of the border?"
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He kept saying lockbox because there was (and still is) a rumor that Congress has been stealing social security to pay for wars and that's why it's bankrupt.
The reality is that the money is invested in US bonds. Although technically Congress uses that money for wars and other stuff, they pay it back at interest which is overall good for social security (at least compared to cash just sitting there). I suppose if the money was invested instead of being used to buy extremely low yield bonds it could have grown many times over by now, so that's "stealing to pay for wars" by SOME definitions.... But it's not what most people mean with their accusations.
Tl;dr: it's in a lockbox!
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Social Security doesn't have assets, it has debt obligations, which to the government, are something you can conjure out of thin air. The only senses in which it can "run out" is if outlays exceed receipts, or if it runs out of debt instruments to cash out and has to ask for a pile of more debt instruments.
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Image Transcription: Twitter Post
Social Security Works, @SSWorks
A worker making $50,000 a year contributes to Social Security on 100% of their income.
A CEO making $20 million a year contributes to Social Security on less than 1% of their income.
It's time to scrap the cap!
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"set to run out"
Source? Man I wish Lemmy could have developed its own culture without every miserable thing from r/All coming in here to peddle the usual toxic negativity from Reddit.
Worthless ass Twitter repost
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Vote. Every. Time.
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Voting prevents things from getting worse, it doesn't make things better.
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Not sure I agree. Obamacare is better than then nothing-burger that was available before if you didn't get healthcare through an employer. Biden is trying to at least get some student loan relief through congress. Getting the right people elected to state governments can help make abortions available again in some states. (If you're a right-wing person then choose the opposite topics for your examples.)
People who are defeatist about voting come across as complainers who are too lazy to get off their butts to help.
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*And/or choose action, because the system is rigged on several levels and our options suck
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I agree. The options at the voting center are rarely great. Action is certainly better.
But getting off the sofa to vote for the least-evil option is critical. Especially in the primaries and mid-terms. Vote. Every. Time. Vote for dog-catcher, school boards etc.
If you're young it's even more important.
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Many of the elderly retirees are already forced to choose between living in a vehicle or paying rent and starving. If SS is still a thing by the time im old enough to retire that monthly check wouldnt be enough to even afford a hyperinflated big mac let alone rent.
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If you don't own your own property by the time you retire, then you're fucked.
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Even then, my landlord needs my income too or she can't afford the house... It's so disgusting.
Part of me wishes we could all move out and once and force the wealthy to reap what they sow. Everything is too expensive and we're not paid enough, social security isn't enough, well when they're the only ones left for miles and miles then who will do everything for them?
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NGL im kind of halfways on that. Yes obviously thinking about investment and ways to make up passive income or even start your own buisness are the best ways to plan for a healthy retirement fund. But people who come from poverty, poorly educated to begin with, poor financial mindset, and just scrapes each week are going to have a much harder time of it and if they try they usually fall for an MLM scheme. Its easy to judge these people and go 'well your financial failure to save up is your own fault you idiot' but Ive had enough poverty stricken friends to know that the deeper the hole you are born into the harder it is to climb out of even with honest work and educating yourself through the internet.
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Ah, the legacy of Bill Clinton. Found some money, but it was just plundering Social Security.
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100%? That doesn't sound right. If all the money goes to Social Security, what will be left for the IRS to take?
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That’s obviously not what they meant, please don’t bring this dumb Reddit smarminess here.
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They aren't even correct in a pedantic way. What a loser.
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I was just remarking on this the other day.
Since Social Security is set to fail, I wouldn't be opposed to ripping the band aid off and cancelling Social Security at the millennial generation.
To make things right with the millennials, pay them out ~50k for their contributions.
Then maybe millennials would have a better shot at owning a home in this lifetime and the Gen X'ers would get the last Social Security payout.
160 comments