We’ve all heard the snickers from Liberals when anyone suggests privatizing social security. I’ve heard them so often that I assumed that, liberals, some of whom must be educated, must have already done the research and Social Security is a good deal for the people so I never really thought about it much.
After all, it has the word Social and the word Security right next to it, both of which are good things.
There’s something about receiving a check when your old from the government every month that seems like a good deal.
So, is it a good deal?
To gauge how my demographic feels about privatizing social security, have a look at these Reddit posts below:
The top post ever on the topic reads:
The GOP’s big ideas for defecit reduction? Raise taxes on the middle class, cut taxes on the rich and privatize both Medicare and Social Security. Basically: Fuck you, America.
So privatizing social security means Fuck You, America?
Let’s have a look, but before I get to my facts (warning: math below) here are some cool facts from the Social Security Administration’s Website:
- The Social Security tax rate for employees is 4.2 percent through the end of the year
- The Social Security tax rate for employers is 6.2 percent
- The Medicare tax rate is 1.45 percent for employees and employers
Total SSI and Medicare Tax rate is 11.85%
- The Social Security tax rate for self-employed is 10.4 percent through the end of the year. The Medicare tax rate is 2.9 percent for self-employed.
The self employed are given a 1.45% break on their SS, but a hike on their Medicare bringing the total to 13.3%. You know the government has some brilliant actuaries studying this shit to get the maximum profit, something we often associate with (scary music) THE PRIVATE SECTOR.
Some more stuff from their website:
The maximum benefit depends on the age a worker chooses to retire. For example, for a worker retiring at age 66 in 2012, the amount is $2,513. This figure is based on earnings at the maximum taxable amount for every year after age 21.
What this means is that if at the age of 21 you make at least $110,000 per year and earn this amount, year after year without leave until you are 66 years old— a total of 45 years , you will be paid $2,513 per month for the rest of your life. Quite a career by most standards. You and your employer will have paid in $586,575 during this same time period, of which you personally contributed $279,675 .
So how much of this do you stand to get back? Interesting question.
Here are some facts:
- The average life expectancy in the United States is 78.2 years.
- If you lived 12.2 years after your retirement at $110,000+ per year (your retirement age after a stellar career to the average life expectancy age– another feat that few in my family have achieved) then you live 146.4 months on the social security “gravy train”.
- In your 146.4 months you will receive $367,903 in benefits . Wait a second, isn’t that $218,672 less than you and your employer(s) paid in? Yes, it is.
- In 2012 i’ve made 16% return on my 401k investment. This is not typical, but I reallocate my investments often based on news and recent performance of the funds available to me. I have no education in finance.
- Let’s say the average person earns 4% per year on their 401k, if they allocate it wisely, which everyone should. What would their investment look like at 66 years of age at an average rate of 4% compounded annually? Hold on to your hat:
Or, $7,211 per month on the Privatized Social Security monster, which of course is a fuck you to all Americans, as we learned earlier. I’d imagine most senior citizens could use those extra 5,000 fuck you’s per month.
Have a look at this report (which would get any MBA, technical writer or web designer fired) to see the income and disbursements for the Social Security “Trust Fund”, please do notice that the operating costs are never explicitly stated, nor are they easily findable with a google search:
|Assets (end of 2010)||$2,429.0||$179.9||$271.9||$72.1|
|Income during 2011||698.8||106.3||228.9||301.0|
|Outgo during 2011||603.8||132.3||256.7||292.5|
|Net increase in assets||95.0||-26.1||-27.7||8.6|
|Assets (end of 2011)||2,524.1||153.9||244.2||80.7|
What this means is that the government is only netting 15.7%, after operating costs on a scheme with a gross profit margin of 46%! And yet you always hear about the government dipping into the social security fund. Even at 15% gross profit on a 46% margin it’s the best thing they’ve got going.
Here are a few easy solutions, which I understand is a Fuck You to America and illiberal:
- Those who bought into the scam fully (any investment with a planned return of minus 54% would be labeled a scam, certainly) will receive their benefits, or a choice of a lump sum of the amount they paid in.
- Those who are partially invested would be offered a transfer to a retirement account of their choosing, in full or at a rate of 75-80% (I’d take 50%)
Can you see why Republicans, Democrats and the Statists (but I repeat myself) don’t want social security to be privatized? It’s the best, most loved scam going.
You have to ask yourself, does Social Security and Medicare help poor senior citizens, or did it create them?