Posted on 08/30/2019 10:40:29 PM PDT by rintintin
Few issues unite millennials like the future of Social Security. Overwhelmingly, they’re convinced it doesn’t have one.
A recent Transamerica survey found that 80 percent of millennials, defined in the survey as people born between 1979 and 2000, worry that Social Security won’t be around when they need it. That’s not surprising — for years, they’ve heard that Social Security is about to “run out of money.”
The language doesn’t match the reality. Social Security benefits come from two sources: taxes collected from current workers’ paychecks and a trust fund of specially issued U.S. Treasury securities. This trust fund is scheduled to be depleted in 2034, but the system will still collect hundreds of billions in payroll taxes and send out hundreds of billions in benefit checks. If Congress doesn’t intervene, the system can still pay 77 percent of projected benefits.
In any case, chances are good Congress will intervene, as it did in 1977 and 1983, to strengthen Social Security’s finances. Social Security is an enormously popular program with bipartisan support and influential lobbies, including the immensely powerful AARP, looking out for it.
Still, millennials who believe Social Security won’t be there for them could make bad choices about their retirement Opens a New Window.savings. The worst outcome would be if they didn’t save at all, convinced retirement was hopeless. But any of the following myths could cause problems.
‘I can save enough to retire even without Social Security’
Good luck with that.
Currently, the average Social Security benefit is just under $1,500 a month. You would need to save $400,000 to generate a similar amount. (That’s assuming you use the financial planners’ “4 percent rule,” which recommends taking no more than 4 percent of the portfolio in the first year of retirement and adjusting it for inflation after
(Excerpt) Read more at foxbusiness.com ...
Capital gains tax rates could skyrocket.
There are even Leftists saying that 401k plans should be grouped together and shared.
Your investments are not safe from Communists.
That’s the gross number. When it is reduced by Medicare payments and taxes the result is much less.
Over the years I’ve seen many scenarios, where if you invested a modest amount on a regular basis, long term, you would have far more than 400k.
The root of the problem is that rock bottom interest rates are debilitating for savers. 5% used to be considered a reasonable expectation for average interest rates over long periods of time, and we’re seeing lots of zeroes and near-zeros over the past few decades which throws off all the assumptions behind established retirement math.
First. The 4% rule is pure unadulterated BULL. We are not making 8% CAGR anymore. Not when the fed funds rate is in the 2% or even 4% range. So anybody that bases their retirement savings on 4% withdrawal is a fool and will die in poverty as they should. 2.7% is probably closer to a good figure.
SS needs to die, to be phased out with the boomer generation. Let future generations off the hook and obligate them to find another way. It had better be better than a 401 or someone had better start educating them really fast about how to save and invest so they will not have to go to the 1% FA vultures. That is another fool’s errand.
Post boomer generations had also better start thinking about working longer and how they will overcome age discrimination when it happens to them so they can work longer.
Starting saving just five years earlier and delaying spending just 5 years will make a huge difference in survival.
SS is already income indexed just as medicare is. Just so we get that straight. The “rich” have already paid in more to both programs by a long shot and will already get less out after taxes and medicare premiums than anybody else. I know the urge to eat the “rich” is overwhelming to most.
Millennials have the collective maturity of defiant, ignorant adolescents.
SS needs to be means tested and then have all new enrollments ended after 5 years, then the tax should be eliminated and the program funded from the general budget until attrition ends it.
Suppose you are 22 make 100k every year unti 62save14.5% at 10% per year When 62 you have 8 mill with as you get 2800 nobody realizes how much wealth social security has squandered away.
You are lost and your post is one of the most ridiculous ones I have seen in 20 years on FR
The 4% guideline works and may even be conservative -- BUT you have to invest mostly in stocks for that to be the case.
This is a political non-starter for Dems. People who have their future well-being invested in American business want that business to succeed, which spells death to the RAT party.
Believe what you want but the odds are that anyone who pulls 4% and does it for 30 years or more will be broke without a way to make any corrections. 85 year-olds seldom pull many rabbits out of a hat.
I’ll stick with m 2.7% and figure out what to do with any excess. That is a good problem to have, being broke and old is not.
The problem with FAs is they don’t have any skin in the game and have a huge conflict of interest as big as Quasimodo’s hump.
Have you ever read the Trinity Study. How about the updated version?
Like I said, you have to invest in stocks. Fixed income is not going to get you there.
An interesting WSJ story yesterday. Typical “but what about the Po’ Folk?” story. What was most interesting were the comments, nearly 800 as of this morning. Almost all were critical of the meme of the story, and said, “work, thrift, and discipline will grow wealth every time its tried. Borrow, spend, and don’t work, you’ll go broke every time.”
Historic Asset Boom Passes by Half of Families
Scant wealth leaves families vulnerable if recession hits, economists say
By David Harrison
Updated Aug. 30, 2019 6:44 am ET
The decadelong economic expansion has showered the U.S. with staggering new wealth driven by a booming stock market and rising house prices.
But that windfall has passed by many Americans. The bottom half of all U.S. households, as measured by wealth, have only recently regained the wealth lost in the 2007-2009 recession and still have 32% less wealth, adjusted for inflation, than in 2003, according to recent Federal Reserve figures. The top 1% of households have more than twice as much as they did in 2003.
We agree on two things
The system should be wound down and abolished in an orderly fashion. But that probably won't happen. More likely, it will crash and burn. The millennials are right to anticipate that they will get nothing out of it, at most, a few inflation-ravaged dollars.
L8r
WHAT THE ____?
You are either really ignorant or drunk, and since it is early in the day, I'll go with the first option.
Fundamental fact???
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