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Wall Street, we have a problem. (lemmy.world)
submitted 2 years ago by to c/whitepeopletwitter@sh.itjust.works
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[–] 0 points 2 years ago (11 children)

Social security is not enough to live off of.

Nevertheless, it is 40% of retirement income. And none of it comes from the stock market.

projected to be unobtainable for future generations

Projected by advocacy groups trying to abolish social security.

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  • [–] 6 points 2 years ago (10 children)

    You are being untruthful and dismissive: https://www.ssa.gov/oact/tr/2024/tr2024.pdf Page 9 is the jist.

    They are going to have to change something either raise the retirement age or lower the payments both which make it more unobtainable then it already is. And that 40% is based what people make… in a time of rising inflation and stagnant wages…

    The fact that social security is not tied to the market is super irrelevant, when the argument was that the 401k is in danger, when social security already is not enough to live on. so it’s important that people have a successful 401k to supplement it.

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  • [–] 7 points 2 years ago (1 child)

    The real solution is making the average wage go up. Significantly. Which puts more money into the program overall.

    With so much money having been shifted away from the average worker and Into the pockets of people who hit the FICA cap in their first paycheck of the year, over the last few decades, it was bound to have issues.

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  • [–] 2 points 2 years ago (7 children)

    They are going to have to change something either raise the retirement age or lower the payments

    Or just pay directly out of the general fund, which they can do with a simple vote in Congress and which they already do for Medicare/caid.

    The fact that social security is not tied to the market is super irrelevant

    It is the primary argument both for and against the program. Investors kick and scream about the benefits of compound interest, right up until a big market nosedive and bankruptcy spree. Meanwhile, it's the benchmark for guaranteed basic income that progressives love to reference.

    Decoupling income from economic growth isn't irrelevant. It's the program's entire raison d'etre.

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  • [–] 1 point 2 years ago (6 children)

    You would have the tax payers pay even more of the burden now, with out the benefit of even having it contribute to their social security… to pay the gap in social security, damning the tax payers twice. That’s not a permanent solution on top of that! I’m not saying social security should be attached to the market. I mean we are talking about the market fall after all! I am saying that being flippant that everyone Just needs to remember they have social security is dismissive and not relevant.

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  • [–] 2 points 2 years ago (5 children)

    You would have the tax payers pay even more of the burden now

    Tax revenues have been decoupled from government spending for nearly a century. You don't need to change the tax rate at all.

    But if you really did want to, I'd recommend simply uncapping the SS Tax and collecting on income above $176k. That, alone, gets us back into surplus. It even raises the prospect of boosting COLA to match the real inflated cost of living.

    That’s not a permanent solution on top of that!

    It's how we've been funding virtually every federal program - from the courts to the Pentagon - since the nation's founding. How much more permanent do you need?

    Just needs to remember they have social security is dismissive and not relevant.

    Dismissing 40% of retirement income streams as "not relevant" is a great way to get a senior citizen putting a brick through your window.

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  • [–] 2 points 2 years ago (4 children)

    I am not against making the wealthy pay more in social security as they uniquely benefit from the exploitation of the average workers.

    i am not saying social security isn’t important. I am saying that in a discussion about the risk to the 401k, mentioning social security is irrelevant. Social security has already failed to cover expenses, the 401k was to cover that gap. And in the future social security will get weaker, as ‘40%’ of wages which have been stagnant, refuse to keep up with inflation. They make tax payers pay for the lack of funds to maintain the ‘40%’? Cool, but that does not cover the growing gap the 401k needs to cover.

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  • [–] 1 point 2 years ago (3 children)

    I am saying that in a discussion about the risk to the 401k, mentioning social security is irrelevant.

    If you've ever had to answer the question (or known someone who has to answer the question) "at what point do I begin to draw down from my 401k/IRA/whatever?", the questions "When am I eligible for SS? When do I receive the maximum SS benefit?" looms large. Social Security is an economic backstop for the elder that prevents a downturn in the market from forcing them to divest from their retirement positions at a disadvantage, precisely because it makes up such a large share of their retirement income.

    If you are going to obliterate (or even just privatize) SS entirely, you're eliminating that counter-cyclical cushion. Now there is no baseline of income that elderly people can rely on. There is no guaranteed future income to borrow against, destroying the credit worthiness of the elderly. That's both immediately consequential during a downturn (market goes down, guaranteeing an equivalent drop in retiree spending) and historically consequential (apartments/retirement communities can't admit new elderly residents without assuming high risk of non-payment, credit agencies and mid-term lenders don't want to do business with the elderly, elderly residents are at increased risk of eviction/repo, etc) that make life for elderly people much harder.

    that does not cover the growing gap the 401k needs to cover.

    When the NASDAQ, led by the MAG7, has seen a historic 150% increase in a mere five years, it is extremely premature to talk about 401ks failing to cover basic needs due to a 15% downturn (off a post-inauguration spike). What kind of growth does a 401k need if the last five years isn't covering it? You're not describing a problem of market volatility, at that point. You're just saying 401ks suck as a vehicle for guaranteeing long term retirement needs.

    And that brings us back to alternatives, like Social Security, that both already exist and are pivotal in propping up retirement income when 401ks fail.

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  • [–] 2 points 2 years ago* (2 children)

    I don’t know why you are talking as if i think social security should be removed. I have already said that Its not enough there has to be more. Sure its important to be there. But because it’s not capable of sustaining the elderly, a 401k is a primary method to pay the gap. This whole discussion is that gap, and is why in this discussion about 401k bringing up social security is moot. I do not know why you are trying to sell how important it is, when bringing it up in the first place does not effect the discussion about 401k at all. It’s already been factored in to available funds to retire on, you can’t invoke it a second time

    I am not the one who put social security on the chopping block, Elon Musk is. Go talk to him about social security.

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  • [–] 0 points 2 years ago (1 child)

    But because it’s not capable of sustaining the elderly, a 401k is a primary method to pay the gap.

    Less than half of the US participates in 401ks. It is not the primary method for paying.

    This whole discussion is that gap, and is why in this discussion about 401k bringing up social security is moot.

    Its very difficult to take seriously the idea that a five year bull market is leaving a gap in private investment. The gap isn't the result of a short-term downturn in a record high equities market, its with the vast disparity between equities gains and working incomes.

    The appeal of Social Security, and the reason why it forms the foundation of virtually every retirement plan in the US, has to do with its relative accessibility and guaranteed return. This is in sharp contrast to 401ks (which have outperformed lifetime SS returns thanks to a long term upward market trend) that over half the country isn't eligible to join.

    I am not the one who put social security on the chopping block, Elon Musk is.

    Elon isn't putting SS on the chopping block, he's just trying to deny people payments through blatantly illegal means. You've bought into the theory that SS simply won't be there, in large part, by the people who are trying to shut it down. Might as well take a bank robber at his word that you should open the door and let him into the vault because the cash box will be empty by the end of the day.

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  • [–] 2 points 2 years ago

    You are arguing against claims I never made.

    I didn’t say 401(k)s are the primary method for everyone, but for those who have them, they are a primary tool for closing the gap Social Security leaves. The fact that not everyone has one doesn’t change that reality. The discussion is about that gap, not whether 401(k)s should replace Social Security.

    You’re shifting the goalposts. The issue isn’t whether the stock market has been in a bull run—it’s that wages haven’t kept up with inflation or the cost of living, making retirement savings difficult for many. A strong market doesn’t erase the fact that people still struggle to save enough.

    Again I never argued against the importance of social security, just that it’s insufficient. You are trying to sell Social Security as if I claimed it shouldn’t exist, which I didn’t. It’s already factored into retirement plans, meaning it’s not an additional source of funds—it’s the baseline. That’s why bringing it up as if it changes the discussion is moot.

    Whether Musk’s attempts to undermine Social Security are ‘illegal’ is irrelevant to the point that he is trying to do it. Saying I ‘bought into a theory’ when he’s explicitly stated his position is just a weak deflection.

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