Should Social Security let savers purchase additional pensions?

[DC Al Fine]

The idea behind this proposal is that since the vast majority of people don't have the knowledge to manage their investments and just want a steady income, Social Security should allow them to use their savings from IRA's, DC pension plans etc, to purchase a top up pension upon retirement.

I'm not totally opposed to this idea, but the pensions offered would have to be pretty paltry so as to not make Social Security's underfunding problem worse. The people purchasing these pensions would be much longer lived than pensioners at large (healthier, no terminal cases etc.), so they would have to pay more for their pension.

[🐒Gods of Prosperity🔱🐲💸]

You mean purchasing additional pensions from Social Security funds?  How would this work?  Sounds like it would just add to the burden on current/future workers since the price would likely not cover the outlay.

[DC Al Fine]

You mean purchasing additional pensions from Social Security funds?  How would this work?  Sounds like it would just add to the burden on current/future workers since the price would likely not cover the outlay.

It would work like purchasing an annuity from the private sector now. Social Security would offer you a quote based on your age/gender expressed as $X/month per $100,000 paid in, for life. Social Security would take the money from your retirement plan and start sending you cheques once a month.

As I noted before, I'm not opposed to the idea in principle, but any actual plan would have to offer pretty bad rates for the program to work.

[AggregateDemand]

It would work like purchasing an annuity from the private sector now. Social Security would offer you a quote based on your age/gender expressed as $X/month per $100,000 paid in, for life. Social Security would take the money from your retirement plan and start sending you cheques once a month.

As I noted before, I'm not opposed to the idea in principle, but any actual plan would have to offer pretty bad rates for the program to work.

All of the best actuaries for this kind of work are in the private sector. Government doesn't even have the competence to administer Social Security in it's current form.

Social Security needs to be turned back into insurance in accordance with OASDI and FICA. DC has no business in the pension industry, especially since they still haven't discovered that defined-benefit pensions and democratic governance don't mix.

In other words, the government needs to stop handing out income subsidies to seniors on top of their tax-subsidized private retirement funds, and the government needs to stop promising guaranteed returns to seniors. Your returns depend upon the economic plight of the United States; therefore, invest in your progeny, as your parents did for you, or hurry up and die.

[TNF]

Social Security should be converted into a universal pension program that automatically adjusts for increases in the cost of living (as determined by a statistical commission of workers and economists elected by workers) and provides full benefits at age 55, with a gradual reduction in the retirement age as warranted by expansive use of automated technologies. And obviously, all of this should be financed by seizing the fortunes of the parasitical rich and putting them to better use.

[Indy Texas]

You mean purchasing additional pensions from Social Security funds?  How would this work?  Sounds like it would just add to the burden on current/future workers since the price would likely not cover the outlay.

It would work like purchasing an annuity from the private sector now. Social Security would offer you a quote based on your age/gender expressed as $X/month per $100,000 paid in, for life. Social Security would take the money from your retirement plan and start sending you cheques once a month.

As I noted before, I'm not opposed to the idea in principle, but any actual plan would have to offer pretty bad rates for the program to work.

So what's the point? It sounds like a solution in search of a problem. The logic behind public pensions is that the taxes of the young pay for the benefits of the old. The logic behind private annuities is that the premiums of the not-yet-retired pay for the benefits of the retired.

I don't see how purchasing the equivalent of an annuity from the government would be any more or less complicated/confusing than just purchasing an annuity from a private issuer.

[AggregateDemand]

Social Security should be converted into a universal pension program that automatically adjusts for increases in the cost of living (as determined by a statistical commission of workers and economists elected by workers) and provides full benefits at age 55, with a gradual reduction in the retirement age as warranted by expansive use of automated technologies. And obviously, all of this should be financed by seizing the fortunes of the parasitical rich and putting them to better use.

I thought enslavement was the antithesis of the True Left, but you enslave the young so willingly. Sad.

[DC Al Fine]

Social Security should be converted into a universal pension program that automatically adjusts for increases in the cost of living (as determined by a statistical commission of workers and economists elected by workers) and provides full benefits at age 55, with a gradual reduction in the retirement age as warranted by expansive use of automated technologies. And obviously, all of this should be financed by seizing the fortunes of the parasitical rich and putting them to better use.

Bro, do you even math?

[DC Al Fine]

You mean purchasing additional pensions from Social Security funds?  How would this work?  Sounds like it would just add to the burden on current/future workers since the price would likely not cover the outlay.

It would work like purchasing an annuity from the private sector now. Social Security would offer you a quote based on your age/gender expressed as $X/month per $100,000 paid in, for life. Social Security would take the money from your retirement plan and start sending you cheques once a month.

As I noted before, I'm not opposed to the idea in principle, but any actual plan would have to offer pretty bad rates for the program to work.

So what's the point? It sounds like a solution in search of a problem. The logic behind public pensions is that the taxes of the young pay for the benefits of the old. The logic behind private annuities is that the premiums of the not-yet-retired pay for the benefits of the retired.

I don't see how purchasing the equivalent of an annuity from the government would be any more or less complicated/confusing than just purchasing an annuity from a private issuer.

Well, I'm still on the fence on this particular issue, but I'll have a go at defending it.

I recall you (or maybe another I-TX), arguing against a libertarian model of health care by stating that most consumers can't make an informed choice about which heart surgeon to pick. The same applies to retirement savings. Investments are subject to all sorts subpar and confusing practices which lead most consumers to be near incapable of managing them.

[© tweed]

Social Security should be converted into a universal pension program that automatically adjusts for increases in the cost of living (as determined by a statistical commission of workers and economists elected by workers) and provides full benefits at age 55, with a gradual reduction in the retirement age as warranted by expansive use of automated technologies. And obviously, all of this should be financed by seizing the fortunes of the parasitical rich and putting them to better use.

Bro, do you even math?

the SS "problem" isn't a problem at all.  just drop the cap and it's fixed.  the number is like 118%, so even adjusting for rich people not taking their money in income SS as it exists continuing ad infinitum is not difficult.

the difficulty is having finance look at that big, trillion dollar plus pile of money every year and salivating over it.

[All Along The Watchtower]

Social Security should be converted into a universal pension program that automatically adjusts for increases in the cost of living (as determined by a statistical commission of workers and economists elected by workers) and provides full benefits at age 55, with a gradual reduction in the retirement age as warranted by expansive use of automated technologies. And obviously, all of this should be financed by seizing the fortunes of the parasitical rich and putting them to better use.

Bro, do you even math?

the SS "problem" isn't a problem at all.  just drop the cap and it's fixed.  the number is like 118%, so even adjusting for rich people not taking their money in income SS as it exists continuing ad infinitum is not difficult.

the difficulty is having finance look at that big, trillion dollar plus pile of money every year and salivating over it.

The difficulty is in raising taxes on status-anxious upper-middle class people (i e. Victor in Manhattan makes over $200k and yet "feels poor" compared to his friends and neighbors). They vote at high rates and are large enough as a population to have "grassroots" influence, so neither party is willing to alienate them.

[© tweed]

Social Security should be converted into a universal pension program that automatically adjusts for increases in the cost of living (as determined by a statistical commission of workers and economists elected by workers) and provides full benefits at age 55, with a gradual reduction in the retirement age as warranted by expansive use of automated technologies. And obviously, all of this should be financed by seizing the fortunes of the parasitical rich and putting them to better use.

Bro, do you even math?

the SS "problem" isn't a problem at all.  just drop the cap and it's fixed.  the number is like 118%, so even adjusting for rich people not taking their money in income SS as it exists continuing ad infinitum is not difficult.

the difficulty is having finance look at that big, trillion dollar plus pile of money every year and salivating over it.

The difficulty is in raising taxes on status-anxious upper-middle class people (i e. Victor in Manhattan makes over $200k and yet "feels poor" compared to his friends and neighbors). They vote at high rates and are large enough as a population to have "grassroots" influence, so neither party is willing to alienate them.

I think the parties are less afraid of a miffed Victor and more afraid of angering the billionaires that fund their campaigns.

[All Along The Watchtower]

Social Security should be converted into a universal pension program that automatically adjusts for increases in the cost of living (as determined by a statistical commission of workers and economists elected by workers) and provides full benefits at age 55, with a gradual reduction in the retirement age as warranted by expansive use of automated technologies. And obviously, all of this should be financed by seizing the fortunes of the parasitical rich and putting them to better use.

Bro, do you even math?

the SS "problem" isn't a problem at all.  just drop the cap and it's fixed.  the number is like 118%, so even adjusting for rich people not taking their money in income SS as it exists continuing ad infinitum is not difficult.

the difficulty is having finance look at that big, trillion dollar plus pile of money every year and salivating over it.

The difficulty is in raising taxes on status-anxious upper-middle class people (i e. Victor in Manhattan makes over $200k and yet "feels poor" compared to his friends and neighbors). They vote at high rates and are large enough as a population to have "grassroots" influence, so neither party is willing to alienate them.

I think the parties are less afraid of a miffed Victor and more afraid of angering the billionaires that fund their campaigns.

True in general, but I was thinking in terms of who would be hit by raising the cap on SS specifically.

Unless you did something really novel and drastic, billionaires won't really be affected by raising taxes on "earned" (wage/salary)  income.