Should The Rich Be Required To Pay Higher Taxes In the US?

[Toddsterpatriot]

If you're paying 12.4% of your lifetime earnings for a low yielding insurance policy, you may be doing it wrong.

So NO, you don't understand how insurance works. Thanks anyways

Let's see, pay 12.4% of my lifetime earnings, die a week before I start collecting benefits and my family gets
basically zero.

Wow, great insurance! Sounds like a program only an idiot or a liberal (but then I repeat myself) would create.

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty. I know, that ponzi scheme called the stock market works better right? lol, PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty.

Yet today, American seniors are our wealthiest cohort.
Poor recent college graduates, laboring under mountains of student loan debt, struggling to find a job......finally get one and then 12.4% of their paycheck goes to some rich white guy who retired on a golf course.
That doesn't seem fair, does it?

PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

How Three Texas Counties Created Personal Social Security Accounts and Prospered

Across the country, state and local governments are facing huge unfunded liabilities for their employee pension plans. And then there’s Social Security.

But three neighboring Texas counties, which opted out of Social Security 30 years ago by creating personal retirement accounts, have avoided a fiscal train wreck while providing retirees with even more retirement income.
Galveston, Matagorda and Brazoria County employees, many of them union members, have seen their retirement savings grow every year, even during the Great Recession. If state and local governments—and Congress—are really looking for a path to long-term sustainable entitlement reform, they might start with what is referred to as the “Alternate Plan.”

Most proposals for creating a defined-contribution alternative to a state pension plan or Social Security use an IRA or 401(k) model. That is what the Utah legislature passed for new state employees beginning in July.


Under that model, the employee’s money, along with any employer contribution, goes into a personal account that invests in a limited number of approved options. Those accounts usually follow the stock market, in good times and in bad. It’s those “bad times,” like the one the country recently went through, that critics point to when opposing personal retirement accounts.

But the Alternate Plan takes a different approach, one I call a “banking model.” Employee and employer contributions are actively managed by a financial planner—in this case, First Financial Benefits, Inc., of Houston, which both originated the plan and has managed it since inception.

The contributions are pooled, like bank deposits, and top-rated financial institutions bid on the money. Those institutions guarantee an interest rate that won’t go below a base level, and could go higher if the market does well. Over the last decade, the accounts have earned between 3.75 percent and 5.75 percent every year, with an average of around 5 percent. The 1990s often saw even higher interest rates, 6.5 to 7 percent. Thus, when the market goes up, employees make more; and when the market goes down, employees still make something.

Like Social Security, employees contribute 6.2 percent of their income, with the county matching the contribution (Galveston has chosen to provide a slightly larger share). Once the county makes its contribution, its financial obligation is done. So there are no long-term unfunded liabilities.

But not all of that money goes into an employee’s retirement account. When financial planner Rick Gornto devised the Alternate Plan in 1981, he wanted it to be a complete substitute for Social Security. And Social Security isn’t just a retirement fund; it’s social insurance that provides a death benefit—a whopping $255—survivors’ insurance, and a disability benefit.

Part of the employer contribution in the Alternate Plan goes toward a term life insurance policy, which pays four times the employee’s salary tax free, up to a maximum of $215,000. That’s nearly 850 times Social Security’s death benefit.


How Three Texas Counties Created Personal Social Security Accounts and Prospered

Galveston ‘Opt-Out’ Plan Not a Serious Proposal for Social Security

Social Security and the Galveston plan do not share the same goals: Social Security is wage insurance that provides basic protection against loss of income resulting from retirement, disability or death of a worker; it is not intended to be a wealth-maximizing vehicle


Nearly everyone fares worse under the Galveston plan, with the possible exception of high earners with no dependents.


Women and low-income workers are not well served by the plan

Substantial inflation risks appear with the Galveston plan


· Under the Galveston plan, workers do not control how their funds are invested. Many advocates of the Galveston model tout the fact that participants would have more autonomy over their retirement decisions. In fact, workers have no control over how their funds are invested; those decisions are made at the county level. Moreover, far from being able to ‘opt-out’ of the system, participation in the Galveston plan is mandatory.



The Galveston plan’s options for claiming benefits means that some retirees could outlive their benefits, something that cannot occur under Social Security

Galveston | Strengthen Social Security


"The basic difference between the Texas plan and Social Security, Brainard said, is that the Texas plan is a "retirement savings plan that provides benefits based on contributions and investment performance, while Social Security is an insurance plan intended chiefly to prevent stark poverty in old age."

Rick Perry says employees in three counties left Social Security for alternate savings plans and are faring very well


In 1999, the Social Security Administration and the General Accounting Office (now the Government Accountability Office) separately examined the program adopted by Galveston and surrounding counties and found that its benefits depended on income and longevity: The lower one’s income and the longer one lived after retirement, the less advantage there was to participating in the program compared with Social Security. Also, Social Security payments increased with inflation, while payments under the Galveston plan did not.

“If you’re single, if you’re well off and you die within 10 years [of retirement], maybe you’ve done better,” said Eric Kingson, a professor of social work at Syracuse University and a vocal critic of the Galveston alternative. “For most people, it’s somewhere between ‘very bad’ and ‘not very good.’ ”


Galveston alternative to Social Security held up as model

the program adopted by Galveston and surrounding counties and found that its benefits depended on income and longevity:

Kinda like Social Security, eh? Where if you die before you start collecting, your family gets basically nothing.

Part of the employer contribution in the Alternate Plan goes toward a term life insurance policy, which pays four times the employee’s salary tax free, up to a maximum of $215,000. That’s nearly 850 times Social Security’s death benefit.

Hey, look at that giant improvement over Social Security.

And those who retire under the Galveston model do much better than Social Security. For example:
http://www.forbes.com/pictures/fkmm45mfid/comedy-is-gold-in-tv-ear/

• A lower-middle income worker making about $26,000 at retirement would get about $1,007 a month under Social Security, but $1,826 under the Alternate Plan, according to First Financial’s calculations.

• A middle-income worker making $51,200 would get about $1,540 monthly from Social Security, but $3,600 from the banking model.

• And a high-income worker who maxed out on his Social Security contribution every year would receive about $2,500 a month from Social Security vs. $5,000 to $6,000 a month from the Alternate Plan.

Wow! Those are giant improvements too!!!

 

[Dad2three]

Don't understand how an INSURANCE policy works huh? I'm NOT surprised


Hint how'd the stock market work out after the Banksters hosed US in the 1920's?

If you're paying 12.4% of your lifetime earnings for a low yielding insurance policy, you may be doing it wrong.

So NO, you don't understand how insurance works. Thanks anyways

Let's see, pay 12.4% of my lifetime earnings, die a week before I start collecting benefits and my family gets
basically zero.

Wow, great insurance! Sounds like a program only an idiot or a liberal (but then I repeat myself) would create.

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty. I know, that ponzi scheme called the stock market works better right? lol, PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty.

Yet today, American seniors are our wealthiest cohort.
Poor recent college graduates, laboring under mountains of student loan debt, struggling to find a job......finally get one and then 12.4% of their paycheck goes to some rich white guy who retired on a golf course.
That doesn't seem fair, does it?

PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

How Three Texas Counties Created Personal Social Security Accounts and Prospered

Across the country, state and local governments are facing huge unfunded liabilities for their employee pension plans. And then there’s Social Security.

But three neighboring Texas counties, which opted out of Social Security 30 years ago by creating personal retirement accounts, have avoided a fiscal train wreck while providing retirees with even more retirement income.
Galveston, Matagorda and Brazoria County employees, many of them union members, have seen their retirement savings grow every year, even during the Great Recession. If state and local governments—and Congress—are really looking for a path to long-term sustainable entitlement reform, they might start with what is referred to as the “Alternate Plan.”

Most proposals for creating a defined-contribution alternative to a state pension plan or Social Security use an IRA or 401(k) model. That is what the Utah legislature passed for new state employees beginning in July.


Under that model, the employee’s money, along with any employer contribution, goes into a personal account that invests in a limited number of approved options. Those accounts usually follow the stock market, in good times and in bad. It’s those “bad times,” like the one the country recently went through, that critics point to when opposing personal retirement accounts.

But the Alternate Plan takes a different approach, one I call a “banking model.” Employee and employer contributions are actively managed by a financial planner—in this case, First Financial Benefits, Inc., of Houston, which both originated the plan and has managed it since inception.

The contributions are pooled, like bank deposits, and top-rated financial institutions bid on the money. Those institutions guarantee an interest rate that won’t go below a base level, and could go higher if the market does well. Over the last decade, the accounts have earned between 3.75 percent and 5.75 percent every year, with an average of around 5 percent. The 1990s often saw even higher interest rates, 6.5 to 7 percent. Thus, when the market goes up, employees make more; and when the market goes down, employees still make something.

Like Social Security, employees contribute 6.2 percent of their income, with the county matching the contribution (Galveston has chosen to provide a slightly larger share). Once the county makes its contribution, its financial obligation is done. So there are no long-term unfunded liabilities.

But not all of that money goes into an employee’s retirement account. When financial planner Rick Gornto devised the Alternate Plan in 1981, he wanted it to be a complete substitute for Social Security. And Social Security isn’t just a retirement fund; it’s social insurance that provides a death benefit—a whopping $255—survivors’ insurance, and a disability benefit.

Part of the employer contribution in the Alternate Plan goes toward a term life insurance policy, which pays four times the employee’s salary tax free, up to a maximum of $215,000. That’s nearly 850 times Social Security’s death benefit.


How Three Texas Counties Created Personal Social Security Accounts and Prospered

YOU KEEP TRYING BUBS

Retirement Benefits Are Generally Lower Under the Galveston Plan



The Galveston plan does not provide any benefits for spouses or other dependents of retirees. Nor does it provide any redistribution from higher earners to lower earners. In addition, the Galveston Plan fails to provide an inflation-indexed annuity — participants can choose a combination of lump-sum payments or a variety of fixed annuities that do not increase with inflation (and thus that erode in value over the course of a beneficiary’s retirement years). Finally, the Galveston plan allows early withdrawal of account balances in several cases (such as serious illnesses or certain other problems), which reduces the ability of the plan as a whole to provide income for as long as beneficiaries live and thereby increases the plan’s costs. (This is one of the reasons that the tax rate is higher under the Galveston plan than under Social Security, even though the retirement benefits are generally lower under the Galveston plan.)

Does Galveston Offer a Model For Social Security Reform? | Center on Budget and Policy Priorities

 

[Ray From Cleveland]

If you put 12.4% of your lifetime earnings in the stock market and 12.4% of your lifetime earnings into Social Security and die tomorrow, at the age of 61 years, 363 days, which of your two retirement plans will give your family more money, the stock market or Social Security?

Don't understand how an INSURANCE policy works huh? I'm NOT surprised


Hint how'd the stock market work out after the Banksters hosed US in the 1920's?

If you're paying 12.4% of your lifetime earnings for a low yielding insurance policy, you may be doing it wrong.

So NO, you don't understand how insurance works. Thanks anyways

Let's see, pay 12.4% of my lifetime earnings, die a week before I start collecting benefits and my family gets
basically zero.

Wow, great insurance! Sounds like a program only an idiot or a liberal (but then I repeat myself) would create.

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty. I know, that ponzi scheme called the stock market works better right? lol, PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

There are millions of them. They are called IRA's.

 

[Dad2three]

SOME rules have changed:


EFFECTIVE tax rates

do you honestly think that a 70% tax rate is fair at any income level? seriously?

You mean like the hedge funder making $4.7+ billion by gamiong the system on his subprime bets? HELL YES.

ANY income over about $10 million a year should be taxed about 50%. ANYTHING over $100 million, 70%


WE CAN'T EVEN GET THE GOPers TO SUPPORT A MIN 30% TAX ON $1+ MILLION INCOMES THOUGH!

You really dont understand incentive do you.
so, are you going to give half of your income to someone that doesnt work? to them, you must look rich if you can eat and keep a roof over your head.

Yes, we didn't have "incentives to work" when EFFECTIVE rates were 60%-70% on the top 1/10th of 1% of US right?

If the federal tax rate was 0%, the government would collect 0 dollars.

If the federal tax rate was 100%, the government would still collect 0 dollars because who would be stupid enough to create wealth?

Weird you don't disagree. Who argues for a 100% tax rate Bubs? Hint want to know WHERE the curve is at, according to STUDIES? EFFECTIVE tax rates above 65%-70%..

 

[Toddsterpatriot]

If you're paying 12.4% of your lifetime earnings for a low yielding insurance policy, you may be doing it wrong.

So NO, you don't understand how insurance works. Thanks anyways

Let's see, pay 12.4% of my lifetime earnings, die a week before I start collecting benefits and my family gets
basically zero.

Wow, great insurance! Sounds like a program only an idiot or a liberal (but then I repeat myself) would create.

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty. I know, that ponzi scheme called the stock market works better right? lol, PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty.

Yet today, American seniors are our wealthiest cohort.
Poor recent college graduates, laboring under mountains of student loan debt, struggling to find a job......finally get one and then 12.4% of their paycheck goes to some rich white guy who retired on a golf course.
That doesn't seem fair, does it?

PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

How Three Texas Counties Created Personal Social Security Accounts and Prospered

Across the country, state and local governments are facing huge unfunded liabilities for their employee pension plans. And then there’s Social Security.

But three neighboring Texas counties, which opted out of Social Security 30 years ago by creating personal retirement accounts, have avoided a fiscal train wreck while providing retirees with even more retirement income.
Galveston, Matagorda and Brazoria County employees, many of them union members, have seen their retirement savings grow every year, even during the Great Recession. If state and local governments—and Congress—are really looking for a path to long-term sustainable entitlement reform, they might start with what is referred to as the “Alternate Plan.”

Most proposals for creating a defined-contribution alternative to a state pension plan or Social Security use an IRA or 401(k) model. That is what the Utah legislature passed for new state employees beginning in July.


Under that model, the employee’s money, along with any employer contribution, goes into a personal account that invests in a limited number of approved options. Those accounts usually follow the stock market, in good times and in bad. It’s those “bad times,” like the one the country recently went through, that critics point to when opposing personal retirement accounts.

But the Alternate Plan takes a different approach, one I call a “banking model.” Employee and employer contributions are actively managed by a financial planner—in this case, First Financial Benefits, Inc., of Houston, which both originated the plan and has managed it since inception.

The contributions are pooled, like bank deposits, and top-rated financial institutions bid on the money. Those institutions guarantee an interest rate that won’t go below a base level, and could go higher if the market does well. Over the last decade, the accounts have earned between 3.75 percent and 5.75 percent every year, with an average of around 5 percent. The 1990s often saw even higher interest rates, 6.5 to 7 percent. Thus, when the market goes up, employees make more; and when the market goes down, employees still make something.

Like Social Security, employees contribute 6.2 percent of their income, with the county matching the contribution (Galveston has chosen to provide a slightly larger share). Once the county makes its contribution, its financial obligation is done. So there are no long-term unfunded liabilities.

But not all of that money goes into an employee’s retirement account. When financial planner Rick Gornto devised the Alternate Plan in 1981, he wanted it to be a complete substitute for Social Security. And Social Security isn’t just a retirement fund; it’s social insurance that provides a death benefit—a whopping $255—survivors’ insurance, and a disability benefit.

Part of the employer contribution in the Alternate Plan goes toward a term life insurance policy, which pays four times the employee’s salary tax free, up to a maximum of $215,000. That’s nearly 850 times Social Security’s death benefit.


How Three Texas Counties Created Personal Social Security Accounts and Prospered

The Galveston Plan bears little resemblance to the President’s plan. The Galveston plan does not have voluntary private accounts. Instead, the county invests pension funds in the market; individual workers do not have accounts or any control over investment decisions. In addition, participation in the Galveston plan is mandatory. The Galveston Plan also features higher payroll tax contributions: 13.9 percent of payroll, as compared to 12.4 percent under the traditional Social Security system

Retirement benefits are generally lower under the Galveston Plan. Under the Galveston Plan, initial retirement benefits are lower for many workers than under Social Security. Furthermore, unlike Social Security, the Galveston plan does not adjust benefits from year to year to reflect increases in the cost of living. As a result, according to a Social Security Administration study, “After 20 years, all of Galveston’s benefits are lower relative to Social Security’s.”


Galveston could not provide a model for the country as a whole.



The 5,000 municipal employees covered by the plans run by Galveston and the two other Texas counties opting out of Social Security do not make any contributions to support current Social Security beneficiaries. If the United States as a whole adopted a Galveston-like plan, there would be no one left to pay the $500 billion annual cost of benefits for the nation’s 45 million current Social Security beneficiaries .

In other words, municipal employees from these three Texas counties are “free riders” who are escaping their share of the national obligation to finance Social Security for current retirees. The United States as a whole cannot “free ride” in the way that government employees in one relatively small county can.

Does Galveston Offer a Model For Social Security Reform? | Center on Budget and Policy Priorities

If the United States as a whole adopted a Galveston-like plan, there would be no one left to pay the $500 billion annual cost of benefits for the nation’s 45 million current Social Security beneficiaries .

Sure there would. The US taxpayer would continue to pay the benefits until all the recipients passed.

 

[Dad2three]

Yep, Walton's/Walmart use the best tax breaks they can buy in Congress!

Oh so our Founders were wrong to worry about INHERITED aristocracy over merit? Thanks for letting me know!

If it bothers you to have a complex tax code, the solution is quite simple: A low fair flat rate tax that applied to everyone.

Easy Peasy Lemon Squeezy!

Keep dreaming. A REGRESSIVE tax isn't needed, but weird how the GOP stops ANYTHING that might require their overlords to pay more equitable with their wealth!

What I find perplexing is how the liberals seem to think they have a right to someone elses earned income.

What I find perplexing, is conservatives/libertarians "think" those people made it on their own, without SOCIETY and our laws?

What does our society and laws have to do with anything? We all have the same society and laws, yet many of us don't become wealthy. How does that work anyhow?

The only people that benefit more from our society are those who put more in: more hours, more money, more borrowing, more headaches.........

Other than that, I'll trade you one bushel of apples for your bushel of corn. Now if you happen to have much more corn than I have apples, that doesn't mean you owe me (society) anything. It means you worked harder than I did.

RIGHT, because SOME PEOPLE (Mittens Romney, Koch Brothers, the Walton's,etc) WERE born on 3rd base. Honesty. Try it'

 

[Dad2three]

So NO, you don't understand how insurance works. Thanks anyways

Let's see, pay 12.4% of my lifetime earnings, die a week before I start collecting benefits and my family gets
basically zero.

Wow, great insurance! Sounds like a program only an idiot or a liberal (but then I repeat myself) would create.

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty. I know, that ponzi scheme called the stock market works better right? lol, PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty.

Yet today, American seniors are our wealthiest cohort.
Poor recent college graduates, laboring under mountains of student loan debt, struggling to find a job......finally get one and then 12.4% of their paycheck goes to some rich white guy who retired on a golf course.
That doesn't seem fair, does it?

PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

How Three Texas Counties Created Personal Social Security Accounts and Prospered

Across the country, state and local governments are facing huge unfunded liabilities for their employee pension plans. And then there’s Social Security.

But three neighboring Texas counties, which opted out of Social Security 30 years ago by creating personal retirement accounts, have avoided a fiscal train wreck while providing retirees with even more retirement income.
Galveston, Matagorda and Brazoria County employees, many of them union members, have seen their retirement savings grow every year, even during the Great Recession. If state and local governments—and Congress—are really looking for a path to long-term sustainable entitlement reform, they might start with what is referred to as the “Alternate Plan.”

Most proposals for creating a defined-contribution alternative to a state pension plan or Social Security use an IRA or 401(k) model. That is what the Utah legislature passed for new state employees beginning in July.


Under that model, the employee’s money, along with any employer contribution, goes into a personal account that invests in a limited number of approved options. Those accounts usually follow the stock market, in good times and in bad. It’s those “bad times,” like the one the country recently went through, that critics point to when opposing personal retirement accounts.

But the Alternate Plan takes a different approach, one I call a “banking model.” Employee and employer contributions are actively managed by a financial planner—in this case, First Financial Benefits, Inc., of Houston, which both originated the plan and has managed it since inception.

The contributions are pooled, like bank deposits, and top-rated financial institutions bid on the money. Those institutions guarantee an interest rate that won’t go below a base level, and could go higher if the market does well. Over the last decade, the accounts have earned between 3.75 percent and 5.75 percent every year, with an average of around 5 percent. The 1990s often saw even higher interest rates, 6.5 to 7 percent. Thus, when the market goes up, employees make more; and when the market goes down, employees still make something.

Like Social Security, employees contribute 6.2 percent of their income, with the county matching the contribution (Galveston has chosen to provide a slightly larger share). Once the county makes its contribution, its financial obligation is done. So there are no long-term unfunded liabilities.

But not all of that money goes into an employee’s retirement account. When financial planner Rick Gornto devised the Alternate Plan in 1981, he wanted it to be a complete substitute for Social Security. And Social Security isn’t just a retirement fund; it’s social insurance that provides a death benefit—a whopping $255—survivors’ insurance, and a disability benefit.

Part of the employer contribution in the Alternate Plan goes toward a term life insurance policy, which pays four times the employee’s salary tax free, up to a maximum of $215,000. That’s nearly 850 times Social Security’s death benefit.


How Three Texas Counties Created Personal Social Security Accounts and Prospered

The Galveston Plan bears little resemblance to the President’s plan. The Galveston plan does not have voluntary private accounts. Instead, the county invests pension funds in the market; individual workers do not have accounts or any control over investment decisions. In addition, participation in the Galveston plan is mandatory. The Galveston Plan also features higher payroll tax contributions: 13.9 percent of payroll, as compared to 12.4 percent under the traditional Social Security system

Retirement benefits are generally lower under the Galveston Plan. Under the Galveston Plan, initial retirement benefits are lower for many workers than under Social Security. Furthermore, unlike Social Security, the Galveston plan does not adjust benefits from year to year to reflect increases in the cost of living. As a result, according to a Social Security Administration study, “After 20 years, all of Galveston’s benefits are lower relative to Social Security’s.”


Galveston could not provide a model for the country as a whole.



The 5,000 municipal employees covered by the plans run by Galveston and the two other Texas counties opting out of Social Security do not make any contributions to support current Social Security beneficiaries. If the United States as a whole adopted a Galveston-like plan, there would be no one left to pay the $500 billion annual cost of benefits for the nation’s 45 million current Social Security beneficiaries .

In other words, municipal employees from these three Texas counties are “free riders” who are escaping their share of the national obligation to finance Social Security for current retirees. The United States as a whole cannot “free ride” in the way that government employees in one relatively small county can.

Does Galveston Offer a Model For Social Security Reform? | Center on Budget and Policy Priorities

If the United States as a whole adopted a Galveston-like plan, there would be no one left to pay the $500 billion annual cost of benefits for the nation’s 45 million current Social Security beneficiaries .

Sure there would. The US taxpayer would continue to pay the benefits until all the recipients passed.

Oh you prefer welfare. Got it

 

[Toddsterpatriot]

Let's see, pay 12.4% of my lifetime earnings, die a week before I start collecting benefits and my family gets
basically zero.

Wow, great insurance! Sounds like a program only an idiot or a liberal (but then I repeat myself) would create.

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty. I know, that ponzi scheme called the stock market works better right? lol, PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty.

Yet today, American seniors are our wealthiest cohort.
Poor recent college graduates, laboring under mountains of student loan debt, struggling to find a job......finally get one and then 12.4% of their paycheck goes to some rich white guy who retired on a golf course.
That doesn't seem fair, does it?

PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

How Three Texas Counties Created Personal Social Security Accounts and Prospered

Across the country, state and local governments are facing huge unfunded liabilities for their employee pension plans. And then there’s Social Security.

But three neighboring Texas counties, which opted out of Social Security 30 years ago by creating personal retirement accounts, have avoided a fiscal train wreck while providing retirees with even more retirement income.
Galveston, Matagorda and Brazoria County employees, many of them union members, have seen their retirement savings grow every year, even during the Great Recession. If state and local governments—and Congress—are really looking for a path to long-term sustainable entitlement reform, they might start with what is referred to as the “Alternate Plan.”

Most proposals for creating a defined-contribution alternative to a state pension plan or Social Security use an IRA or 401(k) model. That is what the Utah legislature passed for new state employees beginning in July.


Under that model, the employee’s money, along with any employer contribution, goes into a personal account that invests in a limited number of approved options. Those accounts usually follow the stock market, in good times and in bad. It’s those “bad times,” like the one the country recently went through, that critics point to when opposing personal retirement accounts.

But the Alternate Plan takes a different approach, one I call a “banking model.” Employee and employer contributions are actively managed by a financial planner—in this case, First Financial Benefits, Inc., of Houston, which both originated the plan and has managed it since inception.

The contributions are pooled, like bank deposits, and top-rated financial institutions bid on the money. Those institutions guarantee an interest rate that won’t go below a base level, and could go higher if the market does well. Over the last decade, the accounts have earned between 3.75 percent and 5.75 percent every year, with an average of around 5 percent. The 1990s often saw even higher interest rates, 6.5 to 7 percent. Thus, when the market goes up, employees make more; and when the market goes down, employees still make something.

Like Social Security, employees contribute 6.2 percent of their income, with the county matching the contribution (Galveston has chosen to provide a slightly larger share). Once the county makes its contribution, its financial obligation is done. So there are no long-term unfunded liabilities.

But not all of that money goes into an employee’s retirement account. When financial planner Rick Gornto devised the Alternate Plan in 1981, he wanted it to be a complete substitute for Social Security. And Social Security isn’t just a retirement fund; it’s social insurance that provides a death benefit—a whopping $255—survivors’ insurance, and a disability benefit.

Part of the employer contribution in the Alternate Plan goes toward a term life insurance policy, which pays four times the employee’s salary tax free, up to a maximum of $215,000. That’s nearly 850 times Social Security’s death benefit.


How Three Texas Counties Created Personal Social Security Accounts and Prospered

The Galveston Plan bears little resemblance to the President’s plan. The Galveston plan does not have voluntary private accounts. Instead, the county invests pension funds in the market; individual workers do not have accounts or any control over investment decisions. In addition, participation in the Galveston plan is mandatory. The Galveston Plan also features higher payroll tax contributions: 13.9 percent of payroll, as compared to 12.4 percent under the traditional Social Security system

Retirement benefits are generally lower under the Galveston Plan. Under the Galveston Plan, initial retirement benefits are lower for many workers than under Social Security. Furthermore, unlike Social Security, the Galveston plan does not adjust benefits from year to year to reflect increases in the cost of living. As a result, according to a Social Security Administration study, “After 20 years, all of Galveston’s benefits are lower relative to Social Security’s.”


Galveston could not provide a model for the country as a whole.



The 5,000 municipal employees covered by the plans run by Galveston and the two other Texas counties opting out of Social Security do not make any contributions to support current Social Security beneficiaries. If the United States as a whole adopted a Galveston-like plan, there would be no one left to pay the $500 billion annual cost of benefits for the nation’s 45 million current Social Security beneficiaries .

In other words, municipal employees from these three Texas counties are “free riders” who are escaping their share of the national obligation to finance Social Security for current retirees. The United States as a whole cannot “free ride” in the way that government employees in one relatively small county can.

Does Galveston Offer a Model For Social Security Reform? | Center on Budget and Policy Priorities

If the United States as a whole adopted a Galveston-like plan, there would be no one left to pay the $500 billion annual cost of benefits for the nation’s 45 million current Social Security beneficiaries .

Sure there would. The US taxpayer would continue to pay the benefits until all the recipients passed.

Oh you prefer welfare. Got it

Higher benefits for future retirees isn't welfare, silly.

 

[Maryland Patriot]

If it bothers you to have a complex tax code, the solution is quite simple: A low fair flat rate tax that applied to everyone.

Easy Peasy Lemon Squeezy!

Keep dreaming. A REGRESSIVE tax isn't needed, but weird how the GOP stops ANYTHING that might require their overlords to pay more equitable with their wealth!

What I find perplexing is how the liberals seem to think they have a right to someone elses earned income.

What I find perplexing, is conservatives/libertarians "think" those people made it on their own, without SOCIETY and our laws?

What does our society and laws have to do with anything? We all have the same society and laws, yet many of us don't become wealthy. How does that work anyhow?

The only people that benefit more from our society are those who put more in: more hours, more money, more borrowing, more headaches.........

Other than that, I'll trade you one bushel of apples for your bushel of corn. Now if you happen to have much more corn than I have apples, that doesn't mean you owe me (society) anything. It means you worked harder than I did.

RIGHT, because SOME PEOPLE (Mittens Romney, Koch Brothers, the Walton's,etc) WERE born on 3rd base. Honesty. Try it'

Doesn't matter where they were born or with how much to inherit, YOU DONT HAVE ANY RIGHT TO THEIR MONEY
Why cant you get that through your head.

 

[Soggy in NOLA]

If it bothers you to have a complex tax code, the solution is quite simple: A low fair flat rate tax that applied to everyone.

Easy Peasy Lemon Squeezy!

Keep dreaming. A REGRESSIVE tax isn't needed, but weird how the GOP stops ANYTHING that might require their overlords to pay more equitable with their wealth!

What I find perplexing is how the liberals seem to think they have a right to someone elses earned income.

What I find perplexing, is conservatives/libertarians "think" those people made it on their own, without SOCIETY and our laws?

What does our society and laws have to do with anything? We all have the same society and laws, yet many of us don't become wealthy. How does that work anyhow?

The only people that benefit more from our society are those who put more in: more hours, more money, more borrowing, more headaches.........

Other than that, I'll trade you one bushel of apples for your bushel of corn. Now if you happen to have much more corn than I have apples, that doesn't mean you owe me (society) anything. It means you worked harder than I did.

RIGHT, because SOME PEOPLE (Mittens Romney, Koch Brothers, the Walton's,etc) WERE born on 3rd base. Honesty. Try it'

What's it to you? Why do you feel entitled to something you or your family didn't earn?

 

[Soggy in NOLA]

Liberals are such petulant children.

 

[Dad2three]

So NO, you don't understand how insurance works. Thanks anyways

Let's see, pay 12.4% of my lifetime earnings, die a week before I start collecting benefits and my family gets
basically zero.

Wow, great insurance! Sounds like a program only an idiot or a liberal (but then I repeat myself) would create.

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty. I know, that ponzi scheme called the stock market works better right? lol, PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty.

Yet today, American seniors are our wealthiest cohort.
Poor recent college graduates, laboring under mountains of student loan debt, struggling to find a job......finally get one and then 12.4% of their paycheck goes to some rich white guy who retired on a golf course.
That doesn't seem fair, does it?

PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

How Three Texas Counties Created Personal Social Security Accounts and Prospered

Across the country, state and local governments are facing huge unfunded liabilities for their employee pension plans. And then there’s Social Security.

But three neighboring Texas counties, which opted out of Social Security 30 years ago by creating personal retirement accounts, have avoided a fiscal train wreck while providing retirees with even more retirement income.
Galveston, Matagorda and Brazoria County employees, many of them union members, have seen their retirement savings grow every year, even during the Great Recession. If state and local governments—and Congress—are really looking for a path to long-term sustainable entitlement reform, they might start with what is referred to as the “Alternate Plan.”

Most proposals for creating a defined-contribution alternative to a state pension plan or Social Security use an IRA or 401(k) model. That is what the Utah legislature passed for new state employees beginning in July.


Under that model, the employee’s money, along with any employer contribution, goes into a personal account that invests in a limited number of approved options. Those accounts usually follow the stock market, in good times and in bad. It’s those “bad times,” like the one the country recently went through, that critics point to when opposing personal retirement accounts.

But the Alternate Plan takes a different approach, one I call a “banking model.” Employee and employer contributions are actively managed by a financial planner—in this case, First Financial Benefits, Inc., of Houston, which both originated the plan and has managed it since inception.

The contributions are pooled, like bank deposits, and top-rated financial institutions bid on the money. Those institutions guarantee an interest rate that won’t go below a base level, and could go higher if the market does well. Over the last decade, the accounts have earned between 3.75 percent and 5.75 percent every year, with an average of around 5 percent. The 1990s often saw even higher interest rates, 6.5 to 7 percent. Thus, when the market goes up, employees make more; and when the market goes down, employees still make something.

Like Social Security, employees contribute 6.2 percent of their income, with the county matching the contribution (Galveston has chosen to provide a slightly larger share). Once the county makes its contribution, its financial obligation is done. So there are no long-term unfunded liabilities.

But not all of that money goes into an employee’s retirement account. When financial planner Rick Gornto devised the Alternate Plan in 1981, he wanted it to be a complete substitute for Social Security. And Social Security isn’t just a retirement fund; it’s social insurance that provides a death benefit—a whopping $255—survivors’ insurance, and a disability benefit.

Part of the employer contribution in the Alternate Plan goes toward a term life insurance policy, which pays four times the employee’s salary tax free, up to a maximum of $215,000. That’s nearly 850 times Social Security’s death benefit.


How Three Texas Counties Created Personal Social Security Accounts and Prospered

Galveston ‘Opt-Out’ Plan Not a Serious Proposal for Social Security

Social Security and the Galveston plan do not share the same goals: Social Security is wage insurance that provides basic protection against loss of income resulting from retirement, disability or death of a worker; it is not intended to be a wealth-maximizing vehicle


Nearly everyone fares worse under the Galveston plan, with the possible exception of high earners with no dependents.


Women and low-income workers are not well served by the plan

Substantial inflation risks appear with the Galveston plan


· Under the Galveston plan, workers do not control how their funds are invested. Many advocates of the Galveston model tout the fact that participants would have more autonomy over their retirement decisions. In fact, workers have no control over how their funds are invested; those decisions are made at the county level. Moreover, far from being able to ‘opt-out’ of the system, participation in the Galveston plan is mandatory.



The Galveston plan’s options for claiming benefits means that some retirees could outlive their benefits, something that cannot occur under Social Security

Galveston | Strengthen Social Security


"The basic difference between the Texas plan and Social Security, Brainard said, is that the Texas plan is a "retirement savings plan that provides benefits based on contributions and investment performance, while Social Security is an insurance plan intended chiefly to prevent stark poverty in old age."

Rick Perry says employees in three counties left Social Security for alternate savings plans and are faring very well


In 1999, the Social Security Administration and the General Accounting Office (now the Government Accountability Office) separately examined the program adopted by Galveston and surrounding counties and found that its benefits depended on income and longevity: The lower one’s income and the longer one lived after retirement, the less advantage there was to participating in the program compared with Social Security. Also, Social Security payments increased with inflation, while payments under the Galveston plan did not.

“If you’re single, if you’re well off and you die within 10 years [of retirement], maybe you’ve done better,” said Eric Kingson, a professor of social work at Syracuse University and a vocal critic of the Galveston alternative. “For most people, it’s somewhere between ‘very bad’ and ‘not very good.’ ”


Galveston alternative to Social Security held up as model

the program adopted by Galveston and surrounding counties and found that its benefits depended on income and longevity:

Kinda like Social Security, eh? Where if you die before you start collecting, your family gets basically nothing.

Part of the employer contribution in the Alternate Plan goes toward a term life insurance policy, which pays four times the employee’s salary tax free, up to a maximum of $215,000. That’s nearly 850 times Social Security’s death benefit.

Hey, look at that giant improvement over Social Security.

And those who retire under the Galveston model do much better than Social Security. For example:

• A lower-middle income worker making about $26,000 at retirement would get about $1,007 a month under Social Security, but $1,826 under the Alternate Plan, according to First Financial’s calculations.

• A middle-income worker making $51,200 would get about $1,540 monthly from Social Security, but $3,600 from the banking model.

• And a high-income worker who maxed out on his Social Security contribution every year would receive about $2,500 a month from Social Security vs. $5,000 to $6,000 a month from the Alternate Plan.

Wow! Those are giant improvements too!!!

Weird, you start with a LIE?

"Kinda like Social Security, eh? Where if you die before you start collecting, your family gets basically nothing."


The spouse of a worker gets the survivors benefits he/she, usually half of the workers rate? I know, it blows a hole in your lie, but it's based in REALITY

Critics of the Alternate Plan say it is more like a savings program than a social insurance program for all Americans, which Social Security was created to be — particularly for low-wage retirees, widowed spouses and children with deceased parents.

“People forget that before Social Security, there really were poorhouses,” said Eric Kingson, co-director of the coalition Social Security Works.

The General Accounting Office and the Social Security Administration conducted the most current comparative studies of the Alternate Plan and Social Security in 1999. The G.A.O. report noted “fundamental differences in the purpose and structure of the two approaches.”

Both the G.A.O. and Social Security studies concluded that lower-wage workers, particularly those with many dependents, would fare better under Social Security, while middle- and higher-wage workers were likely to fare better, at least initially, under the Alternate Plan.

....The lump-sum option is one of the biggest problems in the Alternate Plan, Mr. Kingson said, because “people end up unprotected.” If retirees do not choose the lifetime annuity, they could outlive their benefits and end up wards of the state.

Even Mr. Holbrook has outlived his Alternate Plan benefits. When he retired 15 years ago, he decided to receive $1,500 to $2,000 from his Alternate Plan account every month for 10 years. Now, his Alternate Plan account is empty.

Fortunately, Mr. Holbrook has other savings and, ultimately, $1,300 a month in Social Security benefits from his 27 years of contributions before his county dropped out of the program.

“It was a mistake to only take it for 10 years,” he said. “It should be over a lifetime, like Social Security.”


http://www.nytimes.com/2011/09/18/us/how-privatized-social-security-works-in-galveston.html?_r=0

 

[Ray From Cleveland]

If it bothers you to have a complex tax code, the solution is quite simple: A low fair flat rate tax that applied to everyone.

Easy Peasy Lemon Squeezy!

Keep dreaming. A REGRESSIVE tax isn't needed, but weird how the GOP stops ANYTHING that might require their overlords to pay more equitable with their wealth!

What I find perplexing is how the liberals seem to think they have a right to someone elses earned income.

What I find perplexing, is conservatives/libertarians "think" those people made it on their own, without SOCIETY and our laws?

What does our society and laws have to do with anything? We all have the same society and laws, yet many of us don't become wealthy. How does that work anyhow?

The only people that benefit more from our society are those who put more in: more hours, more money, more borrowing, more headaches.........

Other than that, I'll trade you one bushel of apples for your bushel of corn. Now if you happen to have much more corn than I have apples, that doesn't mean you owe me (society) anything. It means you worked harder than I did.

RIGHT, because SOME PEOPLE (Mittens Romney, Koch Brothers, the Walton's,etc) WERE born on 3rd base. Honesty. Try it'

And most weren't. Most wealthy are self-made. But in this discussion, it's irrelevant anyway. It doesn't matter where or who you were born to. It doesn't give the government anymore right to your money than your family.

 

[Dad2three]

Don't understand how an INSURANCE policy works huh? I'm NOT surprised


Hint how'd the stock market work out after the Banksters hosed US in the 1920's?

If you're paying 12.4% of your lifetime earnings for a low yielding insurance policy, you may be doing it wrong.

So NO, you don't understand how insurance works. Thanks anyways

Let's see, pay 12.4% of my lifetime earnings, die a week before I start collecting benefits and my family gets
basically zero.

Wow, great insurance! Sounds like a program only an idiot or a liberal (but then I repeat myself) would create.

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty. I know, that ponzi scheme called the stock market works better right? lol, PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

There are millions of them. They are called IRA's.

Yep, TOTALLY different objective of the Social Security INSURANCE Program

 

[Soggy in NOLA]

If you're paying 12.4% of your lifetime earnings for a low yielding insurance policy, you may be doing it wrong.

So NO, you don't understand how insurance works. Thanks anyways

Let's see, pay 12.4% of my lifetime earnings, die a week before I start collecting benefits and my family gets
basically zero.

Wow, great insurance! Sounds like a program only an idiot or a liberal (but then I repeat myself) would create.

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty. I know, that ponzi scheme called the stock market works better right? lol, PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

There are millions of them. They are called IRA's.

Yep, TOTALLY differ objective of the Social Security INSURANCE Program

Which is broke.... personal IRA's are not. SSI is a Ponzi scheme.

 

[Ray From Cleveland]

Let's see, pay 12.4% of my lifetime earnings, die a week before I start collecting benefits and my family gets
basically zero.

Wow, great insurance! Sounds like a program only an idiot or a liberal (but then I repeat myself) would create.

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty. I know, that ponzi scheme called the stock market works better right? lol, PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty.

Yet today, American seniors are our wealthiest cohort.
Poor recent college graduates, laboring under mountains of student loan debt, struggling to find a job......finally get one and then 12.4% of their paycheck goes to some rich white guy who retired on a golf course.
That doesn't seem fair, does it?

PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

How Three Texas Counties Created Personal Social Security Accounts and Prospered

Across the country, state and local governments are facing huge unfunded liabilities for their employee pension plans. And then there’s Social Security.

But three neighboring Texas counties, which opted out of Social Security 30 years ago by creating personal retirement accounts, have avoided a fiscal train wreck while providing retirees with even more retirement income.
Galveston, Matagorda and Brazoria County employees, many of them union members, have seen their retirement savings grow every year, even during the Great Recession. If state and local governments—and Congress—are really looking for a path to long-term sustainable entitlement reform, they might start with what is referred to as the “Alternate Plan.”

Most proposals for creating a defined-contribution alternative to a state pension plan or Social Security use an IRA or 401(k) model. That is what the Utah legislature passed for new state employees beginning in July.


Under that model, the employee’s money, along with any employer contribution, goes into a personal account that invests in a limited number of approved options. Those accounts usually follow the stock market, in good times and in bad. It’s those “bad times,” like the one the country recently went through, that critics point to when opposing personal retirement accounts.

But the Alternate Plan takes a different approach, one I call a “banking model.” Employee and employer contributions are actively managed by a financial planner—in this case, First Financial Benefits, Inc., of Houston, which both originated the plan and has managed it since inception.

The contributions are pooled, like bank deposits, and top-rated financial institutions bid on the money. Those institutions guarantee an interest rate that won’t go below a base level, and could go higher if the market does well. Over the last decade, the accounts have earned between 3.75 percent and 5.75 percent every year, with an average of around 5 percent. The 1990s often saw even higher interest rates, 6.5 to 7 percent. Thus, when the market goes up, employees make more; and when the market goes down, employees still make something.

Like Social Security, employees contribute 6.2 percent of their income, with the county matching the contribution (Galveston has chosen to provide a slightly larger share). Once the county makes its contribution, its financial obligation is done. So there are no long-term unfunded liabilities.

But not all of that money goes into an employee’s retirement account. When financial planner Rick Gornto devised the Alternate Plan in 1981, he wanted it to be a complete substitute for Social Security. And Social Security isn’t just a retirement fund; it’s social insurance that provides a death benefit—a whopping $255—survivors’ insurance, and a disability benefit.

Part of the employer contribution in the Alternate Plan goes toward a term life insurance policy, which pays four times the employee’s salary tax free, up to a maximum of $215,000. That’s nearly 850 times Social Security’s death benefit.


How Three Texas Counties Created Personal Social Security Accounts and Prospered

Galveston ‘Opt-Out’ Plan Not a Serious Proposal for Social Security

Social Security and the Galveston plan do not share the same goals: Social Security is wage insurance that provides basic protection against loss of income resulting from retirement, disability or death of a worker; it is not intended to be a wealth-maximizing vehicle


Nearly everyone fares worse under the Galveston plan, with the possible exception of high earners with no dependents.


Women and low-income workers are not well served by the plan

Substantial inflation risks appear with the Galveston plan


· Under the Galveston plan, workers do not control how their funds are invested. Many advocates of the Galveston model tout the fact that participants would have more autonomy over their retirement decisions. In fact, workers have no control over how their funds are invested; those decisions are made at the county level. Moreover, far from being able to ‘opt-out’ of the system, participation in the Galveston plan is mandatory.



The Galveston plan’s options for claiming benefits means that some retirees could outlive their benefits, something that cannot occur under Social Security

Galveston | Strengthen Social Security


"The basic difference between the Texas plan and Social Security, Brainard said, is that the Texas plan is a "retirement savings plan that provides benefits based on contributions and investment performance, while Social Security is an insurance plan intended chiefly to prevent stark poverty in old age."

Rick Perry says employees in three counties left Social Security for alternate savings plans and are faring very well


In 1999, the Social Security Administration and the General Accounting Office (now the Government Accountability Office) separately examined the program adopted by Galveston and surrounding counties and found that its benefits depended on income and longevity: The lower one’s income and the longer one lived after retirement, the less advantage there was to participating in the program compared with Social Security. Also, Social Security payments increased with inflation, while payments under the Galveston plan did not.

“If you’re single, if you’re well off and you die within 10 years [of retirement], maybe you’ve done better,” said Eric Kingson, a professor of social work at Syracuse University and a vocal critic of the Galveston alternative. “For most people, it’s somewhere between ‘very bad’ and ‘not very good.’ ”


Galveston alternative to Social Security held up as model

the program adopted by Galveston and surrounding counties and found that its benefits depended on income and longevity:

Kinda like Social Security, eh? Where if you die before you start collecting, your family gets basically nothing.

Part of the employer contribution in the Alternate Plan goes toward a term life insurance policy, which pays four times the employee’s salary tax free, up to a maximum of $215,000. That’s nearly 850 times Social Security’s death benefit.

Hey, look at that giant improvement over Social Security.

And those who retire under the Galveston model do much better than Social Security. For example:

• A lower-middle income worker making about $26,000 at retirement would get about $1,007 a month under Social Security, but $1,826 under the Alternate Plan, according to First Financial’s calculations.

• A middle-income worker making $51,200 would get about $1,540 monthly from Social Security, but $3,600 from the banking model.

• And a high-income worker who maxed out on his Social Security contribution every year would receive about $2,500 a month from Social Security vs. $5,000 to $6,000 a month from the Alternate Plan.

Wow! Those are giant improvements too!!!

Weird, you start with a LIE?

"Kinda like Social Security, eh? Where if you die before you start collecting, your family gets basically nothing."


The spouse of a worker gets the survivors benefits he/she, usually half of the workers rate? I know, it blows a hole in your lie, but it's based in REALITY

Critics of the Alternate Plan say it is more like a savings program than a social insurance program for all Americans, which Social Security was created to be — particularly for low-wage retirees, widowed spouses and children with deceased parents.

“People forget that before Social Security, there really were poorhouses,” said Eric Kingson, co-director of the coalition Social Security Works.

The General Accounting Office and the Social Security Administration conducted the most current comparative studies of the Alternate Plan and Social Security in 1999. The G.A.O. report noted “fundamental differences in the purpose and structure of the two approaches.”

Both the G.A.O. and Social Security studies concluded that lower-wage workers, particularly those with many dependents, would fare better under Social Security, while middle- and higher-wage workers were likely to fare better, at least initially, under the Alternate Plan.

....The lump-sum option is one of the biggest problems in the Alternate Plan, Mr. Kingson said, because “people end up unprotected.” If retirees do not choose the lifetime annuity, they could outlive their benefits and end up wards of the state.

Even Mr. Holbrook has outlived his Alternate Plan benefits. When he retired 15 years ago, he decided to receive $1,500 to $2,000 from his Alternate Plan account every month for 10 years. Now, his Alternate Plan account is empty.

Fortunately, Mr. Holbrook has other savings and, ultimately, $1,300 a month in Social Security benefits from his 27 years of contributions before his county dropped out of the program.

“It was a mistake to only take it for 10 years,” he said. “It should be over a lifetime, like Social Security.”


http://www.nytimes.com/2011/09/18/us/how-privatized-social-security-works-in-galveston.html?_r=0

What the article is talking about is taking more out than you put in. No private business could ever operate that way, yet, government does it all the time. In the private market, it would be called bankruptcy.

 

[Dad2three]

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty. I know, that ponzi scheme called the stock market works better right? lol, PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty.

Yet today, American seniors are our wealthiest cohort.
Poor recent college graduates, laboring under mountains of student loan debt, struggling to find a job......finally get one and then 12.4% of their paycheck goes to some rich white guy who retired on a golf course.
That doesn't seem fair, does it?

PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

How Three Texas Counties Created Personal Social Security Accounts and Prospered

Across the country, state and local governments are facing huge unfunded liabilities for their employee pension plans. And then there’s Social Security.

But three neighboring Texas counties, which opted out of Social Security 30 years ago by creating personal retirement accounts, have avoided a fiscal train wreck while providing retirees with even more retirement income.
Galveston, Matagorda and Brazoria County employees, many of them union members, have seen their retirement savings grow every year, even during the Great Recession. If state and local governments—and Congress—are really looking for a path to long-term sustainable entitlement reform, they might start with what is referred to as the “Alternate Plan.”

Most proposals for creating a defined-contribution alternative to a state pension plan or Social Security use an IRA or 401(k) model. That is what the Utah legislature passed for new state employees beginning in July.


Under that model, the employee’s money, along with any employer contribution, goes into a personal account that invests in a limited number of approved options. Those accounts usually follow the stock market, in good times and in bad. It’s those “bad times,” like the one the country recently went through, that critics point to when opposing personal retirement accounts.

But the Alternate Plan takes a different approach, one I call a “banking model.” Employee and employer contributions are actively managed by a financial planner—in this case, First Financial Benefits, Inc., of Houston, which both originated the plan and has managed it since inception.

The contributions are pooled, like bank deposits, and top-rated financial institutions bid on the money. Those institutions guarantee an interest rate that won’t go below a base level, and could go higher if the market does well. Over the last decade, the accounts have earned between 3.75 percent and 5.75 percent every year, with an average of around 5 percent. The 1990s often saw even higher interest rates, 6.5 to 7 percent. Thus, when the market goes up, employees make more; and when the market goes down, employees still make something.

Like Social Security, employees contribute 6.2 percent of their income, with the county matching the contribution (Galveston has chosen to provide a slightly larger share). Once the county makes its contribution, its financial obligation is done. So there are no long-term unfunded liabilities.

But not all of that money goes into an employee’s retirement account. When financial planner Rick Gornto devised the Alternate Plan in 1981, he wanted it to be a complete substitute for Social Security. And Social Security isn’t just a retirement fund; it’s social insurance that provides a death benefit—a whopping $255—survivors’ insurance, and a disability benefit.

Part of the employer contribution in the Alternate Plan goes toward a term life insurance policy, which pays four times the employee’s salary tax free, up to a maximum of $215,000. That’s nearly 850 times Social Security’s death benefit.


How Three Texas Counties Created Personal Social Security Accounts and Prospered

The Galveston Plan bears little resemblance to the President’s plan. The Galveston plan does not have voluntary private accounts. Instead, the county invests pension funds in the market; individual workers do not have accounts or any control over investment decisions. In addition, participation in the Galveston plan is mandatory. The Galveston Plan also features higher payroll tax contributions: 13.9 percent of payroll, as compared to 12.4 percent under the traditional Social Security system

Retirement benefits are generally lower under the Galveston Plan. Under the Galveston Plan, initial retirement benefits are lower for many workers than under Social Security. Furthermore, unlike Social Security, the Galveston plan does not adjust benefits from year to year to reflect increases in the cost of living. As a result, according to a Social Security Administration study, “After 20 years, all of Galveston’s benefits are lower relative to Social Security’s.”


Galveston could not provide a model for the country as a whole.



The 5,000 municipal employees covered by the plans run by Galveston and the two other Texas counties opting out of Social Security do not make any contributions to support current Social Security beneficiaries. If the United States as a whole adopted a Galveston-like plan, there would be no one left to pay the $500 billion annual cost of benefits for the nation’s 45 million current Social Security beneficiaries .

In other words, municipal employees from these three Texas counties are “free riders” who are escaping their share of the national obligation to finance Social Security for current retirees. The United States as a whole cannot “free ride” in the way that government employees in one relatively small county can.

Does Galveston Offer a Model For Social Security Reform? | Center on Budget and Policy Priorities

If the United States as a whole adopted a Galveston-like plan, there would be no one left to pay the $500 billion annual cost of benefits for the nation’s 45 million current Social Security beneficiaries .

Sure there would. The US taxpayer would continue to pay the benefits until all the recipients passed.

Oh you prefer welfare. Got it

Higher benefits for future retirees isn't welfare, silly.

Right, having taxpayers pay for SS benefits that has ALWAYS been paid by program recipients is however!

 

[Ray From Cleveland]

If you're paying 12.4% of your lifetime earnings for a low yielding insurance policy, you may be doing it wrong.

So NO, you don't understand how insurance works. Thanks anyways

Let's see, pay 12.4% of my lifetime earnings, die a week before I start collecting benefits and my family gets
basically zero.

Wow, great insurance! Sounds like a program only an idiot or a liberal (but then I repeat myself) would create.

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty. I know, that ponzi scheme called the stock market works better right? lol, PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

There are millions of them. They are called IRA's.

Yep, TOTALLY differ objective of the Social Security INSURANCE Program

Nope, same objective, it's just that IRA's teach you the right way to handle money and the rewards of doing so.

 

[Dad2three]

Keep dreaming. A REGRESSIVE tax isn't needed, but weird how the GOP stops ANYTHING that might require their overlords to pay more equitable with their wealth!

What I find perplexing is how the liberals seem to think they have a right to someone elses earned income.

What I find perplexing, is conservatives/libertarians "think" those people made it on their own, without SOCIETY and our laws?

What does our society and laws have to do with anything? We all have the same society and laws, yet many of us don't become wealthy. How does that work anyhow?

The only people that benefit more from our society are those who put more in: more hours, more money, more borrowing, more headaches.........

Other than that, I'll trade you one bushel of apples for your bushel of corn. Now if you happen to have much more corn than I have apples, that doesn't mean you owe me (society) anything. It means you worked harder than I did.

RIGHT, because SOME PEOPLE (Mittens Romney, Koch Brothers, the Walton's,etc) WERE born on 3rd base. Honesty. Try it'

Doesn't matter where they were born or with how much to inherit, YOU DONT HAVE ANY RIGHT TO THEIR MONEY
Why cant you get that through your head.

Right, silly me, I thought as a SOCIETY we could make laws that can, and ALWAYS has redistributed wealth?

 

[Maryland Patriot]

Yet before it, most seniors lived in POVERTY in the US, today SS keeps almost half of seniors out of poverty.

Yet today, American seniors are our wealthiest cohort.
Poor recent college graduates, laboring under mountains of student loan debt, struggling to find a job......finally get one and then 12.4% of their paycheck goes to some rich white guy who retired on a golf course.
That doesn't seem fair, does it?

PLEASE give me the SUCCESSFUL privatization of SS ANYWHERE?

How Three Texas Counties Created Personal Social Security Accounts and Prospered

Across the country, state and local governments are facing huge unfunded liabilities for their employee pension plans. And then there’s Social Security.

But three neighboring Texas counties, which opted out of Social Security 30 years ago by creating personal retirement accounts, have avoided a fiscal train wreck while providing retirees with even more retirement income.
Galveston, Matagorda and Brazoria County employees, many of them union members, have seen their retirement savings grow every year, even during the Great Recession. If state and local governments—and Congress—are really looking for a path to long-term sustainable entitlement reform, they might start with what is referred to as the “Alternate Plan.”

Most proposals for creating a defined-contribution alternative to a state pension plan or Social Security use an IRA or 401(k) model. That is what the Utah legislature passed for new state employees beginning in July.


Under that model, the employee’s money, along with any employer contribution, goes into a personal account that invests in a limited number of approved options. Those accounts usually follow the stock market, in good times and in bad. It’s those “bad times,” like the one the country recently went through, that critics point to when opposing personal retirement accounts.

But the Alternate Plan takes a different approach, one I call a “banking model.” Employee and employer contributions are actively managed by a financial planner—in this case, First Financial Benefits, Inc., of Houston, which both originated the plan and has managed it since inception.

The contributions are pooled, like bank deposits, and top-rated financial institutions bid on the money. Those institutions guarantee an interest rate that won’t go below a base level, and could go higher if the market does well. Over the last decade, the accounts have earned between 3.75 percent and 5.75 percent every year, with an average of around 5 percent. The 1990s often saw even higher interest rates, 6.5 to 7 percent. Thus, when the market goes up, employees make more; and when the market goes down, employees still make something.

Like Social Security, employees contribute 6.2 percent of their income, with the county matching the contribution (Galveston has chosen to provide a slightly larger share). Once the county makes its contribution, its financial obligation is done. So there are no long-term unfunded liabilities.

But not all of that money goes into an employee’s retirement account. When financial planner Rick Gornto devised the Alternate Plan in 1981, he wanted it to be a complete substitute for Social Security. And Social Security isn’t just a retirement fund; it’s social insurance that provides a death benefit—a whopping $255—survivors’ insurance, and a disability benefit.

Part of the employer contribution in the Alternate Plan goes toward a term life insurance policy, which pays four times the employee’s salary tax free, up to a maximum of $215,000. That’s nearly 850 times Social Security’s death benefit.


How Three Texas Counties Created Personal Social Security Accounts and Prospered

The Galveston Plan bears little resemblance to the President’s plan. The Galveston plan does not have voluntary private accounts. Instead, the county invests pension funds in the market; individual workers do not have accounts or any control over investment decisions. In addition, participation in the Galveston plan is mandatory. The Galveston Plan also features higher payroll tax contributions: 13.9 percent of payroll, as compared to 12.4 percent under the traditional Social Security system

Retirement benefits are generally lower under the Galveston Plan. Under the Galveston Plan, initial retirement benefits are lower for many workers than under Social Security. Furthermore, unlike Social Security, the Galveston plan does not adjust benefits from year to year to reflect increases in the cost of living. As a result, according to a Social Security Administration study, “After 20 years, all of Galveston’s benefits are lower relative to Social Security’s.”


Galveston could not provide a model for the country as a whole.



The 5,000 municipal employees covered by the plans run by Galveston and the two other Texas counties opting out of Social Security do not make any contributions to support current Social Security beneficiaries. If the United States as a whole adopted a Galveston-like plan, there would be no one left to pay the $500 billion annual cost of benefits for the nation’s 45 million current Social Security beneficiaries .

In other words, municipal employees from these three Texas counties are “free riders” who are escaping their share of the national obligation to finance Social Security for current retirees. The United States as a whole cannot “free ride” in the way that government employees in one relatively small county can.

Does Galveston Offer a Model For Social Security Reform? | Center on Budget and Policy Priorities

If the United States as a whole adopted a Galveston-like plan, there would be no one left to pay the $500 billion annual cost of benefits for the nation’s 45 million current Social Security beneficiaries .

Sure there would. The US taxpayer would continue to pay the benefits until all the recipients passed.

Oh you prefer welfare. Got it

Higher benefits for future retirees isn't welfare, silly.

Right, having taxpayers pay for SS benefits that has ALWAYS been paid by program recipients is however!

You should really just stop, Im almost embarrassed for you because of the ass whipping you are taking here.