How to Fix Social Security

It's not a choice to pocket the FICA tax and do what you want. Privatization allows you to invest those funds in the market rather than trusting the government to hold it for you. It won't change your take-home pay. It does however, help you establish a better retirement AND you will know it WILL be there for you, unlike with Social "Security" which is anything but secure.
I know what privatization is. What That Guy suggested was not privatization - it was abolishing Social Security entirely and letting people do what they want with their money. You said "BINGO", and I wanted to get your thoughts on how to handle the fallout.

It's not a choice to pocket the FICA tax and do what you want. Privatization allows you to invest those funds in the market rather than trusting the government to hold it for you. It won't change your take-home pay. It does however, help you establish a better retirement AND you will know it WILL be there for you, unlike with Social "Security" which is anything but secure.
It would also give you ownership of the money you invested so that your spouse and children can enjoy your hard work if you pass away unlike SS. For example. If me and my wife divorce and my children are grown and I pass away the money I have put in SS is gone. It goes back into the system for someone else to collect. Now can anyone explain how that is fair?

The whole concept of "let me give my money to the government so they can manage it for the next 30-40 years at which point they'll give it back to me a little bit a time" just never sat well with me.

I don't even factor SS into my retirement planning - as far as I'm concerned the entire thing is a farce. Preparing for retirement is the individual's responsibility, not the governments.

Philosophically, I agree that the government should just stay the hell away and not have a social security program at all. It should be up to us as individuals as to how we want to plan for retirement.

But from a pragmatic standpoint, this is unrealistic. Too many Americans will use that money for other things, failing to save enough for themselves. They'll then be forced to remain in the workforce until they're 80 or dead, which will take up more jobs, leaving fewer jobs for those under 65, resulting in much higher unemployment rates and much lower productivity and hence GDP. Not having some sort of organized retirement system would be a social and economic disaster.

But what needs to change is the rate of efficiency the government gets from our money. Right now they sock it away in the Social Security trust funds, and earn 3-5% on it. That barely outpaces inflation. A big chunk of that money needs to get invested in the stock market, corporate bonds, commercial paper, real estate trusts, and international investments. Just by making this change, the forecasts for social security's solvency would be nearly 100% healthy, simply because the rate of return on those investments is so much better than what the government is currently investing in.

I mean think about it, if Peter Lynch, Warren Buffett, Bill Miller and Joel Tillinghast can become some of the best investment minds as corporate guys, why can't the US government hire one of the best to help manage the money?

I don't care if you privatize or not. The bottom line is we need a much better return on investment from the social security trust, otherwise this predicament is only going to get worse. It's actually shameful that we haven't done this ages ago.

Philosophically, I agree that the government should just stay the hell away and not have a social security program at all. It should be up to us as individuals as to how we want to plan for retirement.

But from a pragmatic standpoint, this is unrealistic. Too many Americans will use that money for other things, failing to save enough for themselves. They'll then be forced to remain in the workforce until they're 80 or dead, which will take up more jobs, leaving fewer jobs for those under 65, resulting in much higher unemployment rates and much lower productivity and hence GDP. Not having some sort of organized retirement system would be a social and economic disaster.

But what needs to change is the rate of efficiency the government gets from our money. Right now they sock it away in the Social Security trust funds, and earn 3-5% on it. That barely outpaces inflation. A big chunk of that money needs to get invested in the stock market, corporate bonds, commercial paper, real estate trusts, and international investments. Just by making this change, the forecasts for social security's solvency would be nearly 100% healthy, simply because the rate of return on those investments is so much better than what the government is currently investing in.

I mean think about it, if Peter Lynch, Warren Buffett, Bill Miller and Joel Tillinghast can become some of the best investment minds as corporate guys, why can't the US government hire one of the best to help manage the money?

I don't care if you privatize or not. The bottom line is we need a much better return on investment from the social security trust, otherwise this predicament is only going to get worse. It's actually shameful that we haven't done this ages ago.
You really think they are earning 3-5% on money that they have allready spent? Can I get in on that programe! If finacial institutions did with their customers money what the goverment has done with the tax payers they would all be in jail.

The whole concept of "let me give my money to the government so they can manage it for the next 30-40 years at which point they'll give it back to me a little bit a time" just never sat well with me.

I don't even factor SS into my retirement planning - as far as I'm concerned the entire thing is a farce. Preparing for retirement is the individual's responsibility, not the governments.

I think you're about the same age as me (I'm 25). I am doing the same thing. I pretty much think of my SS contributions as money I'll never see again.

There has to be a more efficient and fair way to do this, but I don't know what it is. I share That Guy's line of thinking at this point.

You really think they are earning 3-5% on money that they have allready spent? Can I get in on that programe! If finacial institutions did with their customers money what the goverment has done with the tax payers they would all be in jail.

Money they've already spent? Whatchu talkin bout, Willis?

schneeds answer is spot on. the only problem is that the govt feels the need to dip into this program whenever they run into funding problems. lets go to the Gore lock-box( im sure this will get some response:))

Philosophically, I agree that the government should just stay the hell away and not have a social security program at all. It should be up to us as individuals as to how we want to plan for retirement.

But from a pragmatic standpoint, this is unrealistic. Too many Americans will use that money for other things, failing to save enough for themselves. They'll then be forced to remain in the workforce until they're 80 or dead, which will take up more jobs, leaving fewer jobs for those under 65, resulting in much higher unemployment rates and much lower productivity and hence GDP. Not having some sort of organized retirement system would be a social and economic disaster.

But what needs to change is the rate of efficiency the government gets from our money. Right now they sock it away in the Social Security trust funds, and earn 3-5% on it. That barely outpaces inflation. A big chunk of that money needs to get invested in the stock market, corporate bonds, commercial paper, real estate trusts, and international investments. Just by making this change, the forecasts for social security's solvency would be nearly 100% healthy, simply because the rate of return on those investments is so much better than what the government is currently investing in.

I mean think about it, if Peter Lynch, Warren Buffett, Bill Miller and Joel Tillinghast can become some of the best investment minds as corporate guys, why can't the US government hire one of the best to help manage the money?

I don't care if you privatize or not. The bottom line is we need a much better return on investment from the social security trust, otherwise this predicament is only going to get worse. It's actually shameful that we haven't done this ages ago.

So it's the government's job to make sure irresponsible people don't experience the consequences of their irresponsible actions? More precisely, it's MY money that has to ensure that these people never face the consequences of their irresponsible actions.

So it's the government's job to make sure irresponsible people don't experience the consequences of their irresponsible actions? More precisely, it's MY money that has to ensure that these people never face the consequences of their irresponsible actions.

Correction, it's your money that's serving as an INVESTMENT in your own, and the country's, future to ensure that your grandchildren have the same decent shot at a decent paying job just as you do now. Because if you don't make that investment, your grandkids will find it very hard to find work.

Such is the way economics works. Sometimes making investments isn't about gaining a return on investment, sometimes it's about avoiding losses.