[PilotAlan]

Originally Posted by Bill14564

3. The average salary does not matter, the actual salary does. Working with the average salary will skew the compound interest from the earliest years.

Times have changed. In many states, minimum wage is somewhere near or north $20/hr. McDonalds pays over $20/hr in Colorado.
A college graduate with a decent degree (not Interpretive Dance Theory) starts well north of $50k.
It's not hard to make $50k nowadays.

[RUCdaze]

GOOD EXAMPLE OF FAKE NEWS.
This is why people don't trust mainstream media.

[biker1]

It was not fake news. They did, however, present a worst case scenario; two retired people drawing the SS maximum - this is representative of a small percentage of the population. The also presented some lower benefit level examples. It is old news. It is also a situation that has a low probability of happening.

Originally Posted by RUCdaze

GOOD EXAMPLE OF FAKE NEWS.
This is why people don't trust mainstream media.

[jimhoward]

If the SS trust fund invested in assets other than USG securities the economics get very complex. If you changed the law to allow the SS trust fund to buy stocks and If you then inject 2.6 trillion into the stock market then prices will rise and the trust fund will pay dearly for the stocks. The future returns on stocks would then be lower than would otherwise be the case. At the same time the USG would still need to borrow that 2.6 trillion because the deficit doesn't get any smaller just because the trust fund doesn't fund it. Those hated government programs still happen. So it would go into the market and auction 2.6 trillion of T-bills. That would cause interest rates to rise. We would then owe the Chinese (or whoever else buys the T-bills) $2.6T instead of the SS trust fund.

So what would be the end result? I have no idea, but I know it is complicated.

[OrangeBlossomBaby]

Originally Posted by Rainger99

I used 22 instead of 17 to allow for people to graduate college or trade school or to get a few years experience.

The average projected starting salary in the U.S. for the class of 2025 at the bachelor’s degree level is $68,680!

For those people, who don't want to go to college, the minimum wage in Florida goes up to $14 an hour in September. That is $29,120 a year for a high school drop out. I assume that most 17-20 year old people will start at $14 an hour and hopefully get raises as they gain experience in their job.

Most 17-20-year-olds who drop out of high school, won't get a full time job with benefits with no experience, and no GED. If they're lucky they'll find a part-time 20-hour-a-week job with no paid sick time and no health insurance.

[Rainger99]

Originally Posted by OrangeBlossomBaby

Most 17-20-year-olds who drop out of high school, won't get a full time job with benefits with no experience, and no GED. If they're lucky they'll find a part-time 20-hour-a-week job with no paid sick time and no health insurance.

87% of students graduate high school within 4 years.

COE - High School Graduation Rates

A significant number go on to college or trade school.

We are talking averages here.

If you focus on the small minority that don’t graduate high school, I agree that their earnings may be below average in the above example.

However, if 87% graduate high school and most of them go on to higher education, then the vast majority of those people will probably have average earnings and if allowed to invest in the market, they will probably have a significant amount of money when they retire.

[OrangeBlossomBaby]

Originally Posted by Rainger99

87% of students graduate high school within 4 years.

COE - High School Graduation Rates

A significant number go on to college or trade school.

We are talking averages here.

If you focus on the small minority that don’t graduate high school, I agree that their earnings may be below average in the above example.

However, if 87% graduate high school and most of them go on to higher education, then the vast majority of those people will probably have average earnings and if allowed to invest in the market, they will probably have a significant amount of money when they retire.

You're the one who brought up high school drop-outs earning $29,120 a year. Here's the words you posted, from your post:

For those people, who don't want to go to college, the minimum wage in Florida goes up to $14 an hour in September. That is $29,120 a year for a high school drop out. I assume that most 17-20 year old people will start at $14 an hour and hopefully get raises as they gain experience in their job.

Consider also most 17-year-olds haven't graduated high school yet, even if they plan to graduate. So no, most 17-year-olds won't be getting full time jobs at minimum wage, while they're 17 years old. They'll be busy going to high school, preparing to graduate.

In addition, MOST full time jobs aren't minimum wage jobs. MOST full time jobs pay more than minimum wage, AND come with health insurance, paid time off, and some manner of pension or 401k. MOST 17-20-year-olds are not working those jobs, while they are 17-20-years old.

In addition, $29,120/year doesn't even cover the minimum cost of living for a single individual with no children in Florida. The minimum cost of living for a single individual in Florida with no children is over $50,000/year. In addition, at $29,120/year, a single individual living in Florida would qualify for SNAP benefits (food stamps).

[Rainger99]

Originally Posted by OrangeBlossomBaby

Most 17-20-year-olds who drop out of high school, won't get a full time job with benefits with no experience, and no GED. If they're lucky they'll find a part-time 20-hour-a-week job with no paid sick time and no health insurance.

I didn’t bring up 17 year olds. Another poster asked if I knew any 17 year olds making $33,000 a year. I don’t but I pointed out that minimum wage in Florida goes up to $14 an hour in September and a minimum wage job will pay $29,000 a year.

If the 17-20 year old is not working, they will not be making minimum wage - or any wage.

However, if the drop out wants to work, jobs are plentiful. Most fast food restaurants always have help wanted signs up as to big box stores.

A smart, reliable, hardworking dropout with a great worth ethic (show up on time, etc.) can get a minimum wage job.

[PilotAlan]

First, there’s no $2.6 trillion. There’s IOUs for 2.6 trillion.

Second, SSA could begin a phased transition, with new tax receipts invested in the market and the principal and gains used to pay current beneficiaries.

Then, over the next 30 years or so, the ownership of the funds transition to ownership by the worker.
Let’s say 75% of the funds are owned by the worker, and 25% by SSA to cover disabled folks, provide a minimum level of benefits, etc.

Obviously it would be complex, but it’s sustainable forever, the retiree has assets rather than promises, and it builds generational wealth.

Originally Posted by jimhoward

If the SS trust fund invested in assets other than USG securities the economics get very complex. If you changed the law to allow the SS trust fund to buy stocks and If you then inject 2.6 trillion into the stock market then prices will rise and the trust fund will pay dearly for the stocks. The future returns on stocks would then be lower than would otherwise be the case. At the same time the USG would still need to borrow that 2.6 trillion because the deficit doesn't get any smaller just because the trust fund doesn't fund it. Those hated government programs still happen. So it would go into the market and auction 2.6 trillion of T-bills. That would cause interest rates to rise. We would then owe the Chinese (or whoever else buys the T-bills) $2.6T instead of the SS trust fund.

So what would be the end result? I have no idea, but I know it is complicated.

[OrangeBlossomBaby]

Originally Posted by Rainger99

I didn’t bring up 17 year olds. Another poster asked if I knew any 17 year olds making $33,000 a year. I don’t but I pointed out that minimum wage in Florida goes up to $14 an hour in September and a minimum wage job will pay $29,000 a year.

If the 17-20 year old is not working, they will not be making minimum wage - or any wage.

However, if the drop out wants to work, jobs are plentiful. Most fast food restaurants always have help wanted signs up as to big box stores.

A smart, reliable, hardworking dropout with a great worth ethic (show up on time, etc.) can get a minimum wage job.

They don't hire full time. You keep using $29k/year as your brag about how great a minimum wage job will pay, and now you're specifying what KIND of minimum wage job - a fast food joint or big box store. They don't hire full time for their minimum wage jobs. Those jobs are part time jobs. They don't pay $29k/year. IN ADDITION - $29k/year is not a living wage.

We're talking about the cost of living for seniors earning Social Security checks, and how "something other than Social Security" would return better income upon retirement.

You're supposing that someone starting out with no high school diploma, and no experience, can get a part-time minimum wage job and live independently while at the same time putting money away in investments instead of social security, and magically come out ahead when it's time for them to retire.

I'm supposing that they'll end up realizing that $14/hour for only 18 hours a week won't even get them a single bedroom in someone else's apartment, AND money to invest, AND utilities, AND food, AND transportation, AND clothing for the year, AND the cost of health care beyond the yearly physical, even if the insurance premiums are free (thanks to the ACA). It can't be done in Florida.

It isn't practical, or kind, or helpful, or useful, to suggest that 17-20-year-olds who drop out of high school can just get a full time minimum wage job and swap out social security payroll deductions for investments, and be able to retire some day having done better. Because they won't even make it to 25 with that ridiculous idea, since they'll discover in their FIRST year of trying, that no such scenario exists.

[golfing eagles]

Originally Posted by OrangeBlossomBaby

They don't hire full time. You keep using $29k/year as your brag about how great a minimum wage job will pay, and now you're specifying what KIND of minimum wage job - a fast food joint or big box store. They don't hire full time for their minimum wage jobs. Those jobs are part time jobs. They don't pay $29k/year. IN ADDITION - $29k/year is not a living wage.

We're talking about the cost of living for seniors earning Social Security checks, and how "something other than Social Security" would return better income upon retirement.

You're supposing that someone starting out with no high school diploma, and no experience, can get a part-time minimum wage job and live independently while at the same time putting money away in investments instead of social security, and magically come out ahead when it's time for them to retire.

I'm supposing that they'll end up realizing that $14/hour for only 18 hours a week won't even get them a single bedroom in someone else's apartment, AND money to invest, AND utilities, AND food, AND transportation, AND clothing for the year, AND the cost of health care beyond the yearly physical, even if the insurance premiums are free (thanks to the ACA). It can't be done in Florida.

It isn't practical, or kind, or helpful, or useful, to suggest that 17-20-year-olds who drop out of high school can just get a full time minimum wage job and swap out social security payroll deductions for investments, and be able to retire some day having done better. Because they won't even make it to 25 with that ridiculous idea, since they'll discover in their FIRST year of trying, that no such scenario exists.

Great post. And the term for those people will unfortunately turn out to be "homeless". Unless they can stay on Mommy's couch in the basement.

[Stu from NYC]

Originally Posted by jimhoward

If the SS trust fund invested in assets other than USG securities the economics get very complex. If you changed the law to allow the SS trust fund to buy stocks and If you then inject 2.6 trillion into the stock market then prices will rise and the trust fund will pay dearly for the stocks. The future returns on stocks would then be lower than would otherwise be the case. At the same time the USG would still need to borrow that 2.6 trillion because the deficit doesn't get any smaller just because the trust fund doesn't fund it. Those hated government programs still happen. So it would go into the market and auction 2.6 trillion of T-bills. That would cause interest rates to rise. We would then owe the Chinese (or whoever else buys the T-bills) $2.6T instead of the SS trust fund.

So what would be the end result? I have no idea, but I know it is complicated.

the problem is as life expectancy goes up we have more and more people to support with not enough funds going into the system.

Would need to raise the retirement age and do not think congress will do it. They would rather kick the can further down the road with bandaids

[OrangeBlossomBaby]

Originally Posted by Stu from NYC

the problem is as life expectancy goes up we have more and more people to support with not enough funds going into the system.

Would need to raise the retirement age and do not think congress will do it. They would rather kick the can further down the road with bandaids

"raise the retirement age" isn't the only possible option. You can raise the EARLY retirement age from 62 to 64. You can raise the maximum income cap, or eliminate it. Currently it's $176,100. If you raised it to $400,000 that would increase the amount in the fund every year.

You can increase the deduction AND make the increased payout be a lower percentage after the first "x". In other words - if the current max SS check, based on a $176,100 deduction, and you retire at age 70, the most you can currently get is $5,108 per month. If you increase the max from $176.1k to $400k, maybe only increase the max payout to $5,800/month.

You can also cut the age of max payout to 69, making it so the most you can get, you'll get if you retire when you're 69, and not when you're 70. Retiring at age 70 wouldn't give you any added benefit.

You could add a .5% payroll deduction increase, with .25% paid by the employee, and .25% paid by the employer, rounded UP to the nearest penny.

You could do any combination of these things, and the result would be an increase of funds into the system, and more available to pay out to future generations.

[PilotAlan]

Holy Straw Man, Batman! You're debunking arguments that no one has made.

No one's talking about making private 401k contributions in addition to SS, we're talking about making SS contributions go into a market pension. Not optional, just like now.
Yes, someone making minimum wage won't be a millionaire from their investments, but they will still be better off than with the return in the present system.

If someone spends their entire lives working minimum wage, they have larger problems. The vast majority of people rapidly move up the ladder as they gain experience and wisdom. But you already knew that.

You can't make large policy decisions based on edge cases. And the explosion of wealth throughout the economy will provide much more tax funds to help those people in edge cases who need public assistance.

Originally Posted by OrangeBlossomBaby

They don't hire full time. You keep using $29k/year as your brag about how great a minimum wage job will pay, and now you're specifying what KIND of minimum wage job - a fast food joint or big box store. They don't hire full time for their minimum wage jobs. Those jobs are part time jobs. They don't pay $29k/year. IN ADDITION - $29k/year is not a living wage.

We're talking about the cost of living for seniors earning Social Security checks, and how "something other than Social Security" would return better income upon retirement.

You're supposing that someone starting out with no high school diploma, and no experience, can get a part-time minimum wage job and live independently while at the same time putting money away in investments instead of social security, and magically come out ahead when it's time for them to retire.

I'm supposing that they'll end up realizing that $14/hour for only 18 hours a week won't even get them a single bedroom in someone else's apartment, AND money to invest, AND utilities, AND food, AND transportation, AND clothing for the year, AND the cost of health care beyond the yearly physical, even if the insurance premiums are free (thanks to the ACA). It can't be done in Florida.

It isn't practical, or kind, or helpful, or useful, to suggest that 17-20-year-olds who drop out of high school can just get a full time minimum wage job and swap out social security payroll deductions for investments, and be able to retire some day having done better. Because they won't even make it to 25 with that ridiculous idea, since they'll discover in their FIRST year of trying, that no such scenario exists.

[CoachKandSportsguy]

Originally Posted by Stu from NYC

the problem is as life expectancy goes up we have more and more people to support with not enough funds going into the system.

Would need to raise the retirement age and do not think congress will do it. They would rather kick the can further down the road with bandaids

there are other means to raise money other than to cut costs. .
One of the issues with increasing the age is that there is real age discrimination in the workforce, even though it's illogical. Hiring after the age of 55 is spotty and lucky at best. . which makes raising the age a nightmare for many people, due to no fault of their own.

Raise the tax on the remaining people who are the ones making the decisions on who should be laid off or fired. . and if the AI hopes and dreams come true, raising the retirement age will be fruitless as there will be no jobs other than commodity labor jobs.

good luck to us. .