Nearly 1 in 4 Americans think they have a personal social security account(cato.org)
cato.org
Nearly 1 in 4 Americans think they have a personal social security account
https://www.cato.org/blog/poll-nearly-1-4-americans-think-they-have-personal-social-security-account-3
48 comments
CATO gets it wrong too. Social Security is an insurance program. Employer and employee payments function as insurance premiums. Like most insurance policies if you don't qualify for a disbursement you don't get your premiums back (e.g., you die before 62). Unlike normal insurance, Soc Sec has no coverage limit, so if you live to 105 you can collect far more than you paid in.
Since Soc Sec is income insurance, I am opposed to the flat benefit concept. Higher incomes pay higher premiums so they should get higher payouts. We already have some benefit flattening now because Soc Sec benefits are partially taxable above $25K single/$32k married.
Since Soc Sec is income insurance, I am opposed to the flat benefit concept. Higher incomes pay higher premiums so they should get higher payouts. We already have some benefit flattening now because Soc Sec benefits are partially taxable above $25K single/$32k married.
I think of Social Security as an annuity, or reverse life insurance.
I sure do. It's the youth of America.
They'd had better pay me, because I paid someone else, so they owe me. Especially after I paid a few pittances in property taxes for their wonderful schools.
They'd had better pay me, because I paid someone else, so they owe me. Especially after I paid a few pittances in property taxes for their wonderful schools.
Talking to everyday people you need to realize that many many folks count on this govt pension and Medicare to live at all when they can't work. It's not an option. Company pensions are long gone, and 401Ks are only somewhat recently starting to take hold on younger people as a must have.
401k already covers more people than pensons ever did. and that is before we account for the pre-reform cases where the pension lost it all. (Though some 401k is lost to scams)
"covers" is pulling a lot of weight here, I know a lot of folks with pretty small balances, and/or who "had" to withdraw due to medical or other emergencies. They need a govt pension, otherwise we are going to have a lot of people on the streets.
I do not know how to get data for how much people have in 401ks. I do know a lot of people didn't have a useful pension back in the day too. Government pensions are too one size fits none though. If you want to retire when you are still able to work you have to save for yourself, nobody else will take care of you like you want.
I think we are in agreement on your points, I'm only stressing that we can't take an attitude of "sucks to be you!" if Social Security "runs out of money". Many folks will need this, no matter how they got to that point.
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Good luck with that. There is a generational conflict coming, and in many ways it’s already here. At some point young people are going to be asked to pay more in taxes in order to bail out social security and it’ll radicalize them more than they are already. Given the option of bail out grandma or burn down the whole system don’t be surprised when they chose to burn it down.
I think it’ll look a bit like the collapse of USSR when the state reneges on its obligations and the people have to scramble to find new ways to make ends meet.
Edit; I can’t tell if the parent comment is satire, it’s too early in the morning for me
I think it’ll look a bit like the collapse of USSR when the state reneges on its obligations and the people have to scramble to find new ways to make ends meet.
Edit; I can’t tell if the parent comment is satire, it’s too early in the morning for me
Sorry sonny, I'm afraid I've rezoned the entire USA to basically ban building the amount of housing needed, and by the way we locked all our houses into long term mortgages at negative real interest rates you'll never see again so we will inflate away your money via the fed to pay for our house.
I'll let you lower social security, but if you want someplace to stay you'll have to pay me a gazillion dollars or perform a $10 million environmental study before you can build it -- for a house I was able to build for $30,000 under the rules of my time.
I get my due either way.
I'll let you lower social security, but if you want someplace to stay you'll have to pay me a gazillion dollars or perform a $10 million environmental study before you can build it -- for a house I was able to build for $30,000 under the rules of my time.
I get my due either way.
That doesn't work when the young generation rebels - gen x might side with old people, but they may also see how the system is failing in burn it. Youngers seeing the problem in 2034 will not have reason to continue it.
for that matter zoning reforn is already a thing - so their property map not be worth that much.
of course when predicting the future always use plenty of salt
for that matter zoning reforn is already a thing - so their property map not be worth that much.
of course when predicting the future always use plenty of salt
Ah yeah, you got me, I do get a bit triggered by boomerisms.
As a millennial I could already see the ladder being pulled away and was luckily enough to grab on to the bottom rung. Young people are so ready to burn down the system that they’re just waiting for the opportunity to do so and I don’t blame them. At this point it only seems to be a matter of time. I try to warn boomers that they should be more sympathetic because they’re going to have to ask the young people for a bailout and as bad as it is doing deliveries for minimum wage as a young person it’s infinitely worse doing that as a old person.
As a millennial I could already see the ladder being pulled away and was luckily enough to grab on to the bottom rung. Young people are so ready to burn down the system that they’re just waiting for the opportunity to do so and I don’t blame them. At this point it only seems to be a matter of time. I try to warn boomers that they should be more sympathetic because they’re going to have to ask the young people for a bailout and as bad as it is doing deliveries for minimum wage as a young person it’s infinitely worse doing that as a old person.
Unpaid the great generation for the work they did. Do newer generations deserve payment for theft (squandering investments, privatizing, destroying education and safety nets)?
Statistics like this are a pet peeve of mine. And to see a whole article filled with "x% of people think Y" is not that interesting.
But honestly I'm pretty impressed that ~50% of people understand that social security payments today are funding current retirees, and not future retirees. The fact that only 25% think the opposite, and 25% don't know, is actually pretty impressive.
But honestly I'm pretty impressed that ~50% of people understand that social security payments today are funding current retirees, and not future retirees. The fact that only 25% think the opposite, and 25% don't know, is actually pretty impressive.
The juxtapositions in here are interesting:
- Most Americans don't know how social security is funded but
- An overwhelming majority of nonretired adults (79%) do not believe they will receive their full scheduled Social Security benefits when they retire.
- About three in four adults (77%) have heard that Social Security is projected to run short of money by 2033.
If you thought you had an individual account, and you also thought the program overall was going to run out of money and that you weren't going to get the "full benefit", does that mean you thought you weren't paying enough in?
- Most Americans don't know how social security is funded but
- An overwhelming majority of nonretired adults (79%) do not believe they will receive their full scheduled Social Security benefits when they retire.
- About three in four adults (77%) have heard that Social Security is projected to run short of money by 2033.
If you thought you had an individual account, and you also thought the program overall was going to run out of money and that you weren't going to get the "full benefit", does that mean you thought you weren't paying enough in?
Having an individual account does not mean that money earmarked for you is sitting in a vault. E.g, our banking system gives everyone an individual account, but does not have enough cash to pay everyone back; and occasionally their other assets fall, resulting in them not being able to satisfy their obligations to account holders. This has happened often enough, that bank accounts are not required to be insured against it.
There has also been a common talking point of Congress stealing from social security to fund other expenses, which could also explain how it would not be able to pay even with individual accounts.
There has also been a common talking point of Congress stealing from social security to fund other expenses, which could also explain how it would not be able to pay even with individual accounts.
How much should I put in isn't knowable - if I have known many who died before 62, and others who lived to 104. then there is various health that affects what you can spend - both ways, low health may mean spend nothing since you can't do anything or it may mean expensive nursing homes
It's very knowable. You pick an arbitrary retirement age, decide how much you want to have then, and run the compound interest formula backwards.
Aka, how all retirement accounts are handled.
Aka, how all retirement accounts are handled.
your need your death date, inflation, and other details about your life after retirement to get that number.
I was just having a conversation (argument) with my MIL about this. She claims that people have felt that SS would run out of money before they retire her entire life. Has this sentiment been tracked at all? I certainly feel like I (aged mid-30s) will not be benefitting, but the common argument is that the Ponzi scheme will find a way to perpetuate for longer
Impossible to tell, but there's factors making it more likely to happen this time than in previous generations. Probably the biggest factor is the declining population, which no government around the world has been able to materialise an answer to.
My personal retirement plans assume no social security. Anything I may get in old age is a nice bonus, but in my planning, it's not the beef.
My personal retirement plans assume no social security. Anything I may get in old age is a nice bonus, but in my planning, it's not the beef.
>which no government around the world has been able to materialise an answer to.
I disagree. The whole hot political topic of "illegal immigration" is as a side effect - seemingly a successful solution to motivate (foreign) people to bump the population. Specifically - "if you have a kid in the US, the kid is automatically a citizen, you don't have to pay taxes, you don't need a green card, you work under the table so make $0 on paper and thus qualify for free food and housing (welfare) and free healthcare (medicaid)".
Honestly if we gave such a deal to young non-foreign american women free and clear, likely we'd be seeing a lot more childbirths.
Despite all the economic burden and political strife this program has caused, it may in fact extend the life of the nation and welfare.
I disagree. The whole hot political topic of "illegal immigration" is as a side effect - seemingly a successful solution to motivate (foreign) people to bump the population. Specifically - "if you have a kid in the US, the kid is automatically a citizen, you don't have to pay taxes, you don't need a green card, you work under the table so make $0 on paper and thus qualify for free food and housing (welfare) and free healthcare (medicaid)".
Honestly if we gave such a deal to young non-foreign american women free and clear, likely we'd be seeing a lot more childbirths.
Despite all the economic burden and political strife this program has caused, it may in fact extend the life of the nation and welfare.
Couple that with the out of control deficit spending. The US is bankrupting itself and the music will eventually stop.
There's a damn good reason i hold very few bonds.
Social Security counts on there being a larger workforce every year.
If there's ever a significant population crunch of working age people, it would be in trouble. In 2018, the cost of the Social Security program exceeded total revenues for the first time.
At current rates, Social Security is projected to be insolvent by 2034.
The only ways to mitigate this is to spend less or make more. But no one wants to pay more and no one wants to give up anything.
If there's ever a significant population crunch of working age people, it would be in trouble. In 2018, the cost of the Social Security program exceeded total revenues for the first time.
At current rates, Social Security is projected to be insolvent by 2034.
The only ways to mitigate this is to spend less or make more. But no one wants to pay more and no one wants to give up anything.
That early-mid 2030s prediction has been consistent all my life. It has gone up a little as rules changed but nobody was ever willing for the big reforms that could make it work long term.
This is anecdotal, but I remember this sentiment becoming widespread in the 1980s, along with the imminent hyperinflation and currency collapse.
Political candidates (Carter and Reagan) promised reductions in federal spending, but couldn't get past the obvious lack of any real discretionary control due to the size of the biggest ticket items such as the entitlements and military. The conservative message of "entitlements will make you immoral" was replaced by "entitlements are unsustainable," making it sound like serious economics but without any real basis.
Political candidates (Carter and Reagan) promised reductions in federal spending, but couldn't get past the obvious lack of any real discretionary control due to the size of the biggest ticket items such as the entitlements and military. The conservative message of "entitlements will make you immoral" was replaced by "entitlements are unsustainable," making it sound like serious economics but without any real basis.
This is an interesting topic that is also a very current one in the Netherlands: https://business.gov.nl/finance-and-taxes/pensions/the-new-p...
Where they've essentially implemented the system as the 1 in 4 American think it works in the USA. Specifically:
> It will become clearer how your pension or your employee’s pension grows. Employees will have their own pension account, showing all the contributions they have paid. And the profit or loss made with this money.
It will be interesting to see if this works out as they've calculated/predicted.
Where they've essentially implemented the system as the 1 in 4 American think it works in the USA. Specifically:
> It will become clearer how your pension or your employee’s pension grows. Employees will have their own pension account, showing all the contributions they have paid. And the profit or loss made with this money.
It will be interesting to see if this works out as they've calculated/predicted.
I'm not from the US, so please correct me if i'm wrong. My understanding is that the Social Security in the US is more comparable to our "AOW". And our AOW is not changing. Our pensions are more comparable to the 401K in the us.
Where do you live, and what does AOW stand for? There's no way to say whether your comparison is correct without having any idea of what you're comparing Social Security to.
Context suggests they live in the Netherlands and are talking about https://en.wikipedia.org/wiki/Algemene_Ouderdomswet .
I've been told by the libertarians since the early 80s that social security was running out of money, and back then I fully believed that the program would be gone by the time I retired. Yet somehow Congress manages to tweak it as necessary to keep it solvent. I expect they will continue to do so.
In 2034, it will be insolvent. We'll either increase contributions or raise the age to compensate. It's not going to be pretty.
They’ve been raising the contribution limit for several years now. In 2016 the cut off on taxable earnings for social security was $118,500. Next year it’s $186,000.
They have done both before.
I would love a survey asking people about the half-truths the smug libertarian types like to tell about social security.
I can go to ssa.gov and click the button that says "log into your account."
Yeah, we can't really fault people for thinking something the government itself says.
The phrasing doesn’t make sense anyway. I think I have an individual social security account where they track how much I’ve paid and how much that will entitle me to receive. I also think I have an individual savings account with my bank, and an individual investment account with my brokerage. In none of these perceptions do I think there is a little bin with my money in it stored separately from everyone else’s money.
100% of the people polled are the type of people who interact with polls. The questions, framing, and context of the interaction is going to influence the results in ways that aren't corrected for. The day of the week, what's in the current news cycle, the context of the individual media bubbles of the poll takers, whether or not they've had breakfast, and a myriad other factors will influence the results in ways that aren't accounted for.
The confounders and the structure of these polls are not statistically significant or valid ways of understanding anything except perhaps the poll taking institutions, and the polls they choose to perform and publish can provide insight into underlying agendas. The bubbles which they influence most are part of that context, so the social narrative of those bubbles represents a significant bias, regardless of the rules which may or may not be followed for any given poll.
The sampling of 2200 people, the use of the "it's math! ta-da! Statistics." is handwavy and manipulative at best. The error bars are so large as to make the results effectively meaningless. People should stop believing polls and pollsters unless or until they engage in scientifically legitimate methodology. Blinds, multiple question distributions, psychological profiling, corrections for environmental, cultural, and personal bias, multiple significant population sizes, effective sampling in choice of participants, and so on, and those sorts of polls require money and time that make doing legitimate polls prohibitively expensive and lengthy.
Most institutions engaging in polling don't want to bother with because they know they can handwave away concerns by claiming "Statistically valid random sample size!" and not have to address any of the other methodological or structural flaws.
This is no better (or worse) than a poll on bsky or twitter or hackernews, effectively. They just hide the fact that they're sampling from a segregated population and pretend it's representative.
And as far as the economic doom of social security hanging over our heads, it requires a balanced budget and fiscal responsibility, and the chuckleheads who've been running congress the last 60 years got what they wanted. Austerity or collapse or a whole menu of unpleasant shit sandwiches await for those of us who have to deal with the boomers' irresponsible and reckless orgy of self enrichment.
The confounders and the structure of these polls are not statistically significant or valid ways of understanding anything except perhaps the poll taking institutions, and the polls they choose to perform and publish can provide insight into underlying agendas. The bubbles which they influence most are part of that context, so the social narrative of those bubbles represents a significant bias, regardless of the rules which may or may not be followed for any given poll.
The sampling of 2200 people, the use of the "it's math! ta-da! Statistics." is handwavy and manipulative at best. The error bars are so large as to make the results effectively meaningless. People should stop believing polls and pollsters unless or until they engage in scientifically legitimate methodology. Blinds, multiple question distributions, psychological profiling, corrections for environmental, cultural, and personal bias, multiple significant population sizes, effective sampling in choice of participants, and so on, and those sorts of polls require money and time that make doing legitimate polls prohibitively expensive and lengthy.
Most institutions engaging in polling don't want to bother with because they know they can handwave away concerns by claiming "Statistically valid random sample size!" and not have to address any of the other methodological or structural flaws.
This is no better (or worse) than a poll on bsky or twitter or hackernews, effectively. They just hide the fact that they're sampling from a segregated population and pretend it's representative.
And as far as the economic doom of social security hanging over our heads, it requires a balanced budget and fiscal responsibility, and the chuckleheads who've been running congress the last 60 years got what they wanted. Austerity or collapse or a whole menu of unpleasant shit sandwiches await for those of us who have to deal with the boomers' irresponsible and reckless orgy of self enrichment.
As usual, I don't think the conclusion of the survey is fully supported by the way the questions were worded. I'm not sure I've ever felt differently about a survey, in fact.
For example, if I was asked the second question, I honestly don't know which way I would have responded before being told the answer, because clearly the answer is in between the two options. Obviously it is not intended to "largely replace" your income, but also obviously it is not intended to only keep you above the poverty line, since it is based on your income during your life. So yes, it very concretely "replaces" your income, but only partially, not "largely". If it was only intended to keep you above the poverty line, it would be based on the poverty line.
Even the government phrases it as "replacing" income:
https://www.ssa.gov/pubs/EN-05-10024.pdf
> Social Security replaces a percentage of a worker’s pre-retirement income
Reading survey questions drives me insane.
For example, if I was asked the second question, I honestly don't know which way I would have responded before being told the answer, because clearly the answer is in between the two options. Obviously it is not intended to "largely replace" your income, but also obviously it is not intended to only keep you above the poverty line, since it is based on your income during your life. So yes, it very concretely "replaces" your income, but only partially, not "largely". If it was only intended to keep you above the poverty line, it would be based on the poverty line.
Even the government phrases it as "replacing" income:
https://www.ssa.gov/pubs/EN-05-10024.pdf
> Social Security replaces a percentage of a worker’s pre-retirement income
Reading survey questions drives me insane.
Your benefits amounts are tied to lifetime earnings, and you get less per month if you start early, so it is effectively a personal account, regardless of the details.
CATO is being pendantic.
CATO is being pendantic.
It's a weird hybrid. There is a connection to a persons earnings but it's far from what most people mean by a personal account(savings, 401k, IRA). It's closer to an annuity, but a very generous/flexible one that no private company would offer. The difference is minor for the never married but not for most people, and there are unusual cases. I know a guy who retired overseas, married a young wife and had kids. They get like 180% his benefit till the kids hit 18. Then assuming he's passed, the wife gets 100% survivor benefit at 60. I figure his SS account will probably pay out around 3x what it would if he was a bachelor, and that's strictly needs based not contribution based. If, instead, it was a 401k or a personal lifetime annuity at his personal benefit amount, their financial situation would be a whole lot uglier.
What I found is that if they took my contributions and my employer's contributions on my behalf each month and put them into one year T-bills, with maturing bills rolled over into new one year T-bills, if I retired now (a couple years before my full retirement age) there would be enough to pay out something like 90-95% of my monthly benefit for the rest of my expected lifetime.
I didn't try to find the actual amounts of contributions for each month. I just took that total for the year and assumed it was spread equally across all 12 months. For T-bill rates I used the rate from the last day of the month.
I did a similar calculation for Medicare. With the same kind of setup my Medicare account would have had enough when I turned 65 to pay the unsubsidized monthly premium for a good marketplace plan on my state's ACA marketplace for the rest of my expected lifetime.
This suggests that a system that works like they say 1 in 4 thinks it works could be viable. Make it so if someone dies before their account runs out the remainder is used to pay people who have lived longer than their expected lifetimes.