Why should the USA government be held accountable for my retirement?

Question

Why did Social Security get set up in the first place??? Who in the right mind would trust so much money to a government???

Answer 1

Like many Americans, you would do well to study a subject that used to be known in the old days as "U.S. History." It's a complicated story, but a partial, brief explanation would be that Social Security was set up during the Great Depression as a social safety net to protect the general population against the worst results of social problems such as unemployment, old age, and disability (including the loss of one or both parents). It was to be financed on a "pay as you go" basis by assessing both employers and employees. In other words, when it was originally established, it began helping people immediately by taxing those who were working and using the money to help people in need immediately, whether they had paid into the system or not. The theory was that future workers would pay for problems encountered by current workers in the future.

It was intended as a kind of insurance program, to provide people with help if they needed it and peace of mind in the sense that people knew that help would be there for themselves, their relatives, and their friends. The goal was relatively modest: to stop people from falling into utter poverty through no fault of their own.

It has worked remarkably well. Do you know what a "poor house" is? Neither do I. These were institutions that the elderly, the poor, and the infirmed used to be sent to when life struck them a blow.

There have been problems that Congress has struggled with over the years. Obviously the size of the population in various age groups has varied tremendously, and so has the state of the economy. More insidiously, many people came to see it as something it was never intended to be, most importantly in the area you are talking about. It was supposed to provide a very modest income for the elderly so that they wouldn't suffer from poverty in their final years. But many people came to depend on it solely and think of it as a sort of pension. It isn't that, and it was never intended to be.

So in a sense, I'm denying the premise of your question. The government should not be, and is not, accountable for your retirement. You are. Social security is only to prevent you from becoming impoverished.

Answer 2

its either trust it to the government or to corporations. The corporations run the government so the government is a lesser evil, and corporations have to profit. The only problem with social security is the ability of the anti-social security people who would spend the money in the trust fund for war rather then for what it is intended... Atleast you get social security back in the end unlike most taxes.

Answer 3

The government is not accountable for your retirement. Social Security is not a guarantee...it's simply a tax specifically designated for a social program. They can change the rules at any time. Lord help you if they do decide to and you haven't saved anything. Tattoo the name and address of your local food bank on your hand so that you will always be able to remember where to go there for food.

Answer 4

because you give them money in good faith to save for your retirement. Every week they take FICA out of your paycheck. There was a lot of talk about a "social security lock box" about 10 years ago - money taken in for SSI was to be put into an account only to be used for SSI. Instead, it has become part of the budget and is spent every year, either to pay existing claims or other budget items.

Answer 5

Pretty much... if some people weren't forced to put money into a retirement system like Social Security, we'd be taking care of them anyway - but with even less money.

Answer 6

The government is NOT accountable for your retirement. If you're counting ONLY on Social Security, you're a fool. YOU are accountable for your retirement. It's called 401K; Profit Sharing, IRA, ROTHS, SAVINGS ACCOUNTS.

Anything else you need to know?

Answer 7

you think of in basic terms you human beings have a foul government, think of back, they're around the international which incorporate Canada. The final occasion have been given away with billions of dollars which stole from taxpayers and all they get is a slap on the wrist. it incredibly is the final time I vote for a Liberal. Now, it is going to likely be not undemanding to make certain to vote for who ever are any different from the Liberals.

Answer 8

Because you gave them your money in good faith. If you were able to bank that money during the whole life of your working.....you'd have SOMETHING to show for it, wouldn't you?

Answer 9

Right.

Answer 10

In the United States, before 1935, very few workers in the United States worked in jobs covered by pensions. Of those with coverage, many never received any benefits because their benefits were not guaranteed.

The original Social Security Act was passed in 1935. It had two components: a Social Security retirement benefit that applied only to workers and a welfare program for the needy elderly called Old Age Assistance. The welfare program was initially more popular because the benefits were bigger. No Social Security benefits were to be paid until 1942, allowing for a period of partial forward funding. The retirement benefit was initially funded by a 2 percent tax on the first $3000 of payroll earnings,1 percent from employers and 1 percent from workers.

The Social Security system has been reformed many times but it has always sustained the basic concept of social insurance. The income (premium) has come from payroll taxes and benefits have been paid according to benefit formulas.

In 1939, Social Security was amended to include coverage to dependents of workers who died. It was also decided to set the payroll tax income aside in a separate trust fund.

Social Security gained full national commitment in 1950 when it was decided to phase out the Old Age Assistance program and make the Social Security benefit more adequate. Benefits were increased by 77 percent and the payroll tax rate was raised to 6.5 percent on a phased-in basis. This move was partly in response to an expansion in private pensions that were being won by unions in collective bargaining agreements. Such pensions were usually designed as a supplement to Social Security benefits. Employers supported the increase because Social Security was considered cheaper than private pensions, because the payroll tax costs were transferred to workers by lowering wages and because the decrease in the welfare based Old Age Assistance program meant there would be less demand for general revenue which was then drawn significantly from corporate income taxes.

From 1950 to 1972 there were many incremental increases in Social Security taxes and benefits and more groups of workers were brought under Social Security coverage and taxation. By 1960, 78 percent of workers were insured. In 1956 disability insurance was added and women were allowed to retire at 62 with a benefit equal to 80 percent of what they would have received at 65. In 1961 men were offered a similar early-retirement benefit.

Nearly universal coverage was reached by 1965 and Social Security had demonstrated success in achieving its primary purpose of reducing the percentage of elderly living in poverty. Major legislation in 1965 built on this success by passing Medicare and Medicaid, increasing the tax base for Social Security and raising benefits by 7 percent, by making it easier for retirement beneficiaries to work without losing benefits, by liberalizing the definition of disability, by expanding the scope of child disability insurance, and by lowering the age at which widows could receive benefits. In 1969 benefits were raised by 15 percent and in 1972 by 20 percent. In 1972 benefits were indexed to increase at the same rate as inflation.

After 1972, in response to an economic downturn, attention switched to making sure that Social Security would be able to pay all the benefits that had been promised. In 1974, instead of additionally expanding Social Security, SSI was added as a welfare program. In 1977, the tax rate, and the amount of payroll subject to the payroll tax, was increased without increasing benefits. In 1983, after defeating an effort by President Reagan to sharply cut retirement and disability benefits, it was agreed to tax half of the Social Security benefits for wealthier recipients, to permanently delay a cost of living increase by 6 months, to increase the reduction in benefits for early retirement from 20 to 30 percent, to slightly increase the payroll tax rate and to raise the normal retirement age from 65 to 67 on a phased in basis beginning in 2003. As a result, the trust funds began to grow sharply so that Social Security was once again in a period of partially forward funding later benefits.