Obama endorses Social Security expansion

[Torie]

There seems to be this assumption that "the rich" have enough income to tax away to finance just about everything that might be desirable. The dirty little secret is that folks making from 125K to 300K will have to pony up more in tax payments - substantially more - to make all these dreams come true.

[Torie]

They need to raise the age limits and get rid of the stupid ceiling and drop the percentage taken.  Is there any tax (other than maybe cig taxes) that affect the poor so much more than the rich?

Interesting proposal. I would very much be in favor of that. FICA is a very regressive tax. I still do wish ateast a portion of it, especially the employee contribution portion, should be given to the employee to invest themselves. There should be rules like no investing in individual stocks, mandated Bonds/Stocks ratios at a certain age etc. I think I could make more money just putting that in an index fund tracking the S&P 500 than I would get back as social security benefits.

The idea of taxing earned income at a substantially higher rate than unearned income seems quite insane to me. If we want to turn SS into a pure social safety net for the old impecunious (a problematical idea but that is anther discussion), fund it out of general tax revenues.

Privatizing SS is the most insane idea of all. If somebody blows there retirement nest egg with bad investments, we have a moral hazard problem. Most individuals can't invest their way out of a paper bag, and the average rate of return by folks is about 2% annualized less than the market annualized return. That is a huge percentage, ending up being a huge amount of money, compounded over the decades.

Isn't it great, not having to chat about that massive ahole Trump for once? 

[Torie]

There seems to be this assumption that "the rich" have enough income to tax away to finance just about everything that might be desirable. The dirty little secret is that folks making from 125K to 300K will have to pony up more in tax payments - substantially more - to make all these dreams come true.

The real "dirty little secret", Torie, is that individuals earning $125-$300k/year, not withstanding the absence of a chauffer or butler in their households, are rich. And un-mistakenly so.

Well, that is a subjective thing (Dems tend to be careful in categorizing "the rich" to use a number north of 200K to 300K since so many of their voters seem to be making 125K to 300K), and in any event, making 150K in Texarkana is very different when it comes to lifestyle, than making 150K in Manhattan.

[Torie]

They need to raise the age limits and get rid of the stupid ceiling and drop the percentage taken.  Is there any tax (other than maybe cig taxes) that affect the poor so much more than the rich?

Interesting proposal. I would very much be in favor of that. FICA is a very regressive tax. I still do wish ateast a portion of it, especially the employee contribution portion, should be given to the employee to invest themselves. There should be rules like no investing in individual stocks, mandated Bonds/Stocks ratios at a certain age etc. I think I could make more money just putting that in an index fund tracking the S&P 500 than I would get back as social security benefits.

The problem with that is when the bottom falls out of the market as in 08-09 and the individuals retiring at that point are screwed. They need to keep working (if physically and professionally able) until the market recovers, which could take years. That happened with many people relying on Index Funds and the like during the Great Recession; now imagine that problem accelerated to covering the ENTIRE retiring population nationwide.

When talking about a multi-generational institution, stability and conservative growth is paramount over aiming towards even moderate growth.

If you are planning to retire within 5-10 years, your portfolio should be much more conservative compared to someone like me who has almost 40 years remaining till retirement. I understand many people don't get this and that is a shame. That's why we can't have nice things.

What do you not understand about "the bottom [fell] out of the market"? Which conservative investments did just fine during the financial crisis?

Treasury bonds went up in value during the 2007 meltdown. That's the ballast of any sensible portfolio, along with high quality short term corporate bonds (using a mutual fund for the latter of course for diversification purposes), although those did take something of a hit for a short period of time due to liquidity issues. Thus a mix of the two is in order.