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Pastimes : Let's Talk About Our Feelings!!! -- Ignore unavailable to you. Want to Upgrade?

To: Ish who wrote (68711)	12/26/1999 8:59:00 AM
From: nihil	Read Replies (1) \| Respond to of 108807

Sorry, Ish, we are talking administrative expenses, not individual return. If you have paid $70 thousand in FICA you should check with them about the present value of your future benefits. Remember you have already paid for expired (unused benefits), life insurance, disability insurance etc. In my own case, I have paid about $50 thousand, close to the maximum for an employee, and covered my three kids and my wife during their younger years. When we retire in about 5 months, we hope to receive $30,000 a year for life. If our life expectancies were average that would be about $330,000, or in present value about $150,000. There is plenty of money in the Trust Fund to pay for our retirement (and for yours). You confuse the actuarial funding of the system to its administrative efficiency. Actuarially, the fund (technically "partially funded") has never since 1951 been expected to accumulate enough to pay all future benefits. It has since then always been assumed that future tax rates would have to increase (or the fund would run out). In contrast, MONY sells fully funded (whole life) policies. If you had had a 20 year term policy, you would expect nothing if you had the good luck to survive the term. In my own case, I put a nice sum into a variable universal life policy a few years ago and have enjoyed a 29% per cent ROI which has paid all of my insurance expenses for eternity and I have had to contribute nothing since. If I had managed the SSTF with the same efficiency that I managed the investments in this account, the whole damned country could retire -- of course, after a couple of years I would have had to invest all over the world to find the returns I needed. Because the government has to pay very small collection expenses, very small investment expenses, it simply doesn't cost much to administer the SS system. Once we get into managing compulsory individual investment accounts with individual investment choices it will cost a little bit more percentagewise than now, but elimination of sales expenses (pay or die) makes social insurance significantly cheaper than private voluntary insurance. Contrast the administrative cost of Workers' Compensation (compulsory private insurance in most states) and Unemployment Insurance (compulsory social insurance everywhere). In insurance in particular, socialism is almost always much more efficient (benefit/cost). If we could simply get market returns on reserves (instead of being concerned with a secure but tiny government bond return) social insurance could really clean up. If we could use level life time premiums instead of current cost (PAYG), we could build up huge reserves. It was precisely the fear of conservatives that social security would socialize investment that made us abandon a fully funded system in 1951.

To: Ish who wrote (68711)	12/26/1999 9:08:00 PM
From: nihil	Read Replies (1) \| Respond to of 108807

Your wife is now disabled, and should you drop dead (absit omen!) she will receive a disability benefit until age 62 at which time she will receive a widow's benefit of 90 per cent of your primary benefit. Where did you get the idea that she would receive nothing? You may check on line with the SSA to see what your wife's benefits would be. Don't forget the generous $255 one time payment the SSA makes to him what buries you. As for the efficiency of the administration of social security, check the 1999 trustees' report. available at ssa.gov You will find that total disbursements of the OASI fund in FY1998 was $329,952,792,000 and total administrative expenses paid by the fund to the general treasury was $2,034,188,000 (less than 1%)(p 39). You will also see that the balance on September 30, 1998 was $653,108,300,000, which was predicted to increase for the next 14 years or so. As for the Disability Trust Fund, total disbursements were $49,338,095,000 and total administrative expenses were $1,562,607,000 (about 3%). The balance was $77,087,107,000. The combined results for both funds is that administrative expense is less than 2% as I said. You really ought to be more careful (as should Michael) in talking about these big numbers. If you inquire further into the report you will see lists of exactly what securities the funds hold. Very dull. All special treasury issues.