Social Security

[I have WHAT in my yard?]

Here's the issue. I am a well educated fairly bright person. I am trying right now to address electricity generation deregulation. I have to study up on it and determine what is best for my family over the next five years. In an area about which I know nothing.

I have to do the same for my cell phone
my cable
my land line (I still have to have one)
my internet provider
my fuel source
my food
my appliances
etc
etc

You get the picture.

Investing is intimidating and confusing. I have money in Vanguard Funds. Do you have any idea how many different Vanguard Funds there are?

I am NOT saying people shouldn't have choices, but it is well known that there comes a point of diminishing return. What we expect the "average consumer" to be able to navigate is simply nuts at this point.

Many many people do not understand investing, many cannot grasp compound interest, many are simply too intimidated to make the first step. When my DH was young he wanted to start investing on his own. This was way before E-trade! He went to a broker who literally laughed at him and told him to come back when he had $50,000. to invest. Clearly that is what is was like. This is too far in the other direction.

We tried to turn the stock market into social security and as a result the government could not let it correct when it should have. Does that mean it was over regulated or not regulated enough??

Why is balance so hard for people to understand? None of these are either/or issues.

 

[vfem]

I have WHAT in my yard? :

Here's the issue. I am a well educated fairly bright person. I am trying right now to address electricity generation deregulation. I have to study up on it and determine what is best for my family over the next five years. In an area about which I know nothing.

I have to do the same for my cell phone
my cable
my land line (I still have to have one)
my internet provider
my fuel source
my food
my appliances
etc
etc

You get the picture.

Investing is intimidating and confusing. I have money in Vanguard Funds. Do you have any idea how many different Vanguard Funds there are?

I am NOT saying people shouldn't have choices, but it is well known that there comes a point of diminishing return. What we expect the "average consumer" to be able to navigate is simply nuts at this point.

Many many people do not understand investing, many cannot grasp compound interest, many are simply too intimidated to make the first step. When my DH was young he wanted to start investing on his own. This was way before E-trade! He went to a broker who literally laughed at him and told him to come back when he had $50,000. to invest. Clearly that is what is was like. This is too far in the other direction.

We tried to turn the stock market into social security and as a result the government could not let it correct when it should have. Does that mean it was over regulated or not regulated enough??

Why is balance so hard for people to understand? None of these are either/or issues.

Just to say, I did some investment research way back... I literally spent hours and days just getting basic concepts. Its to the point that honestly, I watch a lot of Suze Orman every Saturday! She breaks it down when I can understand it.

This is my basic belief, people can be very intelligent in 1 or 2 areas of life... but every aspect? Investing? Accounting? Hello.... come on! People don't know how to do it, and the people we pay to do it, don't always do what is in our best interest because they know how to profit it off of us, not for us.

And yeah... I invest through Vanguard its probably the best choice out there for funds. But man did it take a year or so to figure out exactly what half the terms they use out there to mean!

I have NO doubt that my less then educated sister would NEVER figure this out or save for her future... she rather get her hair done each month other then invest. This is why the take taxes out of people's checks, but they can't count on people to save the money for their taxes to pay at the end of the year. They knew that was irrational... SS going and leaving us to fend for ourselves is just dumb.​

 

[Dunkopf]

Quote:
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 reduced 2011 Social Security tax rates for employees and self-employed people by two percentage points, from 6.2 percent to 4.2 percent for employees and from 12.4 percent to 10.4 percent for self-employed people. Without further changes in the law, these tax rates will return to 6.2 percent and 12.4 percent, respectively, beginning in 2012.

The 7.65% figure includes Medicare. So it helps the employed and the self employed. I believe that if you are retired and collecting reduced SS benefits then they still collect SS from your paycheck. The actual reduction is 2%. So everyone should be seeing an extra 2% of their gross income on their check by the end of this week. Unless you get paid once a month.

 

[Ridgerunner]

This 2% is on the employee's portion, so yes you should eventually be seeing it in your paychecks. The employer still pays the higher portion, 6.2% instead of 4.2%. That is why the self-employed pay the higher rate, both the individual 4.2% and the 6.2% employer portion for a total of 10.4%.

The way I read this, since it was passed so late in the year, the employers have until February to adjust the paychecks. Many people probably will not see it in January but should see the effect in their first February paycheck. This will obviously add to the confusion, but the first February increase in take home pay will be too high since it includes January and February. The second February paycheck should have it right,or if you get a monthly paycheck, the March Paycheck will have the right amount.

Why keep it simple if you can confuse it?

Dunkopf, one of your posts clarified that your original reason for posting this topic was that it may not go back up but that this temporary tax cut will become permanent. Since it would have to be extended in 2011 and 2011 is not an election year, it has a chance to be a temporary change. If they had to vote on it in 2012, which is an election year, I'd already consider it permanent.

 

[Dunkopf]

Good point. Anything they do more than 10 days ahead of an election is forgotten. There may be hope.

 

[Wild Trapper]

Just to be ornery, I'm going to predict that SS recipients will see an increase this coming year, right in time to make a play for votes in the 2012 election. I've been disabled since 2001 and while I did have a retirement from my last work place, I have not had to draw any of it yet. I locked it away into an IRA. In a few years, I will have to start drawing from it to subsidize my disability compensation checks which will actually be reduced, not in dollar amount but in purchasing power. That is the hidden tax of inflation that will rob us all of dying rich unless you are filthy rich, then why worry.

 

[EweSheep]

I had Vanguard investments and we lost alot of money thru them but not as bad as some folks had been. I sure hope my benefits will kick in. My aunt, who did work the same place as I did, told me that if I take the benefits, I would no longer have SS money. Not sure if it is true.

 

[Wild Trapper]

Quote:
I made good in mutual funds back in the '90s but I bailed out when the market was doing good. I got totally out of debt and then a few years later became too disabled to work shortly thereafter. Looking back, I'm really glad I had the gut feeling to get out when I did. I would hate to have those debts hanging over my head now that I'm on a limited income.

 

[EweSheep]

We had to cash in our 401Ks because it was considered assets by Public Aid and therefore, we had to take a down payment on our house (I was filiing bankruptcy from the job loss) and was pregnant at that time. It was crappy to say at the least because we wanted to keep it in there for our retirement. No, they didn't look at it that way. So neither one of us have anything for our retirement now.

 

[Ridgerunner]

Quote:
I don't know what benefits you are talking about or where you work, but that does not sound right. When I was looking at retirement, whether I took the lump sum (one chunk of cash) or the annuity (monthly payments for the rest of my life) I could still draw Social Security. I had some other retirement benefits but none had anything to do with SS. I'm really confused by what you said. There should be a human resources person at that company you could talk to. I'd sure want somebody to clarify it for me. Every plan is different.

It is like I have WHAT in my yard wrote earlier. You need to be an expert at too many things these days. I really get frustrated by that.