US Social Security Administration Out of Control

Self ^ | May 21, 2022 | Self

[4Runner]

We cannot believe this has happened. We sent business correspondence to our local U.S. Social Security Administration office two weeks ago by certified mail, return receipt requested. The documents were received by the Office, as we received the green Cert Mail card in return verifying same.

Included in the envelope we had sent to SSA was an official SSA form whose instructions were to return the form to the local SSA office. Along with the SSA form was a detailed cover letter, and documentation SSA requested confirming legal status.

Ten days later, we received an envelope in the mail from the local SSA office. The envelope contained every single document we had mailed them. The originals. There was no SSA cover letter, no SSA explanation as to why our documents were being returned to us, no SSA reference to the matter we were communicating about, nothing. Absolutely nothing.

Two pages were stamped as "Received", the other pages were not stamped.

This has to be someone's definition of institutional insanity. Someone had to be working really, really hard for a very long time, to bring us to this level of malfeasance. We are truly, truly lost as a nation. And these government employees earn six figure salaries? Good God almighty.

[DIRTYSECRET]

Max out your 401k plan? That’s the problem. One should be free to put in 100% of their income into their 401k until it reaches half a million. After that they won’t need uncle sam’s guidance. Sources can include anyone who wants to help these people out. I’m talking a national sales tax with none on their IRA’s. Get rid of the income tax.

[faithhopecharity]

Certainly get rid of the income tax. A more center- productive and oppressive system would be difficult to imagine

[olivia3boys]

“The managers are told that, not in blunt words necessarily. We have hiring goals. We want more diversity. More women. More minorities. We put these first before white males.”

Not true. There are already plenty of women and minorities in the federal gov’t—look up the stats. I don’t hire by race or gender. I hire by excellence. The last 10 hires I’ve made were mostly white males (I’m a white woman, if that matters), but two of them were black females and a few Asians as well. For the younger ones without a lot of experience, I look carefully at their college, their major, and their college GPA. It’s easy to pick out the most excellent candidates by resume and interview. I’ve been happy with all of my hires. (It’s the staff assigned to me who OTHERS have hired who are the low performers.)

[Terabitten]

Those stopped getting sent through the mail due to theft and fraud. You have to go to an SS office to get one.

Sorry, but that's completely incorrect. SSA offices were closed to the public for almost two years due to COVID, and all requests for an SSA card were done through the mail, except in very specific circumstances.

[Spktyr]

I believe that policy has gone back to normal now, though.

[Harmless Teddy Bear]

It's still run by the Social Security program.

And Centers for Medicare and Medicaid Services run both programs but one is paid for and one is welfare.

Do you know the return for the first person to receive SS?

They are dead.

A long time ago. Everyone now on SS (not SSI) paid into the system fully.

As people live longer nowadays, they end up getting paid more than they put in, even accounting for interest/inflation.

Nope.

I ran the numbers probably about 20 years ago.

A guy who never earned more then minimum wage, worked only 40 hours a week, fifty weeks a year from age 20 to age 67 and put his money in government bonds would retire with over a million.

Drawing $4000 a month from that account and containing to invest in just government bonds the account would continue to grow and the principle would never be touched.

[Secret Agent Man]

Your personal example does not invalidate the general trend it is overwhelmingly occurring across government. More so in jobs that do not require excellence, a crime free background, and high intelligence.

[Svartalfiar]

And Centers for Medicare and Medicaid Services run both programs but one is paid for and one is welfare.

One is partially paid for.


They are dead.

A long time ago. Everyone now on SS (not SSI) paid into the system fully.

And managed to receive a 900x return.
Fully paid in doesn't mean anything - you don't have an account with your name on it, with your principle and interest/investment return. You get money paid out based on your income, and it pays out nonstop until you die. Live long enough, and you'll make a better return than investments.


I ran the numbers probably about 20 years ago.

A guy who never earned more then minimum wage, worked only 40 hours a week, fifty weeks a year from age 20 to age 67 and put his money in government bonds would retire with over a million.

Drawing $4000 a month from that account and containing to invest in just government bonds the account would continue to grow and the principle would never be touched.

What does that have to do with SS? There is no investment, no return on the money paid in. That money isn't even put into itself in bonds, it simply goes into general revenue, and later years' general revenue is what is used to pay out. At just a random payout rate, with increases based on cost of living, NOT on any actual return from the $$ that aren;t even in the account.

[Harmless Teddy Bear]

One is partially paid for.

Nope.

One is paid for. And supports the other one.

And managed to receive a 900x return.

Not even close.

Live long enough, and you'll make a better return than investments.

Out and out lie as I proved.

There is no investment, no return on the money paid in.

It is loaned to the general fund.

Therefore there is a return on investment.

I know you so dearly want to whine about SS being welfare to those greedy boomers but, it isn't.

Sorry that reality bothers you. No, actually I am not sorry. Not at all. I hope reality makes you cry into your pillow at night and scream in anguish during the day.

[Svartalfiar]

One is paid for. And supports the other one.

One of them funds the general revenue. Both of them pull out from the general revenue. Their "special account" is just a numbers game, just like your savings account at the local bank. There is no specific folder there with all your money in it, it's just part of the big pool of cash down in the basement for the CEO to swim around in. The SSA website even explicitly states that it's primarily a pay-as-you-go program, with current income funding current benefits. SSA projects their current "reserves", their gov't savings account, to be zeroed out in 2034-35. How does that happen if, as you say, the program is fully self-funded? You should be able to remove current income from the equation, and STILL stay solvent if all benefits are already fully paid for!


And managed to receive a 900x return.

Not even close.

Here, I'll do the math for you. First SS benefits paid out was to Ida May Fuller. Only working a few years after it was enacted before she retired, she paid in a grand total of $24.75. She was paid out $22,888.92 in benefits before she died.

22888.92 / 24.75 = 924.8, so I apologize. She didn't receive a 900x return, she received a 924.8x return!


I know you so dearly want to whine about SS being welfare to those greedy boomers but, it isn't.

Part of it is. If someone paid in $100M over their lifetime, and the Treasury bond interest (again, funny money accounting, not real return. If I loan myself $100, and pay myself back $110, I didn't net an extra ten dollars...) adds in $200M over their lifetime, but they're still alive and end up drawing, say, $350,050.92, what do you think that is?

So $100M was paid in, $200M was interest 'gained', then where does the other $50M come from? The first $300M was earned entitlement, sure, but every dollar above that is unearned, from wages or 'interest'. Is that not how you define welfare? Government giving you money for free (to you)?

[Harmless Teddy Bear]

There is no specific folder there with all your money in it,

There is not with any money you put in a bank either.

So if you are going to go there you might also say that you should not expect any money from your bank, your 401k or any investment account.

NONE of them keep your money all by it's self in a specific folder.

First SS benefits paid out was to Ida May Fuller.

Who is long time dead. That is not what is happening now. DO try to keep up. There is this thing called time. It passes.

And everyone now alive who is drawing SS paid into it all their working life.

[Svartalfiar]

There is not with any money you put in a bank either.

So if you are going to go there you might also say that you should not expect any money from your bank, your 401k or any investment account.

NONE of them keep your money all by it's self in a specific folder.

Um, that's my point. But, the difference is that the bank has an account with your numbers in it, and you gain that interest based on your numbers, and that's what you have.
SS doesn't do that - your total payout doesn't really depend on any numbers in your "account", it only affects the monthly amount. So if we relate this to the bank, once you start withdrawing from the bank, you get your monthly check until the account is empty, then the money stops. SS doesn't though - once your "account" is empty, they still go right on paying you until you're six feet down. You might end up costing more than the money the government made off of you. Might being the key word here, I'm not claiming that every Tom, Dick, and Harry pulling SS is a welfare case.



And everyone now alive who is drawing SS paid into it all their working life.

Not necessarily. I'm sure there's other potential reasons, but I know for sure that teachers and other public employees in some States receive a different pension/retirement benefit, and don't pay into SS at all. BUT, if they earned enough credits to qualify for SS based on previous/post employment, or other part-time stuff because those jobs paid into SS, they will receive a very-reduced SS check, based on how much they worked which job, and how much the other retirement is.

Also, survivor's benefits can easily pay out to someone who didn't pay in much (or any), but that's not really applicable because the dead spouse paid into the system for those, so merely a technicality to your statement.

[Harmless Teddy Bear]

I ran the numbers six ways from Sunday and the only way someone would get more out of SS then they put in is if they worked the absolute minimum and lived to be 92. Not impossible I will admit, just unlikely.

At that point then yes, they would get back more then they put in. Of course you also have to figure in the bunch of people who will pay in and never draw out a dime because they died.

SS is a horrible program, like most government programs and it is extraordinarily wasteful, like most... eh.. make that all.. government programs.

The government keeps it because it keeps the money flowing in at a record pace. And because it allows them to jerk you around.

[Svartalfiar]

Based on 2022 numbers to keep the math simple, in order to be eligible for SS you need 40 credits, at four credits per year at a minimum income of $6040 for the year. That's $60M in income, not SS taxes. Multiplied by 6.2%, that's $3745 in taxes paid in to SS. Lets say you make this bare income for 30 years, so you've paid in $11,235. At 30 years of income, the minimum SS payment is currently $950. You'll make your money back (ignoring the interest part) in less than 12 years.

But wait, in 1990 (30 years ago), minimum income for credit was $520, or $2080 a year. So the average from then till now was 30% lower than our numbers (6000-2000 / 2 = 4000/year), meaning this guy only paid in about $7500 in SS taxes, so now we're at less than eight years to balance, ignoring interest. So they only have to live to 74-75, not the 92 you calculated somehow..?

Interest is hard to calculate, not just from varying numbers in/compounding, but also because that's not interest on your account, that's what SS makes in income based on the money you gave them. What you pay in monthly is automatically adjusted when they calculate your benefits, and is related to the average wage for that year, not what SS made in interest off your money. Hard to find numbers on the bonds' interest rates, but what I can find seems to vary between one and two percent. So our guy's money earned SS less than $3000 in interest, making the eight-year return into maybe eleven years to balance out. (Assuming the income is spread evenly, that's $22/month SS taxes for 30 years at 2% comes out to $2800.)

Of course, these numbers do exclude the employer-side of SS taxes, since most people don't count those as taxes on their wages (even though ANYTHING your employer pays based on you is essentially directly a tax on your wages, as that amount is factored in to what they pay for employing you, and reduces what the company could have afforded to pay you), so these numbers are more realistically doubled, placing our break-even in the mid-80s, so not that likely, but definitely more probable than your 92-year-old dude.

[Harmless Teddy Bear]

Of course, these numbers do exclude the employer-side of SS taxes,

Never ignore that.

As an employer I assure you that is part of your compensation calculation along with insurance and your 401 and Workman's comp and your "half" of medicare tax and the cost of hiring someone to work all this out.

And the interest is not that hard to figure. You just take the lump sum for the year and calculate it. It is not exact but close enough.

If you want to make it very simple you can average it. I admit I did go for a young employee because the concept of someone getting their first paying job at 52 is a bit out there. So your amount would (using ten year bonds) would, on average double every 12. And then that would once again double.

Once you work in that you can see how I got my number.

Also remember that the amount is not frozen when you retire.

It still continues to be lent to the government and so it still continues to earn interest. And that is how you get to ninety two.

As you can see even your low earner would rarely empty his "account" and your high earner, poor soul, never would. Not even if he lived to be 122 which is I believe is the oldest anyone has lived in the modern era.

And of course that still does not factor in all the people who never draw because they die before they can.

Privatized savings accounts would work out much better for people.

But not for the government who would not have all that lovely money to buy votes with.

[Vermont Lt]

Medicare is Federal. Medicaid is state.

Anyone who has ever had to fill out a Medicaid application knows this…and has many grey hairs to prove it. My mom’s was literally six inches thick.

[Svartalfiar]

Yes, I did all that with my numbers.

But if everyone is a net payer in, and it’s extremely rare for someone to achieve a net pay out, then why does SS expect to go in the negative about now, and burn through all their built up reserves by 2035? Where is all the money going, if not net to all the retired people?

[cgbg]

“built up reserves”

There are no reserves.

There is no fund.

Welcome to the real world of Social Security:

https://moneymorning.com/2017/03/31/the-social-security-trust-fund-is-just-a-stack-of-ious-in-a-west-virginia-filing-cabinet/

[Harmless Teddy Bear]

Same place all the gas tax (perhaps I should say fuel tax) money is going.

For the amount of fuel tax we are paying we should have a road system that is the best in the world. But somehow it does not seem to end up that way. And they are constantly telling us we need to pay more to get basic repairs done.

If they spent the money on just what they should spend it on with (being generous) ten percent for administration cost there would be plenty of money.

They don't.

Or the education money. Same thing.

Which is a common problem with government. They spend the minimum they can on what they said they would do, they dole out the rest to buy votes and influence.

Which is why I always vote no on any increase. They have plenty of money. Too much in fact. So they waste it.

[Svartalfiar]

“built up reserves”

There are no reserves.

There is no fund.

Welcome to the real world of Social Security:

I am fully aware of that, and it is mentioned in this conversation. SS Does have a fund, it's just not funded. All the dollars are kept track of, the dollars just aren't kept. So if you look only at the numbers, and ignore the dollar signs, you can get a picture of what it is, theoretically, doing.