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by verelo 3310 days ago
The US has to pick model for right or wrong. Saying it's in everyone's best interests to look after people is totally true, but it's not really the design of the US social system. The US is free market, in a free market you look after yourself and in return are a little less regulated and/or taxed. Both work, but yeah...in the current model, it anticipates people looking after their own retirement plans.

In my opinion, most people are incapable of planning for their future. I've probably done a great job in comparison to others, but I often wonder if it's going to be enough.
2 comments
ant6n 3310 days ago
Most developed countries have a system that's somewhere between free market capitalism and socialism, trying to pick each approach for each concern to maximize benefit to society overall.

Just because you organize a fair amount of the economy around ideas of free market efficiencies (which already has a big asterisk), doesn't mean you should organize all of society around that idea.

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Retric 3310 days ago
US pension model (Social Security) does do redistribution just from the middle class to the lower class and single people to married people.
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lr4444lr 3310 days ago
I doubt that's true, in fact, could be the reverse. SS is not enough in many cases for poor people to live on because they have less in savings, but if they earn too much working, they can't qualify for SS. They also have shorter lifespans. Middle class people in general live longer and can afford to retire earlier because SS complements their savings, which transfers to them the taxes on the wages of the poor.
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Retric 3310 days ago
The gap is large enough it's really just math. TLDR; Some people get 70+% more per dollar put into the system.

Further, there is no income cap on social security, you simply get deferred payments, but at 70 earnings stop counting. AKA if you take it at 62 and make enough money to get 1/2 as much from SS at 70 it's recalculated and you get more money than if you had started at 62.

Anyway try some numbers: https://www.ssa.gov/OACT/quickcalc/index.html Date of birth: 6/15/1950 Current earnings: $40,000.00 Retirement month: 6/2020 = $1,564.00/month.

Double earnings to 80k and keep other number the same and you get: $2,510.00 which is much less than 3,128 or 2x $1,564.00/month. Drop that to 20k and it's still $1,090.00.per month which 73.7% better ROI than someone making 80k per year.

Now yes lifespan is critical, but not enough to make up the 73+% gap. Marriage on the other hand can provide more than a 50% benefit on it's own which shifts things even more dramatically.

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