[marvin]

Just out of curiosity, what's preventing the US from implementing changes to Social Security that are sustainable? I read up on this for Norway a few months ago, and was actually pleasantly surprised at the thought that's gone into the sytem.

Norway's public pension system is now funded by every employee having 8% of their salary taxed away and earmarked to retirement. The money is placed in a broad stock and bond fund. In retirement, the earmarked amount of money for each employee is paid out in a monthly amount that matches the life expectancy of the retiree.

E.g. if the employee has paid $150.000 to the system over a lifetime of work, retires at 65 and the life expectancy for this age cohort is 10 years, the annual payment will be $15.000. The state covers for retirees that live longer, keep the money for retires that live shorter and provide a guaranteed minimum for people who reach 67 without saving up a minimum amount. To offset this, the possible monthly payment is capped with a maximum for high earners. There is also some inflation adjustment built in.

In effect, this provides a living wage for all retirees, with additional private savings required if you want to maintain a higher standard of living. The system is self-contained and is not based on younger workers paying the pensions of older workers.

[tonyedgecombe]

"Just out of curiosity, what's preventing the US from implementing changes to Social Security that are sustainable?"

Politics, in particular the "tax is theft" brigade.

[icelancer]

>Norway's public pension system is now funded by every employee having 8% of their salary taxed away and earmarked to retirement.

Social Security payroll taxes are ~15% of salary per employee, so assuming Norway doubles the 8% (employee responsible for half, employer responsible for the other half) that's not much higher than the United States' system.

>The money is placed in a broad stock and bond fund.

Social Security is not privatized in the United States and efforts to do that by Republicans are regularly shot down. Social Security is an annuity that is tax-free and inflation-adjusted. The average ROI is about 2-4% for single, average salary employees who work full-time.

EDIT: Forgot to add, the United States excess funds in Social Security are loaned to the government for use for non-SS purposes. The government owes the Social Security program something on the order of $5+ trillion right now, which makes up over 25% of the national debt. Yes, you are reading this right. No, it is not a good thing.

You could argue that Social Security could do a lot better if citizens were allowed to control that money or if it was simply invested in a total stock/bond market index fund, but then you'd be incurring significant risk as well.

>In retirement, the earmarked amount of money for each employee is paid out in a monthly amount that matches the life expectancy of the retiree... The state covers for retirees that live longer, keep the money for retires that live shorter and provide a guaranteed minimum for people who reach 67 without saving up a minimum amount.

This is basically how it works in the United States, except:

> To offset this, the possible monthly payment is capped with a maximum for high earners.

This is likely to happen in the United States as the country moves more economically liberal (current administration excluded, but even Trump has some economic policies that old-timer conservatives would never agree to). We currently don't have this. But taxes and fees and other such efforts will be successful against the rich soon enough here.

>The system is self-contained and is not based on younger workers paying the pensions of older workers.

This doesn't really make sense. Your example describes this to a T.

Tell me: What happens when the "broad stock and bond fund" collapses in a thirty-year low for a period of six years and pension promises far outpace receipts? Who will pay for this? The state will cover, correct? Well, that's younger people paying for older people no matter how you slice it.

[votepaunchy]

> Social Security is an annuity that is tax-free and inflation-adjusted.

This used to be true but Social Security is fully taxed on the way in and now partially taxed when payed out.

[kamaal]

>>Norway's public pension system is now funded by every employee having 8% of their salary taxed away and earmarked to retirement.

In general this how any pension scheme is supposed to work. Except that it doesn't. When you start to add things like exceptions whole scheme starts to come apart after a while.

Pensions are one of those things which are ripe for abuse. Also you need to start looking at other benefits that come along with it like health care. Then there are unions that graciously award over time work to employees to drive up their compensation in the last few years of work.

There are also other things going on like inflation adjusted pensions.

In India there was a recent drive to include One Rank One Pensions for armed forces, which demands pension revisions every single year based on last highest pension paid in that rank for that year.