LETTER TO THE EDITOR: Preserve Social Security and Medicare

Saturday, January 5, 2013 | 6:00 a.m. CST

I understand that there are many items on everyone's political agenda that need discussion. However one that should concern us all is what too many people call entitlements — Social Security and Medicare. These are not entitlements. They are paid for by the people. If we fail to provide for seniors and their health care, our society will not survive as the nation we want it to be. We are a nation that cares about families and their well-being.

When my husband passed in 2007, I financially lost all I had — a house and a small farm. I had only my Social Security and Medicare to depend on. I fell from the middle class into poverty. If not for Social Security and Medicare, I would not have been able to make a new start. After five years, I am now buying a house, volunteering on important social justice issues and ready for my new life after 70.

My husband passed nine days before my 65th birthday. Thank goodness I did not have to wait for Medicare or Social Security. Changing these programs would adversely affect every family in America. We should save and improve these programs.

I am a success story. I paid into Social Security and Medicare all my working years. I paid for it — I benefited from it. I am now more than ever convinced that we need these programs.

If we invest in our country by creating jobs in infrastructure and clean energy, we will have income for these valuable and necessary programs.

Joan Wilcox is a resident of Hallsville.

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Michael Williams January 5, 2013 | 9:30 a.m.

I'm sorry for what happened to you, but I'm happy things worked out.

But, here's something else that happened to you:

You and your husband paid into SS and medicare for many, many years. But then, he passed. And you had to make a decision about whether to use HIS social security...or yours. You were unable to take's not allowed...even though both of you had paid into the system.

You said, "They [SS and medicare] are paid for by the people" and in this case "the people" were you and your husband. In being forced into that decision of one-or-the-other, you lost much of what you and your a wedded partnership...paid into the system. That money went elsewhere. You did not get it back.

How much better would it have been for you if SS had been privatized, that YOU and your husband could have taken that money paid over so many years and put it into other carefully thought-out investments?

And, you could have kept it all after his passing. Even better, when you pass those assets would have been passed on to your descendants.

I maintain that the financial horror you went through did not have to happen if only you and your husband could have kept that 15% of total salary (your contribution and your employer's contribution) that went to SS and made wise investments.


Each and every year for your entire working lives!

How much did you lose?????

Somebody else got half of your money...simply because your husband passed. You had to make a choice of one-or-the-other and half of that so-called "savings" the gov't promised you and your husband went away. It's as if you and your husband had invested money in a bank and, when he passed, the bank said, "Sorry, we sent half of your money to Jane Doaks down the street. You can have the other half, tho."

I've said it before, and I'll say it again: If every single American was paid his/her ENTIRE salary and had to individually write FICA, FUTA, SS, and medicare checks to the gov't EACH month, we'd have one helluva better interest in what happens to our money and we'd have one helluva better government.

Instead, we don't care because the gov't has made our employers it's tax collectors. Out of sight, out of our mind.

Out of our mind is right....

(Report Comment)
Tim Dance January 5, 2013 | 6:30 p.m.

Don't let people like Mike talk you out of social security. these people are under the notion that if they just screw themselves over, that the rich will reward them with prosperity. The last election thankfully let me know the American people are not buying the libertarian snake oil.

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Michael Williams January 5, 2013 | 7:16 p.m.

TimD: If I said anything that was wrong, please feel free to correct me.

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frank christian January 5, 2013 | 7:56 p.m.

Tim Dance, is not to correct anything. Tim Dance is to sit and bitch about the wrong people while his world dissolves around him.

(Report Comment)
John Schultz January 5, 2013 | 11:11 p.m.

Well-spoken Mike, too bad it's lost on bitter ol' Tim. Sounds like the screwing was of the little folks (the letter writer), but he missed that point and somehow tried to tie the Republicans to a political philosophy they ain't.

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Michael Williams January 6, 2013 | 9:20 a.m.

JohnS: You're right. Ms. Wilcox was the one who got hurt, and the gov't is the one who did the hurting.

She and her husband faithfully paid into SS for years, but when he died Ms Wilcox had to decide whether to take HER SS or HIS. She cannot take is illegal.

That means either the money she paid into SS or the money her hubby paid into SS...depending upon her choice...went to someone else. If the bank does this to a customer, someone is in trouble. If the government does it, it's sanctioned and legal...and accepted by we, the hoi polloi.

My analogy about a couple depositing money in a savings account only to be told, upon the death of one spouse or the other, that half of it was given to Joan Doaks down the street is spot on. That's EXACTLY what happened to Ms Wilcox.

That's either bad faith, or stealing, or something else...but whatever it is is just not right. Ms Wilcox got hurt. The gov't either took her money or her hubby's money paid in at 15% all those years and gave it to someone else.

It amazes me that TimD either does not understand this or chooses not to understand this.

But, mainly I wish that Ms Wilcox understood how badly she got her own gov't. If she did, I'm guessing the tone of this article would be much different. It's hard for me to believe she would thank her gov't for letting her keep 50% of the money she and her hubby so faithfully paid in all those years.

(Report Comment)
Tony Black January 8, 2013 | 4:04 p.m.

You guys let slide the fact that, had social security been privatized, they would have lost most of their wealth in the crash of '08, like everybody else. Oh, I know, they should have invested more wisely, but not everyone is as smart as you.

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Tony Black January 8, 2013 | 4:05 p.m.

Or the fact if she lives a long time she could draw as much as both paid in, or more.

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John Schultz January 8, 2013 | 4:31 p.m.

So Tony, every "little guy" in the market with an IRA, 401k, etc. lost most of their wealth? I wasn't old enough to invest then, but I'm thinking it wasn't as bad as the recent travails. Have any proof I can peruse?

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Tony Black January 8, 2013 | 5:08 p.m.

What? A righty that wants proof? You usually howl when I ask for proof. If you don't think people lost portions of their 401k, at varying amounts(not all lost half, some lost more, some lost less), then there is no discussion here. I didn't realize there was an age limit on investing.

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John Schultz January 8, 2013 | 5:51 p.m.

I'm not a righty, I'm a Libertarian. We ask for proof from those on both ends of the political spectrum, so don't think you've been singled out. I will modify my request for proof of losses since I misread your previous statement and thus my comment about not investing in the 80s, but I know my IRA didn't lose "most of my wealth" when the '08 fun occurred. Maybe people who cashed out of the market and bought back in too late or who didn't have a competent financial advisor to tell them otherwise.

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frank christian January 8, 2013 | 6:48 p.m.

Tony B., must have been a viewer of C-SPAN when NYT expert economist was aired to give us the low down on privatization of SS. In his first offering he stated, the stock market is a good source for investment. But if, the market, when the retiree decides to take the money out, is down, "all his profit, will be gone!".

Tony Black is liberal. Any attempt to take our money out of Democrat plans to Spend, is suspect!

(Report Comment)
frank christian January 8, 2013 | 7:50 p.m.

The NYT economist stated, "all the savings will be gone!"

(Report Comment)
Michael Williams January 8, 2013 | 9:11 p.m.

TonyB: The only person here who has mentioned the stock market!

I sure didn't. I even checked.

And I don't care much for IRAs or 401K's, either. Ofttimes the brokers/managers make more money than the client. I wish I didn't have one and had done something else with the money. IRAs and 401Ks are poor retirement plans, imo.

The original privatization plan I remember would restrict the investments a person could make, but the payments would still be required. If memory serves, it involved 5 plans ranging from very, very low risk (T-bills, gov't bonds, and the like) up to somewhat risky (but not great risk). A person would declare which plan they wanted and, I presume, could change their mind as they got older. The idea would be that someone young would invest "riskier", then move to less risk as they aged. This makes sense. For example, a person in their 20's in 2008 and invested in more risky investments (i.e., certain stocks) would indeed have lost much money, but they are young enough that they will most certainly recover. A person in their 50s needs to be moving to lower risk, and much of that IS NOT the stock market.

And, these investments would pass to their spouse and also be heritable.

I might also remind you that a Muni pays one helluva lot more than SS. Right now, you can get a muni for >4.5%. This year's SS increase to recipients was a little over 1%.

Wow, whadda deal...

Quite frankly, I would rather depend upon a City of Columbia (and my neighbors) school bond than I would the federal government!!!!!

The only reason folks accept SS and think they get back more than they put in (even if they live a long time) is that when they take SS, they are TAKING INFLATED DOLLARS! There is no lockbox and there is no accrued interest. There is only inflated dollars and a gov't who says they are taking care of you. They aren't.

Tony...I'm pretty sure you know all of this. I don't figure you for the "in denial" role. Rather, I think you view SS and early deaths as a redistribution plan; I don't think you like the "heritable" part at all, and I think that's true for most liberals.

Ms Wilcox got hurt. She got hurt a lot and it didn't have to happen. I don't know if she will believe you, me, or her own math skills. Certainly she should go back and look at her check stubs (or her spouses, depending upon how she chose) to see what was taken from her.

I do hope she thinks about this and ESPECIALLY those who are coming after her.

Like kids and grandkids.

And you.

(Report Comment)
frank christian January 8, 2013 | 9:51 p.m.

Careful Mike, you have come close to reminding T. Black of the "Federal Employees' Thrift Savings Plan". federal employees have long been able to contribute to any of 5 different avenues of investment including the stock market. The money is extracted from their pay checks as is their other contribution. I always wondered why Bush and R's did not suggest this as privatization and allow a portion of the FICA to be invested. None of this will help Tony with his argument against capitalism.

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Michael Williams January 8, 2013 | 10:27 p.m.

As for, "You guys let slide the fact that, had social security been privatized, they would have lost most of their wealth in the crash of '08, like everybody else. Oh, I know, they should have invested more wisely, but not everyone is as smart as you."

Most of their wealth?

Take a look at this chart (scroll down and look for 2008):

Then tell me how in the hell someone lost "most" if they had a relatively balanced portfolio (Note: The y-axis is log scale)

Who have you been listening to? Who told you "most?" Were you born in 2000 (that would make you 12) and have never known anything except sideways action such that even a 3000 point dip is a friggin' catastrophe?

You want to see catastrophe, check out the 1930s.

Anyone over 55 who has the majority of their assets in the stock market probably has rocks in their head. You'd have to x-ray or shake them to find out, but they are there.

My guess is they are listening to their broker whose vested interest is to keep you in stocks. After all, how do they make their money? By buying and selling YOUR stocks! They get paid a commission every time they do so.

For those older folks in stocks, their portfolio generally includes companies that give dividends even as their stock fluctuates...for the most part, they continue to pay that dividend even if their stock takes a cold shower. Only those retirees whose portfolios were insufficiently funded (like retiring with only $250K in cash-generating assets) AND whose portfolios were mainly in stocks got hurt. THEY are the ones taking principal out, not interest.

I don't know where I am on the continuum of smart versus dumb in this world, but if you've been reading what I've written on this particular topic, you're definitely a bit smarter...on this topic.

(Report Comment)
Tony Black January 9, 2013 | 7:46 a.m.

Isn't that cute. Michael fixates on the word "most", even after I clarified my statement. And both of you point out federally administered programs as a "relief" from SS. If it's not federally regulated, how do they "restrict" investments to a few certain avenues. My own investments, along with almost everyone I know, suffered in 08, that's where I get my info. Stock market, bonds, real estate,...... Very few investments held up. Luckily, mine has all come back to where it was before the recession. Are you both willing to abandon SS and not take that government money? Or is this a "do as I say, not as I do". And we all pay into SS, except the ones scamming the system. But dropping SS because of the bums is like banning guns because of the actions of a few.

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Michael Williams January 9, 2013 | 8:35 a.m.

TonyB: No, I have no intention of quitting my SS. I paid into it and I plan on drawing it out.

But, I (and Ms Wilcox) would have been MUCH better off if I/we had been able to invest the money on my/our own....even including the losses of 2008. Fact is...SS is probably the worst long term investment a person can make.

It's perfectly ok for me to gripe about a forced "savings" program (i.e., SS), yet continue to participate. It's my money; I contributed it..albeit "forced". To not participate would be like contributing to a savings account at a bank my entire life, the bank gives half the money away to someone else or simply fails to pay me interest, and me deciding to forget the remainder out of some stupid holier-than-thou principle. That would be kinda dumb, don't you think?

I'll make the same statement to you that I asked the silent TimD: If I have said anything wrong in my posts above, please feel free to correct me.

As for your "how do they restrict investments to a few certain avenues", did you not catch my comment on January 8, 2013 @ 9:11 p.m?: "The original privatization plan I remember would restrict the investments a person could make, but the payments would still be required."

Note the "payments would still be required" part.

PS: Another joke: Constructing a retirement scheme totally dependent upon (1) printing new money and (2) a growing new generation of young payers paying their elders...when our birth rate is going down. That's like basing an educational system upon tobacco taxes, all the while trying to get folks to quit...thereby reducing the taxes available for education.

Sheesh, TonyB...this isn't rocket-science.

(Report Comment)
John Schultz January 9, 2013 | 10:48 a.m.

Unfortunately a previous letter to the editor I wrote in 2010 is behind the paywall or I would direct Tony to some figures I crunched for it. My recollection is that if one was able to take the money invested in Social Security on one's behalf (I think it was just the employee portion) using the median salary at the time and assuming an average 8% return on investment, you would have $750K for retirement or WHATEVER after 40-some years of work. I'll try to re-crunch the numbers later today, but it was a heck of a lot better than the average Social Security benefit that George Kennedy was lauding at the time.

(Report Comment)
Mark Foecking January 9, 2013 | 12:32 p.m.

John, I'd argue that 8% isn't a realistic rate of return to assume these days, but I did a similar calculation recently (that's also behind the paywall) using the 10 year average rate of return of the federal Thrift Savings Plan, and the advantage was still to self-investment, by about 25% over SS.

How many people would feel comfortable doing that? Probably not many. But we do have a solvency problem looming and perhaps people should be allowed to opt-out now.


(Report Comment)
John Schultz January 9, 2013 | 5:49 p.m.

Per-capita income in 2011 according to the Census is $27,915. 6.2% of that (employee Social Security tax) is $1730.73 per year or $144.23 per month. Investing the monthly value from age 22 to age 65, you would have $649,724.25 at retirement. Total contributions are $74,422.68, meaning you have earned $575,301.57 from investments.

The average Social Security payment for a retired worker is $1230 according to the SSA website. The hypothetical value saved above would be equal to 44 years of Social Security payments...

The range of 10 year TSP returns for the various funds is 2.94% to 6.76%. The average is 4.84% (not far from the median either), plugging that value in to the calculator comes up with a retirement nest egg just barely over $250K. That's still 17 years of monthly SSA payments.

(Report Comment)

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