AgentR11 wrote:vision-master wrote:but it answers the ultimate question of how the feds will raid the retirement accounts of the middle class
Tell me how this works.....?
I thought the numbers were clear enough in my simplified presentation.
Say you're some middle class Joe with a retirement account of some sort, and you've just hit 68 and retired.
That retirement account can now be thought of as an annuity, equal to a series of payments distributed across your (and your cohorts) average life expectancy. Say that equivalent to an annual pmt of $25k / yr till death (and death of spouse, as applicable).
Say SS pays $30k / yr.
Congress passes law X: Defense of Social Security Against Mean Ole Rich People Act of 2014. Sum of law is as follows: Social Security is means tested such that the annuitized value of the person's available assets act to reduce the amount paid by Social Security to the recipient. IE, you get a check for $5k/yr from SS, because you are rich and have assets saved for your retirement, thus you do not need it, thus are means tested out of the bulk of the benefit.
The government didn't tap any account with your name on it, so no transfer or confiscation happened; and yet your financial position ends up being identical to the folks who did not save anything for retirement. They got $30k a year from SS; you got $5k a year from SS, plus you are permitted to keep your name on your IRA/etc account.
Its an Americanized version of confiscation. Slick as goose poop too.
Now, to be fair, I suspect they will bias it a bit, such that you come out slighty better off than the folks who saved nothing; but I wouldn't count on that difference being able to buy more than a couple TV dinners...
Pensions are underfunded bc Wall Street took em for a ride with toxic bundled mortgage-backed securities. The white shoe crooks did this intentionally.