# Is it possible to not fear Soc. Sec. legislation



## Knight (Dec 16, 2016)

Financial and the fear that congress will pass legislation that makes Soc. Sec. obsolete in it's present form of funding is real for seniors that fear the stock market. Easy to understand that fear if for whatever reason investing has not been a part of a retirement plan. With 40 plus years of investing I don't share that fear & neither does my wife. 

Easy for me to say that because 40 plus years of investing & uderstanding that stock market declines mean buying opportunities instead of panic. Beginning back in the early 70's when things got ugly we began by buying a utility stock that was if I remember right was about $13.00 a share. Learning about dividend reinvestment then we thought that as a way to build was genius. That utility had that plan so we let that one build and still do. We did sell some from our separate accounts when the price went way up. Funny thing about having a favorite it drops and can be bought again for a lot less.  A nice feeling to have as much again for 1/2 the price and have cash to build our portfolios even more. Combined we have 32,776.083 shares built back up. Todays stats. Average volume 4.66M P/E ratio 12.79 EPS 2.70 Dividend 0.38 Div yield 4.40%. That dividend will be reinvested and continue to be reinvested since we don't need that for income. That .38 is a quarterly dividend translating to $1.52 a year as of now with an expectation of a 4% increase over the next few years. Slow and steady isn't exciting but it is nice to know our kids will not have to fear what might happen to Soc. Sec. as a way to live when they retire. 


Setting up a self directed IRA with the cash was probably the best thing we did. Somewhere someone said don't do like previous investors did and fall in love with a stock. OK but we did love our original utility so the flexibility this offered was apart from that. Buying opportunity like in 2009 when portfolios went down the drain saw G E at a little over $6.00 a share leaving some cash buying 9000 shares was risky at our age but G E is a good company. Pretty static at around $30.00 a share long term capital gains we sold in Dec. of 2015. That boosted the cash account enough to risk again in late Jan. 2016 to buy 10,000 shares of a startup called TLN at a little over $6.00 a share. No dividend so capital gain is where we are on that one. That is pretty static now at about $14.00 a share so looks like Jan. 2017 will be time to sell and wait out the rise in the stock market. We both have diversified portfolios and both have survivor transfer of accounts to each other. Then when both of us are gone equal distribution of whatever remains to our sons. That should be smooth since they too have accounts set up with the same financial institution. Using real stock examples isn't my way of promoting anything. It's so that real examples can be looked at and researched to see how that can work. And yes we are old school and don't waste money on trying to impress people. 


This is a seniors board so I suspect a lot are past being able to begin now with a long term outlook. But if having children and being concerned for their future is real. Then maybe knowing that beginning early and not fearing the stock market as a way to fund retirement when soc. sec. may not be enough is possible for the average  everyday high school graduate. Of couse they would have to spend some time doing quality research instead of spending time on facebook or any other social media source of bad info.


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## Aunt Bea (Dec 16, 2016)

I agree that achieving financial security is pretty simple if you start young and as you say slow and steady isn't exciting but it works.  

Another thing that helps is to have a financial role model or two, when you are young, that you can observe and emulate.  I think we really drop the ball in our public education system and at home by not spending more time on basic life skills.  I think most people would rather have an uncomfortable conversation with their kids about sex than they would about money and financial planning.

I started with payroll savings when I got my first real job in 1974 and kept increasing the amount as raises came along.  When I built up some cash I began to invest in a variety of mutual funds and reinvested the dividends and capital gains.  Along came the 401K and I contributed to that, then the IRA and I contributed to that.  The most important thing of all was that original payroll savings deduction and the idea of paying myself first.  The knowledge of investing, taxes, etc... came as the amounts of savings and investments grew.  All of these things combined allowed me to stop working at the age of fifty and to weather the financial crisis of 2008 without losing much sleep.

I think that all people should manage their finances as though they were the CEO of a small business, always attempt to end the year with a small surplus or small profit if you will.  Understand the difference between needs and wants, the difference between good debt and bad debt, etc...

I have always enjoyed Mr Micawber's recipe for happiness. - _"Annual income twenty pounds, annual expenditure nineteen [pounds]    nineteen [shillings] and six [pence], result happiness. Annual income twenty    pounds, annual expenditure twenty pounds ought and six, result misery." 

_I understand that things don't always go according to plan and life has a way of throwing us curves that may prevent a person from achieving financial security but it has been my observation over the years that most people find the money and time to do the things that are important to them.  I also understand that by the time a person is eligible for Social Security this topic is of little or no value.

About all we can do is tell the younger folks to save their money!


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## Don M. (Dec 16, 2016)

If SS funds had been fully invested in the Stock Market back in the 1940's, that fund would probably have a worth in the Trillions, today....and offering COLA's that outstrip inflation.  Today, there are so many people dependent upon SS, and the fund is so small, that it could not withstand any major downturn in the Markets for any length of time.  That "Golden Opportunity" slipped through the governments fingers, decades ago.  

With fewer companies offering any sort of pensions, it will be incumbent on today's workers to save and invest for their own futures....via IRA's, etc.  If they fail to do so, future generations may not be able to live in retirement anywhere near as well as many today.  I stressed saving and investing to our kids as they advanced in their careers...and they are now in pretty good shape as they reach their 50's....and now, we are all preaching to the Grandkids.  IMO, the best thing the government ever did for the working class was to initiate the IRA/401K programs....I just wish it had been around when I first started working...I'd be a millionaire.


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## QuickSilver (Dec 17, 2016)

Don M. said:


> If SS funds had been fully invested in the Stock Market back in the 1940's, that fund would probably have a worth in the Trillions, today....and offering COLA's that outstrip inflation.  Today, there are so many people dependent upon SS, and the fund is so small, that it could not withstand any major downturn in the Markets for any length of time.  That "Golden Opportunity" slipped through the governments fingers, decades ago.
> 
> With fewer companies offering any sort of pensions, it will be incumbent on today's workers to save and invest for their own futures....via IRA's, etc.  If they fail to do so, future generations may not be able to live in retirement anywhere near as well as many today.  I stressed saving and investing to our kids as they advanced in their careers...and they are now in pretty good shape as they reach their 50's....and now, we are all preaching to the Grandkids.  IMO, the best thing the government ever did for the working class was to initiate the IRA/401K programs....I just wish it had been around when I first started working...I'd be a millionaire.



No PENSIONS were the best thing...  401K's simply shifted the risk from the Corporation to the individual..   I have 3 pensions coming in.. and they will continue until I die... regardless  of what the market does.    I would have hated to go through the 2008 market crash and have been dependent solely on my 401ks for my income.   Remember?  when the market was down to 6,000...  What would have happened to seniors then without their Social Security?

What are people just at the upper age of when this Privatizing kicks in.  People in their early 50's.. or upper 40's   HOW are they supposed to be able to save enough for a comfortable retirement in 10 years?   Or I guess since they were not saving... regardless of the reason.. maybe health problems.. maybe family obligations...maybe job loss..  etc..  Tough for them?


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## Don M. (Dec 17, 2016)

QuickSilver said:


> No PENSIONS were the best thing...  401K's simply shifted the risk from the Corporation to the individual..   I have 3 pensions coming in.. and they will continue until I die... regardless  of what the market does.    I would have hated to go through the 2008 market crash and have been dependent solely on my 401ks for my income.   Remember?  when the market was down to 6,000...  What would have happened to seniors then without their Social Security?
> 
> What are people just at the upper age of when this Privatizing kicks in.  People in their early 50's.. or upper 40's   HOW are they supposed to be able to save enough for a comfortable retirement in 10 years?   Or I guess since they were not saving... regardless of the reason.. maybe health problems.. maybe family obligations...maybe job loss..  etc..  Tough for them?



You are Partially Correct...Pensions WERE the best thing.  However, in recent years, fewer and fewer companies are offering pensions....and even many of those who have offered pensions are beginning to default.  The government maintains a program...the PBGC...which is supposed to prop up pension plans for companies that default....but that program is severely underfunded....88 billion in assets, with double that in obligations.  It won't be long before that program is in trouble.
Yes, the market suffered a massive loss in 2007, but it has rebounded and moved even higher.  Anyone with an IRA managed by a worthwhile fund, or self managed, saw their assets moved to safer havens during that time, and the losses were a fraction of the overall market losses.  
Bottom line....times have changed, and will continue to do so.  Individuals are going to be held responsible, more and more, for their own well being in retirement.  That may not be Pretty, but it is the reality that is coming closer with every passing year.  With longevity on the increase, and millions of people relying more and more on the government for financial security, something is going to "give".  Either taxes will have to be increased by a substantial margin, or people are going to have to recognize, at an early age, that saving and investing is a Must, if they expect to live decently in retirement.


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## Aunt Bea (Dec 17, 2016)

This is an interesting timeline of pension plans and Social Security in America, take a look.

http://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?article=1049&context=legal


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## Lon (Dec 17, 2016)

I have no fear at all.


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## Buckeye (Dec 17, 2016)

If things get really bad, I'm just going to move in with Lon!


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## QuickSilver (Dec 17, 2016)

Looks like lon can afford to support all of us..


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## Lon (Dec 17, 2016)

QuickSilver said:


> Looks like lon can afford to support all of us..



Fear & Worry are all for naught and no one on this Forum will effect what will be.   As A Well Known Person once said  "The only Thing We Have to Fear is continuing Liberal Influence."


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## QuickSilver (Dec 17, 2016)

Lon said:


> Fear & Worry are all for naught and no one on this Forum will effect what will be.   As A Well Known Person once said  "The only Thing We Have to Fear is continuing Liberal Influence."



Please outline what you believe to be "liberal influence"...  You throw that word around a whole lot...and I imagine you  saying  it sort of like spitting out a hairball.  .  Just curious what you believe it to mean.


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## dpwspringer (Dec 18, 2016)

QuickSilver said:


> Please outline what you believe to be "liberal influence"...  You throw that word around a whole lot...and I imagine you  saying  it sort of like spitting out a hairball.  .  Just curious what you believe it to mean.


"I imagine you  saying  it sort of like spitting out a hairball"... do you know how to communicate with people that have a different opinion without being insulting? Just curious what you think that accomplishes.


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## QuickSilver (Dec 18, 2016)

dpwspringer said:


> "I imagine you  saying  it sort of like spitting out a hairball"... do you know how to communicate with people that have a different opinion without being insulting? Just curious what you think that accomplishes.



  It's an old expression used when someone says something disdainfully.  Actually, I cleaned it up a bit.. the actual expression is PUKING out a hairball... But anyway,    no insult was intended..

   By the way...you sound familiar... have you been here before?


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## OneEyedDiva (Dec 25, 2016)

My SS, which I invest, makes up 37% my retirement income, not counting income distributions from my funds. I take less than 25% of my divs and caps each year.  One of my favorite funds happens to be a utility fund I've had for decades. The SS administration has already "warned" that there will be a 23% cut in benefits across the board by 2033 or 2034. Being I like to play with numbers, I figured out how I would budget should that reduction take place along with a 50% reduction in my pension. At that point I would not have to take distributions from my investments, I would simply stop saving/investing. Considering our low housing costs (mortgage paid off), great retiree benefits, our frugal tricks and a debt free lifestyle, at this time I don't fear changes in SS.


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