Economy Do we get more or less money if we put our money into a 401k instead of Social Security?

[F1980]

I have union pension and 401k and also social security to look forward to when I retire.

Does anyone know if, in general, we didn't have social security and instead we put that money into something like a 401k or Roth IRA, that we would get more or less money than we would get with social security?

Like at 18 years old, we had something that transfers over from job to job and that money gets invested into the DOW or S&P 500, etc...

last time I checked, I think it said I'll be getting $2,400 a month if I retire at 65 with social security.

 

[tenniswhiz]

It depends how much you have in your retirement account(s) at the time you retire. It also depends on if and how much you want remaining when you die.

Conventional wisdom says you may take 4% of your total retirement annually and the balance can remain the same. In this model, retired folks have moved their retirement assets to more conservative investments.
So a million can give you $40k/yr, $2 million can pay you $80k/yr, and so on.

Many people don’t move their assets to more conservative investments because they have enough financial cushion that they won’t be affected by market volatility. Someone with $5 million in retirement savings, who also gets a pension + social security, mortgage paid off, kids done with college, may only need $100k/yr more. In such a case, they may just leave most of the $5 million in stock funds, and continue to build wealth.

I don’t think individual accounts can ever be a substitute for social security. Too many people might be irresponsible or unlucky. A family financial emergency could destroy people, leaving them with nothing. We can’t have 70 or 80 year olds go broke, that’s not cool. Social Security HAS to exist.

 

[F1980]

It depends how much you have in your retirement account(s) at the time you retire. It also depends on if and how much you want remaining when you die.

Conventional wisdom says you may take 4% of your total retirement annually and the balance can remain the same. In this model, retired folks have moved their retirement assets to more conservative investments.
So a million can give you $40k/yr, $2 million can pay you $80k/yr, and so on.

Many people don’t move their assets to more conservative investments because they have enough financial cushion that they won’t be affected by market volatility. Someone with $5 million in retirement savings, who also gets a pension + social security, mortgage paid off, kids done with college, may only need $100k/yr more. In such a case, they may just leave most of the $5 million in stock funds, and continue to build wealth.

I don’t think individual accounts can ever be a substitute for social security. Too many people might be irresponsible or unlucky. A family financial emergency could destroy people, leaving them with nothing. We can’t have 70 or 80 year olds go broke, that’s not cool. Social Security HAS to exist.

Set it up just like social security where you cant take money out. What I want to know is would you have more money per month if they took that money out of your paycheck and put it in the market vs. what we have now.

 

[Fedor>Cain]

Ask people who lost their 401k's in 2008 lol.

It really depends. If the stock market is good when you retire, 401k. If you need to retire during an economic meltdown, then your 401k is probably fucked. On the flip side, if you don't need to retire and can afford it, pumping your money into a 401k during a recession and waiting for market recovery is great. The vast majority of people can't do that during a recession though

 

[RoastBeast]

It depends how much you have in your retirement account(s) at the time you retire. It also depends on if and how much you want remaining when you die.

Conventional wisdom says you may take 4% of your total retirement annually and the balance can remain the same. In this model, retired folks have moved their retirement assets to more conservative investments.
So a million can give you $40k/yr, $2 million can pay you $80k/yr, and so on.

Many people don’t move their assets to more conservative investments because they have enough financial cushion that they won’t be affected by market volatility. Someone with $5 million in retirement savings, who also gets a pension + social security, mortgage paid off, kids done with college, may only need $100k/yr more. In such a case, they may just leave most of the $5 million in stock funds, and continue to build wealth.

I don’t think individual accounts can ever be a substitute for social security. Too many people might be irresponsible or unlucky. A family financial emergency could destroy people, leaving them with nothing. We can’t have 70 or 80 year olds go broke, that’s not cool. Social Security HAS to exist.

$5million and a pension? Sign me up for that.

Although I'm guessing about 5 people in the country are in that situation.

 

[Source]

I have union pension and 401k and also social security to look forward to when I retire.

Does anyone know if, in general, we didn't have social security and instead we put that money into something like a 401k or Roth IRA, that we would get more or less money than we would get with social security?

Like at 18 years old, we had something that transfers over from job to job and that money gets invested into the DOW or S&P 500, etc...

last time I checked, I think it said I'll be getting $2,400 a month if I retire at 65 with social security.

I think it would depend on what they do with the company’s portion of SS payroll tax. My guess is they would eliminate the payroll tax portion, which is around 6% of compensation.

 

[Scerpi]

Ask people who lost their 401k's in 2008 lol.

It really depends. If the stock market is good when you retire, 401k. If you need to retire during an economic meltdown, then your 401k is probably fucked. On the flip side, if you don't need to retire and can afford it, pumping your money into a 401k during a recession and waiting for market recovery is great. The vast majority of people can't do that during a recession though

If you weren't a moron and didn't sell your mutual funds on the dip (which technically you can't), all those lost gains came back when the market recovered.

lol...

Weiterleitungshinweis

www.google.com

401Ks aren't trading stocks...

 

[Fedor>Cain]

If you weren't a moron and didn't sell your mutual funds on the dip (which technically you can't), all those lost gains came back when the market recovered.

lol...

Weiterleitungshinweis

www.google.com

401Ks aren't trading stocks...

Never said they were trading stocks.

I see your tiny dick syndrome is still in full force lol.

 

[Stoic1]

I wish I could have invested all my SS money into an individual retirement account. And if it was matched dollar for dollar for the first couple bucks every check.

Holy shit.

I've been working since I was 16.

 

[boingyman]

No one has a crystal ball. All we can hope is that the indicies will continue to average what they have been averaging since inception, however there is no guarantee that will happen. Imagine if you were in your 60s and about to retire in 2000. The dotcom crash followed by the great recession in 2008. It wasn't until 2013 where we finally got out of the red. SS being more of an annuity gives piece of mind especially in combination with retirement investments and even a pension in some cases. Ideally all 3 and property.

 

[Natural Order]

Imagine entrusting your well being to the government.

Elon isn't wrong, the whole thing is a ponzi scheme.

 

[jimmas99]

I find it amusing and interesting that Americans now have to rethink Social Security in a different way. Trump is really putting ideas into your heads.

In two years, there will surely be a question about 'what is the final solution to the immigration issue.'
Or "should we nuke europe" to save Russia?