I was at a family gathering recently, and a cousin of mine was whining about their 7% mortgage. Our Aunt shut them up real quick, complained about how her first home had a mortgage that was 16%, didn’t have AC, no dishwasher, wood furnace heating, one bathroom for four people, and a lawnmower that wasn’t electric nor gas. My sister and I, as bystanders were in stitches when she when off on her.
@mattderron
2 ай бұрын
😂 that’s awesome!
@Kinetic754
2 ай бұрын
Yeah because your aunts 16% interest on a 70000 must have been brutal
@mattderron
2 ай бұрын
According to the census bureau median household income in 1985 was $23K vs $74K in 2022. So yeah...that 16% on $70,000 would've been brutal. Context matters.
@michaelhaidee
2 ай бұрын
As a GenX I am more irritated about the deception, mishandling, and irresponsibility of how the US government is handling Social Security.
@mattderron
2 ай бұрын
I hear that, I’m not a fan of politicians in general and how there is no accountability for government spending overall is one of my biggest pet peeves
@KrustyKlown
2 ай бұрын
FYI - it's been that way since I was born 65 years ago. I spent decades assuming I would never get a cent from SS / Medicare ... now it looks very possible. Stop worrying and vote for Democrats.
@evadeanu1
2 ай бұрын
Thanks for putting it all together for all to see that playing victim is a nonsense in our current society.
@mattderron
2 ай бұрын
Agreed, too much of it IMO. Even if it's true in some cases it's almost never productive
@Pauln71
2 күн бұрын
Well said.. My Father lived through the Great Depression and lived through 18 percent interest rates in the early 80s
@daveschmarder-1950
2 ай бұрын
I remember hearing that chatter over 40 years ago. Turned out not to be true. And this was way before anyone heard of the internet or much cable news.
@MrDboydeluxe
2 ай бұрын
Thanks for the video Matt, I've been getting SS for two years now, it's not great getting 200 a month pulled out for Medicare but like you said it is what is and you know this years/decades in advance so plan for it. One thing I hear often from young people is "it's my money let me invest it on my own" the facts you presented explain why that's not really possible, plus I can just imagine the entire country investing money that was otherwise earmarked for SS, judging by how many people are 50k, 75k or more in credit card debt, they are suddenly going to be wise investors for 40+ years?? What a calamity that could be. Ughh. I've droned on too long! Hey! I sold SBUX today, I feel like an anvil is finally off my head, time to redeploy that money!!
@mattderron
2 ай бұрын
Agreed - even though in theory I would love some kind of "forced investment for yourself" system, it's likely not realistic. Just think about this - if you had to place a bet on what is the most likely to be true: a) everyone will consistently invest for their own retirement, b) you give the government money to hold for you and they will invest it and give it back in a respectable amount or c) people in 20-30 will be paying taxes with their income. I'd bet C is the most likely. So maybe it's done that way for a reason. 🤷🏻♂️ Congrats on getting out of SBUX, I know how you feel. If you don't believe in it anymore, cut it and move on. No big deal. Good luck!
@Sylvan_dB
2 ай бұрын
It could be put into an earmarked account instead. At least some of the "employer" portion. No withdrawal for any reason. And if the person demonstrated ability+responsibility they could control their account.
@lilmsgs
2 ай бұрын
I'm 68 and have been hearing that SS won't be available when retiring for over that 30 years. This info was right on excellent and 100% correct. I'm retired and enjoying it in large part due to SS, thank you very much
@mattderron
2 ай бұрын
Thank you!
@KrustyKlown
2 ай бұрын
EXACTLY .. DITTO here, several years from collecting
@kahvac
2 ай бұрын
Not to worry....you will get what was promised, the younger people 40's 50's perhaps not so much.
@lilmsgs
2 ай бұрын
@@kahvac Yes, that's exactly what I've heard for over 30 years.
@answerman9933
2 ай бұрын
When I first began my working career back in the early 1980's I said then I would rather be able to invest my own money than have it placed into social security. Having said that, people should NEVER rely on one source of retirement income. Anyone who does that is planning for failure.
@bruceanderson8179
2 ай бұрын
Thanks Matt. Hope it sets some people straight. I'm 70 and have been collecting benefits for nearly 5 years. Yes, I read all the time about how boomers are responsible for the failings of SS longevity. But those that point a finger at us have little knowledge of what what's been asked of us in regard to funding SS. When I was around your age I was skeptical of whether SS would be available to me and invested accordingly. But during the course of my working career, and true of all other boomers, we saw our SS payroll taxes rise from 5% in the mid 70s to 6.2% by 1990 plus there were increases in earnings caps beyond indexing. On top of that, up to 85% of our SS benefit is subject to income tax. The income tax associated with SS benefits is earmarked for the SS/Medicare trust funds. Not only did we have our SS taxes increase during our working career we continue to pay into the SS trust fund in our retirement years. Something definitely needs to be done to extend SS viabiity. We haven't had a SS payroll tax increase in over 30 years. Perhaps it's time for that as well as increasing the earnings cap. I'm not a proponent of increasing FRA but perhaps increasing the minimum age that SS can be claimed might be a consideration. There's really no easy answer. What concerns me most is whether our dysfunctional Congress can work together and come up with a viable bi-partisan plan that will maintain the SS trust fund for decades to come.
@l0gic23
Ай бұрын
Did you know a top sports star pays all their social security for a year in a check or two when you consider how much they get paid per game? Normal people pay in their whole life, every paycheck/month. The rich pay the same total amount in a paycheck or two... There should be no cap on how much is put in.... Or it should be raised...
@l0gic23
Ай бұрын
Short term and long term gain taxes should contribute to Social Security without a cap... Not saying to raise the amount collected just that some % goes into the social security pot (presuming that's not the case today)
@Icecold0505
2 ай бұрын
Canadian here. I have maxed CPP since 2005. I am 43 and have at least 15 years more of working and maxing CPP. All for a max benefit of $1700 per month at 65. More if I wait to 70. Put this money in an SP500 ETF, and I’d retire well off just from that. Fact is, CPP/SS are designed for the financially illiterate. I have a DBPension and save in TFSA and RRSP plan also. I will be OK on my own, mainly cause I am not an idiot.
@mattderron
2 ай бұрын
Agreed...the percentage of people who even know what the S&P 500 is compared to the general population is probably shockingly small. It's meant for those who are unable or unlikely to save and invest for themselves which unfortunately is a large part of the population.
@Icecold0505
2 ай бұрын
@@mattderron Also, unsure on SS. But for CPP you need 39 years of max contribution from employer/employee to receive the max. They have also added CPP 2 this year. My self employed buddy has opted out at my recommendation, and is saving both payments on his own. He will be better off in 20 and still receive partial for the last 25 that he has contributed.
@HerrLT
2 ай бұрын
You’re such a reasonable, levelheaded person. I always appreciate your delivery. Unrelated to todays video… I know you had a career in payments and I’d love to hear your perspective on the industry and some companies. PayPal, Ayden, Fiserv, etc. any consideration for a video there? Also - why no LinkedIn?! I searched for you to connect.
@mattderron
2 ай бұрын
Thanks! Regarding payment companies...this is just my opinion, but I don't have a lot of interest in "payment providers" as investments, mainly because I view what they provide as a commodity that is always in a race to zero in terms of price. Let me explain... Payment infrastructure rails will do well (Visa, Mastercard), and user platforms / ecosystems that integrate payments functionality to make it easy to use everywhere (Apple, Google, Amazon / Alexa) will do well. they are adding the true value in the payments stack IMO. Apple Pay / Apple wallet - huge win for the user. The card networks created a global payment network where you can pay in almost any currency and initiate instant commerce anywhere in the world. Huge value for everyone (even if merchants disagree, but it was huge for them too). The companies you listed to me are just middle men. They create software and some services that sit on top of the payment rails and inside other applications. It's not that they aren't profitable businesses, because they are. They may be decent investments that grow slowly but I think they are in a business that will always be under pressure to price cheaper or people will simply go to their competitor. There's no moat. P/E ratios tend to be lower for these companies for that reason IMO. That's why I think PayPal is appropriately priced now and not some "great value play." But that's just my perspective on it, and you can see it in my portfolio. I have 3 of the 4 card networks (V, MA, AXP) and most of the ecosystems (AAPL, GOOGL, AMZN) but not the actual payments software providers. Anyway, not saying this is right, it's just how I look at it. In terms of LinkedIn, I have an old one that I deactivated because I'm not on there anymore. I am on Instagram and Twitter though if you want to connect there.
@mellon7214
2 ай бұрын
@@mattderron, Good insights on these payment companies.
@aw.8.
2 ай бұрын
Part of the irony of so many people’s beliefs on these topics is that they seem to think their actions would occur in a vacuum. To the person who thinks their SS contributions would amount to $1.9 million if they could invest that money themselves, do you really think the stock market’s returns would look the same if SS didn’t exist? The $1.5 trillion that SS pays out each year is being spent by retirees on every day living expenses, not saved or invested, and therefore generating a good chunk of the earnings that help propel investments higher. It’s like the same people who say everyone should stop eating McDonald’s and instead invest that money into McDonald’s stock. If we all actually did that, McDonald’s stock would be worthless, because there would be no one left spending their money at the establishment to generate the revenues that give the stock its value. SS recipients make up 20% of the population and they are all in the “spend it” phase of wealth accumulation. You take away that $1.5 trillion and leave it with the people in the “saving” phase and you basically shrink the economy overnight.
@mattderron
2 ай бұрын
Great point, well said!
@thetapheonix
2 ай бұрын
Yes the stock market return would be the same because not everyone would do what you say. If everyone lived frugally on less income than they make the economy would crash. Our system depends on dummies over spending to function so this hypothetical doesn’t work.
@mattderron
2 ай бұрын
Sure but the hypothetical was “if SS didn’t exist.” What you’re talking about is “if I had a choice to invest my SS taxes instead and I was one of the few smart people to do so.” Those are different things
@Sylvan_dB
2 ай бұрын
What do you call it when someone threatens you with a gun and takes your money? I've also run the numbers for what my SocSec taxes would have done had they been invested the end of every year in the S&P 500. It was depressing. I agree that SocSec should be a backup plan. I've lived my life that way. I hope to take SocSec in 10 years... We'll see!
@mattderron
2 ай бұрын
Ultimately if people think taxes are theft, then it's a much bigger discussion about the role and effectiveness of government, and not specific to SS. That's why I didn't focus on that part in the video. People tend to go round and round arguing their political beliefs which is fine...but non-productive as it relates to "what should I do about planning for retirement" I'm not saying the government is good at what they do, I've mentioned my stance on it a few times in previous videos. But saying "SS is theft" outside of a broader narrative of "all taxes are theft" is simply not understanding how SS is designed IMO.
@RS-lw9cd
2 ай бұрын
When should you take your Social Security benefit? If you take it early (starting at age 62), your monthly benefit will be reduced. If you delay taking your S.S. benefit, your monthly benefit increases (until 70). Your S.S. benefit amount is based on S.S. Actuarial life table. It is set up so theoretically, no matter when you start drawing your benefit, the recipient will receive the same monetary amount based on the statistical average of a person’s death. This table is a person’s life expectancy based on their current age. If you were to pass away before your time according to that table, it would be better to take S.S. early. If you were to pass away after your time according to that table, it would be better to delay taking your S.S. benefit. For drawing your S.S. benefit, there is no definitive right or wrong answer because none of us know when we will die. Basically, like you explained, people will complain and put blame on the government about S.S. in some way or another. The bottom line is that you have to "play the hand you are dealt". It is ultimately your responsibility to take care of your financial situation. Again, like you stated, everyone is unique, so you must honestly access your own situation and try to do what is best for yourself. Under this subject, S.S. is or will be part of your financial situation (provided you live long enough and paid in S.S.), so you should plan accordingly. Your choice of taking your S.S. benefit early, at full retirement age or delaying receiving it, is a decision you must make based on your own unique situation. Put your numbers together, calculate and project your income, including your S.S. benefit and take in consideration your own personal cost of living and how you project your retirement to be. Educate yourself and make the best decision for yourself and your family. It is a big decision, so make that decision wisely.
@thetapheonix
2 ай бұрын
You take Social Security as early as possible to ensure you at least get something.
@jasonshambach1869
2 ай бұрын
When the gov't taxes you with the promise of a tangible benefit later in your life and then reneges on a portion of that promise, it's not wrong to feel that you've been treated unjustly. Given U.S. demographics, lifespan and the current fund balance, it seems quite likely that something along those lines will happen. So those tweets may "technically" be wrong , but they are not conceptually wrong. The misnomer that your SS tax dollars are "your money" probably stems from the fact that your earnings directly affect how much you receive in SS during retirement. Since the entitlement grows with your earnings, it does promote a certain sense of individual ownership, the diminishment of which seems quite like theft.
@mattderron
2 ай бұрын
I think this goes back to expectations. The government and political will can change every 4 years. Issues and events can change dramatically over the course of 30-40 years. I never expected SS because of all the things I heard when I was young. Also, knowing how it actually works - how can you reasonably say “I know it’ll be there” you can’t. Now if you assume they are holding your money and then spending it sure, then it’s theft. But that’s not what they are doing. My point is, knowing how things actually work is advantageous to all of us, more than trusting some number on a piece of paper that promises you something 30 years down the line. Or trusting that a government or political entity will be able to fulfill a promise in 30 years. We can argue technicalities and whats “fair” but my point was it’s a waste of time when we could be working to improve our situations so the issue doesn’t affect us.
@jasonshambach1869
2 ай бұрын
@@mattderron Thanks for the reply! I like your videos and hearing your reasoning. I also think your advice is sound here in light of the situation. "Educate yourself. Take ownership of your retirement planning." Totally agree. I'd probably quibble about whether it's a 'waste of time' to cry foul, if for no other reason than to be careful ourselves of the promises that we make to our posterity. But yes, miring in generational grievances can paralyze people from taking positive steps toward their future and kudos for trying to discourage that.
@fs5775
2 ай бұрын
Personal responsibility, YES 👊
@l0gic23
Ай бұрын
I always wonder, what if? What if it became patriotic for people who dont need social security payments to wave them entirely? What if it became patriotic to put in extra? What does the government do to make that money grow? Anything? What if they did grow it via interest, or other means? What if the top 10+ richest US citizens each took a billion or even 100 million, each, and donated to the social security fund? Is that even possible?
@mattderron
Ай бұрын
I think the issue here is that in general it's not really "put away" and invested for later. There is a fund, but most of the current social security taxes are used to pay out current benefits with the idea that future generations will pay for those who are paying now
@Sylvan_dB
2 ай бұрын
Social Security depends on an increasing tax base. Even with that increasing tax base it has required increasing tax rates. The reason for this is simple math. There is actually no solution that will preserve the benefits expected today. People are living longer, and dollars in cannot sustain dollars out without reducing benefits. Sure, a short term fix like the 1980s that increases tax rates can work for a little while. But remember, that 1980s fix required reducing benefits and an increasing number of tax payers. The boom is over. Run the math. It does not work without cutting benefits. In fact, there is no permanent solution that looks anything at all like the system. It is mathematically impossible without making completely outlandish assumptions about population growth or death rates of retirees. Social Security is a legal Ponzi scheme. Current investors pay returns to people currently making withdrawals. The math is identical, and just as a Ponzi always collapses, so with SocSec.
@smileyspoon1
2 ай бұрын
This is obviously a touchy topic. In essence this is insurance that the government can provide certain level of income for the elderly even if they were utterly financially illiterate and didn't plan for anything. I think for this purpose it's good. One way or another we would pay for it since you can't have starving old people out in the streets. I mean you technically can... But we don't want that as a society since we would be taking a step back. I would personally like to get rid of social security but see the benefit for as a social safety net. I feel like it's theft sometimes because the returns are atrocious, but like I said I see the benefit. It's a complicated feeling fighting between self interest and the public good. In general I would vote for the public good if it doesn't hinder my life too much, which is how social security is to me currently. I think the US could use more us and less I personally. This coming from a millennial by the way.
@mattderron
2 ай бұрын
Very well said and I agree with a lot of that. I think having a safety net is important for those that need it too. The challenge for me is that the people responsible for stewarding these things aren't doing a very good job of it and have no accountability for things they spend on (my personal opinion). So my issue isn't so much that we're trying to help people, it's that it's not being designed and managed by competent people IMO
@smileyspoon1
2 ай бұрын
@@mattderron Amen
@mjs28s
2 ай бұрын
In all my retirement planning calculations since the late 1980's I never once added social security income to figuring out what I needed to invest. I just acted like it didn't exist and it also never impacted my investing decisions (like using it as an excuse to invest a smaller portion of my income since SSI will be there for me). I wish they would means test it. Lots of people don't need it but take it because they feel entitled to it. You know the old "I paid into it" argument. I have had that discussion with people worth millions of dollars and they still are going to take (or are currently taking) a few thousand a month. I guess they just want to buy more garbage or get their range / course fees covered for the year.
@mattderron
2 ай бұрын
Agree this is the approach I’ve taken. Never expected it and planning accordingly
@thetapheonix
2 ай бұрын
Means testing it just proves the point that you won’t get it. It also punishes success. Why should I invest when my outcome is the same?
@zacharysoderberg1099
2 ай бұрын
Since I was born after 2000, I’m counting on myself for retirement. Roth IRA & 401K for me! Too bad that I have to pay to social security each paycheck.
@mattderron
2 ай бұрын
Probably a good plan anyway. Technically you’re paying for the people today, and future payroll taxes will pay you (in theory) 🤷🏻♂️
@Dmindthinker011
2 ай бұрын
Firm handshake to you, brother!
@mattderron
2 ай бұрын
Same to you!
@justinjohnson8398
2 ай бұрын
well there’s zero reasons it shouldn’t pay out . the government has a variety of ways to even increase benefits
@mattderron
2 ай бұрын
as long as people are paying taxes out of their income for it - it should pay out. Will be interesting to see how the payout need versus what they're taking in evolves over the next generation though
@dominiquetheeasyminimalist
2 ай бұрын
Polarized topic 😂. It's mind boggling how so many people choose to believe and spread BS, when facts are within a few seconds of research.
@mattderron
2 ай бұрын
It’s harder and harder to find topics that aren’t polarized lol
@kyukyu90002
2 ай бұрын
What are your thoughts on ROTH IRA?
@mattderron
2 ай бұрын
Roth IRAs are great accounts to diversify your tax planning for retirement and they are very useful for other things (you can pull contributions if you need them, etc). Just remember a Roth IRA is just an account it’s not an investment itself. You still have to invest the money in something
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