I read an article this morning about how Social Security had turned age 80, and the things that we can do to fix this bankrupt system. Let me explain how we got to this point. Social Security had always been operating in a surplus, until the 1970s, when the politicians raided it for other things. At the time, there were nine people working for every one person on Social Security. Today, there are five people working for everyone person on Social Security. In 20 years, there will be two people working for everyone person on Social Security. The benefits that are being paid and now, go to pay the people that are currently on Social Security. The article asked, what would you do to fix Social Security?
I’m from Generation X. I’ve always been told, that I would never see Social Security. Because of that, I have had a retirement plan since I was 18 years old. Further, because I’m the employee, and the employer, every time I take a salary, I have to pay 12.4% into Social Security. Social Security benefits will be exhausted by 2035. I will never see Social Security in its current form. If you want to fix Social Security, here’s what you do: you allow workers, to opt out of Social Security. I will still pay 12.4%, but it will go into a retirement account for me, and only me, and will be managed by a financial advisor of my choice. If I don’t make it to retirement age, then my retirement account will be dispersed to my beneficiaries. In opting out of Social Security, I’m never allowed to get disability benefits, or any Social Security related money. My Social Security, will all be put into my own private account.
For the people that do not opt out of Social Security, and there will be a lot of them, then you raise their taxes. Currently, Social Security is only paid up to the first $118,500, of wages that are paid to an employee. If you remain in the Social Security system, there would be no cap on the wages of which Social Security was charged. As for Medicare, you allow me to continue to pay 2.9% of my wages, but this goes into an account for me from when I reach retirement age, and have to continue on with insurance. I will use a 2.9%, to pay my insurance premiums. I don’t want to be on Medicare, and I never will be.
Allowing people to opt out of Social Security system, should be allowed by age 35. Before then, everybody needs to pay into Social Security. If I didn’t have to pay Social Security, I can put an additional 12.4% that I’m currently paying, into Social Security, and put it into my retirement account.
It’s time to allow people to opt out of this bankrupt system. Social Security was used as a way to get the sound of the Great Depression. It was part of FDR’s Square Deal, and it’s not needed anymore with the invention of retirement plans.
Just some food for thought.