benefits cuts for Social Security recipients, there lurk good intentions, political dogmas,
past decisions by committee-think, and grotesque pandering to young and old.
our root philosophy, the politicians ponder? Meanwhile, millions are being spent to
"educate" you by calling on your emotions, clouding your reason, and confusing you over
what is common sense by turning United States social security benefits and retirement
discussion into double-talk and half-truths about voluntary, private accounts.
inflation salary increase, at age 65 you should accumulate $565,059 at a 3.3% inflation-
adjusted interest rate. That's under the current 6.2% contribution plan for workers and
6.2% for employers. Your retiring salary at 65 should be $40,266, and your benefits should
be $25,391, slightly more than 60% of current salary - and net of income tax. You and your
employer will have contributed $86,261 each to your retirement. (See Benefits Table: left.)
established an actual individual fund for anyone. Part of the reason is that the original law
in the 1930s the United States reflected the accounting reality of the day - millions of
hand-entries in the insurance and banking industries, and hundreds of thousands of clerks
and accountants tracking money. It would have been a costly nightmare to manage millions
of pension accounts, especially voluntary, personal accounts by hand, and so tables were
established and payments for personal accounts calculated on a set rate of return.
- Set the interest rate for Social Security bonds and payments at 3.3% above
the current inflation rate, adjusted quarterly. This reform will guarantee a 60%
or higher payment to every retirement recipient at age 65 and it will maintain
the solvency of the trust fund and payments to personal accounts..
- Raise the limit on contributions to $250,000 of annual wages, instead of the
current cap of $90,000. If combined with principle #4 these high-income
individuals will receive a commensurate return on their increased payments.
- Base recipient payments solely on the amount contributed over their lifetime
of work - in short, the sum of their set and voluntary contributions, employer
contributions and interest earned. Personal accounts benefits will be based
on the same formula - 3.3% above the current inflation rate.
- Permit the designation of all individual contributions to be placed in the trust
fund of another person or persons. For example, the $86,261 - accumulated
by the $20,000 wage earner in our benefits table - could be transferred to the
trust fund of a spouse, children, grandchildren or other loved ones. This
voluntary allocation of private accounts would enhance their benefits and this
estate would be part of their contribution base for future, similar endowments.
- Remove all federal, state and local taxes on the payments of benefits to trust
fund recipients. This reform for personal accounts is in exchange for
sacrificing the interest earned by their contributions over a lifetime, tax free.
- Invest the trust fund, not just in United States Treasury notes, but in municipal
bonds, which are guaranteed by state or local tax bases. This would eliminate
an enormous premium on interest rates, now paid by governments, and end
excessive bond counsel and other fees, encouraging new school and road
construction, and repairs to the nation's infrastructure.
- Allow the voluntary contribution of more than 6.2% by individuals. These
voluntary pension private accounts would form part of the base of their
retirement benefits. All funds and the interest they earned would be payable in
the same manner as an I.R.A. - withdrawn as early as 59 1/2, with mandatory
deductions at age 70. These disbursements would be taxable as withdrawn,
and loans would be permitted under the current 401K rules.
book by clicking on the Guest Book button on the left. Contact your congress person by
email - use the Contact Congress button. You can also visit Social Security Reform, which
is our new Google Group discussion board, and leave messages or reply to topics.
