SOCIAL SECURITY BENEFITS COULD INCREASE
With average annual wage of $50,000 and Social Security contribution of about $6000 per year for 45 years with compound interest of 5% yields over $1,000,000 LIFETIME contribution. Average person lives about 18 years beyond age 65 and receives about $1000 per month for about $216,000 in life time retirement benefits.
HOW TO FIX IT
Create a tax free savings Plan for Old Age, Disability and Survivors.
Make mandatory at 1% of income for those currently age 44-36, 2% of income for those currently age 36-28, and 3% of income for those currently age 18-28. Allow voluntary contribution up to 12% tax free savings.
Max contribution cap at amount that would provide $3000-$4000 per month cola adjusted benefits. Since this is more than typical SSA benefits it would make plan attractive to voters.
Ninety percent of funds used by FHA to originate or guarantee home loans up to x times individual account balance with max home loan of amount income qualifies for with cap of $250k on value of residence; cola adjusted. Ten percent of funds used for secured Small business loans.
Plan would be like IRA but withdraw tax free at age 62 or earlier, when disabled, or at death for survivors. Old age, survivors and disability come out of this fund before SSA fund. Withdrawal should be tax free as this replaces SSA funds. This would also make plan attractive to voters. If funds in plan sufficient for twenty years most males would never draw SSA funds. Average SSA pay-out is about $1000 per month.
SSA still administers distribution of funds.
Fund held in individual account earning interest at mortgage rates. Balance inheritable by children in their account.
Speculation but could use part of savings to buy long term disability insurance and term life insurance with govt regulated policy. Let SSA operate more like insurance company with ability to seek underwriting spreading risk. Could also design plan to create long term disability insurance policy that would stay with member for life. I realize SSA does this now and this plan as described does also but marketing/packaging it as portable less costly alternative to commercial plans could also make plan attractive to voters.
Once baby boomer bulge is past Social Security rates could go down when large percentage of members begin to use plan funds
With average annual wage of $50,000 and Social Security contribution of about $6000 per year for 45 years with compound interest of 5% yields over $1,000,000 LIFETIME contribution. Average person lives about 18 years beyond age 65 and receives about $1000 per month for about $216,000 in life time retirement benefits.
HOW TO FIX IT
Create a tax free savings Plan for Old Age, Disability and Survivors.
Make mandatory at 1% of income for those currently age 44-36, 2% of income for those currently age 36-28, and 3% of income for those currently age 18-28. Allow voluntary contribution up to 12% tax free savings.
Max contribution cap at amount that would provide $3000-$4000 per month cola adjusted benefits. Since this is more than typical SSA benefits it would make plan attractive to voters.
Ninety percent of funds used by FHA to originate or guarantee home loans up to x times individual account balance with max home loan of amount income qualifies for with cap of $250k on value of residence; cola adjusted. Ten percent of funds used for secured Small business loans.
Plan would be like IRA but withdraw tax free at age 62 or earlier, when disabled, or at death for survivors. Old age, survivors and disability come out of this fund before SSA fund. Withdrawal should be tax free as this replaces SSA funds. This would also make plan attractive to voters. If funds in plan sufficient for twenty years most males would never draw SSA funds. Average SSA pay-out is about $1000 per month.
SSA still administers distribution of funds.
Fund held in individual account earning interest at mortgage rates. Balance inheritable by children in their account.
Speculation but could use part of savings to buy long term disability insurance and term life insurance with govt regulated policy. Let SSA operate more like insurance company with ability to seek underwriting spreading risk. Could also design plan to create long term disability insurance policy that would stay with member for life. I realize SSA does this now and this plan as described does also but marketing/packaging it as portable less costly alternative to commercial plans could also make plan attractive to voters.
Once baby boomer bulge is past Social Security rates could go down when large percentage of members begin to use plan funds
