My Social Security (FICA) Plan In the midst of our Nation’s financial collapse, Roosevelt enacted his New Deal. In that New Deal, came the Social Security System, a Social Insurance Program” in 1935. Back then an individual had an “Account” their card said, “Social Security Account”, and their tax funds were invested into government backed Security Bonds, and or T-Bills. When Johnson became president it was transferred to the General Fund of the US Government, and stated on their budget as income, in which it was not intended to be. Roosevelt stated this program was to be “self-sustaining.” Unfortunately, this Social Insurance Program has grown into an easy fraudulent money grab with no oversight, and the US Government spends this money and replaces with IOUs. My plan for Social Security is to return it to the Social Insurance it was intended for. Each American citizen and legal resident that pays into the system will have their “own” account. Thus, what they put in is what they will get out at age 65. I envision this as a tax-free entitlement upon withdrawal. Basically a Government Back IRA, with a 6% dividend. To fund this and change to this new idea, Social Security must borrow from the Government’s general fund, to continue to make payments to those who are 30 years and older. This accomplishes the “35 highest paid years of work” rule currently in effect. To accomplish the 6% dividend, the fund operates just as an insurance company works. All premiums go to a “clearinghouse”, and are invested as one lump sum, then it is retracted and the gains are “divided” among the policy holders. Unfortunately, for those who do not pay into the system, cannot collect the entitlement at age 65. There will no monies attached to their Social Security number. For individuals under the age of 21 and under the care of their parents, then if their parents elect to withdrawal Social Security Disability payments, then it will count against their account unless the disabled individual is working and paying into the system. FICA Current rate (2013) = 12.4% (6.2% individual + 6.2% employer) $30,000 year (average for 35 years) $3,720 = 12.4% of $30,000 yearly $310 = monthly FICA contribution (3720/12) 6% dividend (compounded once) = $416,920 which if taken at age 65… = $20,846 annually $20846/12 = $1737.16 monthly (based on 20 years or till age 85) If you wait to age 70: 578,903 which if taken at age 70 38,593.53/12 = 3216.12 monthly (based on 15 years or till age 85) This is based on an average of $30,000 annual income for 35 years. I welcome any suggestions on how to improve this plan!
Posted on: Mon, 21 Oct 2013 21:50:45 +0000
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