Help me I’m Rich!

Help me I’m Rich

Social Security, in the United States, currently refers to the Federal Old-Age, Survivors, and Disability Insurance (OASDI) program. Social Security involves several programs all designed to help Americans in need either in retirement, disability, help with children, etc.  It’s basically an insurance program which is funded through a dedicated payroll tax called Federal Insurance Contributions Act (FICA). It came into existence in 1935 and was a great idea to help Americans in need. However, over the years it has became obvious that funding will run out in the near future. Where am I going with this?…

Social security reform has been a heated political topic of debate for decades and so far no one has implemented a successful program to deal with the pending problem. In my opinion there are several obvious ways to ensure the life of the program for years to come, and I’m sure many of you will disagree but here they are:

• Keep the tax on all income : For the current year 2008 only income less than $102,000 will be taxed for social security. Any amount over this is basically exempt from social security. Basically if you are an upper class American you get a great tax cut. By applying the tax to all income millions of extra dollars will be generated for the program.
• Partial private retirement funds : Currently 6.2%  of your annual wages is taken out for social security and your employer also pays an additional 6.2%. An additional  1.45% from your check and your employer is sent to the Medicare program. The total amount you pay is 7.65%. Give Americans the choice to only pay 4% of their annual wages into social security and have 3.65% placed into a mandatory private retirement fund. Those who choose to do so will not be allowed to draw social security benefits at retirement but will have more control over where their funds are being invested and for younger investors more security of their retirement options. I’m currently 29 years old and don’t plan on any benefits from social security so I would be more than willing to take this option. After all we should be somewhat responsible for our own actions.
• Tax the “non-exempt” state and government employees a small amount. Even though my wife is a teacher and is currently exempt from the tax, how is this fair? They get to use an alternative retirement system instead of investing in the social security. Put a 1/4% annual tax on these employees to help fund the program.
• Currently there is a clause exempting taxes for those who received earnings for serving as a minister (or for similar religious service) if the person has a conscientious objection to public insurance because of personal religious considerations, but only for “qualified services” performed for a religious organization, from the tax.  Tax them….
• BIG ONE those who earn over $8,000,000 in a lifetime ($200,000 for 40 years) are not eligible to receive benefits from the program. Not sure this would effect a large percentage of people but it couldn’t hurt. Sorry but I think you you have been successful with your financial life then you can help those who are in need.

Ok, ready for your comments…..