By Ken Hildebrand, host of The Information Nation
As everyone knows the Social Security System is going broke and not one person in congress is willing to step up to the plate and make changes. Now that more and more people are retiring it’s putting an immense strain on the system. Plus the fact that we have high un-employment, and a cut in the social security tax, social security is receiving less revenue.
Well I’m not an economics major or a politician but I do have a starting point for the reform of the system and a way to get the funds out of the hands of the government. Bear with me and remember this is just a starting point and it will take the will of those in congress and the White House to make any meaningful changes.
In order to bring the deficit down and make social security solvent I propose the following:
People age 56 and above will continue to get the current benefits. People age 50 to 55 will have a choice. Put 25% of the total social security contribution in a 401K type vehicle and take a 25% reduction in social security benefits or continue the way it is.
People age 40 to 49 will put 50% of the total social security contribution into a 401K vehicle but will
get a 50% reduction in social security benefits.
People age 30 to 39 will put 75% of the total social security contribution into a 401K vehicle but will get a 75% reduction in social security benefits.
People age 20 to 29 will put 100% of the total social security contribution into a 401K vehicle but will get a no social security benefits. When I say total social security contribution I mean both the employee and the company contribution.
People under the age of 20 will not be required to make any contributions at all. Nor will they have to pay any taxes. This should help with college funding or a way for them to jump start their future.
As a side benefit 401K distributions will not be taxable and they will be able to add up to 5% more to their 401k. Business will be able to write off their contributions from their income taxes. Individuals will have to claim that as income.
The 401k must be in mutual funds with an A+ rating and must be reviewed by the House finance committee, approved by both houses of Congress and signed by the President. Investment firms must apply for the right to handle the funds. The firms filing must have a group of offerings, for the people to choose from, in their package. People may start taking distributions at 59 ½ and you can retire whenever you want. People starting this at 40 or above may make as much income as they want when retired, at age 65, and only pay taxes on 50% of that income. The federal government may never again control any of the funds for the people’s retirement.
I know that there will be many arguments about this. There are some flaws in it and those have to be ironed out but it’s a place to start. If we don’t start soon we won’t have to worry about it because there will be no retirement for the elderly. Maybe you can move in with your children. Or work until you drop and then they can throw you out with the trash. In either case if we don’t do something soon, well you get my drift.
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