Luis R Cardenas asked:


The main idea of the social security program is people welfare. The United States created this program based in what other countries in Europe were doing for its citizens. This program has experimented many changes since its creation in 1935. When this program was signed by President Roosevelt, the idea was to provide retirement income for people 65 or older. Lately the government has made changes on the retirement age and social security income requirements. People in the US are starting to worry about the Social Security funds which they think are getting lower and lower with time. The main question could be: Is there going to be money left when you retire. 

The average Social Security Check a retired person gets is around $1000.00 per month and usually does not replace more than 60% of the income they were making before retirement. The main factor that contributes to set a check figure is the average annual income the retired person was making while he/she was working. If that person was not able to save on a 401k program or any other retirement account before deciding to leave the workforce, he/she will have to considerably lower their living standards to be able to retire. But, it could get worst! 

It is considered by many that if congress does not make a big injection of money to the social security funds soon, money will run out within the next 30 years. In the past few years the Social Security reforms have helped alleviate the problem but, currently, more money is been paid to retirees than what the administration is collecting. In other words, more money is going out than what is coming in. If the social security administration don’t get at least 6 trillion dollars soon, we could expect the fund to run out by the year 2041 and it considers the contribution of tax payers made during that period too. The Social security administration has considered lowering the social security payment in the future. Would you like that? 

Without a doubt we need a Social Security reform soon. But we need to know where the money is going to come from. Congress can not make a good reform if it has not been studied as for its consequences. It is very difficult to consider a tax increase when the economy may not be able to support its impact. The normal citizen may be pushed to avoid paying what for others could be considered fair but some do not have. Our best option at this time could be to start preparing our selves by saving money for retirement through a retirement account or long term investments but not every person will be able to do it. 

We need to make conscience that the Social Security fund may not be enough for everybody to retire unless something is done soon. Due to the actual situation some people are thinking about how to survive the moment but time does not stop and we have to get ready for the future. Our congress needs to start working on a reform and stop thinking about the next election or how to look good in the eyes of the voters. We could be sure that good ideas are welcomed by your congressman because if he/she can not come up with something we may be able to help. Think about it. We may be able to change things.  The point is that we need a reform NOW!



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Hans Hasselfors asked:


You should be able to find several indispensable facts about social security tax in the following paragraphs. If there’s at least one fact you didn’t know before, imagine the difference it might make.

Every week that you work, there are taxes deducted from your gross payroll that are distributed to the Social Security Administration, along with other programs administered by the government. Of all the taxes we pay, social security is one of the most beneficial, one of the most watched. Why do we pay social security tax, and what does it potentially mean for all Americans? The following article discusses the social security tax regulations and what we benefit from the mandated deduction.

Social security tax is deducted from our payroll each week in order to cover a portion of our retirement income when we reach age 65, but also a survivor benefit, should we become disabled during the course of our working life, or die as a result of work-in which case the surviving spouse and children would receive a monthly income supplement to help them with their daily expenses.

Each and every day, we are bombarded with statements that want to make us aware of the dire straits our social security system and the gloom and doom picture we face in just a few years. This article examines the information available about our social security system, and asks the questions about its fate and ours.

The social security tax we know and pay today has become a greater chunk of our income with the passing years. And, as if this is not enough, it is the poorest of this nation that pay the most, since there is a cap on the income levels that are subject to the social security tax. Currently, any income above $90,000 isn’t subject to social security tax. This presents a problem for the nations poor and the federal government’s level of social security tax received. As more and more of our population begin to age, there are fewer and fewer based employees to sustain the fueled growth and maintenance of the social security system. Add to this the fact that individuals with wage earnings beyond $90,000 are growing faster than the wage base for employees who remain below the $90,000 level, and you have the makings of a disaster. The latest predictions place the collision date somewhere around 2017. That’s not an extremely distant future, and it certainly will be a problem for the 45-50 year old wage earner.

So what has been proposed to deal with this growing problem? There are currently several proposed solutions to the problem, and all of them, with just a few exceptions point to higher taxation of the wage earners income. It is interesting to note here, that when income tax and social security, Medicare, and the many other “beneficial” programs the government has implemented to aid the general public, we have lost in the area of disposable income. In 1913, when the income tax program was begun, less than 1% of the average individual’s income was taxed. Today, we pay roughly 10% of our income in tax. That’s a staggering rate of growth, when you consider that our income levels have also tremendously increased too. The following paragraphs briefly outline some of the more popular proposals for dealing with the projected shortfall, and the effect it should have on “Joe Citizen”.

The information about social security tax presented here will do one of two things: either it will reinforce what you know about social security tax or it will teach you something new. Both are good outcomes.

Increases in FICA taxes; of course, this is a hard sell in the current climate, but by the time we reach 2017, it might look like a better solution than any of the others.

Increases in normal retirement age (NRA) have already begun, and it looks like it is going to be an ongoing process. As our life expectancy increases, the ability of social security to accommodate greater payouts, and a reduction in the working population continues, extending the NRA on past the age of 70 is a real possibility.

Privatization of social security; although on the surface this looks like a promising solution, it would take a special kind of citizen to intelligently, objectively, and rationally invest their 4% allocation wisely, and truly reap the benefit that social security has previously provided.

Selling bonds or printing money. The US Treasury does have the option to intervene and raise the money to accommodate the excess demand, but you increase the probability of runaway inflation when you begin to pump excess money into the economy.

What is the ultimate solution for this problem? No one really knows, simply because no one can accurately predict long-range models. 20, 30, of even 40 years into the future, accurate predictions are extremely hard to come by.

That’s how things stand right now. Keep in mind that any subject can change over time, so be sure you keep up with the latest social security tax news.



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Steve Selengut asked:


Who wants to be a president; the President of the United States? Social Security reform is the winning ticket. Research supports the thesis that Social Security reform would provide all the lubrication necessary to get our economic ball bearings rolling in the right direction. Economies do not grow, or increase employment, when job providers are taxed and regulated unmercifully, throttling their energy, creativity, and profitability. Consumer spending pushes the economy; we need to do more than hand out a few hundred bucks.

The objective of the exercise, Barack, is to permanently place more disposable income in consumers’ wallets while providing incentives for employers to hire more workers. There are three areas where the impact of reforms would be beneficial to all, irrespective of political sentiment. Social Security reform would benefit the most people, most quickly. Next on the list, Hillary, would be elimination of income taxes (federal, state, and local) on: (a) all forms of retirement income, and then, (b) all forms of investment income. Third, and particularly important for job creation, John, would be the elimination of all income taxes and nuisance fees on businesses.

Who wants to be President?

Social Security will be the easiest to implement quickly while producing unprecedented increases in disposable income, business cost reductions, and job growth. Here’s a rough outline of a brainstorming plan. Throw out the politics and focus on the program— phase one deadline, January 1,2010.

Change Social Security funding to a mandatory, private program, for all employed persons, and add a voluntary program for those who are not employed. All employees would contribute to deferred fixed annuities, purchased from new divisions of qualified financial institutions. Existing Social Security credits would be the initial deposit to the contracts for all participants under age 60.

Employer matching contributions would be eliminated and participant contributions would be cut to a mandatory 3% of total compensation (including deferred comp, stock options, etc.). Both changes would be phased into the system by participant age group over a five-year period, youngest first. The five age groups would be 13-year periods starting at zero to thirteen (obviously for voluntary accounts) and ending with ages fifty-two through sixty-five.

Phase one would involve qualifying providers, assignment of workers, issuance of contracts, elimination of employer matching contributions, and elimination of income taxes on social security payments. Employers would be required to appoint at least one person to coordinate the transition.

Contributions to the annuity contracts would begin upon issue; the Social Security Administration (SSA) would have five years to move credits to participants, starting with the youngest group, and would be responsible for shortfalls to retirees for five years.

Under the new system, there would be no penalties for early retirement, but tax free annuity payments would begin at age sixty-five whether or not the person continued to work. Participants could voluntarily establish retirement accounts for non-working spouses and children, and could elect to deduct an additional 1% of salary for each account. A new Federal Administration for Social Security (ASS) will select, qualify, and monitor provider companies and their investment portfolios to assure that only high quality, income-generating securities are used to fund benefits.

Companies showing a surplus would be able to invest up to 25% of the surplus in stocks that qualify for the Investment Grade Value Stock Index (IGVSI). Only fixed life annuities would be available, but there would be 50% of cash value, family-only, death benefits up until the time of retirement. After age 65, the death benefit would be reduced 10% per year for four years. There would be no loans, withdrawal privileges, etc.

The *** would be represented on provider company boards, would monitor annual audits of firm financial statements, and would supervise the selection of all non-company directors (60% of the board). Each provider company would be encouraged to use non-market value portfolio assessment techniques, such as The Working Capital Model, to monitor income portfolios. Retiree associations would also be represented on company boards of directors, and board member compensation would be capped at a reasonable number, plus 45% of *** related expenses.

Annuity providers would be assigned a fair share of the huge Social Security Retirement Income Account (SSRIA) participant pool; every dollar contributed would be invested. All providers would use the same mortality tables and base interest rate guarantees in their calculations and would be precluded from any form of advertising. Companies would be required to focus 100% of their efforts on the SSRIA.

Annuity providers would be allowed a .5% investment management fee so long as the Annuity Investment Portfolio generated no less than the 3.5% income level needed to fund a guaranteed 3% contractual cash value growth rate. 50% of any excess realized income would be added to retirement accounts in the form of dividends.

The remaining 50% would be apportioned between three separately managed accounts for: retirement benefit support contingencies (20%), universal health care and disability benefits for annuitants (50%), and post retirement death benefits (10%). Half of the remaining 20% would become “surplus”. The balance would accrue equally to the employees of the insurance company— the mailroom staff receiving the same dollar amount as the CEO.

These changes would produce: a whole new sub-industry of jobs, increase disposable income, reduce the Federal budget deficit, provide universal retirement benefit eligibility, stabilize the market for plain vanilla corporate and government debt securities, reduce corporate expenses and product price levels, and subsidize health care for senior citizens. Annuity providers would have significant incentives to minimize costs, but their investment portfolios would be closely supervised to prevent excessive risk.

Politicians at all levels just love for us to **** big business, and have no compunctions about taxing and regulating employers in every manner imaginable. The impact is higher prices, lower job creation rates, and the need to move many operations to lower cost environments. Many small businesses simply refuse to hire additional employees. Regulatory procedures and company defense measures add billions to the costs of goods and services.

Social Security benefits are grossly inadequate yet we continue to tax all forms of retirement benefits. Politicians ignore the simple solutions to these problems and none seem to care about Social Security reform. It’s just too big an issue to be so shockingly ignored, but the last politician with any courage— well, I can’t remember who that was either.



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