I agree that Social Security is a complete ponzi scheme that is going to collapse at some point. It needs to be genuinely reformed to deal with its imbalance or just scrubbed altogether.
Having said that, over $300,000 was paid into FICA in my name throughout my career. Had that money every year been invested into an S&P 500 index fund, it would be worth well over $1M today...and that includes all the ups and downs for the various recessions. At the time of my retirement, had that been converted into a nice, safe 6% annuity, I’d be getting 5000 a month in pension income my government mandated retirement rather than the 2000 a month I’ll get from social security if and when I start collecting it.
And that’s independent of any 401k investments by the way. Just looking at how the FICA could’ve/should’ve been handled.
So you’ll excuse me, Mr. Thiel, if I tell you to shove that proposal to cut social security up your @**.
If you want to fix social security, you need to take one massively hard bite on the bullet. Those over 50, you keep as is. Those under 40, you do the math and calculate what their contributions with employer match would’ve been had they been invested and you set up TSP-like account for each person. For those between 40 and 50, you give them a choice. No more off budget, no more “trust fund” money laundering, no more “special issue bond” shell game. Just eat it once and be done with it.
They’d need to legislate some serious protections on that: it could only be withdrawn as an annuity with monthly payments, cannot borrow against it (like you can against your 401k), not subject to art forfeiture, liens, divorce property division, etc., and if you die before the annuity is paid in full, your surviving spouse it children don’t get a cash payout, but rather have the funds go into their accounts to be used in their annuities. But that’s doable.
Sadly, it’ll never happen though it would completely heal the system with only one major shock. It would also largely wipe out the unfunded debt problem this government (and thus we) have. Oh well...
Sorry all, I meant Mr Schiff, not Mr. Thiel.
If you are a self-employed high earner, your FIXA tax can dwarf your federal income tax. I should have self identified as a Seventh Day Adventist decades ago and just invested all the FICA paid.