Skip to comments.A Plan to Save Social Security: Simple and Workable
Posted on 07/25/2017 7:05:59 PM PDT by SeekAndFind
It is no secret that what the major media seem to care most about is radically different from what concerns average Americans. While the inside the Beltway crowd continues to focus on alleged collusion between President Trump and Russia, real concerns like the future of Social Security are ignored.
The Social Security Board of Trustees, a six-member panel who serve the federal government by offering a short-term and long-range forecast on the health of the Social Security program, has issued a new report, which says that while the retirement program will be "cash flow positive" through 2021, it is still in line to run out of money unless taxes are raised, or benefits are substantially reduced.
Financial Planner Ric Edelman has come up with an idea that is so simple and workable it could transform the aging program and make retirement more comfortable and secure for years to come. Full disclosure: Edelman, who has been ranked three times the number one independent adviser by Barron's, is my financial adviser.
Edelman says reforming Social Security is essential because, according to the Pew Charitable Trusts, roughly 58 percent of workers have access to a retirement plan, while 49 percent participate in one.
Edelman notes that people who do have such plans don't have much money in them, just an average balance of $159,000, according to the Employee Benefit Research Institute. That amount can only generate a few hundred dollars a month in retirement income, which is why even when Social Security is added to this pittance it can't adequately provide for the needs of most retirees.
Edelman's solution? The federal government would set aside $7,000 one time for each child born during the next 35 years. The money would be placed in an investment account managed by a blue-ribbon panel of investment experts appointed by the president and Congress.
After 35 years, the government gets back its $7,000 -- increased for inflation -- and uses the money to pay for children born during the next 35-year cycle, making it self-funding.
When the child reaches age 70, monthly benefits are provided -- equal in income to what Social Security provides, allowing the current program to be replaced with no adverse effect on retirees.
I asked Edelman about the politics of this, since Social Security is considered a political third rail, untouchable, highly charged. "That's why I don't propose altering how the Social Security trust fund is managed," he said, "which is what killed privatization efforts years ago."
Under his proposal (he calls it the Trust Fund for America), the money would be invested in a diversified portfolio put together by a panel of investment experts consistent with how the nation's pensions funds and endowments are managed.
To keep the money from being "raided" by Congress, Edelman says each baby would be assigned an individual account, much like an IRA, and would receive annual statements showing the account balance.
Edelman says he is joining the Bipartisan Policy Center, a Washington, D.C.-based think tank that addresses the challenges facing the nation, to focus on fixing the problems with Social Security and ensure a stable retirement program for every American.
Anticipating criticism from the usual suspects who want to use Social Security as a political weapon instead of fixing it, Edelman says, "If anyone complains about my proposal, they need to complain about the nation's pension plans, too, because I am doing nothing different from them."
Wouldn't you like to see dysfunctional Washington and the anti-Trump news media actually get behind something that benefits the most people? If surveyed, I'd bet an overwhelming number of respondents who are fed-up with issues that do not impact their lives, would scream "yes!"
is not possible.
Yes, this would work. Trump could get such a plan through, were he not dealing with the Stop Sticks of fake news, Russian election meddling lies, #resist idiots, and assorted AstroTurf anarchists who want to keep him from succeeding.
Pineda of Chile fixed their retirement program. We should do the same.
This plan seems plausible ,, by getting rid of 20 years of time when nothing is saved or grown you get over the hump to sustainability...
What struck me was that each time I visited was that I was,by far,the oldest person in the waiting room.Another thing struck me as well but to mention it would be an unforgivable violation of the rules of "political correctness".
The easiest way and first attempt at Fixing social security should be to Abolish all other Taxpayer Funded Retirement Programs Nationwide, all the assets turned over to Social Security and All retiree’s rolled in to Social Security.
Then we can talk about reduced benefits or higher costs for retiree’s
Make teenagers from 9th grade on work 4 hours/day in a fast food joint. Friday, Sat. Sun-no school interference. Allow them to put 100% in a Roth IRA if parents are paying the bills. Learn the work ethic, teamwork, good grooming, get rid of illegals.
What struck me was that each time I visited was that I was,by far,the oldest person in the waiting room.Another thing struck me as well but to mention it would be an unforgivable violation of the rules of “political correctness”
I remember when I went to college I was surprised at the number of students getting various survivor? benefits from Social Security. That was years ago, and I am guessing the numbers have not decreased.
This plan would create a nation of capitalists that share an interest in success in the markets. Democrats and RINOs would never stand for that.
But, but we were promised! Here is what was said back in 1964!
The program is designed so that contributions plus interest on the investments of the social security trust funds will be sufficient to meet all of the costs of benefits and administration, now and into the indefinite futurewithout any subsidy from the general funds of the Government. Both the Congress and the Executive Branch, regardless of political party in power, have scrupulously provided in advance for full financing of all liberalizations in the program.
And here is where your money went. Read and weep!
With tens of trillions of dollars to be "invested" (i.e., stolen/spent) this "blue-ribbon" panel will be a magnet for the most corrupt and incompetent "experts" in the country. And it'll be appointed by the President and Congress—guaranteeing that only the worst people will be in charge of it.
RE: Another thing struck me as well but to mention it would be an unforgivable violation of the rules of “political correctness”.
Hey, you can go ahead and be politically incorrect, you’re among fellow posters who are politically incorrect :)
End it. Socialism security is an unconstitutional transfer of wealth from working people to non-working people. Cut off payments and stop the taxes. It’s criminal and always has been and always will be.
The alternative is that the experts will be wise, prudent, and honest... and they’ll be “fired” by the voters who’ve fallen for the promises of another group claiming they’ll get better returns. (They’ll accomplish that by ignoring the risk/return rule and eventually crash the system.)
Let the “experts” select half a dozen different portfolios, ranging from treasuries to growth funds (mostly baskets of index funds), set limits on the max percentage of his/her investment any individual participant can invest in any one fund, and let the individual choose.
There is no pot of money that congress won’t raid to buy votes with.
The post-WWII economic boom threw off so much revenue (including SS), that congress created disability insurance. While the original program still has low losses to fraud, the disability program is a joke (even before considering how many illegals get it).
So, we’re going to borrow the money to fund this new entitlement? Cal needs to grow his mustache back.
“Let the experts select half a dozen different portfolios, ranging from treasuries to growth funds (mostly baskets of index funds), set limits on the max percentage of his/her investment any individual participant can invest in any one fund, and let the individual choose.”
I fear that it would also violate FR's posting guidelines.I guess anyone who's curious will just have to use their imagination.
we need to transition the young out if they want to.
currently 15% of gross wages go to SS - let anyone under age of say, 25 opt to place that 15% into a 401(k) or stay in the SS system. The clincher is once you decide, you can never change.
Social Security is easy to fix, at least on paper. Politically I know it’s difficult, but, it’s really straightforward as to how we can fix things.
In order to make Social Security solvent, with a perpetual balanced budget into the future, a combination of three factors have to be considered. Those factors are:
1. The retirement age could be raised incrementally for younger workers.
2. A modest tax increase could be enacted.
3. Benefits could be trimmed back.
All of these are political dynamite. But, if the powers that be want to make Social Security solvent, some combination of these three things has to happen.
Otherwise, we will continue into the future, and we will reach a point at which the system is completely broke.
The laws of economics and math cannot simply be ignored, any more than we can ignore the laws of physics. At some point, the system as we know it will collapse if it stays on the current trajectory.
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