By President FDR design, Social Security (SS) is a pyramid scheme, with a chain-letter structure. It was brilliant, back when FDR started it as a genuine people concern, PR move, and strategy to guarantee many Democratic voters for decades. However, it is really burdensome now and unsustainable. The pyramid has grown exponentially, and by its design, will continue growing. Handouts, political pandering, COLA, and "give me my share!" expectations have increased that drain-rate. It's pointless to argue about how many workers' incomes it takes for every person drawing SS (past, present, future). The future is clear: Pyramid schemes all crumble. Chain letters fizzle. Larger pyramids crash harder than small ones.
Rather than just blindly keep the SS pyramid alive until it crashes, people need the ability to strategicall "wean themselves" from the pyramid, after they have paid "their fair share" of societal debt to that pyramid. Those numbers must be accurately determined, well published, easy to understand and act on, as part of our personal and national retirement/ economic strategy. A smaller pyramid equals smaller problems, and a gentler crash.
A big reason that USA corporations have phased out traditional retirement plans is that they were forced to contribute the OASDI/ SS 6.2% matching tax. They can¡¯t afford to fund both. It is disappointing that they don¡¯t lobby for a better overall National Strategy to retirement. A lot more could be done with that 6.2%, towards retirement, rather than just supporting the SS pyramid.
According to my 2007 Social Security Annual Statement, I have paid $80,917 into SS, over the past 27 years. I turn 44 this year. At age 62, I will be "entitled" to $1,604/ month; at age 67, $2,323/ month, or if I wait until age 70, $2,904/ month.
At retirement, my wife and I don't want to collect SS. Why bother collecting our "entitlements", when the "funds" aren¡¯t there? They are just ongoing tax burden on our kids, nephews and nieces (c/o the pyramid scheme). Also senseless, is that if we collected SS, we would have to pay some of it (thru income taxes) right back to Washington. Preposterous! I am willing to pay into the SS pyramid for another 14 years to keep it afloat (for my ancestors who are drawing on it now and my "debt to society"), without planning to draw a dime myself. However, at age 58, I want to be "completely unhooked" from the SS pyramid. My employer should also be relieved of their 6.2% matching SS tax burden at that point (for me) too. Regardless, I plan to retire at about age 62, and in my retirement strategy (401K, IRA), I am€on track to raise my own $1 Million, and not need anything from SS, for me or my wife. We don't want it; it's not ours. Entitlements are meaningless, unless there are earned $$ in an account for us.
President Bush had the right idea, about people being able to "divert" a few percent of their 6.2% SS tax into personal IRA's, while continuing to support the pyramid for others. However, he didn't pursue it strongly enough, and the whole concept remained under the umbrella of the SS "pyramid tax withholding".
Obviously, I have to ignore my feelings about being snookered into paying into SS for my full working career and taking nothing from it. I'm OK with being that "sucker", since I have no control over the past. I'm willing to pay into the pyramid, consider it an interesting Federal "experiment gone awry", and move on. In the name of common sense and a greater good, I am willing to leave those tax $$ behind me. I don¡¯t see the point of collecting from the SS pyramid, when the funds aren't really there as my "nest egg". My whole family wants out, the sooner the better.
In conclusion: My main burning questions about Social Security are;
* When will the SS trust fund start holding real money?
* When will the Congress act to make illegal, Federal budget siphoning of SS tax funds and let them actually build?
* How long do I have to pay into SS to cover my share of debt to society?
* At what age can I "opt out" from the SS pyramid (paying taxes, with the signed promise of never collecting)? I don't need a cash-out lump sum, I just want out of the pyramid.
* How can I get my kids' future SS tax burden eliminated, or reduced by the amount that they would have had to put into the pyramid to support me and my wife thru SS?€ The multi-generation linkage to a Government pyramid, for personal retirement makes no sense.€ We are fine on our own, thank you.
Tackle these above issues, and the whole SS system problem will get smaller over time.
Thanks for your time.