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Tuesday, July 08, 2008
Ed Feulner :: Townhall.com Columnist
Social Security: Finding Fixes for the Flood
by Ed Feulner
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Social Security started in 1935, and at that time slightly more than half of workers lived to reach the retirement age of 65. These days, though, life spans are much longer. Our government needs to encourage people to work longer or, at least, not tap their benefits at age 62. The best way to increase the retirement age would be to increase it over time (say two months per year until it reaches, say 68) and then index it for longevity after that.

Next, lawmakers should ensure that Social Security and other entitlements only go to those who need help. Bill Gates, for example, recently stepped down from Microsoft. In 10 years, this multi-billionaire can start collecting Social Security and Medicare. That’s absurd. Reducing payments to wealthy seniors would leave more available for lower income retirees.

Finally, our government needs to shore up Social Security with personal retirement accounts.

The concept is simple, and would work similarly to an IRA or 401(k). All workers would be able to invest a small percentage of their Social Security taxes in an account that they would own. The money would go into a few simple, low-cost investments that would grow over time, just as other retirement plans do. These accounts would not replace employer-sponsored retirement plans, but increase the ability of Social Security to pay benefits to them.

In 1940, Ida May Fuller received the first monthly retirement check sent by the Social Security Administration. The program served her well; she paid in a total of $24.75 and collected $22,888.92 from Social Security over 35 years.

That sort of math simply doesn’t add up anymore. Our country needs fundamental entitlement reform. And quickly -- before the growing tide of retirees overwhelms our budget.

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About The Author
Dr. Edwin Feulner is president of The Heritage Foundation, a Townhall.com Gold Partner, and co-author of Getting America Right: The True Conservative Values Our Nation Needs Today .
 
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(58 comments so Far)
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Reply # 1
Date: Sep 12, 2008 - 9:50 PM EST
Social Security
Here ya go. Social Security has always been a general revenue tax. The Supreme Court, in two decisions has ruled that even though one has paid into the system he or she has no right to any money from the system. It worked for years because there were plenty of people paying in for every person who collected. It did operate as a Ponzi scheme. We now have less than three workers paying into the system for each person collecting.
The system rips of the working poor as they and their employer pay a total of 12.4% of the salary they earn.
The solution is to privatize the system and allow each contributor own their account. There are several ways to do this. The younger workers should be able to place all their money in a private account. Do some research and see what plans have been formulated.
Here is an example of wealth building, all in today's dollars: A young couple earning a total of $30,000 per year puts $3720.00 per year into their account. They never make a dime over 30 grand per year and their money earns only 5% per year. When they wake up at 65 years of age their nest egg is close to $597,000. That is their money, not a "promise" of a monthly benefit that Uncle Sam has to pay.
The drawback: That couple is no longer beholdin' to the Government. The people inside the beltway don't like that at all!
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Reply # 2
Date: Sep 12, 2008 - 8:54 AM EST
Social Security
Ok people: Now wea as Americans are stupid, correct, we believe every thing politicians say. If the Govt wanted to fix Social security and Medicare, they could. Without raising taxes or the retirement age. People wake up for the last 40 years(Fact) Politicians have raided Social Security, which was set up as a trust fund. If you raid a trust fund it depletes the amount of interest and principal. When FDR instituted Social Security means just what it is Security for our Social wealth. It was never meant to be raided or touched it was meant to protect us from financial security. Politicians may tell you something different, however if you look up the original bill, you will see it was never meant to be used for Wars, Foreign Aid, to pay for infrastructure or any thing but retirees. So it is a bunch of you know what So I say if we want change we need to change. Change is not voting the same old politicians in, change is voting the politicians out. But do we do that no we as voters are lazy.
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