Todd's Views: Social Security Reform

Social Security. A dead system. Well, actually, dying because the young support the old, and there's too many old people nowadays and too little disposable income for the young thanks to inflation and Republican taxation schemes that take money from the poor and give it to the rich...

Ok, the solution:

• Everyone over 50 right now, right here, they are still fully covered and still continue paying in the full amount.
• Everyone between 35 and 50 are half covered, and will now pay in only half the standard SSI deduction. At retirement they will get half the amount the over 50 set would get, if they qualify (and those qualifications will change).
• Everyone under 35 is out. No more SSI deductions, no benefits waiting for you after retirement.
• Give SS benefits only to those whose total income from investments and work is below a certain dollar amount. If you don't need the benefits, you'll just have to do without. That alone will cut the amount paid out drastically.
• When there's no one left alive to make use of the benefits, the program is officially dead.
• Create a special type of federally insured 401k. Make ALL money that went into that 401k tax free until you're 45. All money put in after you're 45 is tax deferred. The 401k cannot be touched until you hit 65. At that time, the first money that comes out is the last money that went in, so you begin by paying the taxes on the taxable portion of the benefits. This would reduce fraud.

The result:

Social Security fades away to be replaced with a 401k investment plan that makes each individual responsible for his or her comfort in retirement. Since a sizeable amount could be invested tax free, it's worth more than a less restricted 401k. If you die, the money doesn't just fade away, it can be inherited by your children.

No matter what, I think talk of simply doing away with Social Security is unrealistic. It'll still be around in 2010, but in serious trouble. What the heck are politicians going to do when so much of their electorate is close to retirement age? The percentage of our population nearing retirement is greater than ever. You can't even pretend like you'll yank the rug out from under them or you'd never get elected. No, someone will have to have the guts to reform it or, better yet, replace it slowly. Retirement support cannot simply end, but it will suck the nation dry if it doesn't change or at least get phased out slowly. And no one in the federal government typically has the intestinal fortitude this requires...