Jay Dubya describes how the Social Security System is ripping us all off!
Average American Works 40 Plus Years: He or She Should Die A Millionaire! Here’s Why and How!
1) Under Federal Law, each EMPLOYEE must pay 6.2% of his or her annual wages into Social Security (up to $118,500.00 in salary). The worker’s EMPLOYER must pay a matching 6.2%, totally 12.4% of a person’s wages going into the Social Security Fund. (This 12.4% does not count additional Medicare Contributions). On the other hand, SELF-EMPLOYED individuals must pay the full 12.4% (up to $118,500.00).
2) On August 24th, 1935, President Franklin D. Roosevelt signed into law the Social Security Act. In the 1930s, 1940s and 1950s, mostly men were employed in the national work force. Women mostly stayed at home serving as mothers and housewives. In 1935, the average life-expectancy of men was 58 years; for women 62 years.
3) Thanks to advances in medical technology, today both men and women live to be 70 years of age or older. The point here is that Social Security had been government-created so that few Americans would be able to collect at age 62-63 because most eligible men would have already been dead at age 58 in 1935.
4) If an American retiring today in 2016 had worked for 40 years, his contributions over that 4 decade span would have exceeded $40,000.00. Add to this $40,000.00, the employer’s $40,000.00 matching contributions, the joint sum would raise the total to $80,000.00. The government trick here is that NO ONE has an INDIVIDUAL SOCIAL SECURITY ACCOUNT with the indicated total amount that had accrued over 40 years. The Social Security FUND is a “general pot” consisting of all contributions of all workers.
5) Over the span of 40 working years, $80,000.00 in total contributions, if prudently invested in government bonds, telephone and electric utility blue chip stocks paying at nominal 3.5% dividend, should grow from 80 thousand dollars to around a million dollars with the yearly incremental dual employee/employer contributions.
6) The annual interest paid on 1 million dollars (at 3.5%) would be $35,000.00 a year. But instead, Social Security pays about half the sum (17-18 thousand or less) to the average American at age 63. Theoretically, the average American gets systematically cheated out of around $18,000.00 dollars a year.
7) Even with the annual payments of $18,000.00 or less for Social Security, there still should remain the one million dollar PRINCIPAL AMOUNT (3.5% growth a year over 40 years) in the individual worker/contributor’s accumulated account. But since the S.S. FUND is a GENERAL FUND and is NOT based on INDIVIDUAL ACCUMULATION AND DISTRIBUTION, instead of $1,000,000.00, the spouse of a deceased former worker (you or me) receives a paltry “Death Benefit” of $255.00.
8) Now if you aren’t already angry, this next item should make you totally furious! There are two existing divisions in Social Security Benefit Distribution. The first has already been described, YOUR S.S. The second division of Social Security is identified as “DISABILITY PAYMENTS”. When Barack Obama took office seven and a half years ago, 4 million people were on Social Security Disability. Today, there are over 12 million people on S.S. Disability, an increase of 8 million recipients who are DRAINING the system. And to top it all off, these additional 8 million people are NOT counted on the National Unemployment List, thus keeping the artificial number at around 5%.
Many Congressmen want to save the present Social Security System by first raising the retirement collection age from 62-63 to 70 and then by raising the top employer/employer contribution from 12.4% of $118,500.00 to a much higher amount. (Please bear in mind that the employees or self-employed workers making over 118 thousand would never get back their contributions in terms of benefits received, thus making the designed BENEFIT a TAX).
Donald Trump will rescue Social Security from its present monetary dilemma, which ought not exist in the first place if bungling (or conniving) Washington bureaucrats had managed the program properly from its outset!
Jay Dubya
Author of 51 Books
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There is also the difference between income of individuals. My father was a Teamster truck driver. My mother worked cleaning, factory, and restaurant jobs nearly her entire life. At the end of their working life when he was 62 and she was 57, he earned as much social security wages that last year--1982--as she did her entire life. Still, by being married to him, my mother benefited until he died, the Teamsters pension went away, and her situation drastically changed.
I have been legally "disabled" and could have collected Social Security benefits for the past 53 years. I never did. I worked instead until I was 69. The problem is, SSI is for "those who cannot work." Not for those who are "disabled," like me. As a result of modern medicine, more and more people are being brought into the category of "disabled." And, as a result of increasing unemployment for higher-paying skilled jobs (automation and outsourcing) more and more people with disabilities like mental conditions or medical conditions brought on by obesity are finding themselves unemployed and therefore collecting SSI instead.
I certainly hate cheaters as much is anyone. But I understand the problem and why people are taking advantage of SSI when they have no other options.
I understand that the Social Security Fund has been siphoned off into the General Fund since the Reagan administration. If we don't address corruption, nothing will ever get fixed.
Ron