More on Social Security

I don’t know why I think I know all the answers, but I like to propose my solutions anyway! First, personal accounts don’t really matter one way or the other. Most of us, at least those of us who actually think about retirement, already have personal accounts that we contribute to in the form of a 401k, IRA, or other sort of savings. Instead of giving us some government managed personal account, how about giving us some additional incentive to maintain our own personal accounts?

I don’t agree with the proposals to pay reduced benefits to those who have paid the most into the social security system. Although, one solution would be to eliminate the $90,000/year or so cap of wages that you pay social security on. Also, raising the age of retirement isn’t a bad idea. This wouldn’t put a whole lot more into the system, but would effectively reduce benefits for higher income workers, without actually reducing benefits. I would personally be affected by this change, of course, I’d rather have the six percent of the extra few thousand I make to put into my own account, I’d gladly give it up in order to help the system.

What can we all agree on, well, we don’t want to pay a higher percentage of our paycheck into social security? Other than that, the issues can get quite polarizing.

I’m going out on a limb with a crazy idea that doesn’t sound like me at all with this one. Maybe the federal government could find some way to require us to put a percentage of money away for retirement. This would impact me, as I do so without the government telling me too. Not everyone wants to risk their money in stock, bonds, or mutual funds, but putting the money in a standard savings account or in some sort of savings bond program might work. Its an idea that I don’t really like, and doesn’t actually solve the social security funding problem, but it sounds like a way to accomplish the goal of higher returns on private accounts without a huge government management system wrapped around it. It would however, effectively be an additional payroll tax.

What do I like about all of the talk on Capitol Hill? They are committed to leave things the same for older workers and those already receiving benefits. Of course, they have their reasons; these older workers are a huge voting block that they don’t want to upset.