Photo courtesy of The Hawaii Independent
Social Security retirement benefits are in trouble. This great idea of taking care of the public, which so many rely on today, has been under great fire and a lot of debate. Should we be worried? You have no idea.
Let me be straight with you. While I am very critical of the social security system, I am truly sympathetic for the millions of people that depend on it. Almost 80% of seniors depend on Social Security for all or most of their monthly income. Any lapse in social security checks mean that people won't be able to pay their mortgage, continue utilities, and even put food on the table.
Social Security retirement benefits are at risk. It's easy to see why if you look at the history of Social Security. Yet, most people don't understand why it's failing.
Most people think that the Social Security system works like a bank account. You pay money into your account and when you retire, you cash it out. Easy breezy as my wife says.
But that's not how it is. The system is more of a pass through system...a switching of hands. When the system started, and people started retiring day one, they didn't have time to "build up" their account. So, the money that the current workers paid into the system quickly switched hands.
Current working individuals paid in...retirees received benefits.
Thus, the system can only be sustained if the current working population can sustain the Social Security retirement benefits of the retirees.
It takes around 5 working people to pay for the benefits of one retiree. The trend is not in our favor.
"Social Security will fall, as have all socialist programs since time began. Before it falls, they will attempt to prop it up. The source of funds that they will use is the reserves of private pension plans and other government sanctions."
According to Ron Holland,
"all the necessary legislation that is necessary to confiscate your retirement money is now in place and all they have to do to enact it is to declare an emergency!"
So, what does this all mean? In the event of an emergency, Uncle Sam has legislation in place to pull out money from these plans to use at their discretion.
I can see him telling people right now...
"So that $20,000 you may have put into your pension plan...it wasn't all yours. This tax deferred investment allowed you to defer taxes...but you were going to have to pay it anyway. I'll take my half now so I can prop up Social Security.
Our plan is to not rely on Social Security retirement benefits for the future. I don't think it will be here in the next 20 years. I urge you to do the same. It sucks that you and I have to pay into it now knowing that it is not sustainable. But, I sort of think of it as a way for me to help those that actually need it now. I'm OK with that.
Relying on the government "just ain't" one of them.
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