For decades our country has been fighting the problem of social security running out of money. What we have done as a country is that we have increased employer and employee contribution rates, increased the age of receiving the benefits, and increase the social security cap. For all the debate, that has been our countries solution. Basically, that is our go to plan of action to kick the can down the road.
Let me ask a couple of questions – After so many years, does our house insurance pay a benefit if you don’t have a claim? Does our vehicle insurance pay out a claim if we don’t have an accident? Families across the country pay these insurance premiums without ever getting a penny back. They are happy that they never received a penny back because they have been fortunate to never have a house or vehicle accident. Ok, I am sure you might be asking where I am going with this. Social Security was originally setup and meant for an insurance policy. An insurance policy that was set up for families after years of work. This insurance would provide a minimal amount of income to use at retirement age. An insurance policy that was funded by the employee and employer over many years of work. This insurance was meant as a protection just in case you worked a fair amount of your life and for one reason or another you didn’t make it financially.
Now think of any wealthy married individual over the normal retirement age. Quite possibly, the family you thought of is earning $64,488 a year in social security benefits. Do you believe these people have made it, they have been fortunate, they have been blessed? Many of these people who you are thinking of have put in many hours of work and took on a lot of risk to achieve that wealth. Now do you believe these same people would say that the same thing about themselves. I would guess that most of these people would say the same thing. But they are still receiving the automatic insurance benefit from our countries insurance program called social security. Doesn’t it make more sense, as a country to start at the top in making changes. It doesn’t make sense that we ask our coal, steel,construction, roofer’s and other workers to work until age 67. Does it make since that we ask our young professionals who have mortgage, college bills, higher medical premiums, and are trying to make it to pay more social security (increasing the cap or even worse do away with the cap).
We have to take a common sense solution to the Social Security problem. Why in the world are we not starting at the top. I once ask a wealthy individual if he needed his social security to live on, he said with a grin no, I then ask him what he did with his social security? He said he gave it away. I ask him if he would be wiling to give t back to our country, he said he would if everyone else in his position would. He was not going to be the first. Starting at the top is not going to solve the problem, but it would help the problem and any further changes to middle America in regards to rate, age or cap would be better received.
A social security plan based on need. A unique idea to social security but not to other government programs. Need based is usually at the other end of the spectrum – poverty not the wealthy. A person or married person with say a net worth over five million dollars would not receive social security. Instead of social security benefits they could receive a charitable contribution deduction on their income tax return or possibly a credit to be used if they ever had to go to a nursing or an assisted living facility. They would be receiving something for their years of contribution. If for some reason their net worth fell under the need based amount, they would be eligible for social security benefits. We want these people to continue to work if they want to and take risk. The tax deduction equal to 20-25 percent is better than 100 percent of the benefit for our country. In regards to the long-term care benefit – many of these people would die without going to one these facilities or quite frankly, many of these people would pay for private care.
If a wealthy couple could go back in time and ask themselves this simple question when they started their careers “Do you want to work your entire life,pay into social security and receive the benefit because for some reason it just didn’t work out or would you work your entire life, pay into social security, and receive no benefit from social security insurance because they made it financially?
This should be the starting point of any change to social security.