If you grew up isolated from the world and were taught that the color black is really white and vice-versa, then that would be your belief. You would be adamant about that assessment and it would be difficult to change your mind. The same thing applies to privatizing social security. Many folks believe that privatizing social security is evil and incomprehensible. I for one have strong beliefs that this is something that must happen.
We have been forced to believe that the Federal government should take care of us in our old age without us taking control of our own future. We have been forced to believe that social security is our security blanket. I am here to tell you that while I agree with some forms of social security, i.e. disability, the overall system is failing us and will continue to fail us unless the system is privatized.
I recently saw my yearly statement which provides an estimate of what my projected social security benefit would be if I retire at different ages – the earliest being at age sixty-two (62). For folks born after 1960, the full retirement age is sixty-seven (67). No matter what age I choose to retire, the amount that they project that I would be entitled to on a monthly basis is less then what I gross in one week! That money will never be sufficient to cover my monthly household expenses and the presumed medical expenses that I may incur in my “old age”. This is outrageous and again can only serve as another form of “fixed income poverty”.
The current social security tax is comprised of the following: the social security tax is 6.2% of your income plus 1.45% for medicare for a combined total of 7.65%. In fiscal year 2009, the social security tax caps at $106,800 – which means if you earn more than this amount you no longer have to pay into social security for the remainder of the year. There aren’t too many folks that earn such a salary.
My point towards privatizing social security is that if I was allowed to invest 7.65% of my income since I began to work and ultimately retired, I could potentially have earned a lot more than the projected figure that the United States Social Security Administration is telling me that I am entitled to. Further, any monies can be left to my heirs upon my death.
The fear that many people have is that if they invest their money in the stock market, the potential to lose it all is a possibility. However, the stock market will typically bounce back over time and there are so many types of investments that can be made, i.e. real estate, bonds, commodities, etc. that you can diversify your contributions in so many ways that you will decrease the risk factor. Maintaining social security as a form of retirement is outdated and does not work and the reform to privatize the system is really the only way to go. Whether you like it or not, we are a capitalist society – so why are we not screaming about this ancient socialist program that does not work? I can’t afford to rely on the Federal government to support me and my family in my old age. Can you?
by Alonso Rodriguez