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Social Security Reform #SocialSecurity
Proposal to triple benefits for citizens
For those entering the workforce, a new one time choice
1. Privatize Social Security & allow citizens to invest funds in pre approved investments
2. Stay in current system
Move all non retirement benefits such as disability or other programs out of Social Security to general government programs supported by tax revenue
Investment Options for Choice 1:
70% in Total Stock Market Index Fund
30% in Aggregate Bond Market Index Fund
Fee cap of 0.05% & no ability for government to mandate where investment dollars go
To be clear, index includes an estimate of all stocks and bonds in the US markets - no segmentation, leverage or sub targeting allowed
Rules for distributions are the same as IRAs (Required Minimum Distributions or RMD)
At death, remaining money rolls to beneficiaries (same rules as current IRAs)
No emergency withdrawals allowed
Benefits :
Increases retirement income dramatically (more than 3 times greater) & eliminates the challenge of funding a defined benefit retirement plan
There will never be a drain on the federal government finances from Social Security again for those in private plans
Example :
Assuming your invest social security taxes for an individual into the 70% stock / 30% bond portfolio with returns well below historical levels of 7% for stocks & 3% for bonds, total payouts of benefits would be 3.2 times the benefits that the individual would receive in the current social security system
Average annual return for the S&P 500 has been 12.9% in my working lifetime & total bond market aggregate has been 6.1% return annually
Challenges :
Educate voters - new requirement to educate students & students must pass test prior to graduation
Transition costs as young workers transition out of the current system (although it is a current commitment so there is no real change - just following through on past commitments)
Convincing government that giving up control of citizens social security is acceptable (it is citizens money but government controls our money right now)
@WaysandMeansGOP @SocialSecurity
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