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Possible Ways To Reform Social Security

Possible Ways To Reform Social Security:
Smoke & Mirrors -- Reform Social Security By Lowering Benefits
Reform Social Security By Increasing Taxes
Reform Social Security By Increasing Rates Of Return

Reform What?

Is it Social Security that needs to be reformed? Or, should our politicians be reformed? We don't have the answer to that one!

The Solution Is Simple

Bring in more assets into the Social Security "Trust Fund," and/or pay out fewer benefits from the Social Security "Trust Fund."

Deciding On The Solution Will Be Difficult

We see three general ways to save Social Security.

  1. Reducing benefits will hurt those that either are or will be retired. Count on the governments use of "Smoke And Mirrors" to make these change to complex computations appear less painful.
  2. Increasing taxes will be painful. However, that has not stopped the government from raising taxes in the past.
  3. The one painless way to save Social Security is to invest in assets that provide a higher rate of return. Assets that have higher rates of returns typically also have higher risks of loss. Maybe losses would not be so painless after all! This could also result in government manipulation of the stock markets.

We don't see any easy answers. We will try to make each solution look bad. Not because the solution is bad, but because we want to point out the political problems involved with the prospective solution.

My Opinion

For what it is worth! I am not sure my solution is any better than another solution.

I don't want to see my children and their friends have to struggle financially to finance my retirement. Increase the retirement age and the calculations associated with retirement age. Force me to personally invest a relatively small portion of wages that would otherwise be withheld as Social Security tax. Cap recipients' benefits, so that lifetime benefits would not exceed the Social Security taxes that my employer and I am required to pay would accumulate to if invested at a conservative rate of return.

Dave Kaufmann, a baby boomer


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