Author Unknown Essay, Research Paper
I. Nature of the Problem
Social Security is non a job right now ; in fact, it runs a big excess every twelvemonth. However,
Americans are populating longer, and pulling more Social Security payments than they of all time put in. Early in the
following century, we will be paying out more than we take in, and Social Security will hold to dunk into its
excess, which is presently used by the federal authorities for other disbursement. When the last of the babe
boomers retire, the paysheet revenue enhancement would hold to about duplicate to keep benefits. This creates an undue
load on Generation X-ers, and solutions need to be found to forestall this from go oning.
II. The Solution
* Citizens should be given a pick on whether or non they wish to put their ain Social Security financess in
a high-yield bank history, or the stock market.
Right now, the mean American has withdrawn all he has put into Social Security within 7 old ages
of retirement. This forces the mundane worker to back up those presently on Social Security with his
payments. Whoever is still in the work force should be given the chance to make with their money as they
see tantrum. If person feels that they are unable to put sagely in the stock market, there are other options
available. For case, and possibly the simplest, is to put the financess into a money-market history, which
will on mean receive 1-1 1/2 % more involvement than a traditional nest egg history. From the clip the
mean American starts working & # 8211 ; state 16 or 17 & # 8211 ; till the clip he retires, there will be a batch of money that
has accumulated in this history. Another option is a tax-sheltered rente. This is an option available to
anyone & # 8211 ; every bit long as they have an investing agent & # 8211 ; to take a certain sum of money from their
payroll check, revenue enhancement free, and have it invested and re-in!
vested in stocks and bonds. It can be cashed out at any times. Many Bankss offer tax-sheltered rentes for a
moderate committee. The last, and most hazardous option, is to put the financess in the stock market. This is
done sooner for national security grounds. For case, if the authorities bought stock in mass
measures, a bull market could be created, and the market could crash, and the authorities degree Celsius
lose one million millions of dollars. However, every American is non traveling to put in the stock market, and those who
bashs are non traveling to purchase the monolithic measures of stock that the federal authorities would. This would
supply a batch more safety for those investment, and if the market did clang, citizens could non action the federal
authorities for the loss of their money.
* Retirement age should be raised to 70.
When Franklin D. Roosevelt created Social Security amidst the Great Depression, the norm
American could merely anticipate to populate to the age of 60. The retirement age was set at 65. So on the norm,
most people ne’er would populate to roll up their Social Security. Today, the mean American can anticipate to
unrecorded to the age of 76. That is a immense life anticipation alteration, and Social Security policy should be changed
to reflect it. By puting the retirement age at 76, we are giving our mean senior citizen 6 old ages to bask his
retirement, while policy shapers of the past gave him -5 old ages. This should take consequence by the 5th financial
twelvemonth after its transition in Congress.
* Adjust the CPI by -1.1 %
Right now, the CPI ( Consumer Price Index ) , which is used to mensurate the degree of rising prices,
overestimations rising prices by 1.1 per centum points. Since the CPI dictates how much Social Security
payments must increase throughout the twelvemonth due to rising prices, any over-estimation would be the
authorities one million millions of dollars. By cut downing the CPI by 1.1 % , the federal authorities would salvage $ 1 trillion
over 12 old ages.
* Means-Test Social Security
Social Security is an entitlement plan, which means that authorities financess are automatically
provided to people that meet certain standards. Social Security is an entitlement plan in that anyone over
the age of 65 qualifies, irrespective of their income. 40 % of retired individuals depend on Social Security as
their lone agencies of income. However, people like Ross Perot, and Bill Gates, and other multi-millionaires,
are eligible for societal security. What means-testing refers to is that if person did non necessitate Social Security,
they would non be eligible to acquire it. Those who can back up themselves through retirement at $ 50,000 a twelvemonth
should non be eligible for it.