Since the era of what is known as Reaganomics, this country's social security has been in jeopardy for some time. Our forefathers wanted our government to be able to aid in the comfort of our golden years. This generation of baby boomers may be the last ones to benefit from our founding fathers dreams. This report will examine the downfall of the social security program, and what has been done to try and revive its existence. Additionally, my research will try and prove that social security will not be a wise decision in your retirement planning and what other alternatives you have to social security. It will show a time line of where you should be with your alternative savings and a chronological order of when, where, and how much you as an individual should be investing. I will offer options and benefits of different investment programs
[...] The Social Security Administration estimates that, without Social Security benefits percent of individuals aged 65 and older would live in poverty, nearly five times as many as are in poverty today." WHEN BENEFITS KICK IN Year of Birth Full Retirement Age 1937 or earlier 65 1938 65 and 2 months 1939 65 and 4 months 1940 65 and 6 months 1941 65 and 8 months 1942 65 and 10 months 1943-1954 66 1955 66 and 2 months 1956 66 and 4 months 1957 66 and 6 months 1958 66 and 8 months 1959 66 and 10 months 1960 and later 67 Source: Langford 2005 However, the envisioned social security plan did not work as it was designed to function. [...]
[...] Foreseeing a high demand for social security privileges and also due to the collapse of the economy during the 1980s further amendments were carried on the basis of Alan Greenspan's recommendation. According to him partial taxation of Social Security benefits for middle and upper income group needs to include federal civilian employees and non-profit enterprises, and to increase the age of retirement to 67. The taxation structure further increased in 1993 with the legislation mandating raised taxes for higher income levels. [...]
[...] However, the Social Security structure began to fail with the changing social and political conditions prevalent during the 1960s and 1970s when the ratio of working individuals were being replaced by post war soldiers and their families who though added dependants on their lists but their contribution were less to the Social Security fund. As a result there were less supporting workers as compared to the number of retirees and their dependants and survivors. The aggregate imbalance coupled with the increased life expectancy in the US induced deterioration in the functionality of the retirement plan. [...]
[...] Increased life expectancy coupled with the change in the family structure brought about the Social Security Act of 1935 thereby improved the health care and facilities programs from the 1930s onward. The program made provisions for grants to facilitate old-age assistance, unemployment insurance, aid to dependent children and grants to the states for setting up medical care services. The social insurance program continues to serve the people till today by providing economic security to the older worker's population after their retirement. [...]
[...] If 1.6 percent of workers' earnings went to individual accounts, a $25-$50 range of costs charged to the account would be equal to 7-14 percent of new contributions for the mean earner (equivalent to a "front load" charge); with 2 percent accounts, the front load would be 5-11 percent; with 5 percent accounts, it would be 2-4 percent; and with 10 percent accounts, it would be 1-2 percent." According to Rob Strant (2005) of American Bankers Association, funding of the unfunded liability must come from a combination of borrowing, raising taxes and reducing the government spending and reducing Social Security benefits before it would be able to achieve the beneficiaries' needs for the future. [...]
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