Reader Eric Faith was so perturbed by my article “10 reasons you shouldn’t complain about paying taxes” that he just had to send me an article to argue why social security is bad. Actually, I saw his comment and asked him to write an article since I really enjoy learning both sides of an issue. Eric gladly agreed, and here is his counterpoint:
Social Security Needs to Be Fixed
To answer Clever Dudeâ€™s comment:
Social Security Benefits: Many people my age (20s-30s) complain about paying Social Security since they donâ€™t think theyâ€™ll ever get to use it. However, my grandmother and, most likely, my parents will be highly dependent on Social Security as they get older. Iâ€™m financing my eldersâ€™ retirement, and Iâ€™m totally fine with that. Otherwise, Iâ€™d have to help them pay the bills another way.
I donâ€™t want to stop social security for the elderly that have been promised the benefits for generations. Clever Dude is right; the vast majority of elderly is highly dependent on this income. However, we should demand a system that is more effective.
Letâ€™s relate our social security to our personal finances.
First, when we save for retirement, we invest money for ourselves. We donâ€™t depend on our kids to fund our retirement. The government should use the same standard. The money paid into the system should be stored and invested until the payee is ready to retire, not used to fund others retirements. This method would avoid the current problems with Social Security. In 10 years, we are going to be paying out more in social security benefits than we are taking in. There are not enough workers to cover the large, retiring baby boomer population.
Second, most of us are very capable money managers. We donâ€™t need the government doing this for us. Imagine what you could do if you had 12.4% of your salary to invest in your retirement plan. (6.2% income deduction, 6.2% matching employer contribution) I guarantee it would surpass any social security benefits. In addition, since you own it, you know it will be there when you need it. Debt is rampant in America, so maybe not everyone can handle this task. However, we should have a choice; pay into either the government system or your own.
Social Security is a complex issue, but everyone knows the system is not working and needs to be fixed. Though not well received, the presidentâ€™s plan to start developing private accounts seems like a step in the right direction. Having your own private account would be voluntary, would invest in higher rates of return, and best of all would be owned (so the government couldnâ€™t borrow it for some other project) just like a 401k.
Regardless of the fix, we should demand one.
Thanks Eric! What do the rest of you think about the Social Security issue?
If you ever want your own article posted on Clever Dude, whether in response to one of my articles, or a brand new article of your own, feel free to contact me directly. I won’t promise it will be posted, but I love hearing your opinions and I want my readers to be heard too!