Social Security was designed to be your bridge to live a dignified lifestyle in retirementArticle added by Charles McGruder on March 27, 2012

Charles McGruder

Lancaster, CA

Joined: February 23, 2010

The Social Security program was designed to be a safety net for the lower half of middle America. And it is the most talked about safety net program in our country's history.

In the 1930s, Social Security was designed to make room for younger people coming into the work force and allow older workers to retire with dignity. How do we do that? By letting the Social Security operate as it was intended to do.

It was designed to be part of a three-tiered retirement plan made of personal savings, a work place retirement plan and Social Security payments from the government. I submit to you that the government from the 1930s has abused American workers. Governor Rick Perry of Texas called the program a giant Ponzi scheme like that run by Bernie Maddoff.

Gov. Perry was right. However, he was wrong when he placed the blame on retiring workers. People contributing to the Social Security program were deceived by U.S. government starting in the 1980s.

That Social Security trust was designed to take a life of its own and it had grown to such a large amount, members of the various administrations abused their responsibility as trust fund administrators.

Workers contributed to the plan from age 18 to age 65 or death. Workers trusted the U.S. government that the trust fund would be made available at retirement. Yet, the government took money and spent it on various projects — some good and some bad — with no recourse. The trust fund is now loaded with a bunch of I.O.Us never to be paid or collect interest dividends.

Banks don’t pay interest on I.O.Us. China doesn’t hold our greatest debt. The Social Security trust fund holds that distinction. Now the government is turning our kids against the people who made it possible for them to live and grow up in decent surrounding, by saying your contribution to Social Security will be used by your parents and grandparents.

No credit is given to my grandparents, my parents and me for building such a large trust fund. The government interrupted the normal process of money growth by taking the money and leaving worthless I.O.Us. We have to admit our deception and make a course correction. We must stop blaming and start sharing.

Example using fixed universal life paying 7.25 percent

My beautiful wife passed away on Dec. 12, 2011 at age 66. Her plan was to start drawing her Social Security at age 70 with full benefits. Let’s look at her contributions to the Social Security trust fund, starting at age 18 to her death at age 66.

A retirement plan consists of four elements: contributions, accumulations, distributions and transfers. The government interrupted the cycle by taking the money and replacing it with I.O.Us.

Under contribution: She contributed at $60 per month times 48 years = $34,560 over her lifetime.

Under accumulation at 7.25 percent: At 48 years, the contribution has grown to $241,197.

Under Social Security distribution starting at age 66, her monthly Social Security benefit was approved at $1,046 for life.

Under the same contribution for a fixed universal life plan at 7.25 percent, her monthly check would have been $1,862.

Notice the difference of $816 per month. If my wife had lived to age 70, she would have contributed $37,440. Under Social Security, her monthly check would have been $1,546. Under a fixed universal life plan, her monthly stipend would have been $2,518. The death benefit would have been $316,037.

Our family did not receive the death benefit at age 66 for $241,197. Social Security sent us a check for $255, barely able to pay for a floral display. The government kept the death benefit. We need to let people know the real reason why the Social Security trust fund is in trouble.

Our trustee Uncle Sam abused it. Social security is not an entitlement. It was and is a solemn agreement between the United States government and middle class workers that a dignified retirement support program would be made available at age 62 and beyond. Let’s stop the lies that Social Security is a entitlement or Ponzi scheme.
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