Now with your Social Security taxes going up by 2%, it's important for you to understand that you don't own your Social Security plan, the politicians do. That's why Obama was able to manipulate it. Not only that, the Social Security system is already paying out more than it is taking in. By any and all acceptable financial standards, it is already bankrupt.
Moreover, it ought to be unacceptable to you that federal, state, and local government workers have a far better retirement plan that you have under the Social Security system. Learn the difference between a defined benefit retirement plan and a defined contribution plan. More on this in a later post.
Now, Social Security is sometimes mistakenly referred to as retirement insurance. Nothing could be further from the truth.
When you begin to recognize that it isn't retirement insurance, and is in fact a Ponzi scheme and one that Bernie Madoff would love, you can demand that your politicians change the laws whereby you can have a choice of either participating in the Social Security system or having a personal retirement plan that you actually own.
For women, especially, Social Security is a bad deal. Here are three reasons.
1. Suppose you have been married at least nine years and 11 months, been supportive to your husband through good times and bad times, but the relationship deteriorates and you get a divorce. Since you were married to him for less than ten years, you would not be eligible for survivor's benefits when he passes away.
2. Suppose you had a long and satisfactory marriage and you both retire and begin receiving Social Security benefits, when he passes away you are faced with a dilemma. You can receive either your benefits or his, but not both. Your government has just confiscated your benefits you have worked a lifetime for with without you being given recourse - a totally unacceptable situation.
3. And, suppose you have been single woman all your life, retire and then begin receiving Social Security benefits. If you have been working in a non-professional job, you will have benefits that would be less than the national average. However if your counterpart is a stay-at-home wife married to a professional husband, she will receive 50% of his benefits while he receives 100%. Moreover, when he passes away, she will receive his 100% while never having worked. It is without question that she will have higher benefits than you will as a single woman who worked all your life.
It is clear that the Social Security system discriminates against women as it allocates a significant percentage of women to a poverty existence. This policy need to be addressed both on the political and on a personal level. I stated earlier what you should do on the political level. However, on a personal level, you need to choose the most secure and reliable investment for your funds after your employer has deducted Social Security payments from your paycheck.
I suggest strongly that you consider life insurance with a cash value buildup. This can be a whole life plan or a universal life plan. The key points are that the cash value is guaranteed and builds up tax free. That means that the politicians can’t get their hands on it. You should buy as large a face amount that you afford so that your beneficiaries can receive a tax-free estate if you pass away before retirement. Investing in the stock market or in an annuity are other options, but with either of these options, you have a tax exposure and comparatively little or no remaining estate.
No comments:
Post a Comment