The 3 Things Every Woman Should Know About Social Security and What to Do About It

Ida May Fuller, the first recipient (Photo credit: Wikipedia)

 
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.

Retirement Considerations for Single Parents

 
In 1983, the retirement age for Social Security was changed by Congress from 65 to 67 beginning in the year 2000. It was designed to go up steadily so that everyone born in 1943 will have their retirement age increased to 66. It will then remain at 66 for 12 years and then steadily increase to age 67 for workers born after 1959.

Therefore, if you are a single parent born in 1943 or thereafter, your retirement age will be either 66 or 67.

However, this retirement age only pertain to those whose retirement funds are from the Social Security system therefore highlighting the unequal basis of the retirement system in this country. More on this later. In considering your retirement, if you are looking forward to receiving Social Security funds when you retire, realize that there are no funds in the Social Security "lockbox". The fact is there is no "lockbox". It is a complete fiction. Every dollar taken from your salary in FICA taxes is sent to the General Fund and is spent by the politicians as fast it comes in. The Social Security is currently sending out more money than it's taking in. It is hemorrhaging and soon will be completely bankrupt.

It is important therefore as a single parent and the sole support for your children and yourself that you seriously consider and then act on this matter.

Here are three strategies to do so:
1. Let your Senators, Representative, and President know that you realize that the Social Security will soon be bankrupt and that you no longer want to participate in it -- that you want equality in the retirement system and to own your retirement plan rather than be at the mercy of 535 politicians who can decide much you can receive and when you can receive it.
2. While actively engaging in the political process, you must concurrently study the options for building a substantial fund that can be annuitized, partially or fully, and also provide for your children if you experience an untimely death. Some politicians try to frighten you by saying that by owning your retirement plan, you would irresponsibly invest it in the volatile stock market and when it's time for you to retire, you will not have any money to retire on. This is a fear tactic and need to be rejected.
Look up the retirement plan that your Representatives and Senators have established for themselves. Afterwards, let them know that you want to have the same retirement plan that they have. Keep in mind that not only federal employees, but across the country, county, state and municipal employees often can retire as early as age 55 or even younger with roughly 80% of an average of their last three years of income. Tell them that you want to be able to do the same.
3. Finally, realize that once you own your retirement plan, you may have several options that range from choosing highly risky investments to those with hardly any risk at all. In planning for your retirement, stay away from risky investments. Analyze what the pension funds for public employees and what major insurance companies invest their money in. You will see a wide variety of different investments. However, you will find that a majority of their money will be in one sector primarily, bonds. Become knowledgeable of the different types of bonds, and also consider fixed annuities and the guarantees cash value and self-completing feature of life insurance.


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