Is It Time to 'Super-Size' Social Security?

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It has always been fun to pretend that the employer matches your 6.2% SS contribution. In reality you just get paid 12.4% less and the Government takes it. It has always been fun to pretend that SS is a government insurance plan wherein your "premium" buys a benefit. In fact the benefit is a political shell game calculated by politicians and designed to provide lower and lower benefits as time goes on. There is no guarantee in SS at all, except the guarantee that you will continue to pay for it. Pretending is a game used by liberals to get votes.

JAGUAR6CY of VA 9:38PM January 18, 2010

Mr Moeller and a couple of the responders complain that the Government is using SS funds to pay its bills. This is a common criticism of the program, and the root of the "lockbox" nonsense that became a major issue in the 2000 Presidential campaign.
A more realistic way to look at the issue is to pose the question: How should the SS program invest its surplus trillions? (That's not a misprint: SS has over 2 trillion in investable dollars.) By law, it has to invest its funds in special US Govt bonds paying a fixed rate (4 percent, I believe). Since these bonds are backed by the full faith and credit of the Govt, they are as risk-free as any investment can be. Considering their safety and generous return, I'm wondering "Where's the beef?"

Raymond Rahn of FL 12:55AM November 24, 2009

don't mean to be mean here
but the top of the head "ideas" about social security in the above comments... and in the suggestion of the post... really demonstrate that no one knows much about social security except what they have read in the lying think tank press releases and the reporters and commentators who report them but never bother to think about them.
what might be wrong with the suggestion is that social security is an insurance program, not an investment program. the extra premium suggested here might or might not increase your benefits depending on a bunch of factors best left to the people who designed the original program. an "add on" retirement investment program managed by the government might be a similar idea that would work. but best to keep the "old" social security as the insurance it was intended to be.
i'd make specific comments about the comments above... but what's the use. ignorance tends to persist and we haven't the time or space to educate the masses.

dale coberly of OR 1:44PM September 09, 2009

I suppose that if you are interested in a predictable return you could invest in US bonds and bills, and not get the taxpayer mixed up in your scheme. There is no way that the government can give participants above average returns - that was tried for the earlier retirees under SS who got better returns that were paid for by you and me.
I suspect that your "voluntary" system would become mandatory over time and just increase the size and deficit of the current system. Right now I pay max SS taxes and get a lower benefit as a fraction of my pay, and then get the privilege of paying taxes on the benefits that I have already been taxed to pay for.

Rich Berger of NJ 1:23PM August 25, 2009

Social security was a pay as you go system since 1939. Since the 1980s, it is used to fund the operation of the federal government and clearly pays for more than its stated purpose. So, in essence this regressive tax is paying for programs the middle class and the rich should be paying for and are not because income taxes are simply not covering their fair share of the federal budget. This is a disgrace and needs to be changed.
On the matter of healthcare, people need to be reminded that health insurance is underwritten like life insurance. Once you're stricken with heart disease or cancer, you can forget about buying an affordable policy. Sickness and age are inevitable events for most of us, even for those of us who take care of our bodies. If we are a compassionate society, we must provide support for those people.

The Gorn of CT 8:01AM August 22, 2009

As you correctly point out, there are some catches with your idea. First, putting Social Security on sound financial footing. This is the third rail of politics and, contrary to your statement, will be hard and painful to do since it will require raising taxes and or cutting benefits. Second, making sure the Congress does not put its hands on the contributions -- you correctly point out that this would be hard, if not impossible to achieve. Third, you say that the Social Security program actuaries do an accurate job of projecting future revenues and outlays. That has not been the case as evidenced by the ever changing estimates of when the system will start taking in less than it pays out. Fourth, not many people will want to make voluntary contributions to a separate government sponsored account when all those contributions would revert to the pool when you die whether you have received any benefits or not. You'd be better off just maximizing your 401(k) contributions, having them placed in one of the diversified target date or balanced funds that are available in most plans today or (if you are averse to equity market exposure) in a bond index fund or fixed income option and making after tax contributions to a fixed annuity outside your retirement plan.

Jeff Close of CT 2:31PM August 19, 2009

Now, here's a hurdle.
Extra money we send in for the future must be invested in something. If you put it in INDIVIDUAL separate accounts with consumer choice, then you have the same problem as today with many participants making bad decisions. You also have private interests clamoring to "manage" it for fees and sell the annuities for another fee.
If you put it in an AGGREGATED separate account (where the government can't spend it for other things, but it's still a pool of everyone's money), then government has to choose the investment. Government bonds are one choice, but that's what Social Security does now and the whole government is a dangerously broke entity, calling into question even the value of the bonds sold to the Social Security Administration.
Domestic equities are a choice, but critics will claim you can't have the government buying and owning slices of the private sector. Foreign equities are a choice, and maybe the best one, but market downturns are world events these days and critics from other countries might not like us buying in anyway--given our military power and the scent of colonialism.
Keep trying, Mr. Moeller. Keep thinking.
You're on the right track that America needs enhanced pensions to replace those used-to-be plans that are dying fast in the private sector. You're also right that we need to stop corporations from eating our 401(k) "lunch" which is today's pattern.
All of this is "socialism", of course, and the kind that we need. After all, what is Social Security anyway but the "social" part and the "security" part?

Muser of NM 11:45AM August 19, 2009