How to Reform Social Security (in 3 easy steps)

Look, we can argue about it all day, but Social Security was never meant to be permanent. Maybe if it had been run the way that it was originally intended it would have been okay. But since that SS# no longer represents an account containing all of the funds that you paid into it, it is pretty much belly up.

We all know that the system is ripe with fraud and corruption, and it is unsustainable. Period. So what do we do? Here is how we can reform the social security system and phase it out without hurting anyone financially:

Step 1: Everyone who is currently on the system, stays on the system. They paid into it, they counted on it, they deserve it.

Step 2: Everyone who is still paying into the system (in the workforce between the ages of 18-67), get tax credits back for the amount that they paid in. These tax credits can be used to invest into their own private 401K or other private retirement fund.

Step 3: Everyone who has not yet paid into the system (under 18), stays off the system and starts their own private retirement plan.

Okay, I know, what would happen to irresponsible people who chose not to save for retirement? Simple. they would continue to work, or rely on a family member for support... just like people did before we had a government safety net.

Why is a private plan better than the government plan? There are many reasons, but here are just a couple:

1.) Inheritance. You pay into the system for 40 years and then you die of a heart attack at 65 years old. Where does all that money go? You pay into a private plan, and you die before you use all of the funds, your children inherit that hard-earned money and hopefully invest it into their own plan.

2.) More money. Conservative estimates say that if you invested the same money in a private investment account that you dumped into SS, you would get back 8 to 9 times the amount that you would receive from SS.

3.) Permission: You pay in for years and years and years. Then when you hit a magical age that some bureaucrat determines, you have to then beg for every penny that you get. With a private plan, you decide when you want to retire, and how much you want to spend. You basically pay yourself out of your plan. And you need some extra money to put down on that beach house? You just withdraw it! Try that with social security!

So if a private retirement is so much better, why do we still have this ridiculous government system? Simple: political power. Control people's money and you control them. Listen to all of the rhetoric and scare tactics next election that revolve around seniors. Thanks to the baby boomers, we now have about twice as many people in retirement as we have working. So scare seniors, tell them they will lose their retirement money or have it reduced if they vote for the other guy, and you've got your votes. Easy.

What do you think?