Social security private

The federal government thrift plan was started in 1986 and has been a success. There are five funds and a five percent employer match. The plan has a $25,000 per year maximum and is similar to the 401K plans in the private sector. The President today signed into law a new tax deferred savings plan for the millions of people who do not have an employer pension plan. The plan is for people who earn less than $35,000 and they can save $1,000 per year with a government match of $1,000. This could be the start of privatizing social security (SS). The worker would have his social security money which is deducted from his pay check deposited in the new savings plan. This would include the matching amount from the employer. It would start slow with anyone turning age 25 next year being eligible. The payroll deduction is 7.65% of which 6.2% is for social security. That amount includes 2.2% to cover the cost of disability and survivor benefits and the remaining 4% is for SS. This is matched by the employer and so 8% of salary can be set aside each paycheck and deposited into the new savings plan. Based on past market performance this will far exceed the current SS benefits and the employee will own the account. This means any money left over at death will pass to the heirs. This will remove the discrimination against Blacks under the current system because it is based on life expectancy and Whites live longer. This would also remove SS from the responsibility of government. If a person age 25 earning $40,000 per year gets a 3% raise each year and invests 8% of his salary that earns 10%, he will have $1.56 million in his account at age 62. If he invested this money and earned 8%, he would have $10,000 per month income for life and then pass on the $1.56 million to his heirs. Under the current SS system, he would receive $9,200 per month and have nothing to pass on. The estimate of his earning 10% on his savings during his work career is based on the 100 years average for the stock market. This would have the added advantage of putting money into the private sector to be invested in the economy. Instead of living off the interest at retirement he could purchase a life annuity for $9,400 per month and guarantee his retirement income or some combination of the two.