To enhance retirement savings options for Americans by allowing individuals to opt out of Social Security taxes and instead mandate 401(k) contributions, with safeguards to ensure no one is left without retirement benefits.
Proposal Summary:
Opt-Out Mechanism:
Allow individuals to choose to opt out of paying Social Security taxes.
In place of Social Security taxes, mandate contributions to a private 401(k) plan or equivalent retirement savings account.
Mandatory Contributions:
Ensure that contributions to the 401(k) plan are at least equivalent to what would have been paid in Social Security taxes.
Safeguard for Non-Employer Sponsored Plans:
Individuals without access to employer-sponsored 401(k) plans will remain enrolled in Social Security and continue paying Social Security taxes.
Incentives for Participation:
Offer tax incentives for employers to establish 401(k) plans and for employees to contribute beyond the mandated minimum.
Financial Education:
Implement financial literacy programs to help individuals make informed decisions about their retirement savings.
Benefits:
Increased Control: Greater control over individual retirement investments with the potential for higher returns.
I agree with you in theory, the problem would be running out of money in the Social Security budget. The current working population contributes to the fund as well as their employer. I think they said, by 2030, they will have to reduce everyone’s monthly payment by about 20% (I think)
Contributions to a 401k instead of social security would deplete the fund for the seniors. They contributed their entire working career.
You don’t need an employer Sponsored 401(k) you can always participate in a IRA or ROTH IRA. Maybe they can adjust the limit so that if you don’t have a employer sponsored 401(k) your limit for an IRA is increased so you can contribute a larger amount each month. As you mentioned Social Security is so corrupt so the less money you can send to government to manage on your behalf the better off you will be. They should devise a different tax maybe within sales tax to take over for those who are currently on it (And eventually will go away as fewer people pay into it) and allow others that show contribution into a 401k/Roth to opt out. The problem with having someone still paying into is then continuing to perpetuate the need to have a Social Security for future generations. Retirement needs to be completely out of Governments hands and control. Further more NO ONE should receive Social Security Benefits that has not Paid into it (Besides Marital arrangements).
I would avoid any kind of mandate. Where I choose to invest my money is my own business but I agree that people should be allowed to opt out of SS especially since it actively loses us money
That is a very valid point, that I believe has perpetuated the endless cycle of the Social Security issue for decades. The current budget is expected to run out by 2035. No matter what the money is going to have to be supplemented from somewhere other than SS taxes, which is also the only way to ever allow people the option to opt out of SS. My thought was to use a portion of Trump’s proposed import tariffs, and then possibly a % fee for those that want to opt out (one time thing). Just an idea, but either way the money has to come from somewhere else. I also think a mandate won’t play out well long-term, but if there isn’t some sort of check system, you’ll end up with a bunch of people that didn’t manage their money properly, and are now the government’s responsibility. I think in order to opt out you have to show proof of where you’re going to put your money. (401k, Roth IRA, investment savings etc.)
Almost exactly what I said, but much more concise, well done. I say import tariffs to supplement those currently on social security. (New tax + bring production and jobs back to US) Also, yes must show a contribution into some sort of retirement account to opt out.
I agree with all but #3 on your list. For those of us that are self employed, we should still be allowed to opt out and have a mandate for a Roth IRA in the absence of a 401k.