More on social security

Dear Editor:Two weeks ago I wrote about the mess that is social security. "Social Security Mess," 2/10/11) Let me start by stating that my wife and I have derived benefits from social security for a good 20 years. I'm not inclined to return the money but I think we've receive more than we should have. The program has been meddled with to the point that it will bankrupt our country if it isn't changed drastically. In my previous letter I used my son's numbers (because they were available) to show how unjust the system is. Unfortunately, I made a gross error in my calculations. I showed that my son's lifetime deductions (as of that date) were a rather small $34,832, of which half was contributed by his employer. I showed that, with the $964/month projected benefit from retirement at age 66, he would recoup the deductions from his salary plus those contributed by his employers within three years. If he lived until 80, I showed he would received an additional $10,604. That is wrong. That number would be correct if the $964 were an annual payment. It is monthly, so he would receive an additional $127,250, not $10,604. All told, he would receive a total of $162,080, or 4.6 times as much as the combined contributions from himself and his employers, and 9.3 times his own deductions. That's absurd. I said in my previous letter and I'll repeat that I think the social security and Medicare program should be a defined contribution program, not a defined benefit program. It should be, at most, a way of forcing people to save for their future. It was never intended to be a person's sole source of retirement income, and it certainly was not intended to be the huge giveaway program it is now. There are those seeking to make it even more beneficent by making the benefits tax-free. In all fairness, the employee's portion was taxed when earned and should not be subject to double taxation. Only half of the monthly income should be taxable. There has been a suggestion to reduce or eliminate the widow's fund. Once again, we get into the problem with a defined benefit program. There is no limit to how much money is available. If I were a young woman, I would seek to marry an old man, expecting him to die and leave me with an indefinite source of income. We have to get over the idea that social security is a right. It's a socialistic concept that presumes we aren't smart enough to plan for our own retirement. I see no reason anybody should receive more during his retirement than he contributed during his working career, except maybe for a small interest income from his contributions. I know this isn't a popular position, but it's the only one that is fair. And it's what we must do to save our country from bankruptcy. -- Donald Niemand, Downey

********** Published: February 24, 2011 - Volume 9 - Issue 45