The Social Security Mess
Tom Lewis provides his insightful comments on the Social Security Mess.
Tom Lewis: So, the issue I want to discuss tonight is Social Security. I just started a new job in addition to my current job. So I’m a 1099 employee at my second job with a private contractor in real estate. I’m not making a lot of money but I’m doing well. So I just thought about paying off some debt and what not. But, before I went through this money I wanted to figure out how much I should set aside for taxes, what am I going to be hit with when next April comes. Everything I looked at pointed to about 25% or maybe some more. 25% is a lot, especially let’s say you take $1000 that’s $250 taken off, that’s a lot. That means basically 25% of the time you’re working for the government, but that’s not what I looked into there.
What I did look into and saw was 6.2% of that 25% was going to Social Security and 11% is going to Medicare. I don’t really care about that right now, that’s another issue for another day. But, then I said, ‘Okay, if start working at the age of 22 and worked up to the age of 65, how much will I pay into Social Security over that time period?’ And I figured the math that I did raised over a year and the final number came to $180,000 which would be paid out. And, by the way, if you want to see this chart email me, I’d be happy to share my data with you.
So, $181,000… let’s just say that over the year I had $181,000 in my savings account or a high interest yielding account, which got me 3%. That would be another ridiculous sum of money that I could add on top of that $180,000, it would be like $300,000 if my math was correct. That would be the total amount between my savings account and the initial investment of the money I pay into Social Security. That’s $300,000 that when I am 65 I can get that with no questions asked. That is a lot of money. Inflation is probably not going to be as much by the time I turn 65 as it is now.
So it got me thinking that the average sees about a $1000 a month in Social Security checks when they reach the age of 65. I’ll maybe see more than that, but when I see everything that I’ve put in… probably not. Let’s say I die by the time I’m 70, I won’t see any of the money that I invested. I would not enjoy the fruits of my labor and I’ll tell you I’m really working hard. I mean, putting in almost 12 hour days and weekends, I’m not complaining, I love it. But I want to see some return on my investment. I want to see a return on that sweat that I am putting in. And, you know, I’m exercising responsibility and my reward is my paycheck. So, the bottom line is why can’t I decide where that 6.2% goes, I’ll deduct the other taxes later. That 6.2%… why can’t it be my decision to decide to maybe allocate it to an investment fund. And maybe the way to go about this…and I’ll propose a solution too… is when kids are in high school let’s start with educating them there about stocks and bonds and savings accounts and funds and so on and so forth, 401Ks and what they mean. And maybe when they hit the age of 18 or 17 when they are working a job, they can start managing that stuff they can start to invest that 6.2%, you know. Hey, as opposed to putting in Social Security here is your other choice. Maybe we can give them reedom of choice. This country is all about freedoms and I think they’re depriving us of our freedom to earn money by taking this money away from us. And the government is taking away personal responsibility, and I thought we were supposed to be all about personal responsibility. Yet, the government is going to handle it for us with our Social Security. So why not say, ‘Hey, as opposed to putting that 6.2% into Social Security here’s your other choice; put it into an investment fund’.
What happens when every 18 year old and 30 year old and 25 year old … every person in this country… invests in some kind of portfolio, invests in a stock, invests in a fund. What happens? It means there is lot more money out there to work with. And yes, some funds are going to bomb; absolutely. But that’s why you have a diversified program, that’s why you need to understand what they are doing before you get into this. That begins with education and I believe we can spend some tax dollars on that and accomplish something much greater, and that’s investing in our own country. That’s as opposed to just giving money to the government, letting them take it off their hands for 25, 30 years. You start working with that money now and making it grow so that in that 25 or 30 years it’s even more than what the government could have given back to you. And you can buy a boat, you can buy whatever you want. If you are responsible and if you tracked it for those 35 years, the sky is the limit. And that’s why we need to stat realizing that through personal responsibility and through education we can be a greater society than we are today.
The American work ethic is just lost. People are more and more looking for handouts and assistance. And instead of teaching a man to fish so he eats for a lifetime, our government keeps handing us the fish. The next thing you know is free healthcare and this and that and other things. And it’s all government managed. What do we have to worry about other than going to work and coming home and going on our vacations? But I want an elaborate vacation, as does the guy whose, you know, working at the lowest paying job. Everyone wants that. And it’s the dream of having that that drives me every day. That dream of one day retiring and living the great life is what gives me my drive. That makes me sacrifice time with my girlfriend, and that makes me sacrifice time with my friends right now. Because I know that working hard now pays off far greater in the future if I’m wise and if I invest wise.
And that’s been a life lesson too, not just from the classroom. So, everyone starts investing the 6.2% into the country and the next thing you know, maybe some science groups are benefiting and we have greater products out there and greater ingenuities. You start thinking about what 6.2% spread over millions of people can do. I mean, it could grow our economy substantially, and I think that’s worth its weight in gold, I think that’s better than any Social Security payment that we do right now and I hope that people start to realize that. If you don’t know what taxes you’re paying, or you know the percentage, really look at the salary you’re supposed to have.
You’re supposed to have a $60,000 salary. Figure out how much is really being taken out as taxes each year. That % of the time you’re working for the government. Sure, sometimes you see roads fixed and other things, but the way you look at things anymore, I mean is government really effectively operating with our money? We’re running up a deficit that is just astronomical. So, they want us to continue to give them 6.2% when they demonstrated to us that they can’t manage it by running up this astronomical bill. And it’s not just Republicans and it’s not just Democrats, it’s Americans that are not caring anymore. We’re not engaging our government. We’re just handing over responsibilities and that’s the call to action. Start being more responsible.
Take an interest in your finances, taking interests in your job. If you don’t like your job then go look for another one. The economy is bad but there’s always work to be had. You may not get the salary you want, but if you work hard and if you believe in your work, I promise you it will pay off. I love my two jobs. The one job I have I think it got it by a lot of hard work and it was recognized and that’s why I’m here today. And I’m continuing to work hard, and I love my other job in real estate and I show up to work and the hours are awful, but I love it and I love the idea that I am making money, I love the idea that I am investing in my future, paying off my debts and I’m getting to enjoy some luxuries that I wouldn’t get to enjoy if I didn’t work this hard.
But, I would also like to enjoy that money that I am making as opposed to paying approximately 25% of it to the government and never really seeing that 25% in action. Politicians will stand up and say, ‘Well, I created three jobs here on this transportation project in some obscure town in Alaska’. Well, okay that means what to me? Let’s starting asking accountability from out politicians and from our finances.
Thank you and have a good night.
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