John Bullis: Will Social Security be there for our grandchildren?
For the Nevada Appeal
Lots of folks wonder if the grandchildren will be able to collect Social Security benefits.
No one can absolutely predict the future, but the Trustees of the Social Security program released a report this year. They estimate in 2036 there will be no more “Trust Funds” and there will be sufficient tax revenue to pay about 77 percent of benefits.
It is reported about 53 million people received some type of Social Security benefit in year 2009. The total benefits in 2009 were about $675 billion.
The Wall Street Journal reported that the county workers in three Texas counties opted out of Social Security about 30 years ago. They instead created personal retirement accounts. It’s called the “Alternate Plan.”
There are both employer and employee contributions paid and the contributions are pooled. Then that money is actively managed by First Financial Benefits, Inc. of Houston.
The counties of Galveston, Matagorda and Brazoria have no long-term unfunded liabilities. Part of the money is paid for a term life insurance policy that pays four times the employee’s salary (tax free) up to a maximum of $ 215,000. That’s a lot more than the $255 Social Security death benefit.
A worker in this “Alternate Plan” owns his account. The entire account belongs to the estate of the worker and his heirs.
There is a disability benefit that pays immediately upon injury. That’s better than the usual six months or so wait for Social Security disability benefits.
A worker making about $26,000 at retirement would get about $1,007 a month under Social Security, but $1,826 under the Alternate Plan. That’s a big difference!
A worker making about $51,200 at retirement would get about $1,540 a month under Social Security, but $3,600 a month under the Alternate Plan.
The Alternate Plan has demonstrated that personal accounts work better-its been going about 30 years now.
Of the 1,355 employees that could elect the Alternate Plan, 1,350 elected and participate in it.
Why don’t we hear more about this? What if Social Security was revised to follow the Alternate Plan? Will our members in Congress at least take a full, hard look at it?
Did you hear “Over every mountain is a path that can’t be seen from the valley.”
• John Bullis is a certified public accountant, personal financial specialist and certified senior adviser serving Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs, LLC.