No politician wants to "step on the 3rd rail" being Social Security. Everyone knows it's broken without anything done to it but no one will speak about it! It drives me nuts. Main part that is revolting is the political gamesmanship both the D's and the R's take when the other side makes a comment on how to fix it???
The main reason I get so mad is there are a number of ways to repair what is there or to replace the current system with another. Here is one idea for discussion:
Being that I have my insurance license, I have a very simple idea that I believe would have multiple benefits to the country and it's citizens. Now, first off, this is just one example and I'm sure there could be a product created to achieve greater results given the scope of the policy I'm recommending. Now that the disclaimer is over, here is my idea.
When a citizen enters the work force, instead of FICA withholding's going into the Social Security Fund, each person has a Universal or Whole Life Insurance Policy taken out on them. For example, an 18 year old male, non smoker that the total contribution to the policy being $150 per month would fund a policy with a face value at issue of $100,000 in life insurance (death benefit increasing with cash value option) that could be worth $734,000 in cash value and have a death benefit of $896,000 at age 65. Then the person takes that just short of 3/4 of a million dollars and rolls it into an indexed annuity then they could have a lifetime income of around $36,000 per year minimum (if annuity index does well, then could be more).
While that's not a lot of money, it's definitely much better than many social security checks now being received! Not only that, but everyone working in the country would also have life insurance to establish an estate for their families for those that don't make it to 65 years old. Think of every working person in the USA being insured for at least $100,000 (will go up with age and continued payment premiums to keep policy in force) with a serious cash value accruing along the way.
Now, if that individual could leave the policy alone until they were 69 years old, then the cash value would be over $1,000,000 and the death benefit over $1,200,000 at that same $150 per month! I don't know about your paycheck but the FICA portion for many is well over that amount on a monthly basis.
Consider that my example is with a current universal life insurance product that anyone in Florida (state where I am licensed) could get as long as their health made them eligible for the underwriting process and for most 18 year olds that's not a problem! Now if the insurance industry would put their business minds together, I'm sure a universal or whole life policy could be put together that could increase those benefits by restricting loans out of the policy, etc. (current universal or whole life policies allow loans to be taken out for their cash value) or many other ways to ensure funding the policy will continue and not be depleted along the way.
Let the current Social Security Administration administer the receipt of funds and transfer to the insurance company chosen. Each state regulates the insurance companies in their states and that would continue. They would have to figure out an equitable division between insurance companies to write the policies but with such a large number of policies compared to current levels, there would be plenty of business to go around. Probably would need more insurance companies to handle it all. But those are good problems to have. Now you take the money out of politician's hands and place it directly into the economy! All insurance policies are backed with a number of protections and state insurance boards to ensure the policies remain funded, so safety would not be an issue.
Before you yell at me about the disabled or children of deceased parents, etc. that currently get social security funds in one way or another, I bow to you on those instances but I would say that those exceptions are a very small percentage and could be taken care of separately via some kind of program but the main thing is there would be so much money to do it with at the federal level as social security would not be a burden on the government. Anyway, something to chew on and I'm sure there are ways to improve or amend the idea. So, D's, R's, I's and L's come on and put down political gamesmanship and roll up the sleeves!
What do you think??? Come on and let me know!!! Have a great day everyone!
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