Social Security in 2004
This is very interesting and something that even those of us not collecting now should look at seriously.
Since many of us have paid into FICA for years, and are now receiving a Social Security check every month -- and then finding that we are getting taxed on 85% of the money we paid to the federal government to put away, you may be interested in the following:
Immigrants moved into this country and at 65 got Social Security. The Government gave that to them although they never paid a dime into it.
SOCIAL SECURITY
Perhaps we are asking the wrong questions during election years. Our Senators and Congressmen and women do not pay into Social Security and, of course, they do not collect from it.
You see, Social Security benefits were not suitable for persons of their rare elevation in society. They felt they should have a special plan for themselves. So, many years ago they voted in their own benefit plan.
In more recent years, no congressperson has felt the need to change it. After all, it is a great plan. For all practical purposes their plan works like this, When they retire, they continue to draw the same pay until they die, except it may increase from time to time for cost of living adjustments.
For example:
Former Senator Byrd and Congressman White and their wives may expect to draw $7,800,000.00 ( That's Seven Million, Eight-Hundred, Thousand Dollars), with their wives drawing $275,000.00 during the last years of their lives. This is calculated on an average life span for each. Their cost for this excellent plan is $00.00. Nada! Zilch!
This little perk they voted for themselves is free to them. You and I pick up the tab for this plan. The funds for this fine retirement plan come directly from the General Funds, our tax dollars at work!
From our own Social Security Plan, which you and I pay (or have paid) into every payday until we retire (which amount is matched by our employer) we can expect to get an average $1,000 per month after retirement. Or, in other words, we would have to collect our average of $1, 000 monthly benefits for 68 years and one (1) month to equal Senator Bill Bradley's benefits!
Social Security could be very good if only one small change were made.
That change would be to jerk the Golden Fleece Retirement Plan from under the Senators and Congressmen. Put them into the Social Security plan with the rest of us ... then sit back and watch how fast they would fix it.
If enough people read this, maybe a seed of awareness will be planted and maybe good changes will evolve.
THE REST OF THE STORY
An email message has been making the rounds for years claiming that members of Congress don't pay Social Security taxes or collect Social Security benefits. It is completely false. Likewise, there is no secret retirement program reserved only for members of Congress.
All federal employees (including senators and representatives) that entered service on or after January 1, 1984 are required to pay FICA taxes (payroll taxes which fund the Social Security retirement program). All incumbent members of Congress also began paying Social Security taxes at the same time.
Similarly, all federal employees working before January 1, 1984 can participate in the Civil Service Retirement System that provides relatively generous pension coverage. Those employed after that date participate in the Federal Employee Retirement System and an optional 401k-type program called the Thrift Savings Plan (TSP). Again, all federal employees that meet the eligibility requirements can participate in these retirement programs. All uniformed service members became eligible to participate in TSP in 2001.
The email message that's been making the rounds the last few years taps into the widespread sentiment that members of Congress qualify for many secret perks. There may be other special favors bestowed only on congressmen and senators, but those that entered service in 1984 or later enjoy the same retirement benefits as other federal workers--no more, no less.
However, federal workers can enjoy something the rest of can't: personal retirement accounts through the Thrift Savings Plan. If you want to get angry about something, this is it.
Beginning in the mid-1980s, federal employees had the option of investing in three different mutual funds managed by a government-sponsored board. Today, over three million participate in the TSP. More important since its inception, the average annual return on the funds has been over 6.8 percent. Not bad, huh? Representatives and senators can do it. All federal employees can do it too. Shouldn't every other American have the same kind of retirement options?