Social Security Is Not Secure

Business, Entrepreneurship.

Retirement: social security vs business ownership - on june 8, president franklin d, 1934. It was his goal to help protect millions of workers from poverty in their senior years.

Roosevelt announced his intention to provide a program for Social Security. - over the years many changes have taken place and social security is very different from the original plan. There is no money left in Social Security' s Trust fund. Here are the top ten reasons that Social Security isn' t the best way to plan for your retirement. The original plan was for people to voluntarily put money into an insurance plan. If more money was taken in than paid out the balance would be placed in an interest bearing account. The money was then put into a Trust Fund that would be used only for paying retirement benefits.

During President Lyndon Johnson' s administration, the funds were made available for use in other government programs. - but instead of saving this surplus, the government spends the money and writes the trust fund an" iou, " a special issue government bond to be paid back starting in 201the problem is that when the money comes due, it will still have to come from somewhere - taxes. For years Social Security has taken in more money that it has paid out. Social Security is subject to double taxation. During the Clinton Administration, Social Security benefits became taxable. Originally, the plan was to have the money paid into the program be tax deductible for income tax purposes. Now, you pay income tax on the money that is deducted from your pay check that goes into Social Security.

You have now been taxed twice on the same money. - then when you receive it, you may be taxed on all or part of your benefits if you have other income besides social security. Social Security is not enough to live on. I know of a woman who spent most of her adult life raising her family. Even if you work hard your whole life and pay into Social Security, there is a very slim chance you will have enough to live comfortably in retirement. At age 50, she will have to work until she is 70 to receive$ 566 per month.

High Social Security taxes prevent many people from being able to accumulate a savings account. - no one can live on$ 566 per month. Social Security and Medicare taxes are 13% of earned income. The current system is not fixable. With inflation at an all time high, few can afford to put away anything extra. The only way to fix Social Security' s problems is to raise taxes. Although hire taxes might relieve some of the problem, it most likely would not solve it, leaving the potential for future tax hikes.

This would have a major impact on average worker' s household budgets, would cost hundreds of thousands of jobs, and take a, slow the economy bite out of any personal savings. - money is better spent in the hands of the people rather in the government' s hands. As has been proven in the past, the laws and rules that govern Social Security change according to who is in office at the time. Social Security is not secure. As new elected officials come in, new ideas come with them and change occurs. In 1950, there were 16 workers paying Social Security for every retired person receiving benefits. As More people retire and live longer there are less people paying in.

Today there are 3 per retiree. - the more you make the more you pay. By the year 2020, there will be 2 workers paying in per retiree. In the original program, participants would only have to pay 1% of the first$ 1, 400 of their annual incomes into the program. For most of human history, people lived and worked on farms in extended families and this was the foundation of economic Security. Today, individuals must pay 13% of the first$ 94, 200 and 95% on the rest of their income. 1Being self employed gives you the choice between paying into Social Security and investing in yourself. They were self employed.

When the Industrial Revolution developed, more and more people worked for other people. - as they grew older, children took over the family business and the retiree continued to receive income and benefits until death. When they retired there was no more income. Today is no different than earlier times. Thus Social Security was created. If you own your own business, you can either have a family member take over the business or hire someone to run it when you are ready for retirement. So, how does one solve the Social Security dilemma?

You can receive income until you die and then you can Will the income to your heirs. - start a business that can continue to provide for you even after you are ready to retire. There are many things you can deduct when you own a business that you cannot deduct ordinarily. The best way to do this is to turn a hobby or interest into a business. For example, lets say you have a hobby of wood working. If you turn it into a business, now you can deduct all the tools and supplies you use to make the items.

You have a room in your home and many tools you have purchased and you love to tinker and make decorative items out of wood. - the room you use in your home can be deducted by claiming a percentage of the rent, taxes, interest, utilities, and repairs to, insurance the house. Much of your travel expense may be deductible now. All of those things you are going to pay for whether you have a business or not. As you travel to visit your children and grandchildren you can make the trip deductible by checking on new ideas and materials that will improve your products, etc, attending trade shows. If you choose to sell products over the internet, your internet costs will now be deductible.

You may travel to craft and trade shows to sell your products. - the list goes on and on. Owning a business is a good alternative to the current popular retirement plans. By making these things tax deductible you can limit what you pay into Social Security and invest that money in your business or a savings program of YOUR choice. After you retire, you can keep doing what you love and create income to supplement your retirement and still keep tax deductions that most people loose in their retirement years. Owning a business gives you control over your quality of life when you choose to retire. If you choose a business that you can train others to do, then that business can produce income after you stop and generate passive income to supplement your retirement.