# Presentation: 462292

## Saving our Future

- Congressman Pete Sessions (R-TX)
- March 19, 2001

- Investments

- *Social Security card graphic courtesy of Economic Security 2000.

## What Social Security IS . . .

**What Social Security IS . . .**

**A transfer system that takes money from current workers to fund benefits to retirees.**

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## Social Security Payroll Taxes (Retirement, Life Insurance, and Disability Insurance) of 12.4% are Deducted from Workers’ Salaries

- Self-employed persons must pay both ***employee*** and ***employer*** taxes

- *Valid for calendar year 2001.  Available from the Social Security Administration.

- Employee Retirement

- Employee Life Insurance

- Employee Disability Insurance

- Employer Retirement &
- Survivor Benefits

- Employer Disability Insurance

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- 6.2% is deducted directly from employees’ paychecks and 6.2% is denied them in salary for the employer “match.”

## NOT A SAVINGS PLAN

- What Social Security is NOT . . .

**NOT A SAVINGS PLAN**
- 	You have NO ownership of YOUR savings.
- 	There is no relation from the taxes you pay in 	to the	benefits you will receive.
**NOT AN INSURANCE PROGRAM**
- 	Ordinary insurers require a certain amount of 	cash in reserves.
- 	Social Security does not have (or require) any 	reserves.

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## NOT A PENSION PLAN

- What Social Security is NOT . . .

**NOT A PENSION PLAN**
- 	Even FDR envisioned that retirement income should be 	based on personal savings, job created pension plans, 		_and_ social security.
- 	Pensions typically seek to find the MAXIMUM rate of 	return on your investment.
- 	Money must be managed to the greatest benefit of the 		pensioner; any other uses can send the pension manager 	to jail.
- 	Social security has no fiduciary responsibility.
- 	The Supreme Court ruled in *Flemmingon vs. Nestor*  		that you has _no ownership_ of your benefits.

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## Why Social Security is Going Broke Despite Tax and Wage Increases: Decrease in Workers to Support Each Eligible Retiree Increases the Financial Burden on Workers and Social Security*

- 16 Workers Per Retiree - 1950

- 3 Workers Per Retiree - 1993

- 2 Workers Per Retiree - 2025

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## The Decrease in Workers Supporting Each Retiree Means Future Retirees Will Have to Live Well Beyond Life Expectancy to Get Their Original Social Security Taxes Back!

- *Employee and Employer Retirement Tax Only.  Social Security Administration, *Social Security: the OASDI Programs*.

- The Decrease in Workers Supporting Each Retiree Means Future Retirees Will Have to Live **Well Beyond** Life Expectancy to Get Their Original Social Security Taxes Back!

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## Low-Income African-American Males Would Fare Better if They Flushed Half of Their Social Security Taxes Down the Sewer and Invested the Other Half in T-Bills

- *Courtesy of the Heritage Foundation Center for Data Analysis, *Social Security’s Rate of Return, *January 15, 1998.

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- Dollars

## For Low Income Hispanic Males, Social Security’s Return Is Worse than Highly Speculative Stocks and Government Bonds

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- *Courtesy of the Heritage Foundation for Improving Retirement Security; a Handbook for Reforms, 2000.

- Dollars

## The Social Security Trust Fund Begins Cashing In IOU’s in 2015, but They Will Be Gone by 2037 and the Fund Will Be Bankrupt!

- Look at the potentially huge damage we risk to the trust fund if current laws regarding taxes and benefits are not changed - a debt of almost **$160 Trillion** by 2075*:

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- The Fund will be bankrupt in 2037!

- Projected Trust Fund Debt Under Current Law

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## Raise Taxes - Unacceptable

- Reduce Benefits - Completely Unacceptable

- Make your existing
- taxes work harder
- by investing in real
- assets** **

**- Real long term solution**

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## "The greatest power 

- "The greatest power
- in the universe is
- compound interest."

- -- Albert Einstein

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## Let’s look at an example ...

- This is 30 year old, two-earner couple.
- Both make about $ 29,000 each per year.
- They will pay approximately $320,000 in Social Security retirement taxes.

_**Let’s look at an example ...**_

- The Heritage Foundation, The Candidate’s Briefing Book; Social Security - Improving Retirement Income, 2000.

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## Even conservative investments provide 4 times the 

_**Even conservative investments provide 4 times the **_
_**rate of return of the current system.**_

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