Social Security Records

The annual report from the Trustees for the Social Security program indicates that this fund is starting to show deficits. The main cause of the problem is the "baby boomers" effect. In 2004, the annual deficit for the year 2033 was $300 billion, so it is projected to exhaust Social Security reserves in 2041. This issue has became "The Third Rail of American Politics," in other words, if they touch it they are considered dead. Some presidential candidates offered during their campaigns to solve this problem, but it looks like their proposals did not take into account the current crises in Wall Street and in the housing market.

Self-employed individuals pay FICA tax on the first $106,800 of earnings at a rate of 15.3% multiplied by.935, an effective rate of 14.3%. Again, the Medicare tax is paid on all earnings.

In the federal government operations funds borrowed and collected to pay future obligations are counted as income. Social Security is a tax unencumbered by any obligation. Insurance companies and pension plans are required to use actuarial projections for planning to meet future obligations. The Social Security Administration doesn't need to employ actuaries to report projected funding obligations. Every year since the inception of the Social Security tax the federal government has enjoyed an excess of income above payments to retirees.

The federal fix-it commission chairman, previewing what the committee faces in search of a solution, has labeled our deficit as a cancer. Grasshoppers don't have cancer! The black hole they have created will suck away most of the opportunities for the next two generations. Cancer is curable; unfunded entitlement liabilities are financial death!

If you work in United States then you have to pay social security taxes. The tax amount is deducted by your employer and submitted to the Internal Revenue Services. If you work with an employer then you have to pay 6.20% of you gross income as tax and 1.65% as Medicare tax. If you are self employed then you have to pay 12.4 percent of your gross income as social security tax and 2.7 percent as Medicare tax.

76 million Americans were born between 1946 and 1964, the so-called baby boomers. On January 1, 2011, the oldest member of this demographic - the largest America has ever known - will turn 65. At present they make up about a third of the entire US workforce. Taking their place will be Generation X, about 46 million people strong. Using a quick, back-of-the-envelope calculations, this appears to be 30 million fewer contributors to the Social Security fund and tens of millions of new beneficiaries.

In addition, for those that truly believe sovereign risk is the greatest risk we all face, it is wise to learn how to implement a multiple flag strategy to diversify this risk or provide protection against higher taxes, capital controls, hyper-inflation, civil unrest, erosion of personal liberty, and the rise of a police state. With a multiple flag system, you consider taking preparations like, but not limited to, establishing a foreign bank account, purchasing some real estate overseas, seeking alternate sources of income, dual citizenship, and carrying multiple passports.

For in a long time now, the payments given by the social security programs were free of tax. This was the setup since for the most part of the grantees life, the grantees were paying for their social security record.

Insanity...one of the best definitions of insanity is doing the same thing over and over again, each time expecting a different result. Raising employment taxes and/or reducing benefits in an effort to cure the problems of Social Security is INSANITY. In reality taking these actions will only server to delay and exacerbate the underlying problems.

The minimum contribution is mandated for all employed persons, but anyone with a Social Security number can have a SSRIA.