There is an alternative option to social security that has been used successfully before in private retirement plans. It was structured this way:

*The 401K employer plan was set up to allow the individual employees to manage their own investments using their own investment adviser, preferably a Certified Financial Planner, if the employer’s adviser managing the plan was not acceptable.

* The individual plan pays the costs of any chosen adviser.
* The contributions were made on a monthly basis and held in a money market account until time for distribution.
* At distribution, the contributions plus any interest earned is distributed to the individual plans.
* The employees make what contributions they are allowed to make directly into that account bypassing the company accounting process.
* The employee is required to meet with their plan adviser at the time of distribution to review the plan’s performance and determine the next year’s market strategy.

*The employee is can include a spouse and any additional retirement plans in the annual sessions which is a better planning process.  

This methodology could easily be adapted to handle the social security withdrawals and any required matching amounts PLUS any retirement contributions in addition to that required contribution. I would, however, put the additional contributions into a separate account and only allow that account to be used as an asset to be drawn upon in times of need. The required contribution accounts would not be touchable.

This makes the individual responsible for his own retirement starting the day he enters the work force and bypasses government totally.   This is simple, keeps the individual focused where he needs to be from day one.

In truth, our current social security program illustrates the classical error we all make but is fatal when government makes it:  BAD LOGIC.  No one thought about the reverse population trends that were prevalent at the time.  It is not as if there were not precedents in the population growth figures to trigger that thought process.  The 1918 Spanish Flu epidemic killed approximately 50 million people world wide, 675,000 of whom were Americans.   

Government is not careful enough in its assumptions and is arrogant in its resistance to the input of business and other experienced individuals who can bring more than theory to an issue.We can do better than this.  

Ask questions; don’t make assumptions.

Angela Ahrendts

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