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(Full disclosure: I used AI to help me write specific comments since I started writing them before I was fully awake)
My comment to Mr. Quinn’s very popular piece (8/22/2025) on Social Security appears below. It might even continue his discussion on a topic that affects all of us who are US citizens.
As a small business, in the late 1970s, we converted over to a 401(k) plan as a means to provide our employees with a way to save for their own retirement. Our company provided a 50% match up to 3% of their gross wages.
I started taking Social Security payments at 62 because I feared changes to the system. My thinking 18 years ago was that those in the system would remain undisturbed. I didn’t know at the time whether or not I had enough assets for retirement. Five years ago, I realized that I do.
Is there a more effective way to handle Social Security distributions to retirees?
I’m looking for a way to return to the original mission without increasing taxes or contributions, as fewer workers are supporting an increasing number of retirees with longer lifespans.
Original Mission: Why Was Social Security Created?
Social Security was created in 1935 during the Great Depression as part of President Franklin D. Roosevelt’s New Deal. Its primary purpose was to provide financial security for seniors, individuals with disabilities, and survivors of deceased workers. During that time, poverty among the elderly was widespread, with many unable to work or support themselves after retirement. Social Security established a safety net to ensure that older Americans had a reliable source of income, reducing poverty rates and providing economic stability for retirees and their families.
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### A Case for Separate Social Security Accounts
Requiring all Social Security payments and any investment returns to be kept in a separate account, accessible only after other assets are depleted, could enhance the program’s integrity and sustainability.
Here’s why:
1.**The Reason**: Keeping Social Security funds separate ensures that they are not commingled with the retiree’s budget or used for unrelated retirement expenses.
2.**Encouraging Personal Responsibility**: By mandating that Social Security benefits are only accessible after personal assets are depleted, the program becomes a last-resort safety net. This encourages individuals to save and invest wisely for their retirement.
3.**Preservation of Funds**: Investment returns would accumulate over time, potentially increasing the solvency of the program. If these funds are untouchable until truly needed, they remain available for their intended purpose.
4.**Avoiding Overdependence**: This approach ensures that individuals rely on their own resources first, reducing the strain on the Social Security system and prolonging its viability.
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### What Should Happen to Remaining Funds?
If Social Security funds are structured as separate accounts and an individual passes away with unused benefits, those remaining funds could be reallocated in the following ways:
A.**Survivor Benefits**: Direct the unused funds to designated beneficiaries, such as spouses, dependents, or heirs, to ensure financial stability for the family.
B. **Reinvestment in the Trust Fund**: Unused funds could be returned to the Social Security Trust Fund to support the system for future generations. This would help replenish the program’s reserves and provide ongoing support for retirees, individuals with disabilities, and survivors.
C. **Charitable Redistribution**: A portion of the unused funds could be allocated to programs that assist vulnerable populations, such as low-income seniors or individuals with disabilities.
D. **Individual Choice**: Provide account holders with the option to designate how their remaining funds should be used upon their death, whether for heirs, charitable causes, or reinvestment in the Social Security system.
What do you think of the concept? What is your feeling as to what happens with unused funds, A, B, C, D, or something else?
I want to thank everyone for their comments. In my trial balloon, I have failed to convey the idea of returning unused/unneeded social security payments into the system as one way of funding it by those who leave a substantial estate to their heirs.
I am looking for means to replace increasing taxes and delaying retirement for our children and grandchildren.
The plan, in my mind, is workable and has absolutely no impact on anyone needing all of their SS payments. I failed to convey that message.
Therefore, based on the reader’s understanding, all comments (and anger) were valid. I accept responsibility for all misunderstandings.
Your comments were helpful and appreciated. I will now go back to the drawing board to find a better way to convey the idea.
I hear you. Please hold off on commenting, and please give me a second chance to make this concept unambiguous.
I value all feedback.
Richard
Define substantial. Personally, I am opposed to step up on death and the very high exclusion for inheritance taxes, but that doesn’t mean I am in favor of messing with the design of SS.
Sorry, there are not enough of those with a “substantial” estate that is not needed by their families to make a difference. Since the super wealthy have little if any earned income, most are not collecting SS in any case.
the worst thing we can do in the current divided society is mess with the basic design of SS.
1) Please explain how, in your new approach, the system would transition from how it works now to your new system.
2) Also, it looks to me like your system with individual accounts would be immediately insolvent; its liabilities would be greater than the total in the trust fund. All the people with financial assets would have an account they would only receive at death or if they became bankrupt. But these accounts would represent liabilities of the system which it would have to retain and not pay out to other beneficiaries. The accountants would establish a valuation method for each individual based on some life expectancy metric and the current level of benefits. Many current recipients have already received far more than they ever paid in…..
3) I think you should take a look at: https://www.stlouisfed.org/community-development/publications/the-state-of-us-household-wealth. This is a Federal Reserve study of household wealth.
One big problem in the US is that around half the population doesn’t earn enough to pay their current living expenses and also save for retirement. Just telling people to be self-sufficient doesn’t seem to me to be a workable way to get around this fact.
You seem to be implying that each beneficiary has a set amount of SS money to spend. That is not how the system works. Also, it appears from your description that someone could run out of SS money, which is not the case with the present system. SS is an annuity with a COLA, and I, for one, want it to stay that way.
How do you factor in the benefits others are possibly entitled to due to marriage or relationship based on your contributions? This can occur at your death or disability or when they reach retirement age. There are several possibilities that aren’t related to what you draw.
Not to mention divorce where two or more spouses can collect full spousal benefits on one person’s earnings record.
So, I know I’m not a U.S. citizen, but still, is this just a joke to get a rise out of RDQ?
It blows my mind given the state of retirement savings, the state of financial literacy and the demonstrated lack of personal responsibility in a good segment of the population, that anyone thinks individual accounts or any change in the basic structure of Social Security is a viable let alone good idea.
It may sound good in theory, but it’s nonsense. It is another “empower” the individual notion of a flawed ideology dream.
If it sounded like I was recommending individual accounts, I was not. The basic SS structure remains unchanged. Many of us have money saved in different buckets. For example, for my trustees, I left strict instructions regarding the order in which the buckets are emptied. My suggestion is that the last bucket to empty is the SS one.
I agree with your new comments on individual accounts. But, to me, my comments on your original essay have nothing to do with them.
Couldn’t agree more.
I have a ‘something else’ comment; call it ‘B-‘.
Return to the retiree all the funds contributed to SS, plus some reasonable investment component. The excess then returns to the Trust Fund.
It eliminates the argument for redistribution of wealth.
There is not enough money to do that and there certainly isn’t any excess. Where does the reasonable investment component come from?
I may have done a poor job is describing the concept. There is enough money because they send it to me every month.
(To answer your question: They can use my investment experience over the last 18 years if I die tomorrow.)
I am suggesting that the government deposits my monthly payment into a special account that I cannot access until my assets are gone.
Why should I receive back more than I paid into it if I don’t need it? I do believe it should a bit more, however, to reflect, at least, the time value of money.
I have no desire to hurt those who need SS because for whatever reasons are not able to save enough. I do feel people, who have done well enough not to need SS during retirement, just be made whole, not more.
I don’t mind disagreements. I am just looking for clear understanding.
I see where you’re coming from, your idea touches on the balance between Social Security as a safety net versus a personal return system. The thought of directing payments into a special account until assets are depleted could, in theory, free up more resources for those who rely on it most. At the same time, many retirees view Social Security as an earned benefit, not just a needs-based one, which makes the “fairness” question pretty complex.
Do you think a system like the one you’re suggesting could realistically be structured without discouraging people from saving for retirement in the first place?
I unique perspective for sure. Here on HD there is much discussion on how to maximize the lifetime accumulated SS benefit.
Keep in mind that the funding of SS is actuarial based and thus considers those who collect very little and those fortunate to collect well beyond the expectation for an individual.
if your idea were adopted then those who die young coukd well expect their contributions at least be given to beneficiaries.
The system would not work.
Speak for yourself. What about people whose retirement planning was based on the current system??
Excellent question. Thank you for asking.
Again, I was not clear on how it might work. Nothing is taken away. It has no effect if personal assets are depleted. Just use the SS money that you have. It’s the order in which the money is consumed that has changed. All the amounts are the same until death. I was trying to offer options for the money left over that came from SS to keep SS alive for our children and grandchildren, without the need to raise retirement age or taxes.
Did I answer your concerns regarding the concept?
To me your proposed system would reward those that are irresponsible with their money both during their working years and during retirement, while punishing those that were responsibly saving before, and spending during retirement. The responsible cohort might not see any of the money they contributed to the system with an expected benefit upon claiming, thus just another tax. The system would collapse from a lack of support from Americans. Remember surveys show repeatedly that the vast majority of those surveyed would support an increase in the tax while working to preserve the current system. It’s some in congress whose ideology of all tax increases are bad that is stopping congress from acting. Listen to “the people” and “get ‘er done!”
No. I believe I have enough assets plus SS to last to 100. I do not have a large enough SS benefit to live on that alone. I do not want to spend my last years worrying about running out of money. With the current system there is no money “left over”.
No problem. This proposal applies to funds left unspent. Nothing to worry about. Spent it all if you wish. But if there is $1 left over, who should get it? Your heirs or returned to the SS trust fund. This is the basis of the discussion.
Let me ask the question another way, are the last dollars being spent coming from your assets or from SS?
Now let’s say, you received $500,000 more than you paid into FICA and your assets left over total $2,000,000. Should that SS surplus go to your heirs or to back to the SS Trust Fund?
Current benefits are paid by current workers. There is no surplus.
And by the trust fund.
That’s the ultimate problem is that SS is spending more than they are taking in. The baby boomers supported prior generations with their taxes (which were increased when we first started working in the early eighties, and an effective cut in benefits by increasing the full retirement age) and even created a huge surplus. Now the solution is those who sacrificed to save for retirement and were responsible with their money only get a benefit if they run out of money?
How do you possibly plan for that?
Precisely. That’s the problem to be solved.