I did a Google search and came up with this summary of the Galveston Plan which I mentioned in a thread last week. No one seemed to pick up on it, but since Galveston is right in most of your backyards, you might want to check it out: http://www.conservative.org/columnists/houston07302001.htm There are other more critical articles. Feast away!
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<b>Mr. Meowgi</b>: Why aren't you off having fun then? <b>boomboom</b>: Apparently you could at one time. There is also a hospital in Princeton, WV that has done this. I don't know if they have closed the loophole(s) that allowed these institutions to make this decision. The loopholes must be closed or more would have done the same.
I think Government employees can. I know my dad (Houston Fire Department of 30 years) did because when he died (May 2002), my brother (13 years) was not elligible for Social Security due to my dad not contributing. I asked the pension office about this and they said that government employees do not have to pay SS if the choose not too. I may be wrong about this but this is what I was told. I dont remember getting this option when I was in the military but I dont remember my pay checks that well either. I may not have paid SS and just didnt realize it. Anyway, my two cents.
I heard a discussion of this Galveston Plan on the radio yesterday morning. Apparently the early SS participants did pretty well. What I understood them to say, though, was that the majority of those collecting SS now had only averaged about 4 to 5% gain on their money over a ~40 year period. Those who are in the "throes" of their working lives now can "at best" expect about a 1% return. Inflation is an animal and the numbers are changing so radically in terms of how many fewer workers are subsequently supporting the succeeding generation of retirees.
I'm hoping that I won't need it, but I have been planning all along that Social Security will not be there for me (I'm 31 now) when I retire in 30+ years. There needs to be some sort of massive reform in order to make sure that the current and future retirement populations will be able to utilize this support system if needed. There are apparently major loopholes that still exist (although the option to participate has probably been removed due to the fact that that would more than likely kill the SS system)...I used to work with a guy whose parents were from Croatia (he was born in the US) and his grandparents were still there. About six or seven years ago, my friend's parents wanted to "rescue" their parents from Croatia, so they arranged for them to "visit" the US on some sort of permanent visa. My friend and his parents were doing extremely well at the time and had absolutely no need for government assistance at any level, but the grandparents were coming from an impoverished situation. Well, to make this story shorter, my friend's parents applied for the grandparents to receive social security, mind you, they have never donated one red cent to the system. My friend tries to stand up to his father (a domineering man) and explain that wasn't right, but his father said that if it was available, they should use it. My guess is that this is happening all over and it probably not limited to just the social security system. But healthcare, insurance, and within the government itself. Sometimes I feel that a revamping of the entire system, top to bottom is the only thing that might correct these problems. All-in-all, I've pretty much come to the conclusion that I will need to take care of myself in the long run...I cannot trust or rely on the government to make good decisions for my future!
SS was never meant to be the sole income for senior citizens. Its purpose was to be a safety net. Prior to the 80s, the gov assumed that individuals would save what they needed prior to retirement, to supplement SS. In the 80s, the gov added IRAs and 401s/403s to the mix so that saving supplemental funds for retirement would be easier. SS will most definitely be there for you when you retire. The SS "fund" (which exist only on paper) may be "bankrupt", but you will still get your full monthly SS check. What the current SS incoming funds can not cover will be made up for by monies from the general revenue. Now if you do not want to live in a trailer park and clip grocery store coupons, you might want to start saving to supplement SS for your retirement now (which sounds like you are doing).
Texas Public School districts also have this option. Most Texas school districts choose to opt out of SS and opt into the Texas Teacher Retirement System. The reason most districts opt for this is to avoid paying into both SS and TRS. This was done several years ago but has recently been shown to be a bad decision. The problem is that many teachers who retire draw benefits from TRS but when their spouses who have SS benefits pass away they are not eligible to continue drawing SS benefits. There is a loophole for this, however. There are several districts who decided to pay into SS. To be eligible for spousal SS benefits you must retire from a district that pays into SS. Some of the districts that pay into SS are offering plans for retiring teachers. They will let you work for 1 day in the district(doing odd jobs) then you can retire from them. That allows you to say that you retired from a job that payed into SS thus qualifying you to draw SS benefits if your spouse dies. My mother is retiring from teaching at the end of this year. She has already set up a day in June to work for one of these district. The districts benefit because they charge a fee (not sure what they call it but it is equal to the salary you earn for one day of work). It works out good for everyone. The problem is a lot of people in public education don't realize this. They retire and then a spouse dies and the government says "Sorry you can't get the benefits you should because you don't qualify". It doesn't matter how much your spouse paid in you can't have it.
One point that crying out to be made out the Galveston Plan is the monies were professionally managed. W's plan is let individuals manage their own SS investments, which I feel is a massive mistake. SS is the safety net. Professional money managers would do a much better job of matching risk with return. In a way, this would the more conservative choice of the two. Individuals would still have their IRAs and 401Ks to invest. If those investments do not pan out, they only have themselves to blame. But they still would have the SS net to fall into.
