One Way to Increase Social Security Payments

By now you know I’m a big fan of helping our senior citizens as much as I can. One way to help them is to put more money in their pocket.

Or at least let them keep more of the money they do have.

I want seniors to live a long, healthy life. However, it’s hard to live that life if you don’t have any money.

That’s why I’m excited to see that Representatives Daniel Webster and Thomas Massie recently introduced bill HR 1040 - the Senior Citizens Tax Elimination Act.

The bill will amend the Internal Revenue Code Act of 1986 to terminate the inclusion of social security benefits on an individual’s gross income.

In other words it will eliminate taxes on social security.

The federal government of the US started taxing social security in 1986. Prior to that nobody paid taxes on social security.

Currently everyone who is working pays into social security. You can start withdrawing payments from social security at age 62. Once you pass away, your benefits stop, unless your spouse lives longer than you. Then your benefits can go to them.

Nothing to your kids.

Let’s do some math.

The average stock market returns for the last 100 years or so has been 9.82%  Each worker contributes 6.2% of their paycheck to social security. Employers contribute an additional 6.2%.

The average US salary is $63,975. So workers and employers pay $7,932.90 into social security each year or $661.075 each month on average.

Let’s say you work for 40 years to pay into social security. If you could have taken those funds and just put them in a stock index fund and left them for 40 years, you would have $3,491,156.04 in your investment account when you retired. I just used a simple savings calculator to figure this out.

Not bad for a $63,975 salary. Yes a lot of that money would be taxed when you pulled it out, but you would still be doing pretty well. You could put that money in a CD right now and earn a decent amount each month. You might not even need to draw down your savings.

And when you pass away, you could pass this savings on to your kids or grandkids.

Unlike social security.

Yet we make that same contribution to the social security fund every month of our working lives. Then we are expected to be happy with the $1,000-$2,000/month payment the government gives back to us. And have nothing to pass on when we pass away.

The least they could do is remove the taxes they put on the social security checks of seniors.

That’s why I would ask you to email, call or write your Congressional representative and tell them you want them to pass this bill.

We will all be seniors some day (hopefully). Let’s help each other out. Let’s pass HR 1040.