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iOptOut of Social Security

No matter who is sworn in as president of the United States of America next month, he will have to face some tremendously complex issues. One of those issues is Social Security, a government run program that by all accounts will be on its last legs in several years.

A lot of solutions have been proposed to the potential insolvency of the system including the old favourites of tax hikes (sorry, I meant "contribution adjustments"), lower benefits, or increasing the age before benefits are made available. Some politicians, like George W. Bush, even favour allowing workers to invest some -- but not very much -- of their pension money in the market.

iOptOut of Social SecurityOf course, one option is nearly always ignored. Some people want out of the current system completely. The members of Personal Retirement Alliance are some of those people.

"The Personal Retirement Alliance believes that individuals should have the right to "opt out" of Social Security, choosing instead to divert a portion of their FICA taxes—in effect, an annual tax refund—into personal retirement accounts (PRAs). Modeled after 401(k)s, PRAs are individually owned, portable and privately managed, enabling participants to take immediate control of their retirement savings."

Their case is fairly strong. Over ten per cent of your annual earnings go to paying for the retirement of other people. Despite the money that the system takes in, the program is expected to go insolvent in less than two decades. Social Security has unfunded liabilities of $9 trillion. Grim facts.

To fix the problem, the PRA advocates a privatized system which protects the benefits of current retirees and those about to retire. Current workers would have the choice of moving over to a private account while those just entering the workforce would be automatically streamed into a privatized system.

Although Social Security is no longer the hot button issue that the media made it into last year, it's still one that you absolutely must be involved in. It is your future after all. Look at the web site and find out whether PRAs are something you can support.

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