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Email L. Henry Platt, Jr.
  Henry Platt


The purpose of this Act Is to permit citizens to plan to increase withholding to provide more benefits in retirement. This is a voluntary program which can be started at any age or suspended at any age. Monies set aside through this program may he invested in a wide variety of investment vehicles through a separately established personal Roth IRA.

( I ) When an employee fills out his W-4 Form at the time of hiring or as needed during the course of his employment, he will check one of two boxes to indicate his desire to be enrolled in the enhanced Social Security System or NOT. He will further choose the amount of money he wants deducted from his gross earnings and placed into a Social Security Savings Account. If he chooses to save at least 3%, then his employer would match with 1%. These monies would earn interest at a rate not lower than the then current rate paid on SERIES I Savings Bonds. Congress may adjust this rate but not to more than to the then current rate of 30 year Treasury Bills.

All monies invested in a Social Security Savings Account continue to earn interest (compounded quarterly) until these monies are withdrawn from said Social Security Savings Account except that if a participant is disabled, he may receive the interest on his Social Security savings account as long as he receives disability benefits from Social Security.

( II ) Each year when a participant files his Income Tax Return, his W-2 Forms will show how much money was deposited to his Social Security Savings Account. He will be allowed to transfer any or all of these funds or any other funds in the Social Security Savings Account into a separately established ROTH IRA. This Account must have been established at least two weeks before the filing date of the Tax Return, and it must have been established at a Bank or Brokerage House or some other institution approved by the Internal Revenue Service. All monies transferred into a Roth IRA will be governed by the laws regulating Roth Individual Retirement Accounts.

( III ) When a participant of the Social Security Savings Account program begins to receive Old Age Benefits, he may take any or all of his savings out of his SSSA in cash, or ho may (by default) purchase an annuity to increase his monthly payout from Social Security.

This Annuity would be calculated at 6% (annual payment) when the payments begin at Age 70 years. If payments begin before age 70 years, the payout would be reduced by 1/10th of 1% for each year before 70 years and enhanced by 1/1Oth of 1% for each year (up to 8) the start of the Annuity is delayed. Thus, a participant retiring at age 62 years would receive a 5.2% annual payout, and a participant retiring at 76 years would receive 6.65% annually or 0.55% of the money in his SSSA when his Annuity began. Further, he would receive an enhanced death benefit equal to six months of annuity payments payable immediately.

When a participant chooses or defaults to a Social Security Savings Account Annuity, he or his heirs or assigns are guaranteed at least 50% of the funds from his SSSA at the time of inception of the Annuity. If at the time of death of the participant less than half of the amount of the SSSA balance at the inception of the Annuity (including the 6 month death benefit) has been paid out, a check should be issued to his heirs or assigns according to his directions or the guidance of the probate court. The goal of this provision is to guarantee a minimum payout equal to one half of the amount of the SSSA balance at the inception of the Annuity.

( IV ) There will be no income tax assessments on monies withdrawn from the Social Security Savings Accounts for Roth IRA, Annuity Investments in the private sector, death benefits, or regular monthly distributions; but any lump sum distribution (before initiation of any annuity or other approved retirement investment) will be subject to regular income taxes on one half of that sum.

( V ) This Law will become effective on the first day of January following passage of this Legislation by Congress and the Executive Branch.

Commentary ON the Social Security Enhancement Act Of 2005


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© L. Henry Platt, Jr.