If our young people knew the facts about their future projected contributions into Social Security they would become very disillusioned with the program. Examination of individual yearly maximum Social Security contributions for the years 1950 through 1985 reveals a straight-line projection of future contributions. For example, the projected yearly contribution into Social Security by a non-self-employed individual earning more than the taxable maximum will be $12,500 in the year 2000 and $36,000 in 2010.
An independent study conducted by the Federal Reserve Bank of Boston was reported that enormous contributions are required to fund the retirement of the Baby Boom generation. That study determined that total assets in the trust fund by 2020 are projected to exceed $10 trillion.
However, under current law, these trust fund investments are limited to interest-bearing securities of the federal government, which means trust fund money would be used to buy virtually all of the U.S. government debt held by the public. The political ramifications of such investments is another reason why the present program should be restructured to allow use of the Super IRA as the means for financing our retirement.
ROBERT A. DAHLQUIST