| On June 8, 1934, President Franklin D. Roosevelt | | | | person receiving benefits. Today there are 3.3 per |
| announced his intention to provide a program for | | | | retiree. By the year 2020, there will be 2 workers |
| Social Security. It was his goal to help protect | | | | paying in per retiree. |
| millions of workers from poverty in their senior | | | | 9. The more you make the more you pay. In the |
| years. Over the years many changes have taken | | | | original program, participants would only have to |
| place and Social Security is very different from | | | | pay 1% of the first $1,400 of their annual |
| the original plan. Here are the top ten reasons that | | | | incomes into the program. Today, individuals must |
| Social Security isn't the best way to plan for your | | | | pay 15.3% of the first $94,200 and 2.95% on the |
| retirement. | | | | rest of their income. |
| 1. There is no money left in Social Security's Trust | | | | 10. Being self employed gives you the choice |
| fund. The original plan was for people to voluntarily | | | | between paying into Social Security and investing |
| put money into an insurance plan. The money | | | | in yourself. For most of human history, people |
| was then put into a Trust Fund that would be | | | | lived and worked on farms in extended families |
| used only for paying retirement benefits. If more | | | | and this was the foundation of economic Security. |
| money was taken in than paid out the balance | | | | They were self employed. As they grew older, |
| would be placed in an interest bearing account. | | | | children took over the family business and the |
| During President Lyndon Johnson's administration, | | | | retiree continued to receive income and benefits |
| the funds were made available for use in other | | | | until death. When the Industrial Revolution |
| government programs. For years Social Security | | | | developed, more and more people worked for |
| has taken in more money that it has paid out; but | | | | other people. When they retired there was no |
| instead of saving this surplus, the government | | | | more income. Thus Social Security was created. |
| spends the money and writes the Trust Fund an | | | | Today is no different than earlier times. If you |
| "IOU," a special issue government bond to be paid | | | | own your own business, you can either have a |
| back starting in 2017. The problem is that when | | | | family member take over the business or hire |
| the money comes due, it will still have to come | | | | someone to run it when you are ready for |
| from somewhere - taxes. | | | | retirement. You can receive income until you die |
| 2. Social Security is subject to double taxation. | | | | and then you can Will the income to your heirs. |
| Originally, the plan was to have the money paid | | | | So, how does one solve the Social Security |
| into the program be tax deductible for income | | | | dilemma? Start a business that can continue to |
| tax purposes. During the Clinton Administration, | | | | provide for you even after you are ready to |
| Social Security benefits became taxable. Now, you | | | | retire. The best way to do this is to turn a hobby |
| pay income tax on the money that is deducted | | | | or interest into a business. There are many things |
| from your pay check that goes into Social | | | | you can deduct when you own a business that |
| Security. Then when you receive it, you may be | | | | you cannot deduct ordinarily. For example, lets |
| taxed on all or part of your benefits if you have | | | | say you have a hobby of wood working. You |
| other income besides Social Security. You have | | | | have a room in your home and many tools you |
| now been taxed twice on the same money. | | | | have purchased and you love to tinker and make |
| 3. Social Security is not enough to live on. Even if | | | | decorative items out of wood. If you turn it into |
| you work hard your whole life and pay into Social | | | | a business, now you can deduct all the tools and |
| Security, there is a very slim chance you will have | | | | supplies you use to make the items. The room |
| enough to live comfortably in retirement. I know | | | | you use in your home can be deducted by |
| of a woman who spent most of her adult life | | | | claiming a percentage of the rent, interest, taxes, |
| raising her family. At age 50, she will have to | | | | utilities, insurance, and repairs to the house. All of |
| work until she is 70 to receive $566 per month. | | | | those things you are going to pay for whether |
| No one can live on $566 per month. | | | | you have a business or not. Much of your travel |
| 4. High Social Security taxes prevent many people | | | | expense may be deductible now. As you travel to |
| from being able to accumulate a savings account. | | | | visit your children and grandchildren you can make |
| Social Security and Medicare taxes are 15.3% of | | | | the trip deductible by checking on new ideas and |
| earned income. With inflation at an all time high, | | | | materials that will improve your products, |
| few can afford to put away anything extra. | | | | attending trade shows, etc. You may travel to |
| 5. The current system is not fixable. The only | | | | craft and trade shows to sell your products. If |
| way to fix Social Security's problems is to raise | | | | you choose to sell products over the internet, |
| taxes. This would have a major impact on | | | | your internet costs will now be deductible. The list |
| average worker's household budgets, would cost | | | | goes on and on. By making these things tax |
| hundreds of thousands of jobs, slow the | | | | deductible you can limit what you pay into Social |
| economy, and take a bite out of any personal | | | | Security and invest that money in your business |
| savings. Although hire taxes might relieve some of | | | | or a savings program of YOUR choice. |
| the problem, it most likely would not solve it, | | | | Owning a business is a good alternative to the |
| leaving the potential for future tax hikes. | | | | current popular retirement plans. After you retire, |
| 6. Money is better spent in the hands of the | | | | you can keep doing what you love and create |
| people rather in the government's hands. | | | | income to supplement your retirement and still |
| 7. Social Security is not secure. As has been | | | | keep tax deductions that most people loose in |
| proven in the past, the laws and rules that govern | | | | their retirement years. If you choose a business |
| Social Security change according to who is in | | | | that you can train others to do, then that |
| office at the time. As new elected officials come | | | | business can produce income after you stop and |
| in, new ideas come with them and change occurs. | | | | generate passive income to supplement your |
| 8. As More people retire and live longer there are | | | | retirement. Owning a business gives you control |
| less people paying in. In 1950, there were 16 | | | | over your quality of life when you choose to |
| workers paying Social Security for every retired | | | | retire. |