American Fairhope Retirement
Proposed data from Table-I - Social Security Privatization Factors shows default participation factors for all tax payers.
However, for a period of one year before the privatization plan becomes effective; there should be a one-time open enrollment period. During this open period, any tax payer can elect to increase their private participation and consequently decrease their Social Security participation. However, the reverse option should not be available; because that would be contrary to the ultimate goal of eliminating Social Security. But once privatization has occurred, a tax payer's final participation factors (PF's) become locked-in and unchangeable.
Consequently during open enrollment, any free American can choose to increase Private participation; from the PF figures shown in Table-I, up to a maximum of 100% Private. It should be clear that if 100% Private is elected, the difference is 0.0% Social Security participation. Specifically, this American Fairhope provision gives full rights; to opt-out, of Social Security and Medicare entirely, by free choice.
Hereafter within this document, "PF" designates the final Social Security, final Medicare and final Private participation factors. It should be understood that the PF for Medicare is always equal to the PF of Social Security. The correct PF's (final participation factors) are determined from either Table-I or optionally as-elected during open enrollment.
PF's are used to calculate proper deductions from salaries/ wages of employees and proper deductions from the income of self employed small business owners. Moreover, PF's serve to adjust the Social Security pension at retirement. PF's are also used to compute premium costs of both Medicare and the prescription drug plans at retirement.
Hereafter within this document, 'RSP' designates 'retirement savings plan'; which should be understood to include any generic retirement savings vehicle or plan, which is applicable and proper. Ideally, such a RSP should have the characteristics of a 401k plan or Individual Retirement Account (IRA); with tax deferred earnings.
At privatization, new Social Security cards should be issued, which specify the correct PF's for each tax payer. Employees and self employed small business owners, who are greater-than or equal-to age 31, but less-than age 50; should be contributing to both Social Security and RSP's. Anyone who is over age 50 would be on the standard Social Security program (100%), unless they elect to be either partially or completely privatized during open enrollment.
The age 31-50 band should be considered as the transition phase or gap in smoothing the impact of such retirement change. Normally, a person of ages 26-31 has another 35-40 years of productive life remaining; however, any person of ages 55-60 is on the verge of being too late to make such a transition. Please note that age 40 is the transition point for 50% Social Security and 50% Private participation.
In the following examples; neither Randall, Bob, Mary nor Alan elected to take advantage of the one-time open enrollment period. Since Susan and Sam were each under age 31 at privatization, they were already 100% 'Private'; thus open enrollment was not applicable.
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