{"id":279,"date":"2012-11-18T21:51:07","date_gmt":"2012-11-18T21:51:07","guid":{"rendered":"http:\/\/www.apisbull.com\/blog\/?p=279"},"modified":"2012-11-18T21:51:07","modified_gmt":"2012-11-18T21:51:07","slug":"the-plain-and-painful-truth-about-social-security","status":"publish","type":"post","link":"https:\/\/www.apisbull.com\/blog\/?p=279","title":{"rendered":"The Plain And Painful Truth About Social Security"},"content":{"rendered":"
Most working Americans believe the monthly deductions from their paychecks legally entitle them to future Social Security benefits. Sadly, nothing could be further from the truth.<\/span><\/div>\n
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Do you think Social Security is an “earned right?”\u00a0<\/span>Most people do.<\/span><\/div>\n

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Like Ron D.\u00a0<\/span><\/div>\n

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He recently wrote to us complaining that his Social Security check says “Federal Benefit Payment” on it. \u00a0<\/span><\/div>\n

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He was steaming mad and said:<\/span><\/div>\n
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\u201cThis isn\u2019t a benefit \u2013 its earned income! I\u2019ve worked hard my whole life. I\u2019ve paid in thousands of dollars in Social Security taxes. Now I\u2019m just collecting what I put in.\u201d<\/span><\/em><\/div>\n

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Sounds logical. Seems fair.\u00a0<\/span>Legally, however, the argument falls apart.\u00a0<\/span><\/div>\n

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Here\u2019s the fact: You have no legal \u201cright\u201d to collect back what you\u2019ve paid into Social Security.<\/span><\/div>\n

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In fact, the Supreme Court has already ruled that<\/span><\/div>\n

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Anyone Collecting Social Security\u00a0Is Actually On Welfare<\/strong><\/div>\n<\/div>\n<\/div>\n

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Now before you start writing in and berating us, please understand. This is not our opinion.\u00a0<\/span><\/div>\n

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We\u2019re neither \u201cfor\u201d nor \u201cagainst\u201d Social Security. But we do have a better plan\u00a0right here.<\/span><\/div>\n<\/div>\n

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And we\u2019re not calling anyone a \u201cfreeloader\u201d or judging anyone\u2019s character if they are collecting a monthly Social Security check.<\/span><\/div>\n

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But the facts are the facts.\u00a0<\/span>And the issue was settled in court a long time ago.<\/span><\/div>\n

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The first time the court spoke about it was shortly after President Franklin D. Roosevelt pushed the Social Security Act upon the American people.<\/span><\/div>\n

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In a case named Helvering v. Davis (1937), the Supreme Court ruled that Social Security was not a contributory insurance program.<\/span><\/div>\n

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Here\u2019s how they put it (in true legalese):\u00a0<\/span>“The proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way.”<\/span><\/em><\/div>\n

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In simple words:\u00a0<\/span><\/div>\n<\/div>\n

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Social Security is Not an\u00a0Insurance Program<\/strong><\/div>\n<\/div>\n<\/div>\n

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You do not \u201caccrue\u201d any benefits. You are technically \u201cowed\u201d nothing. It doesn\u2019t matter how long you\u2019ve paid in or how much you\u2019ve paid.<\/span><\/div>\n

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Social Security is simply a payroll tax on one side and a welfare program on the other side.\u00a0<\/span><\/div>\n

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Now understandably, some in Congress didn\u2019t like the sound of that. Adding a new \u201ctax\u201d in the middle of the Great Depression wasn\u2019t the best way to get votes.<\/span><\/div>\n

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So in 1939 they amended the Social Security Act to create a formal trust fund. The amendment also ordered the Treasury department to submit an annual report on the status of the fund.<\/span><\/div>\n

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Because there is now a fund set up to formally \u201cearmark\u201d the social security tax receipts, most people think Social Security is like a big government pension or insurance program.<\/span><\/div>\n

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Wrong again.<\/span><\/div>\n

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Just because Congress created a \u201cfund\u201d to segregate Social Security from other collected taxes, the essence of the law never changed.<\/span><\/div>\n

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What held true in the Supreme Court ruling of 1937 is still true today.<\/span><\/div>\n

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Social Security is just another payroll tax. You don\u2019t actually build up any \u201cequity\u201d through your so-called \u201ccontributions.\u201d\u00a0<\/span><\/div>\n

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Not convinced? Still think you\u2019re \u201cowed\u201d Social Security?<\/span><\/div>\n

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… or that you\u2019ve \u201cearned\u201d the right to your benefits?<\/span><\/div>\n

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If so, you\u2019re not alone.<\/span><\/div>\n<\/div>\n

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The Commie Who Sued\u00a0the Government and Lost<\/strong><\/div>\n<\/div>\n<\/div>\n

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Ephram Nestor came to the United States in 1918 from Bulgaria.\u00a0<\/span><\/div>\n

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He paid Social Security taxes from 1936 (the year the system began operating) until he retired in 1955.\u00a0<\/span><\/div>\n

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For his 19 years of payments into the \u201csystem,\u201d the U.S government rewarded Ephram with a $55.60 monthly Social Security check.<\/span><\/div>\n

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But a year later, the US Immigration Service deported Nestor for having been a member of the Communist Party in the 1930s.\u00a0<\/span><\/div>\n

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In 1954 Congress had passed a law saying that any person deported from the United States would lose his Social Security benefits.\u00a0<\/span><\/div>\n

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Based on that law, the US Treasury stopped sending Ephram Nestor his monthly Social Security check.<\/span><\/div>\n

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Nestor sued, claiming that because he had paid Social Security taxes, he had a right to Social Security benefits.<\/span><\/div>\n

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The Supreme Court disagreed.\u00a0<\/span><\/div>\n

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Specifically, the Court ruled (in the case of Fleming v. Nestor) that workers have no legally binding contractual rights to their Social Security benefits.\u00a0<\/span><\/div>\n

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The court went on to say that Social Security benefits are essentially a government welfare program that can be cut or even eliminated at any time.<\/span><\/div>\n

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The bottom line is this: your Social Security benefits are always subject to the whim of 535 politicians in Washington.\u00a0<\/span><\/div>\n

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Doesn\u2019t that make you feel \u201csecure?\u201d<\/span><\/div>\n

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Listen, Congress has cut Social Security benefits in the past. And when the money runs out, they may have no choice.\u00a0<\/span><\/div>\n
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But the next question is why so many people have a misconception about what Social Security really is.<\/span><\/div>\n

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The answer is that…<\/span><\/div>\n<\/div>\n<\/div>\n

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Congress Has\u00a0Created the Confusion<\/strong><\/div>\n<\/div>\n<\/div>\n

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One of the main reasons people don\u2019t understand this basic fact (that Social security is a tax on one side and a welfare program on the other) is the way Congress talks about it.<\/span><\/div>\n

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Congress encourages people to think they are \u201cinvesting\u201d in an annuity-like insurance policy by calling Social Security taxes “contributions.”\u00a0<\/span><\/div>\n

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When you pay the Social Security tax, your pay stub says it is a FICA deduction. FICA stands for\u00a0<\/span>Federal Insurance Contribution Act.<\/span><\/strong><\/div>\n

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There are actually two misconceptions in that phrase.\u00a0<\/span><\/div>\n

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First, the Supreme Court has ruled it\u2019s NOT insurance. It\u2019s an old-age welfare program.<\/span><\/div>\n

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Secondly, the Court has also ruled it\u2019s NOT a contribution. It\u2019s a tax.<\/span><\/div>\n

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So why do they continue to dodge the issue and use these terms?<\/span><\/div>\n

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That\u2019s easy. Social Security carries huge political leverage.\u00a0<\/span><\/div>\n

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Think about it.\u00a0<\/span><\/div>\n

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How politically appealing would it be to call it the Federal Old-Age Welfare Tax Act?<\/span><\/div>\n

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That\u2019s what it is, but politicians are very happy to let their constituents believe Social Security is an Insurance program.\u00a0<\/span><\/div>\n<\/div>\n

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The Social Security Administration\u00a0Perpetuates the Misconception<\/strong><\/div>\n<\/div>\n<\/div>\n

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In addition, the Social Security Administration (SSA) perpetuates the mistaken belief by mailing out annual Social Security statements to individual taxpayers.<\/span><\/div>\n

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These reports show the amount you\u2019ve \u201ccontributed\u201d over your life … and how much you can expect to receive when you retire at certain ages.<\/span><\/div>\n

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While this can be helpful to people who are planning to have the government pay their retirement (partially or in full), it only adds to the confusion.<\/span><\/div>\n

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These annual statements mislead people into thinking they personally have a \u201cshare\u201d of the Social Security trust fund earmarked for them. They don\u2019t.<\/span><\/div>\n

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These annual statements also convince people they are \u201cowed\u201d the described benefits. They aren\u2019t.<\/span><\/div>\n

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There\u2019s one other huge misconception about the so-called Social Security \u201ctrust fund.\u201d We\u2019ll be tackling that in an upcoming newsletter. Stay tuned.<\/span><\/div>\n

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For now, please understand that if you want to retire wealthy, you can\u2019t rely on the government for that.\u00a0<\/span><\/div>\n

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Heck, there\u2019s not even a guarantee that the government will provide one cent for your retirement.<\/span><\/div>\n

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But don\u2019t worry we can show you<\/span><\/div>\n<\/div>\n

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How You Can Provide Yourself a\u00a0Much Better Retirement than Uncle Sam<\/strong><\/div>\n<\/div>\n<\/div>\n

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How much better?\u00a0<\/span><\/div>\n

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Considering that Social Security can be cut or eliminated at any time (desperate times can bring about the unthinkable), we believe relying on the government for your retirement is a bigger gamble than taking your money to Vegas.<\/span><\/div>\n

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At least in Vegas you\u2019ll have a little fun losing your money. But when the government squanders it away for you, there\u2019s only pain, anger and misery.<\/span><\/div>\n<\/div>\n

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Our Alternative to\u00a0Social Security Dependence<\/strong><\/div>\n<\/div>\n

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We are all about providing you with the valuable information you need to secure your own prosperous life right now, and into your retirement years.<\/span><\/div>\n
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This powerful investment \u201cstacking\u201d technique can either supercharge your retirement or provide cashflow for more immediate needs.<\/span><\/div>\n

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