The boomers are lining up for social security and everyone knows that the system will shortly be stretched to the limit. Meanwhile many of those who have been frugal have seen both their 401k's and equity in real estate diminished. There is a rather simple and elegant solution. It would include these points:
- Allow potential retirees to opt out of the system on a yearly basis in exchange for permitting them to work without paying any income taxes with no income limit.
- Allow those who are at retirement age to collect medicare. This would relieve worry about medical coverage, both privately and from employers.
- Those opting to take the tax free income would continue to make payments into social security but the matching component by the employer would be dropped.
- There would be no cap on social security payments by the tax exempt earner.
- The combination would be very attractive to employers as they could hire skilled people without healthcare costs and with reduced tax liabilities.
- This system would be very attractive to entrepreneurs and would create jobs.
- Senior workers would have a higher propensity to save and that would help build the national saving base.