Women Should Make Retirement Planning a Priority And Not Privatize Social Security

Some lawmakers would have you believe that social security is a massive debt program in terrible trouble. A Ponzi scheme is how many have characterized it. When retirement planning is a priority the privatization of social security should have a lessened affect.

A Ponzi scheme is when a person runs a fake investment company that uses new investor funds to pay old investors, instead of actual investment returns. Most or none of the money is ever invested in anything, but instead is stolen by the fake investment gurus. Because of this, most Ponzi schemes collapse in a short period of time, an exception was Madoff who went for about 30 years.

The Ponzi scheme collapses because the money is used to finance a lavish lifestyle of the Ponzi, and runs out when the Ponzi can no longer attract new money, or when the investors want their money back. An example of a well-known Ponzi scheme culprit is Bernie Madoff.

How does social security compare to a Ponzi scheme? It does not. First of all it has not collapsed in a short period of time; in fact, it has lasted for 72 years. Unlike a Ponzi scheme, where only a small number of investors are paid what they invest until the scheme collapses, social security has paid out what employees have invested.

Social security is a low cost benefit program that pays inflation adjusted benefits, and has not had any missed payments.

Social security takes mandatory payments from employees, while most 401k accounts have voluntary participation. Unlike 401k accounts pre-retirees cannot take loans against their account. These are only a few reasons that social security is more secure than a 401k account.

Another problem with 401k plans is because participation is usually optional; many employees do not understand that they will have a limited or no retirement, if they do not participate in their 401k plan.

Now lawmakers are trying to politicize social security due to the aging American population, the social security trust fund will run low in coming years, (but no time soon). This has given some politicians the excuse to privatize social security, turning billions of dollars over to Wall Street in 401k type investments. This would be far more costly than the current system, and the beneficiaries of the program would get far less money at retirement.

The solution to the social security dilemma is simple. The current social security payroll tax limit is based on the employees first $106,800 in earnings, if this limit is raised just a small amount, a large part of the problem going forward will be solved by adding substantial money to the social security trust fund. There are other viable solutions as well. Putting our social security taxes in private 401k type Wall Street funds is not a viable solution. Leave 401K investments as is, in the current employer based system.

Women are not saving enough money to constitute retirement planning. Paying into Social security and an Individual Retirement account from a small business income, could address those concerns. The business must be real, pay real income, and pay taxes yearly. At the end of the year, you will be directed to pay social security taxes by your tax advisor, and you can voluntarily invest in an Individual Retirement Account (IRA). Social security is considered a supplemental retirement plan, to be used with other plans.

Women are not saving enough due to 5 major reasons. In my opinion the main reason is too much love. 


1. Love for their husband
2. Love for their kids
3. Love for their parents
4. Love for their home
5. Love for the sanity of others

Don’t get me wrong, there is nothing wrong with too much family love, but it can make you poor if it is not put in proper perspective.

Most women get married at some time in their lives, many have kids, and now with modern medicine, many elderly people are living long lives. What does this have to do with women, love and poverty? Women are taught to be caregivers early on. Women are taught to clean up the house, cook, and babysit much more than their brothers. This could be a major reason women become caregivers of all types of love, except themselves. But most cultural issues are complex, so let’s just say this is one of the reasons. But, another big reason is that women are still the ones to get pregnant and have responsibility for the home and children.

Because of the caregiver background women are raised with, in conjunction with their responsibility to their children, housekeeping and cleaning, women are more likely to take extended time off work. Some women never work at all, outside the home. If there is a divorce, which about 70% of Americans divorce or separate, women are usually left with no income, little income from a divorce settlement, or little income from an entry level job. Therefore, in the struggle to just exist, women don’t save enough money. The moral of the story is that girls should be taught to go to school, and women should do a significant amount of earned income work before they stay home to take care of the kids, home, or elderly parents. If you can’t do the work before having kids, you better do it afterwards, so they can save money for retirement.

Women have no excuse for not getting an education. You can go to online schools that are not very expensive. Women can also do work out of their homes, such as copyrighting for online services, editing for college students and authors, ghost writing for authors. There are also graphic design and web design services stay at home Moms can do for local web design companies. There are a whole host of jobs women can do as their own business from home. But, be cautious about who you take work from, and which online services you choose to use as a learning service.

Photography is another hobby that can be turned into an at home income. Take several photography classes from local shops, online services and get really, really good at knowing your camera, using your camera, printing and editing with graphic software. It takes a while to get really good with your camera, but once you get the hang of it, and can produce beautiful photos of kids or families, that could be a viable field.

Learn to sew. When you learn to sew simple garment designs, and sew women or children’s clothes, you can sell them at a flea market, and also sell at yard sells and other places.  

Take affordable online courses, educate yourself in a viable career concentration, or turn a lucrative hobby into an income producing job. When you make an income after a year, put money into your own IRA account, and start a savings account at your local bank. Retirement planning can become a priority for women, whether you work at home or outside the home, make the decision and start planning now.

Lois Center-Shabazz
author of, Live Rich Save Money! Budget Diary
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author of, Live Rich Save Money! 68 Powerful Ways to Save Money, Now and Forever
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