Joel Douglas writes for the American Thinker about a major redesign for one of the nations’ major entitlement programs.

Social Security protects taxpayers across American society. Without Social Security, millions would face poverty, straining families and state and local governments, increasing inequality, and destabilizing the economy.

But Social Security isn’t without its problems. It relies on a larger future generation funding the current generation of older Americans. This model is projected to run out of full funding between 2034 and 2037 for the Boomer generation. With the Millennial generation larger than Gen X, the shortfall might right itself during the Gen X retirement period. …

… To ensure each future generation has access to the social insurance program, we must orient the program to be:

1. Fully funded by the individual, not the following generation

2. Funding achievable by an individual in their earnings lifetime

3. Sustainable, such that the program will incur no government debt and weather future changes in population growth

This is achievable.

What if the American people invested $100,000 in every newborn, purchasing a 65-year government bond on their behalf that guaranteed a 3.5% annual return?

Then, throughout each individual’s lifetime, both the individual and their employer would contribute to Social Security taxes, repaying this investment. This structure would mirror the existing Social Security tax system.

The individual would have access to the funds when they reach 65 years old. The fund would project to pay out 30 years of benefit to age 95 at a fixed monthly rate.

The government would incur no permanent debt with this approach.

Let’s consider the feasibility of this proposal. If America invested $100K at a baby’s birth and the trust grew tax-free and returned a 3.5% annual return, the $100k would grow to $935,670 when the baby turned 65.

If we wanted that money to last until the individual reached age 95, that $935K would pay $2600 per month, or $935,670 spread across 360 months.