Her is a good example of how the federal goverment is getting us with SS. The city of Galviston TX. opted out before congress passed the loopole to stop them and its a sweet deal for them. Here is just some of the numbers:
Galveston vs. Social Security. Upon retirement after 30 years, and assuming a 5 percent rate of return — more conservative than Galveston workers have earned — all workers would do better for the same contribution as Social Security:
Workers making $17,000 a year are expected to receive about 50 percent more per month on our alternative plan than on Social Security — $1,036 instead of $683. [See the Figure.]
Workers making $26,000 a year will make almost double Social Security’s return — $1,500 instead of $853.
Workers making $51,000 a year will get $3,103 instead of $1,368.
Workers making $75,000 or more will nearly triple Social Security — $4,540 instead of $1,645.
Galveston County’s survivorship benefits pay four times a worker's annual salary — a minimum of $75,000 to a maximum $215,000 — versus Social Security, which forces widows to wait until age 60 to qualify for benefits, or provides 75 percent of a worker’s salary for school-age children.
In Galveston, if the worker dies before retirement, the survivors receive not only the full survivorship but get generous accidental death benefits, too. Galveston County’s disability benefit also pays more: 60 percent of an individual's salary, better than Social Security's.
Two government studies of the Galveston Plan — by the Government Accountability Office and the Social Security Administration — claim that low-wage workers do better under Social Security. However, these studies assumed a low 4 percent return, which is the minimum rate of return on annuities guaranteed by the insurance companies. The actual returns have been substantially higher.
Here is a link to the entire story:
NCPA - Brief Analysis #514, Galveston County: A Model for Social Security Reform