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THE PLAN · IN MY OWN WORDS · REV. AUGUST 2026

Supercharged Social Security ($$$) — The Plan

A 12-step proposal to create true retirement security

The whole plan is on this one page. First the twelve steps in plain English, then my Proposal reproduced word for word. Print it, save it, or send the link to someone who says the program can’t be fixed. Skip to my own words ↓

Grow the fund. Cut no checks. Privatize nothing.

Twelve steps, one idea: fund benefits early, in the pooled trust fund, invested in the whole market at index cost — with a benefit floor no retiree falls through and governance politicians can’t reach. Still a defined benefit. Still your pension.

GROUP ONE · STEPS 1–3

The case

  1. 01

    Keep what works, fix what's broken

    $$$ keeps everything that already works about Social Security: the social-insurance safety net, lifelong defined-benefit payments, annual cost-of-living adjustments, and the age-62 earliest retirement age. Existing retirees and workers near retirement stay fully in the current pay-as-you-go system — nothing changes for them. Everyone born after the plan starts has their pension funded at or before birth, instead of waiting on each new generation's payroll taxes to keep the promise.

  2. 02

    Grow the economy, not just the trust fund

    The 2018 revision adds an economic case: funding benefits early, at index-fund cost, would free up money that pay-as-you-go financing has tied up for decades, I argue, growing the broader economy along with the trust fund. I point out that Social Security's designers in 1935 already had roughly eighty years of market history to draw on. My own dollar totals for that counterfactual appear, in my own words, in my Proposal, below; this page’s own copy uses only verified figures — see how the numbers on this site work.

  3. 03

    Include every American, not just some

    $$$ sorts everyone into one of four groups at startup: newborns have their pension funded at or before birth, using official birth forecasts; younger workers split their funding between $$$ and the legacy system; workers already at or near a cutoff age stay entirely in legacy; and older, higher earners can opt in by rapidly funding their own benefit. After two or three generations, nearly everyone is in the fully funded system and the legacy program's obligations shrink toward zero.

GROUP TWO · STEPS 4–9

How it works

  1. 04

    Fund it early — cheaper, better ways to save

    Every newborn's benefit can be funded through an at-birth contribution, voluntary gifts or loans, a transfer from an IRA or 401(k), or a small starter loan from the trust fund itself — a “KerreyLoan” — at ordinary Treasury interest. My design choice: which of these sources applies, and when Workers already in the workforce when the plan starts instead pay a dedicated pension payroll deduction that stops once their own benefit is fully funded, after which it converts to a loan that helps pay legacy benefits, repaid with interest as a benefit supplement.

    It is still one pooled trust fund, professionally managed — nobody gets an account with their name on it.

  2. 05

    Invest it the boring way — dirt cheap, pooled, indexed

    $$$ ends government-bond-only investing and pools contributions into a total-market index fund covering the whole U.S. stock market, with dividends reinvested — the same low-cost, indexed approach large pension funds already use. It stays politically independent, the way the Federal Reserve is designed to, and it explicitly does not privatize anything: contributions go into one pooled trust fund, professionally managed, never into individual accounts.

    A capped emergency reserve — My design choice: sized to a few years of benefit payments — is designed to sell into strong markets and buy into weak ones, smoothing the ride rather than chasing it.

  3. 06

    End elder poverty — a floor no one asked for before

    Every benefit is built around a Minimum Target Benefit, set by actuaries as a multiple of the official poverty line and adjusted every year for inflation. For newborns it is funded at birth; for everyone else it phases in through the pension payroll deduction, and voluntary saving can push a benefit well above the floor.

    $2,508.33/mo = $30,100/yr
    The plan's floor: twice the poverty line — about $2,508 a month ($30,100 a year)
    Source: 2 × R-014 (Census threshold) · R-013
    $1,456/mo
    Today's average earner claiming at 62 gets about $1,456 a month
    Source: SSA PIA formula + bend points + AWI (ssa.gov/oact/cola/piaformula.html et al., Wayback-pinned) · R-012

    That floor is set at twice the poverty line — My design choice: the 2× multiple is my own target, not an outside benchmark, and the transition financing has to be able to pay for it. See how the transition gets paid for.

  4. 07

    Make the loan pay for itself, many times over

    KerreyLoans are small relative to what they can fund over a lifetime of compounding — the loan itself, plus ordinary Treasury interest, is what gets repaid, not a share of any investment gain. Repayments become seed money for the next generation's loans. Workers who never earned wages repay from their own accumulated assets at retirement, trimming their benefit by a modest amount; loans funded by gifts need no repayment at all. The proposal's own worked illustration of how far a small loan could stretch is carried, verbatim, in my section 7, below — or run the reproducible version on the calculator.

  5. 08

    Lock the money away from politics

    The $$$ trust fund can only pay out for benefits, investments, bonus distributions, and administration — borrowing from it, or spending it off-budget, is forbidden by design. If the fund becomes significantly over-funded for a sustained stretch My design choice: the exact trigger and duration are my own parameters, and they shifted between the 2016 and 2018 drafts, it pays bonus benefit distributions — first toward loan repayment and completing the minimum benefit — sized to leave the fund still comfortably over-funded afterward.

  6. 09

    A real death benefit, and the end of double taxation

    If a participant dies before their actuarial life expectancy, named beneficiaries receive at least what was contributed plus Treasury-rate interest, applied first toward funding their own minimum benefit — a firmer promise than the legacy program's modest lump-sum payment. Taxation follows ordinary retirement-plan rules: money is taxed either going in or coming out, never both, ending the layered taxation — FICA on wages, tax on benefits, tax on the bonds that funded them — the current system can produce.

GROUP THREE · STEPS 10–12

Getting there

  1. 10

    Stop paying in once you're funded

    Because $$$ money compounds from early in life, most workers fully fund their own minimum benefit well before they retire — the earnings cap disappears, but withholding stops once a worker's benefit is paid for. Employers keep matching only up to the legacy FICA limits and stop once an employee is fully funded; workers can keep contributing voluntarily to buy a benefit above the floor.

  2. 11

    Fund the transition without a crisis

    During the changeover, workers still fully in the legacy system keep paying ordinary FICA, which keeps legacy benefits flowing. Workers splitting between the two systems lend their $$$ pension contributions to legacy benefits once their own is funded. The plan also leans on long-dated bonds — part of the proceeds pay current benefits, the rest buys index-fund assets meant to retire that debt at maturity — plus any budget surplus and refinancing of the existing trust fund's holdings. My design choice: the bond split and terms are my own design A full accounting lives on Financing the Transition.

  3. 12

    Face the roadblocks honestly

    The proposal's final step is political, not actuarial: public unfamiliarity with how Social Security's financing actually works, employers who don't track FICA's true cost, and — I argue most of all — resistance from parts of the financial-services industry that profit from the status quo, or would rather see individual accounts instead. It closes with a plain call to ask, of anyone opposed: why not?

What’s different from the 2016 draft

  • The 2018 revision adds the Groups 1–4 eligibility framework and cutoff age, plus an entirely new economic-impact chapter and a political-roadblocks chapter — none of which existed in the 2016 draft.
  • The bonus-distribution trigger loosened: 2016 paid a bonus once the fund was over-funded by 50% or more for three to five years; 2018 lowers that to 30% at month-end for two years, with the payout sized to halve the surplus. The minimum-benefit multiple (1.5–2× poverty) is stated explicitly in the 2016 body but dropped from the 2018 body text — a 150%-of-poverty example survives only in a 2018 footnote.
  • Death benefits went from something the 2016 draft says “lawmakers should consider” to a defined 2018 benefit with its own default formula.

EVERYTHING BELOW IS MY OWN DOCUMENT

The Proposal, word for word

Everything above this line is the site’s plain-English summary. Everything from here to the end of the back-test is mine, reproduced from my August 13, 2026 revision — my sections, my tables, my figures, my emphasis.

Everything below this frame is reproduced word for word from my August 13, 2026 revision, and ends where the back-test ends. Only spelling and punctuation have been normalized; every figure is my own, as I wrote it. “Supercharged Social Security” is my shorthand for Supercharged Social Security.

Prefer the annotated summary with verified sources? The plain-English plan is above ↑.

THE PROPOSAL

Summary: a 12-step proposal to create true retirement security

Supercharged Social Security would supercharge our economy, slash Social Security costs, enhance benefits, phase out elder poverty & FICA, shrink income inequality, & create the world’s largest tax cut. This should appeal to both so-called liberals and conservatives. Once the world sees its value, the Supercharged Social Security model could fix Medicare & state pensions to help jump start the world’s greatest economic boom!

  1. Phasing in Supercharged Social Security would help Social Security survive and thrive by fixing its worst problems, and preserving its best “social-insurance” features such as the COLA & defined benefits.

    Read section 1 ↓

  2. Supercharged Social Security would invest in a total stock market index. But NOT via privatization. Reinvesting dividends and holding ultra-long term would make index investment virtually riskless.

    Read section 2 ↓

  3. Supercharged Social Security would supercharge our economy! Had it begun in 1935, benefits could have pumped $31 trillion into our economy through 2019 (net of $1.3 trillion in costs). Plus hundreds of trillions of dollars more from 2020 thru the 2130s — at NO additional cost. In sad contrast, through 2019, our legacy retirement system cost our nation $3 trillion more than its benefits.

    Read section 3 ↓

  4. Supercharged Social Security would expand Social Security eligibility to ALL newborn Americans & most of today’s younger workers. Older & now-retired workers would remain in the legacy system. When fully phased in, ALL Americans would become eligible for strong retirement benefits.

    Read section 4 ↓

  5. Supercharged Social Security would discontinue costly “procrastination funding” and no-growth, government-bond-only investment. At or before birth, parents or family of newborn Americans would fully-fund above-poverty-level retirement benefits. The one-time cost would be dirt cheap!

    Read section 5 ↓

  6. A Minimum Target Benefit (MTB) and an annual Cost Of Living Adjustment (COLA) would phase out poverty for virtually ALL senior Americans within two to three generations. Voluntary contributions could increase the MTB substantially. Supercharged Social Security would allow retirement before age 62 for individuals with substantially over-funded MTBs.

    Read section 6 ↓

  7. Supercharged Social Security would be far more cost effective than any other government program. Some parents might need small at-birth government loans to fund benefits. But for every dollar lent, the government would receive far more money than it gets from any other loan program.

    Read section 7 ↓

  8. Unlike the legacy system’s so-called Trust Fund, the Supercharged Social Security Trust Fund would be a true lockbox to be used only for providing benefits. Borrowing from it would be forbidden by law.

    Read section 8 ↓

  9. Supercharged Social Security could provide death benefits to named beneficiaries from a more tax-friendly retirement plan to further reduce the already low Supercharged Social Security cost, and accelerate legacy-benefit funding.

    Read section 9 ↓

  10. For those born too early for at-birth investment, voluntary contributions & payroll taxes would fund benefits. Employee/employer payroll deductions could stop once MTBs are fully funded, often decades before workers retire. Supercharged Social Security would remove the “earnings cap,” but high-earning workers and their employers would benefit substantially by avoiding the hundreds of thousands of dollars in unproductive, career-long FICA imposed by the legacy system.

    Read section 10 ↓

  11. During the transition to full Supercharged Social Security implementation, payroll deductions would still be a major source of legacy retirement benefits. Supercharged Social Security would also include a variety of other provisions to help fully fund the legacy system’s unfunded obligations as soon as possible.

    Read section 11 ↓

  12. Weak legacy retirement benefits and retirement-industry campaign contributions created an artificial “need” for IRA’s, 401(k)’s, etc. But what politicians & the financial industry don’t know is this: Supercharged Social Security would create the desire for more such plans. Because strong Supercharged Social Security benefits & reduced costs from FICA phase-out would create tens of trillions in new disposable income, and make ALL Americans, employers, and even politicians & the industry better off. If your representatives put YOUR interests first, they’ll amend the Social Security Act with Supercharged Social Security.

    Read section 12 ↓

My original one-page slide, 'The 12-step Proposal — a Summary', listing all twelve steps in my own green-and-black typography.
My original one-page summary slide, as I laid it out.From my research files

Section 1 of 12

Phasing in Supercharged Social Security would enhance Social Security’s best features & fix its worst problems.

Supercharged Social Security would be phased in. It would enhance (not preserve) Social Security’s best features:

  • the so-called “social insurance” retirement safety net provided by OASI.
  • monthly defined-benefit pension payments & Cost Of Living Adjustments (COLAs).

Supercharged Social Security would redesign & strengthen Social Security’s weak retirement provisions. It would:

  • slash costs by funding benefits as early as possible, at ultra-low cost.
  • reduce working-age poverty — and income inequality — by phasing out FICA.
  • phase out elder poverty with above-poverty benefits and pre-retirement FICA savings.
  • raise minimum and maximum retirement benefits substantially.
  • put ALL newborn Americans — not just workers — on track for solid retirement benefits.

Social Security’s founders (the founders) were perhaps well-intentioned. But our national retirement system’s design gave us huge, growing problems. Supercharged Social Security would fix the worst problems:

  • Perhaps Social Security’s WORST flaw is its “inter-generational compact.”
    • Younger generations pay for retirement & survivors’ benefits of their parents’ and grandparents’ generations via pay-as-you-go (procrastination) funding.
    • As a result, OASI’s cumulative cost for 1935–2018 was almost $20 TRILLION!
      • Yet benefits fell short of that cost by more than $3 Trillion!
  • Weak benefits & high costs hurt all age groups and employers.
    • Weak benefits undercut retirees’ disposable income and stunt business revenues.
    • In 2014, low (or no) benefits left 5.8 million seniors in poverty (10.3%).
      • High costs left nearly 41 million of us age 62 or younger in poverty (15.8%).
    • Since Social Security began, average FICA grew 18,688%, raising businesses’ expenses and foisting a huge burden on both employees & employers.
      • as the worker-to-retiree ratio shrunk, FICA grew 12 times as fast as inflation.
    • Had gas costs been tied to the cost of FICA in 1937, by 2019, the average worker would have paid $42 a gallon based on OASI costs only, or $49 including Disability costs.
  • Fixing Social Security just requires common sense and the discrediting of old myths:
    • Smart American parents know their newborn children will need substantial retirement income in six-plus decades, so why procrastinate on funding those benefits?
    • The smartest way to fund benefits is a safe, growing investment at or before birth.
    • OASI’s so-called “government bonds” provide no growth for retirement assets, but they cost YOU and other taxpayers (including retirees) $1.9 TRILLION through 2018!
My chart comparing OASI total cost against total benefits paid, year by year, 1937 through 1974 — cost persistently above benefits.
My chart: OASI total cost vs. benefits paid, 1937–1974.From my research files

Section 2 of 12

Virtually riskless investment would provide substantial benefits — dirt cheap!

Supercharged Social Security investment policy would be simple. Pooling incoming money, investing as early as possible in a Total Stock Market Index (TMI), reinvesting dividends, and holding ultra-long term would make it virtually riskless. Every Supercharged Social Security participant would become an “instant capitalist.”

But Supercharged Social Security WOULD NOT PRIVATIZE Social Security. That would be a recipe for disaster.

For all Americans born after Supercharged Social Security startup (startup), funding benefits and investing “early as possible” would be done at-or-before birth. The TMI would own a part interest in virtually all U.S. common stocks plus similar securities, such as Real Estate Investment Trusts.

For newborns, early investment would provide a huge advantage vs. private-sector pensions. For workers born before startup, Supercharged Social Security would invest payroll deductions. When fully phased in, early-as-possible investment would provide substantial retirement income for virtually all Americans. Strong Supercharged Social Security benefits would supplement other retirement income, not vice versa.

Limited private-sector services would be permitted, e.g., securities custody. Like the Federal Reserve system, Supercharged Social Security-enabled Social Security must be politically independent.

My log-scale chart of the SBBI large-company stock index: growth of one dollar from 1814 to 2018, total return with dividends reinvested vs. capital appreciation alone.
My chart: growth of $1 in the SBBI large-company stock index, 1814–2018, log scale — total return (dividends reinvested) vs. capital appreciation.From my research files

Supercharged Social Security would be long-term focused. Over the past 200+ years, every six-decade period has had significant rate-of-return fluctuations. Periods of unusually high or low rates of return have been followed by an inevitable “reversion to the mean.” An “Supercharged Social Security emergency fund” would be set up to capitalize on such fluctuations. Supercharged Social Security OASI could “sell high” and then buy marketable Treasury securities when rising stock markets have over-funded Supercharged Social Security-OASI significantly. If it later became temporarily underfunded during a bear market, Supercharged Social Security would increase TMI holdings by selling those Treasury securities to “buy low.” If necessary, all employed participants might be required to start or resume PPT deductions. Supercharged Social Security pension managers could use the emergency fund, or resumed Supercharged Social Security PPT deductions, to “buy low,” and/or to pay benefits. Such flexibility would minimize the need to sell TMI assets or stop dividend reinvestment when stocks are cheap.

My chart of high, low, and average annualized total returns of a large-company stock index over lengthening holding periods, 1814 to 2012 — the spread narrows toward the long-term average as the horizon grows.
My chart: “reversion to the mean,” 1814–2012 — the longer the holding period, the tighter returns cluster around the long-term average.From my research files

Supercharged Social Security would discontinue investing in so-called “government-bonds,” excluding Supercharged Social Security emergency fund purchases. Legacy Social Security does not actually invest in marketable bonds, i.e., those that could be sold to pay benefits. Combined with pay-as-you-go funding, this policy contributed greatly to Social Security’s dismal past performance, and creates unacknowledged risk. For example, if the U.S. Treasury (Treasury) lacked sufficient receipts, or ability to borrow due to a government shutdown, legacy benefits could be jeopardized at least temporarily.

The legacy OASI “trust fund” is merely an accounting mechanism, not a true trust fund. Treasury receives OASI revenues, pays retirement benefits, combines remaining funds with other receipts, and issues accounting credits similar to IOUs for any amount not used to pay benefits.

Section 3 of 12

Slashing tax costs and strengthening benefits would supercharge our nation’s economy.

The U.S. economy and stock market are strongly linked. Had the founders recognized that fact, they could have designed a much better retirement system. Table 1 shows that the cost and benefit advantages of Supercharged Social Security vs. legacy Social Security were huge! So huge, fixing Social Security now with Supercharged Social Security could supercharge our economy’s long-term growth.

I marked this table “THE FOLLOWING NEEDS UPDATE” in my latest revision; it appears here exactly as I wrote it while I update the figures.

Table 1 — Legacy Social Security vs. Supercharged Social Security, in trillions of dollars, as I wrote it
Line itemLegacy SystemSupercharged Social Security System
Estimated cost: 1935–2019$19.9$1.3
Estimated benefits thru 201916.8 (1935 thru 2018)32.6 (1935 thru 2018)
Potential benefits beginning 20202.9 (2020 thru 2022)470.0 (2019 thru the 2130s)
Total benefits a19.7 (1935 thru 2022)502.6 (1935 thru the 2130s)
Opportunity cost (502.6 − 18.8) b 483.8

a — Numbers may not add to total due to rounding.

b — 1935 thru last benefit payment (~ 2022 for legacy benefits, ~ the 2130s for Supercharged Social Security)

Cumulatively for 1935–2019, our legacy retirement system took in $19.9 trillion. Benefits paid out fell $3 trillion short of their cost. With no new money in, the trust fund could cash in its trust-fund IOUs and continue paying benefits until early 2022. At that time, the cumulative benefits would fall well short of cumulative cost. However, with Supercharged Social Security, estimated benefits just through 2019 could have exceeded cost by $35 trillion! By ignoring the Supercharged Social Security design, the founders created a $483.8 Trillion opportunity cost from inception through the 2130s.

The Supercharged Social Security design was based partly on annual stock market data for 1814–1934. It’s been published annually since 2001 in Stocks, Bonds, Bills, and Inflation, from sources readily available to the founders before 1935. It revealed how Social Security could have invested retirement money with zero market risk. However, since 2001, failure of elected representatives to use a model like Supercharged Social Security to strengthen Social Security (and Medicare) is inexcusable.

My log-scale chart of SBBI large-company index growth from 1814 to 1935 — the market history that was already on the record before Social Security was designed.
My chart: growth of the SBBI large-company index, 1814–1935 — the data “readily available to the founders before 1935.”From my research files

With low-cost, high-benefit Supercharged Social Security, our post-1935 economy would have grown faster, helping ALL Americans and their employers, not just wealthy Americans. Working Americans and employers would have been totally free from paying FICA by the late 1990s. ALL Americans would have higher disposable incomes at retirement.

Section 4 of 12

By expanding Social Security eligibility, Supercharged Social Security eventually would include ALL Americans.

At startup, Social Security would have four stakeholder groups:

Group 1: ALL Americans born on or after startup, and/or those who fully fund future benefits with sufficient voluntary contributions. Employers would no longer need to withhold and pay involuntary retirement taxes, but employees could opt for limited voluntary withholding with no employer-match requirement to make their benefits even greater.

Group 2: American workers born before startup but younger than an “Supercharged Social Security Retirement-Credit Cutoff Age” (RCCA) established before startup, and certain foreign-born workers. If, for example, Supercharged Social Security had begun in 2018 and the Group 2 cutoff was age 50, (i.e., 12 years from age 62 at startup), life expectancy for the oldest Group 2 stakeholder would have been about 32 years (i.e., pre-retirement investment horizon). Retirement credits accumulated 12 or more years before minimum retirement age would be applied toward legacy benefits. Credits accumulated thereafter would be applied toward Supercharged Social Security benefits. Group 2 stakeholders could expect better retirement benefits than if all FICA were applied to legacy benefits.

Group 3: individuals at, or older than, the RCCA at startup who earn substantial annual income. If that income were sufficient to fully fund Supercharged Social Security retirement benefits before the minimum retirement age, they could opt to participate in Supercharged Social Security.

Group 4: those at or older than the RCCA at startup, excluding Group 3 high income individuals. Included would be those at the minimum retirement age or older who have not yet retired, and all who have filed for, or who are collecting, legacy retirement benefits. Individuals in this group would receive, or continue to receive, legacy retirement benefits after startup.

ALL Group 1 stakeholders would become eligible for substantial benefits. At full phase-in of Supercharged Social Security, two to three generations from startup, virtually all American-born Social Security stakeholders would have been born into Group 1. Their benefits would have been fully funded at or before birth, relieving workers of burdensome, career-long legacy retirement payroll taxes.

Supercharged Social Security could also make provisions to provide some benefits to those Americans the legacy system excludes from benefit eligibility.

Mandatory withholding for foreign-born employees would continue until their retirement benefits were fully funded.

Section 5 of 12

Supercharged Social Security would slash the cost of retirement and yet guarantee above-poverty benefits to all.

Legacy system flaws stem from its design, based on an 1881 German idea used to create the world’s first old-age social insurance program. By ignoring Ben Franklin’s “time is money” principle, the legacy system “inter-generational compact” made children pay for their elder generations’ benefits. No-growth investment and procrastination funding stuck millions of retirees with below-poverty-level benefits. From inception through 2018, each dollar of OASI cost produced benefits of just 84¢. To add insult to injury, OASI’s design exacerbated elder poverty by totally excluding some seniors from benefit eligibility. Failure to end elder poverty deprived millions of retirees from “certain unalienable rights,” including “life, liberty and the pursuit of happiness.”

The Supercharged Social Security funding model’s design would eliminate procrastination funding. Much cheaper, early-as-possible funding from parents would slash retirement costs for newborn Group 1 stakeholders by more than 99%. Low costs would make greater benefits much more affordable. Newborns’ benefits could be funded with one or more of the following methods:

  1. an at-birth tax on parents or guardians, paid when income taxes are filed;
  2. a small, one-time, at-or-before birth “KerreyLoan” to parents or other responsible parties from an Supercharged Social Security-OASI Trust Fund (Supercharged Social Security-OASI);
  3. voluntary payments (contributions) via gifts from parents, relatives, or friends;
  4. limited gifts similar to (c), using voluntary asset transfers from parents or others from existing retirement vehicles such as IRAs or 401(k)s;
  5. contributions from charitable foundations or similar entities.
“The best time to plant a tree was 20 years ago. The second best time is now.”
— old Chinese proverb (likewise for investing)
“The best time to put money into Social Security for benefits payable today was 62 years ago, or earlier, if it was wisely invested and allowed to grow. The second best time is now. The worst time is tomorrow, to pay benefits that are due the next day. And that’s what Social Security has done since it began. Social Security needs to be amended.”
— Landon B. McDonald, CFA, 8/22/2018

For Group 2 stakeholders (young to middle-aged people born before startup), an “Supercharged Social Security Pension Payroll Tax” (Supercharged Social Security PPT) would fund benefits. For many retirees, each dollar of Supercharged Social Security lifetime benefits could cost less than a penny. All contributions would vest immediately. Upon full-funding of an individual’s benefits, the employer would be exempt from Supercharged Social Security PPT payments. Thereafter, workers would be required to lend Supercharged Social Security PPT to SSA to help fund legacy OASI retirees’ benefits. Once legacy system-wide benefits were fully funded, Supercharged Social Security PPT lenders could opt to make supplementary payroll contributions to increase their own retirement benefits. At retirement, SSA would repay PPT lenders via an increase to their regular Supercharged Social Security retirement benefits.

Voluntary contributions from Group 1 or 2 stakeholders could raise retirement benefits of those Supercharged Social Security participants substantially. SSA would set maximum contribution limits at startup, and could adjust them subsequently. Most citizens and certain non-citizens (permanent residents, green cards, etc.), could make voluntary contributions. SSA would establish criteria for non-citizen participation, and for a “Voluntary-contribution Cutoff Age” (VCA).

Section 6 of 12

Supercharged Social Security could achieve what Social Security never attempted — an end to elder poverty.

Supercharged Social Security could phase out elder poverty. The COLA-adjusted MTB would exceed poverty-level income at retirement. Phasing in the MTB for ALL Americans could phase out elder poverty within two-to-three generations. For all newborns (Group 1 stakeholders), Supercharged Social Security would fully-fund MTB at or before birth. For Group 2, 3 and 4 stakeholders, the Supercharged Social Security PPT would be required, but only until individuals’ MTB’s were fully funded. Voluntary contributions, plus investments in various private retirement plans such as IRAs, could help retirees exceed MTB substantially.

Before startup, actuaries would establish MTB amounts at some multiple of poverty-level income. For example, two times a benchmark such as the Census Bureau poverty threshold, with adjustment for expected inflation between birth and retirement. Another possible benchmark: poverty guidelines issued in the Federal Register by the Department of Health and Human Services (HHS). Considerable study would be advised before actuaries set MTBs, but they would have six decades or so to make adjustments for newborns, if needed. Actuaries would then calculate at-birth and payroll-pension contribution amounts needed to provide future MTBs plus annual COLAs over retirees’ expected lifetimes.

Unlike the legacy system, workers born too early for at-birth investment would fund their own retirement benefits, not those of older generations. Supercharged Social Security-PPT withholdings would first be applied to a worker’s own retirement benefits, and then to repayment of KerreyLoans or other loans. Finally, Social Security would borrow (not confiscate) Supercharged Social Security-PPT to fund legacy retiree benefits. Supercharged Social Security OASI would be legally obligated to pay additional Supercharged Social Security retirement benefits from the principal and accrued interest of any borrowed Supercharged Social Security-PPT.

As with legacy benefits, MTB would increase for each month retirement is deferred. SSA should encourage individuals to use available options to increase their benefits above MTB level well before retirement. That would help all Americans, but especially those who retire single in high-cost-of-living areas where the “real” poverty rate is above the official level.

Voluntary Supercharged Social Security pension contributions, e.g., those made early in life or before birth, could make starting retirement benefits higher than MTB. Benefits lower than MTB would become increasingly rare, e.g., for an immigrant who joins the U.S. workforce later in life. Or for a worker with payroll-deduction-funded benefits who becomes unable to work before MTB is fully funded, legacy Disability benefits might be needed. But once Supercharged Social Security is fully phased in, benefits for all newborn Americans would be fully funded at birth.

Those younger than age 62 who had over-funded their benefits substantially could retire early. The earlier the requested retirement date, the greater would be the required over-funding percentage. As with the legacy system, delaying retirement would increase the annual benefit amount. MTB would increase (or decrease) for each month after (or before) age 62.

My copy of the Census Bureau chart of U.S. poverty rates by age group from 1959 to 2007, including the line for Americans 65 and older.
From my files: Census Bureau poverty rates by age, 1959–2007 — the elder-poverty problem Supercharged Social Security targets.From my research files

Section 7 of 12

Supercharged Social Security would be far more cost effective than legacy Social Security and other programs.

SSA would make small, default-proof loans to parent(s) who are unable to fully fund their newborn’s future benefits. Repayment of loans would be required from all recipients who receive earned income before retirement. Some other responsible party (for example, a grandparent) could voluntarily assume responsibility for loan repayments, which would be made to the OASI Trust Fund via payroll deductions or voluntary payments.

Such loans would be quite cheap relative to future benefits, and relatively quick and easy for most borrowers to repay. Repayment of KerreyLoans or other Supercharged Social Security loans generally would be via payroll deductions or voluntary contributions.

Before startup, SSA should create financial incentives to encourage loan recipients to repay loans quickly. Repayments received earlier than scheduled could be recycled into more loans to parents. That could reduce or eliminate government borrowing needed to make more loans.

At-birth funding loans of parents who die prematurely would have to be repaid by the beneficiary via payroll deductions. If that beneficiary has insufficient career income to repay the loan, it would be repaid from accumulated Supercharged Social Security investment assets at retirement. That might result in retirement income that falls short of MTB, but it would still be expected to be well above poverty level.

Parents or beneficiaries would not be required to repay funding from gifts.

Supercharged Social Security at-birth costs would be quite low. So repayments on low-cost loans would place little burden on most people. For example, assuming an at-birth cost of $250 in 1935, and adjusted for inflation since, the one-time 2019 cost at birth would have been less than $5,000. Compared with the cost of the cheapest new car, that would represent a small loan. For Americans born 1935–56, the estimated initial age-62 benefit would have averaged about 250% of poverty level.

Had Supercharged Social Security begun in 1935, it could have produced huge retirement benefits from each dollar loaned at birth. We estimate that an at-birth dollar invested between 1935 and 1956 could have grown to nearly $900 by age 62, on average, and produced well over $1,700 in lifetime retirement benefits. At worst, we expect $1.00 invested for 1956 newborns would produce lifetime benefits of about $970.

Loans from charitable foundations or similar institutions would be repaid via the Supercharged Social Security OASI Trust Fund to the institution, or at the option of the institution, be retained by Supercharged Social Security OASI to fund benefits for future newborns.

My chart of 62-year capital appreciation and total return for large-company stocks over rolling periods from 1824 to 1934 — the birth-to-age-62 horizon the proposal is built on.
My chart: 62-year capital appreciation & total return, 1824–1934 — the birth-to-62 investment horizon.From my research files

Section 8 of 12

Supercharged Social Security would provide a true lockbox to be used only for providing retirement benefits.

Legacy OASI’s “lock box” is leaky. In contrast, Supercharged Social Security was designed to make Supercharged Social Security-OASI a true, leakproof “lockbox.” Borrowing from it would be forbidden. Disbursements would be limited to regular benefit payments, Supercharged Social Security retirement investments, “bonus benefit distributions,” or administrative costs. An additional alternative, when Supercharged Social Security-OASI is overfunded, might be to use excess funds to fully-fund a portion of legacy benefits.

From inception through 2018, when OASI receipts exceeded immediate obligations, the U.S. Treasury “borrowed” any surplus cash not needed immediately to pay benefits. In exchange, OASI’s Trust Fund received what are, in effect, unmarketable IOUs. Treasury could then use borrowed funds to finance government initiatives unrelated to retirement benefits. In effect, it could bypass the federal budget process or make it less transparent. In the process, OASI accumulated more than $3 trillion in “IOUs” that provided no opportunity for growth.

Legacy OASI would have been far more productive had it been allowed to invest all excess funds in a TMI instead of government bonds. With TMI investment, it could have accumulated $18.5 trillion of marketable securities in its trust fund as of year-end 2018 (instead of IOUs). Doing so would have avoided its current (2020) predicament: the need to soon take drastic actions, or cut benefits around 2034.

If the Supercharged Social Security OASI Trust Fund were over-funded for an extended period, after the Supercharged Social Security emergency fund has reached its maximum allowable size, SSA could make bonus benefit distributions to Supercharged Social Security participants. For example, if the Supercharged Social Security Trust Fund were over-funded by 30% or more at month end, over a period of two years. SSA would establish the actual percentage and minimum period of over-funding prior to Supercharged Social Security implementation. The Trust Fund’s grand total bonus benefit distribution would be limited to an amount that would leave Supercharged Social Security-OASI still over-funded by, say, half of the original over-funded percentage.

For non-retired individual participants with MTBs not yet fully funded, or for those with outstanding Kerrey loans, bonus benefit distributions would be applied first to repayment of loan balances and then toward fully funding their MTBs. The remaining amount receivable could then be applied toward increasing future benefit amounts beyond the MTB. Alternatively, recipients might receive bonus benefit distributions partially or fully in cash, or as credits toward income-tax obligations.

As SSA gains experience with Supercharged Social Security, and as the percentage of participants fully funded at or before birth increases over time, the minimum over-funding percentages before and after distributions might be adjusted upward, or downward, as appropriate.

Section 9 of 12

Death benefits from Supercharged Social Security would further reduce the already low cost of benefit funding.

With legacy Social Security, the money for retirement benefits comes mostly from workers’ and employers’ FICA. In some cases, FICA could total hundreds of thousands of dollars over a career. With premature death, a lifetime of previously-paid-out legacy FICA would provide little or no significant benefit to others. In effect, the U.S. Treasury confiscates FICA credited toward, but not set aside for, a worker’s retirement benefits.

Supercharged Social Security could provide death benefits to one or more named beneficiaries in the event of death before retirement, or after reaching age 62 but before reaching the actuarially determined age-62 life expectancy. If a participant were to die at or after reaching life expectancy, no death benefits would be payable.

If a death-beneficiary’s Supercharged Social Security MTB had not been fully funded upon death, the death benefit would first be used to pay off any loans outstanding. Then, death benefits could be payable to named beneficiaries. For any beneficiary spouse or “partner,” whether or not they have reached minimum retirement age, any death benefit would be applied first toward fully funding the beneficiary’s MTB. Then, any additional available death benefits would be applied toward increasing beneficiary’s benefits, up to the maximum allowable Supercharged Social Security benefit.

For younger named beneficiaries, such as a decedent’s children or grandchildren, death benefits would be applied first toward repaying any Supercharged Social Security loans, and second, toward providing or increasing any amounts previously made to fully fund MTB. Any remaining credit toward retirement benefits would be transferred to named beneficiaries’ Supercharged Social Security accounts. That might provide greater-than-MTB benefits, but limited by the maximum allowable Supercharged Social Security benefit.

Supercharged Social Security OASI would, in effect, be the default beneficiary if a decedent had opted out of selecting beneficiaries, if all named beneficiaries die first, or for any death benefits that exceed the maximum allowable death benefit. In such cases, assets that had been accumulated for the decedent could be put into two trust funds. One would be for paying retirement benefits to individuals that had been ineligible for legacy benefits. The other would be to supplement benefits for legacy beneficiaries that would otherwise retire with less-than-poverty-level benefits.

The death benefit payable would depend on factors such as the cumulative amount and timing of the decedent’s contributions, extent to which the individual’s account was “fully funded,” etc. At a minimum, the death benefit would be no less than the amounts paid into Supercharged Social Security plus interest based on long-term U.S. Treasury bonds, less any amount needed to repay any Supercharged Social Security loan.

Section 10 of 12

Supercharged Social Security would be much more tax-friendly than legacy Social Security.

Supercharged Social Security would eliminate double, triple and even quadruple taxation, largely by phasing out a regressive tax on wages — FICA. Taxation of benefits could be similar to other qualified or non-qualified retirement vehicles. Taxation of Supercharged Social Security payroll deductions would be based on two simple principles:

  1. workers work hard for their money,
  2. the money they pay into Social Security should work hard for them.

Employee FICA is like phantom pay. It’s counted as earned income, but it’s excluded from take-home pay as if never earned. Any tax on “earned income” that’s never received amounts to a tax upon a tax. Millions of retired Americans are triple taxed. Social Security may tax up to 85% of benefits received if income is above a specified amount. To add insult to injury, some retirement benefits may be taxed a fourth time. The interest OASI receives from its so-called government bonds comes largely from income taxes. So benefits paid to retirees who pay income taxes, in effect, come from Social Security’s bond interest income, which comes partly from their own income taxes.

Benjamin Franklin’s “time is money” is a cornerstone of Supercharged Social Security. The legacy pay-as-you-go funding model ignored Franklin’s wisdom. Since 1937, legacy Social Security’s initial low tax cost has become exorbitant. Yet they fund legacy retirement benefits that are mediocre at best.

Unlike legacy Social Security, Supercharged Social Security payroll taxes could stop before most workers retire. Supercharged Social Security would put money to work ASAP. That would accelerate funding and make it easy to fully-fund retirement benefits quickly. After workers fully fund their own Supercharged Social Security benefits, they would help fund legacy benefits, and then could continue payroll deductions to increase their own Supercharged Social Security benefits beyond the MTB amount. For this proposal’s author, Supercharged Social Security could have fully funded his actual retirement benefits plus a COLA with FICA to age 29 (at the actual historic withholding rate), or FICA to age 27 (at the 2019 rate).

Supercharged Social Security would remove the cap on FICA taxable income. But rather than penalizing high earners, they and their employers would actually benefit. That’s because the need for hundreds of thousands of dollars of unavoidable career-long payroll withholding would vanish. For some highly compensated individuals, especially younger ones, full funding could occur literally within days or weeks of Supercharged Social Security implementation.

With Supercharged Social Security, employers and self-employed workers would continue making payroll tax deposits, as they do now. Employers would match pension contributions, but only up to the current and projected maximum annual legacy FICA earnings limits. So employers would not be required to exceed those earnings limits for highly compensated individuals. Employer payroll contributions would stop once an employee’s MTB was fully funded.

Section 11 of 12

Supercharged Social Security would help fund legacy Social Security retirement benefits more cost effectively.

There can be no quick cure for Social Security’s high costs and low benefits. Those problems have been ignored and growing since 1935. But there is no good excuse to avoid starting an Supercharged Social Security fix. Elected representatives, their staffs, and their lobbyists have wasted 85 years since Social Security became law by avoiding that fix. Fully funding legacy retirement benefits while phasing in Supercharged Social Security would be easier than critics and politicians might imagine. Why Social Security’s brain trust never made the effort (mostly the unnecessary fear of lower retirement industry campaign contributions) is one of the best-kept secrets of Washington and Wall Street.

Three stakeholder groups and their employers would be major sources of funds for legacy retirement benefits. MTBs for Group 1 stakeholders would be fully funded at birth. So PPT deductions beginning with workers’ very first paychecks could help fund legacy benefits. But long before the youngest of Group 1 could retire, and before the last legacy stakeholder dies, the transition from legacy to Supercharged Social Security would likely be completed.

Group 2 stakeholders could help fund legacy benefits by lending payroll deductions to SSA, after they fully fund their own MTBs. For many of the youngest workers, that could happen by their mid- to late-20s. For high earners, removing the cap on payroll deductions would accelerate their MTB funding, free them from career-long FICA, and provide substantial payroll deduction lending to fund legacy benefits.

FICA from not-yet-retired Group 3 (legacy) stakeholders would also continue at startup. Additional legacy benefit funding could come from some combination of the following:

  1. long- or ultra-long-term bonds; e.g., up to 40- or 50-year maturities
  2. a new form of U.S. Savings Bonds, specifically to fund retirement
  3. any government surplus
  4. Supercharged Social Security OASI assets, when over-funded substantially.

Generally, when government sells bonds, it has no exit strategy. The Supercharged Social Security exit strategy would be simple: “arbitrage.” Sell retirement bonds and buy TMIs. A portion of the bond proceeds (perhaps 50%) would fund retirement benefits immediately. The rest could be invested in TMI assets, which could be sold at bond maturity, or after bond rollover, to repay the debt. Long-term financial-market records show, as investment horizons lengthened, long-term historic TMI-type asset growth would have been more than sufficient to offset government bond liabilities.

Note: the Supercharged Social Security proposal does not apply to Medicare, Disability, or state pensions. But federal and state lawmakers could amend those programs using the Supercharged Social Security early-as-possible funding model to slash costs and increase benefits substantially.

Section 12 of 12

Supercharged Social Security could help ALL Americans greatly — even the retirement-industry & politicians

In 1935, Social Security’s founders had no idea the retirement system they designed would cost Americans $3 trillion more than the benefits it would pay over the next eight-plus decades. Its high costs exacerbated poverty among workers. Its weak benefits never came close to wiping out elder poverty. But their plan created an artificial need for additional income sources, like IRAs, 401(k)s, 403(b)s, 457(b)s, etc. to help provide for comfortable retirement. Such plans are expensive compared to Supercharged Social Security. So people who most need them can least afford them. It’s no coincidence the founders’ design helped expand a retirement industry that gave politicians generous election campaign contributions to encourage more new plans many couldn’t afford.

Nothing in our Constitution prevented the founders from creating Supercharged Social Security in 1935 — or now. Hindsight from stock-market data that goes back to 1814 shows us the founders ignored that better design choice. The low cost and super benefits of Supercharged Social Security could have wiped out both elder poverty and FICA by the 1990s. Only the richest would have needed additional retirement plans. But forget need. Phasing out FICA would have created the means for more people to put more money into IRA-type plans. And that would have created the desire for the industry to make more campaign contributions to encourage politicians to create even more new plans.

Greater means? Supercharged Social Security could have put a minimum of $17 TRILLION in extra disposable income into our pockets between 1935 and 2019! Every Social-Security-era newborn could better afford plans like IRAs and 401(k)s, plus more non-retirement savings and investment, plus more goods and services. Had lawmakers been wiser in 1935, the retirement industry and our entire economy could have enjoyed a bonanza of additional wealth. We’d be looking forward to hundreds of trillions of dollars in additional disposable income in the next century.

We’re still waiting for Supercharged Social Security because, oblivious to the financial and economic power of an Supercharged Social Security-type plan, Congress shunned a 1996 proposal by Robert M. Ball to invest Social Security money in “the stock market.” To end the wait for Supercharged Social Security, the retirement-industry and recipients of their political contributions need to recognize that such a plan could increase disposable income so much, enriched Americans would be clamoring for more private retirement plans, not less, to supplement the two-times-poverty level benefits many Supercharged Social Security participants would receive.

Finally, the icing on the cake. By phasing out two huge tax hogs — FICA and elder welfare — Supercharged Social Security could create the world’s biggest tax cut. Politicians and Wall Street would have several reasons to love Supercharged Social Security, not fear that it would make them worse off.

It’s time to amend OASI with Supercharged Social Security, for a sure cure to Social Security problems that have grown slowly but steadily for 88 years. The huge potential for a win-win-win-win for virtually ALL Americans, employers, politicians, and our economy should start a grass-roots “retirement revolution.” This Proposal should help make it happen. But anything political will take time. Inevitable resistance should fade away once leaders figure out how Supercharged Social Security could enhance (not shrink) their retirement-industry campaign contributions substantially, while helping their constituents and our economy greatly.

FROM MY PRESENTATION FILES

What would have happened to YOU if Social Security had taken the other road?

I call it “the road not taken” — and the theme I built on it: the “Social Security millionaire.” These are my own tables and slides, from my data submission.

“One thing is very clear: wiser lawmakers could have created a Social Security retirement system that put YOU and me on the road to becoming “SOCIAL SECURITY MILLIONAIREs.” BUT THAT WAS: “THE ROAD NOT TAKEN” — and THAT could have made “all the difference.””
— from my slide on the 1814–2000 SBBI study
My slide: 'A landmark 1814–2000 study in SBBI's 2001 edition.' With dividends reinvested, $1 invested at year-end 1814 returned $39 over the very worst 65 years (1867–1932); $53 for the 65 years through 1934; $130 for the average 65-year total return; and with compounding, $1 invested year-end 1814 would have grown to $1,431 by 1934. SBBI's 2015 edition: $1 in 1814 would have mushroomed to $6,357,825 by 2014. The slide closes: wiser lawmakers could have put YOU on the road to becoming Social Security millionaires — but that was 'THE ROAD NOT TAKEN.'
My slide, from my Mensa presentation files.From my research files
My table, 'See who could have been a Social Security millionaire': for well-known Americans born 1935–1953 — Ron Paul (born August 1935, the month Social Security became law), John McCain, Colin Powell, Nancy Pelosi, Michael Bloomberg, Janet Yellen, Mitt Romney, Al Gore and others — what $1 invested at birth in the S&P index with dividends reinvested would have returned by age 62 in large stocks, small stocks, and long-term government bonds, and the one-time cost at birth to reach $1 million. My own 1944 row is labeled 'Yours truly.'
My attention-grabber: what $1 at birth could have become for presidents, politicians, and celebrities born 1935–1953 — and the dirt-cheap one-time cost at birth to retire a millionaire. My own 1944 row reads “Yours truly.”From my research files
My table: the one-time optional contribution, in 2021 dollars, that would have produced a $1 million Social Security nest egg at age 62, by birth month from 1925 to 1935 — values ranging from about $472 to $1,742. My source line: SBBI 2022 Yearbook, based on Total Return data for large-company stocks.
My cost matrix: the one-time at-birth contribution (in 2021 dollars) that could have produced a $1 million nest egg at 62, by birth month, 1925–1935. My source: SBBI 2022 Yearbook.From my research files
A Summary Comparison, in my words: the road taken (legacy Social Security) versus the road not taken (Supercharged Social Security)
ComparisonThe road taken — legacy Social SecuritySupercharged Social Security — the road NOT taken
Total cost: inception–2014$15.7 TRILLION!!!Roughly $800 billion, including only $54 billion to fully-fund ALL Americans born 1935–52
Cost per beneficiaryfor today’s average new retiree, paid over the next 20 or so years, more than $500 thousand 1for today’s average new retiree, fully-funded in birth year, about $1 thousand. Cost would have been inflation adjusted for those born after the early 1950s.
Cost: how paidmostly from our children’s FICA payroll taxes + bond interest from everybody’s taxes (including yours as long as you pay, including your estate taxes)several options: primarily, a one-time birth tax on your parents and/or a KerreyLoan repayable by you
Coverage period for above costs?benefits ONLY through 2014, though Trust Fund reserves were enough for another 3+ years of benefitsbenefits fully-funded into the 22nd century for ALL Americans born thru 2014
Benefitshistorically, 81 cents for each dollar of costfor ALL Americans born 1935–52, $1,500 for each dollar of cost, less for those born before 1935
How & when fundedpay-as-you-go = “procrastination funding” will go on for as long as a retiree livesfully funded at or before birth, or via payroll deductions for those born too soon for at-birth investment
How long to fully fund?NEVERAt birth for ALL Americans born beginning 1935; for many of those born earlier, between their 20s & 40s
Elder povertyin 2014, 5.8 million seniors (10.3% of those age 62+)elder poverty eradicated by the mid-1990s

1 — Assumes average 2016 retirement benefits for a 62-year old retiree

Rebuilt for the web from my original slide, shown below, with my figures and emphasis unchanged.

My original summary-comparison slide: the road taken (legacy Social Security) versus the road not taken ($$$), comparing total cost, cost per beneficiary, how costs are paid, coverage period, benefits per dollar of cost, funding method, time to fully fund, and elder poverty.
My original slide, for the record.From my research files
Run YOUR birth year on the calculator

BACK-TEST · OPPORTUNITY COST

My example, run on public data you can check

My SBBI series starts in 1814; the public Shiller series starts in 1871 — same road, checkable by anyone. This is the live version of the charts above, computed from the calculator’s own verified data.

Growth of $1 in large U.S. stocks, 1871–2026
LOG SCALE · DIVIDENDS REINVESTED · JANUARY VALUES
DERIVED-CALCR-038
Nominal (gold) and in 1871 purchasing power (teal, CPI-deflated). Computed with the calculator's own verified monthly chain — same formula, same pinned data.
Source: Robert J. Shiller, Irrational Exuberance dataset, shillerdata.com. Computed from the pinned snapshot (SHA-256 in methodology).
“It is better to be approximately right than precisely wrong.”
— Warren Buffett — the wisdom I ask every back-test to heed
“Past performance may provide no guarantees, but long-term future stock market index returns will almost always fall between the best and worst returns of the past 200+ years. Average was always good, and the worst was never bad.”
— Landon B. McDonald, CFA

The full record — including the SBBI and Andex charts I keep framed on my wall — is in the data room.

How the numbers on this site work

This site draws one hard line, everywhere. Numbers with an outside, checkable source — trust-fund depletion dates, poverty thresholds, historical market returns, other pension funds' track records — are stated as fact, each with a named source attached. My own projections and totals are set off in their own frame, carry a link to the working behind them, and never appear in a headline.

My own headline counterfactual totals — the kind of numbers that try to answer “what could this plan have been worth, all in, since 1935?” — appear in two places: my Proposal, reproduced word for word above, under a clear “my-own-words” frame, while I reconcile those figures against the source documents; and my Ron Paul example on the home page — a single table inside the same dashed frame, with this site’s own reproducible figure printed beside it. They are quoted nowhere else.

Every dollar figure that appears in this site's own voice — including the ones in the fable and the worked examples — traces to a reproducible calculation.

See the reproducible math

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