Social Security and Medicare are rapidly paying out more than they are taking in. Is it time to completely revamp these programs for a “Plan for America?” The “Plan for America” is the brainchild of Terry Nager, a certified financial planner who devoted his time and resources to this proposal since 2004.  Plan for America aims to take all the payroll tax American workers pay each year, a bit more than $1 trillion, and put it into a private trust that would pay for health care and retirement.

Nager describes how the Plan can solve a huge problem for the government:  the possibility that the trust funds that support Social Security and Medicare will run out of money within a matter of years. Nager explains the plan is a total reorientation of these programs. The full 15.3 percent payroll deduction would go into the individual’s account. The money would be invested in a low-cost, total market index fund which would become a self-funded retirement plan and would replace social security.  At retirement, the individual would receive the highest of one of three calculations. Receipts would be tax free and when the person dies, the account balance goes to the individual’s heirs.  The Plan replaces Medicare by requiring everyone over age 26 to purchase an individual health plan in the private market for a premium of $11,500, of which $1,500 would go into a health savings account.  The individual would choose what health plan works best. The plans would cover long term care. Those who can’t afford the premiums would be given zero interest loans tied to a life insurance component that they can pay off over future years or from the proceeds of the retirement account. 

For more information, see the Plan for America:

Sponsor: Donor’s Trust