In light of the oncoming fiscal cliff I would hope to challenge some of our great thinkers to strut their stuff. We need some ideas that will put money back into the treasury not just through taxes! I think I have one and know for sure there are some very brilliant people reading this who could expound upon its content. So if you can take this idea and run with it or use it to spark a fire, free to get after it.
There are a lot of taxpayers retiring with pensions that make it possible to live without their added Social Security income. However there are no options that make fiscal since to these good folks to give up that income. Charging these taxpayers higher cost for the Medicare and Medicaid they have already paid for isn’t the answer. I have an approach that would cost nothing to the taxpayers and leave billions in the National Treasury. At the same time this approach would meet the income needs of these retirees without government cost. Got your attention yet?
If a SSI recipient should choose to forgo early retirement payments, for example, of $1,500 a month and just say to SSI, keep my check, that money would cover the taxes on a 401K allotment of $6,000. This money would be paid the retiree from their 401K to pay back their $1,500 sacrifice and allow them more freedom of access to the money they have saved in their 401K pension plans.
The tremendous cash flow into the economy this could bring would be a very painless stimulus. It would also help wrestle the wealth of our retirees from the Central Banks controlling 401K fortunes. They could reinvest as they chose.
Let’s run the math on a 62-year-old retiree who said keep my $1,500 a month until they turn 66 which amounts to $72,000. A corresponding $288,000 could be withdrawn from their 401K over that 4 years and reinvested the way the retiree sees fit.
If only 10,000 of the people retiring every month said I want that option the savings would be $720 million over the first 4 years from just that month’s participants. That would also be $2.8 billion reinvested in our national economy. So show me a better way for 10,000 retirees to have a positive impact on the national economy and you’ll have my ear, does this catch your ear?
It’s difficult for me to do the math on the national level as I wouldn’t want to under- or overestimate the possible savings. But I would ask President Obama to think outside that box he is politically forced to walk around in Washington. Sir, you make this fly and I’ll promise you a fair start on the road to recovery. And I’ll put my money behind what I say by being the first to say “You make this happen and I’ll be the first to hand you back that check!”