Ugh…“Old-Age Benefits And the Old Age Reserve Account”

What a terrible name.  Nobody wants to think about old age.  But here is why you should be concerned about this Federal Government Program that was enacted over 80 year ago.

In Title II of the Social Security Act (SSA) of 1935 it reads:

  • “The Secretary of the Treasury shall submit annually to the Bureau of the Budget an estimate of the appropriations to be made to the Account. It shall be the duty of the Secretary of the Treasury to invest such portion of the amounts credited to the Account as is not, in his judgment, required to meet current withdrawals.”[i]

But who are we to say what the intent of those who enacted the SSA was in 1935?  All we know for sure today is that those investments that were supposed to be made by the Secretary of the Treasury were NOT made.  And furthermore, congress has mismanaged (stolen) the capital resources of millions of Americans who have paid their taxes into the social security fund or as the 1935 Act called it “The Old Age Reserve Account.”

What congress’ reason or lack of reason was is beyond the scope of this blog, but you can rest assured that it was on frivolous ventures that only politicians can conjure up as being good enough reasons to steal from their own constituent’s children and grandchildren.  And so today the Social Security Office of Retirement and Disability Policy Board of Trustees reports:

  • “The Social Security Board of Trustees projects program costs to continue to rise through 2035 so that taxes will only be enough to pay for 75% of scheduled benefits. Finally, as Treasury debt securities (trust fund assets) are redeemed in the future they will just be replaced with public debt…and benefits will necessarily be lowered.”[ii]

So there you have it:  The reason you should be concerned about a Federal Government Act that was enacted over 80 years ago.  The Act is going bankrupt.  NOT because millions of Americans haven’t paid their taxes to fund it properly, but because your representatives in congress have stolen it from you and your loved ones.

Now some people get angry when they find out what has happened with all the money they were required to pay into social security.  But the heartbreaking thing is that most people find out way too late in life to do anything about it.  That is why we do what we do here at McFie Insurance.  That is why we share the Perpetual Wealth Code™ willingly with anybody who is concerned or disgusted with the way congress has mismanaged your hard earned money paid into social security.

But here’s the good news.  All the while congress has been bleeding millions of Americans…confiscating money from their pay checks to supposedly supply them with social security in the future, private mutual organizations have calmly, carefully and profitably built a consortium that accomplishes what the Federal Government has failed to accomplish by enacting the SSA.

In fact, long before the SSA was ratified these same mutual organizations were accomplishing what the SSA told the American people they were going to accomplish…an Insurance Policy!  I read from my own Dad’s social security booklet mailed to him with his Social Security Card in November of 1944, 9 years after the Social Security Act was passed and 7 years after it started being funded by American tax payers money:

  • “Your card is like an insurance policy. It shows you have an insurance account with the U.S. Government, under the Old-Age and Survivors Insurance system provided for in the Social Security Act.”[iii]

Today we face a bankrupt Social Security System but what about the private mutual organizations?  What have they accomplished over the years?

Well, because you asked, these private mutual organizations have been paying dividends to their mutual participants for over 150 years.  They helped save the American public financially in 1933 when the president of the United States, 36 hours after being sworn into office, declared a bank holiday.  All banking transactions were suspended immediately.  And for an entire week Americans had NO access to their money deposited in banks.  And many of those banks simply disappeared along with everybody’s money.

Of course, this administrative action was taken because the gold reserves had fallen below 40% and the bankers were going to lose a lot of money.[iv]  So the President’s action saved the bankers at the expense of the American public.  But the private mutual organizations allowed their members to access their money and saved the day.  Like Jimmy Stewart in “It’s A Wonderful Life” the private mutual organization saved the middle class and America was saved because of their good money management.

Later, on August 15, 1971, President Nixon, again through executive order, took the U.S. dollar off the gold standard completely.  Your money has lost over 485% of its value since that infamous day.  What you could have purchased in 1971 for $20, now will cost you over $117.00

Again these private mutual organizations stood strong.  And because they did, you now have access to a strong hedge against the devaluation of your money.  Membership costs to belong to these private mutual organizations is fixed at the time of membership initiation.  Yet the profits and benefits from holding membership in these private mutual organizations have continued to grow annually every year for decades!

In addition to the guaranteed hedge against inflation there is the profit sharing (AKA dividends).  And because these private mutual organizations have been around longer than the Internal Revenue Code of 1913 (the IRS), the dividends received are not subject to taxation until the cost of your membership has been accounted for.  This is a far cry from money distributed under the SSA which faces taxation immediately and increasingly if your combined income is greater than $2666 a month, which the government has attempted to assure happens by introducing the IRA, 401(k) and 403(b) accounts.

If you’d like to discover more about these private mutual organizations that in some cases have been accepting membership since 1876, give our office a call.  Along with the Perpetual Wealth Code™ membership in one or more of these exclusive private mutual organizations can be very beneficial for you today and for your future financial security.



[iii] Form OAAN-7006 U.S. Government Printing Office