Is it mandatory to participate in the Social Security program?

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Is it mandatory to participate in the Social Security program?

If I desired to put my SS payments into a personal investment plan, would I be liable for SSA penalties? In other words, can I opt out of the SS program altogether?

Asked on July 27, 2011 Colorado

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

No, you may NOT do this now, though there have been various plans or proposals to allow something like this, none of which have even been voted on yet.

There is a common confusion about Social Security: people think that it is similar to a pension plan or 401(k) account, in that there is an account for each person. That is most definitely not true. Social Security is more like welfare: the money you pay into social security--which is collected via a tax, like property taxes or income taxes; not something you can opt out of--is paid into a general fund, which is then used to pay benefits for whomever needs it. Thus, you are being taxed for the general greater good, not investing in your own retirement plan.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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