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 12 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.
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