Enhanced Financial Planning

On the Restructure Agencies page, we mention changing the Social Security Administration to an Earned Benefits Agency. COTG proposes the new agency add a department specifically to aid our citizens in retirement, most especially our children. Currently, the Thrift Savings Plan (TSP) for federal employees has multiple investments available and a low operating cost. We propose a civilian equivalent with restrictions. The restrictions are to keep operating costs down, investments stable for the initial years and still allow contributions into other private industry plans while creating an early retirement safety net for all our children to supplement Social Security earned benefits.

1. Every child automatically receives $750 per year deposited from the federal government into their personal retirement account until the government contribution equals $15,000.

• The government contribution is automatically invested into the longest L-cycle fund or equivalent and the allotment cannot be changed until one year after the government's last contribution or the child has reached age twenty-one (21), whichever is later.
• Parents may not make contributions to a child's account.
• If a child dies prior to the government's last contribution, the agency shall retain the entirety of the account, including interest.
• At age eighteen (18), the child may contribute up to 3% of any job earnings per year or a maximum amount set by Congress not to be lower than $5,000 per year. They may choose to allot those earnings contributions to other funds within the program.
• At age twenty (20), the child can designate a beneficiary.
• At age twenty (20), any other benefits of the program beyond switching allotments are also available to the child, with a minimum of $15,000 retained within a Lifecycle fund or equivalent until the agency has its initial investment returned.
• As a job benefit, employers may match employee contributions up to 3% or the Congressionally-set maximum amount.
• All contributions and interest earned are tax-free until such time as monies are withdrawn.
• At age forty (40), after notification to the account holder, the agency will withdraw the government's initial $15,000 investment from the Lifecycle fund or equivalent and retain it, but not the interest earned on it.

2. At the time the law(s) are enacted to create the Agency and it is operational

• Every adult under the age of 45 automatically receives $1000 per year deposited from the federal government into their personal retirement account until the government contribution equals $15,000.
• Only these adults shall retain the $15,000 and interest earned in their accounts until they choose to withdraw them. In the event an adult in this section dies before beginning their withdrawal(s), the agency shall then, and only then, retain the government's contribution, but not the interest earned, before paying out the remainder to the beneficiaries.
• The preceding paragraphs of this section are transitional only and automatically expire upon the first withdrawal of funds.
• Adults may allot the contributions as per agency rules.
• Any other benefits to the program may be accessed once a person is vested after five years.
• As a job benefit, employers may match employee contributions up to 3% or the Congressionally-set maximum amount.
• All contributions and interest earned are tax-free until such time as monies are withdrawn.

3. At the time the law(s) are enacted to create the Agency and it is operational

• Adults aged 45 and older may set up an account and contribute up to 10% per year or maximum amount set by Congress no lower than $15,000 per year.
• The preceding paragraph of this section is transitional only and automatically expire upon the first withdrawal of funds.
• Adults may allot the contributions as per agency rules.
• Any other benefits to the program may be accessed once a person is vested after five years.
• As a job benefit, employers may match employee contributions up to 10% or the Congressionally-set maximum amount.
• All contributions and interest earned are tax-free until such time as monies are withdrawn.

4. The agency overseeing this plan will annually deduct an additional 1% in fees over and above its operating fees with the intent that the additional fees will grow over time to be able to cover the initial government investments for each child. This additional fee may not be raised by more than .5% every ten years.

5. At some point in the future, there should be debate and a decision made on whether to invest any or all Social Security funds into the plan.