The Problem with Social Security

Social Security was never designed to do what we’ve asked of it. Created during the Great Depression, it was meant to be a safety net in a different era—when people didn’t live as long, families were larger, and the ratio of workers to retirees was much higher.

Today, the math doesn’t hold up:

• People are living longer

• The workforce is shrinking

• The trust fund is projected to run dry within the next decade

Instead of facing that reality, we keep patching holes—raising the retirement age, slashing benefits, and hoping the system holds. The Liberty Compact takes a different approach: we don’t patch broken systems—we replace them with better ones.

The LRA: A Simple, Durable Alternative

The Lifetime Retirement Account (LRA) is a publicly seeded, individually owned account created at birth for every U.S. citizen. Instead of paying into someone else’s retirement, you grow your own.

Here’s how it works:

Initial Funding

• Every American receives a one-time investment into their personal LRA at birth.

• The contribution amount is based on the value of nine full-time workweeks at the federal minimum wage.

• With a new federal minimum of $15/hour, the initial seed is $5,400 per newborn.

• This amount scales with inflation and labor conditions—rising as minimum wage does.

Account Growth

• Funds are invested in a low-risk, publicly managed portfolio designed for long-term stability and growth.

• Assuming a conservative 7% annual return, that one-time $5,400 grows to:

  • ~$206,000 by age 55

  • ~$406,000 by age 65

• No additional contributions are required.

• No payroll taxes.

• No generational funding.

Access and Retirement

• Full retirement access begins at age 55, with earlier retirement enabled by design.

• Withdrawals are taxed modestly to keep the system sustainable:

  • 18% if you retire at 55

  • 15% if you wait until 65

• Monthly disbursements continue until the account is exhausted.

• Unlike Social Security, your remaining balance continues to grow until it’s used.

Flexible Use and Optional Borrowing

While the LRA is primarily a retirement fund, limited use is available earlier in life:

• • At age 50, account holders have the option to diversify their portfolio.

  • This allows individuals to take more control over their investment strategy as they approach retirement, while still maintaining guardrails for long-term growth and security.

• • Limited self-backed borrowing is allowed at any age for:

    • First-time home purchases

    • Post-secondary education expenses

    • Family medical emergencies

  • These features offer a responsible, low-risk way to manage major life expenses without turning to high-interest loans or predatory lenders.

Transition Plan for Current Workers

If you’re already paying into Social Security:

• Your payroll contributions are redirected into your own LRA.

• You contribute until your account balance matches what someone your age would have earned if born under the new system.

• Past contributions are honored—you receive scaled-down Social Security benefits on a separate track, ensuring a smooth transition with no one left behind.

Cost and Affordability

• The entire program costs less than $100 billion per year—to fund every newborn in America.

• By comparison, we spend $1.2 trillion annually on Social Security.

• One year of Social Security spending could fund ten years of the LRA system.

End-of-Life, Survivor, and Integrity Provisions

• At death, the LRA pays out basic end-of-life expenses and any remaining personal debts, ensuring dignity without burdening loved ones.

• Survivor benefits are available in select cases (e.g. young dependents, special needs households), designed to stabilize families, not generate profit.

• No inheritance: leftover funds are returned to the system to support future generations.

Not a Full Retirement Plan—A Better Foundation

The LRA is not a full retirement plan. It’s a reliable floor.

You’re still responsible for building your own future—but unlike the current system, this gives you a real chance to do it.

And thanks to the broader economic reforms of the Liberty Compact, financial stability won’t be a luxury anymore. It’ll be possible—maybe even normal.

Why It Matters

The LRA shifts us from a generational debt model to an individual wealth model. It eliminates dependency, removes bureaucratic complexity, and gives every American a simple, scalable pathway to retire with dignity—without bankrupting the next generation.