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Entire contents copyright 2020 by Terry E. Nager, CFP®

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1. How does the powerful funding method of the Plan For America work?

To begin, we must first establish the basic facts:

  • After two years, there would be an additional $1 trillion which would make the annual charge $40 billion.
  • After three years, there would be an additional $1 trillion, the charge would have grown to $60 billion, etc.

2. Under the Plan For America, how will money (15.3% of income) contributed to the For America Trust Fund (FAST) be invested?

The payroll contributions received by the FAST will be placed into a collection of U.S. corporate stocks (large, medium, and small companies) similar to a total market index. With an index-type approach, the cost of administering will be minimized since there will be no cost incurred for investment managers.

3. Is it necessary for the stock market to have 10% returns in order for the Plan For America to work?

The answer is no. If the stock market averages 6%-7% over the longer term, the PFA will work. That means the stock market can average 30–40% less than the longer-term 10.2% average and still be effective; but there can be no doubt that higher returns will make the results even better.

4. Are United States citizens required to join the For America Security (FAST)?

The answer is no. Each U.S. citizen gets to choose whether he/she wants to stay in the Social Security, Medicare, Medicaid, and ObamaCare programs or opt out of them and into the

  • The retirement benefits are far greater.
  • The tax benefits are greater.
  • The benefits are more secure.
  • The economy will be stronger and more jobs will be created.

5. Is the For America Security Trust (FAST) plan guaranteed by the U.S. Government as are Social Security, Medicare, Medicaid, and ObamaCare?

Ultimately, yes.

  • The so-called trust funds for Social Security and Medicare do not provide any security because the politicians have taken all of the money out of them and put in notes (which are IOU’s of the Federal Government). The problem with these notes is the fact that the
  • U.S. Government is $23 trillion in debt and is running annual deficits of over $1 trillion. Therefore, in order for the government to get money out of the trusts, the government would have to redeem the notes but it has no money and the only way to get the money is to borrow more.
  • The U.S. Government backing for the FAST under the Plan for America in accord with the contract is to guarantee the FAST bonds with the “full faith and credit” of the U.S. Government.
  • As you can plainly see, the government-guarantees in both cases are the same; it is the ability of the U.S. Government to borrow money.
  • The Federal Government, on the other hand, has no such growing cash flow source and is, therefore, very likely to continue to borrow ever greater amounts of money until its borrowing capacity is gone.

6. How are the retirement benefits calculated under the Plan For America, and how do they compare to the benefits under Social Security?

The PFA guarantees that each year’s retirement benefit will be the greatest of the following three options; therefore, it will be at least equal to Social Security and most likely will be far greater.

  • Option 2 — 4% of the total of all contributions made to the For America Security Trust (FAST) with a 4% compounded annual rate of return.
  • Option 3 — 4% of the amount of the participating individual’s FAST balance at the end of the previous year.
  • 4% X $381,837 = $15,273 annually or $1,273 per month is the guaranteed minimum subject to annual market return increases.
  • 4% X $1,134,042 = $45,362 or $3,786 per month becomes the guaranteed minimum because it was the value when retirement was elected. Also, it was the highest value of the three options, therefore, it is the payout for that year.
  • It is possible, although unlikely, that the Social Security matching guarantee would trigger an increase.
  • Therefore, whenever the retiring participant’s FAST account has under-performed the FAST portfolio (net of the 2% charge) by 2% or more, then the payout for that participant would be 5% of his/her balance rather than the normal 4%.
  • See example on website of the 26-year old woman in the section entitled “What does Plan For America do for you?” Her annual payout on retirement would be $19,092 instead of $15,273 as shown in Option 2

7. How does the For America Security Trust (FAST) determine investment return on participant contributions?

The FAST places all investments into a portfolio of only U.S. corporate stocks made up of large, medium and small companies similar to what is called a “total market index.”

8. What is “draw-down” and how is my For America Security Trust (FAST) account protected against this happening to my account?

"Draw-down” is something that can happen to a retirement account if it is invested in the stock market and there is an extended period of terrible market conditions similar to what occurred during the Great Depression of the 1930's.

9. Why would an economic downturn likely be much less severe if the Plan For America was in effect?

First, the vast majority of all health insurance premiums would be paid through the For American Security Trust (FAST). Even if people lost their jobs, they would not lose their health insurance (because of the interest-free loans available to them).

10. Will more money be taken out of my paycheck under the Plan For America (PFA) than is taken now for Social Security and Medicare?

The answer is NO. Under each program, a total of 15.3% of your earned income is contributed. Presently, under the Social Security/Medicare plan, one half of the 15.3% (7.65%) is paid by you and the other half (7.65%) is paid by your employer.

11. If my contributions to the For America Security Trust (FAST) are tax deductible, then will I have to pay taxes on the money when I start to receive the monthly payments?

Fortunately, the answer is no. This money will never become taxable to the contributor or to his/her heirs. The contributions are tax deductible, the account grows with no taxes being taken out, and the retirement payments will be tax free.

12. Is it possible to contribute more than the 15.3% of earned income to the For America Security Trust (FAST) account?

The answer is YES!

  • Second, everyone, whether they have earned income or not, can contribute up to $100,000 each year on a tax-deductible basis in addition to any 15.3% of payroll contributions.
  • Second, the provision for the 15.3% of earnings over and above the $137,700 cap is there to encourage more money to come into the FAST as are the additional contributions of up to $100,000 annually. The more rapidly that the FAST grows, the more rapidly our nation’s debts will be reduced and paid off.

13. Why are the benefits under the Plan For America (PFA) much greater than under Social Security?

This is an easy one. The benefits under the PFA are much greater because the participants enjoy the best parts of two worlds. The For America Security Trust (FAST) offers 1) stock market returns for growth as well as 2) government guarantees for safety.

14. How does the death benefit from Social Security compare with the Plan For America (PFA) plan death benefit?

  • Social Security: The actual cash death benefit from Social Security is very small, only $255. There is a provision for the surviving spouse and/or dependent children to receive monthly benefits until the children are no longer dependent and the spouse passes away. After the final benefits are paid out the Social Security Administration keeps all money that was paid in through the contributor’s lifetime.
  • Plan For America: Under the PFA, the death benefit is the same as the living benefit. The heirs continue to receive the tax-free payments that will likely increase through the years for the rest of their lives and then pass it on to their heirs estate tax free.

15. What protection will the Plan For America (PFA) retirees have from the ravages of inflation?

The PFA inflation protection features:

  • According to Morningstar/lbbotson, a highly regarded investment data service company, U.S. stocks (large company stocks) have about a 10.2% compounded annual rate of return over the last 94 years (1926 through 2019), and small company stocks have an even higher rate of return (11.9%).
  • The rate of inflation for that period of time was 2.9%.
  • Taking the 10.2% return and subtracting 2% for the annual FAST charge results in a net return of 8.2%.
  • The 8.2% return easily surpasses the 2.9% historic rate of inflation.
  • The FAST guarantees at least a 4% rate of return on retirees’ investment accounts which also surpasses the 2.9% historic rate of inflation.
  • Finally, the FAST also guarantees that the payout to retirees would be at a minimum at least equal to what they would be under Social Security, which is indexed to inflation.

16. What kind of report will the For America Security Trust (FAST) send out to the participants and how often?

Initially, the FAST will send out at least one report per year, which will indicate the current value of the individual’s account and how the trust has performed in each year since the beginning.

  • Second, the amount of Social Security that the participant would be eligible to receive would be the other guaranteed minimum payout.
  • Third, the accumulated value of the participant’s account at the end of the previous year multiplied by 4% would be the retirement payout for the coming year.
  • The actual payout to the individual would be whichever of the three methods of calculation produces the highest number.

17. Under Social Security, there are restrictions regarding how much an individual can earn (until a certain age is reached) without reducing the Social Security payout. Are there any restrictions under the Plan For America (PFA)?

The answer is simple. Unlike Social Security, there are no restrictions on any earnings whether it is earned income or investment income.

18. At what age can an individual start receiving his/her For America Security Trust (FAST) retirement payout?

Age 60 would be the earliest age (in a non-disability situation) where a FAST plan retiree could begin receiving monthly payouts.

  • There is a potential drawback to taking it at that early of an age if the individual plans on continuing to work. Like Social Security, once you elect to begin receiving benefits, you cannot switch back and forth between receiving benefits and deferring them.
  • Under the FAST, once you elect to begin the payouts, then you will receive the payouts for the rest of your life.
  • However, any earned income will still be subject to the 15.3% tax-deductible contribution up to the Social Security cap (presently $137,700). Optionally, the tax-deductible contributions can be extended to 15.3% of all earned income just like a pre-retirement individual. Also, up to an additional $100,000 can be contributed on a tax-deductible basis just as a pre-retirement individual.
  • Importantly, every dollar contributed produces a four cent permanent increase to the retirement payout on a guaranteed basis and is likely to be much more depending upon market performance.

19. Why is it important that all of the companies listed in the For America Security Trust (FAST) index be required to be US domiciled (US based) corporations?

This requirement is in place because, as the name suggests, the FAST or
For America Security Trust is to benefit the American people.

  1. It benefits both the retirees as well as the working participants by recycling the tremendous capital flows back into the US stock markets.
  • Also, the steady investment flows would give support to the stock market, especially during times of economic weakness, in order to stabilize market returns and support retirement payouts.

20. Why is it important that the estate beneficiaries of the For America Security Trust (FAST) payouts be U.S. citizens, trusts set up for the exclusive benefit of U.S. citizens, bona fide U.S. based charitable organizations, government entities within the U.S. such as city, county, state or federal, or the FAST itself?

This requirement is important because the FAST is “For America” and the intent is to keep recycling the capital through the U.S. economy to not only benefit the current participants and retirees, but also future generations of U.S. citizens.

  • Dependent children of the deceased participant that were not U.S. citizens would continue to receive benefits until reaching adulthood.
  • This does not mean that non-citizen spouses, children, or other heirs would be deprived of value from their inheritance. They would have the opportunity to sell the future payout cash-flow stream to a U.S. citizen for its fair market value.

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