Keep a bad system alive on life support or try something else?

I live in Texas. My mother is a teacher. I also sell mutual funds and a lot of my clients are teachers or they work for the school system.

Here in Texas if you're a teacher you aren't part of Social Security. You don't pay taxes into it and you get nothing from it unless you have credits from previous non-school systems employment, like maybe if you worked at a pizza joint while you were in college. You get the idea. Instead, you're part of a retirement system called Texas T.R.S. -- Texas Teachers Retirement Systems.

How are they different? Here's how: Social Security is designed (stupidly) so that people who are currently working pay taxes into social security. Those taxes are given to people who are currently retired. Based on what you pay into the system you get a number of credits that determine how much you'll get when you retire. That worked fine back in 1935 when you people in those days had more children. At that time there were approximately 13 retirees for every worker. Today, there are less than 3.

T.R.S. is completely different -- instead of being set up as a pyramid, retirees pay the same they'd pay into social security into an account that earns them 5% each year. Then at retirement,
they take the number of years you served, multiply that by 2.3%, and then that is the factor for your annual payout.

Teachers have told me that T.R.S. payouts are better than social security and that T.R.S. is not under the same solvency crisis Social Stupidity, errrr, Social Security is under. Even if TRS payouts were actually the same or slightly less, T.R.S. is an inherently superior system. It is not dependent on birthrates.