The Social Security scam: How the government taxed your retirement twice — then let 60 million people steal it while taxing you again

A Guest Op-Ed on Biz Pac Review Business & Politics by Mark J. Quann

Op-ed views and opinions expressed are solely those of the author.

Let’s talk about the biggest bait-and-switch in American history—Social Security.

It was supposed to be a lifeline for retirees, a system you paid into your entire working life so that one day, when you’re older, you could finally collect what’s yours. But somewhere along the way, the government decided that wasn’t enough. They started taxing Social Security benefits—not once, but twice—and now we’ve discovered millions of people who shouldn’t even be receiving it at all.

It’s time to expose the Social Security tax trap—and, more importantly, how to escape it.

When Social Security was introduced in 1935, it came with one key promise—it would never be taxed. You paid into it through payroll deductions, the government held onto it, and eventually, you’d get your money back. Simple, right?

Well, fast forward to 1983, and that promise was thrown out the window. Congress decided that up to 50% of your benefits could be taxed. Then, in 1993, they doubled down—now up to 85% of your Social Security check could be taxed.

Let me say that again: The government forced you to pay into a system for decades, and then when it was finally time to collect, they taxed it AGAIN.

Why? Because they “needed” more money. Social Security has become a triple taxation scam.

Think about it. Every dollar you put into Social Security was already taxed when you earned it. But the taxes didn’t stop there. You get taxed on your paycheck to fund Social Security. Then, if you were responsible and saved for retirement using a 401(k), when you withdraw from it, it can push you into a higher tax bracket. That higher tax bracket triggers taxes on your Social Security benefits! 

So congratulations—you just got taxed three times on the same money.

Does that seem fair?

Meanwhile, billion-dollar corporations and banks get bailed out with your tax dollars every time they screw up, but if you worked hard and saved, you’re the one who gets punished.

And just when you thought it couldn’t get worse, we now know D.O.G.E., the Department of Government Efficiency, discovered a shocking truth: Social Security has 394 million recipients, yet the U.S. only has 334 million citizens.

That’s 60 million “extra” people collecting Social Security benefits.

Who are they? Ghosts? People from an alternate dimension? Or just straight-up fraudsters siphoning billions?

While the government tells you there’s “not enough money” in Social Security and keeps pushing the retirement age higher, they’re happily giving away benefits to millions of fake people—some of whom are supposedly 140 years old.

But don’t worry, they’ll audit you if they think you might have deducted too many business meals last year.

And it only gets worse. 

The Pentagon has been audited seven times and has failed every single time. They openly admit it: “Oops, we failed the audit again.”

Imagine telling the IRS, “Oops, I failed my audit. Sorry, no receipts!”

You’d be fined, penalized, and possibly arrested.

But when the government loses trillions of dollars, they just shrug and demand more.

They audit you constantly—your paycheck, your savings, your business expenses. But when it comes to their own books? It’s a black hole.

Believe it or not, there is some good news here. There’s a way to legally escape the tax trap.

Now that you see how the system is designed to drain your wealth, what can you do about it?

The answer is simple: Stop playing their game and start using the same strategies the wealthy use.

This is where the Be SMART, Pay Zero Taxes plan becomes a vital weapon in the war against the government wasting your money. It’s a blueprint for legally avoiding taxes, including the triple taxation on Social Security.

The Be SMART plan includes four simple steps, as I explain in my book. 

Ditch the 401(k) Tax Bomb – Instead of deferring taxes and triggering extra Social Security taxes later, use Roth IRAs, IULs (more about this below), and brokerage accounts where you control the taxation.

Leverage “Buy, Borrow, Die” – The rich don’t “withdraw” money and trigger taxes. They borrow against their assets tax-free and live off the loans. You can do the same. Who wouldn’t want to “live off the borrow button” and pay no taxes?

Get Smart About Tax-Free Growth – Indexed universal life insurance (IULs) allows you to grow your wealth tax-free and use buying and borrowing to even avoid the tax man once again and pass wealth tax-free to your heirs.

Break Free from the IRS Plantation – The more you borrow against your assets, the less taxable income you report. That means no Social Security tax trap and no triple taxation.

The middle-class tax trap isn’t inevitable—but it is a test. A test to see if you’re willing to learn the rules and play to win.

Be SMART Pay Zero Taxes exists for one reason—to teach you how to stop being the IRS’s favorite piggy bank and start keeping more of what’s yours.

How I implemented the “Buy, Borrow, Die” and other tax smart strategies on M1

A Guest Post on the M1 Blog by Mark J Quann

I grew up in a family with very little money, and no one ever found the time to understand how money works. There was no way to “Google it” and since my parents lived paycheck to paycheck, there was no extra money to invest.

I’ve spent a lot of time studying personal finance in the past two decades. After dropping out from college, I started reading books to raise my financial IQ. “Rich Dad Poor Dad” by Robert Kiyosaki taught me the difference between assets (“they put money in your pocket”) and liabilities (“they take money out of your pocket”) and introduced me to the concept of Other People’s Money (“OPM”) aka using debt to invest, which is tax-free. I was hooked and decided I was going to become financially independent at a young age.

I became a Financial Advisor, Author and Educator 

If I was serious about financial independence, the most obvious next step would be to become a financial advisor, right? 

In 2005, I became a financial advisor and later, a Fiduciary Investment Advisor. I then built my financial advisor business and wrote three books. While writing my second book about investing and tax strategies, I realized that the investments I was recommending to my clients would not allow them to become financially free at a young age. In fact, I was concerned that many would likely have to work until they die. Investing money in a retirement account so I could retire at age 65 or 70 seemed ridiculous. How could I continue recommending it to others?   

It was a difficult decision, but I decided that I would resign as a financial advisor and instead focus on teaching strategies that allow for retirement at any age.

Press the Button!

I stumbled across M1 and decided to open a brokerage account in December of 2020. Interest rates were very low and M1 was advertising margin loans at 2%. I was buying covered call ETFs that paid a dividend of 7-10% and borrowing at 2% seemed fascinating. It also sounded “too good to be true.” I remember reading in Robert Kiyosaki’s books that the rich used debt to build wealth, as debt was tax-free, but I had never seen a “borrow” button in a brokerage account. I PRESSED THE BUTTON! M1 gave me the option to send the margin loan to my bank account or reinvest it back into my M1 portfolio. This changed everything! I realized that I didn’t have to work or pay any taxes on the loan. I could finally invest with “OPM” using M1 margin.

“Buy, Borrow, Die?”

While I was already using debt to invest on M1, I was formally introduced to this strategy in 2021 when I read an article in the Wall Street Journal called: “Buy, Borrow, Die: How Rich Americans Live Off Of Their Paper Wealth.” Another article published by Forbes also mentioned how the wealthy buy assets, never sell them, and never pay taxes. Rather than sell the assets (and trigger the taxes) they simply take loans, which are 100% tax-free. To my surprise, this article also referenced M1’s “Borrow” feature.  After two decades, I had finally found a strategy and M1 was the key! 

My wife and I decided that we would master the “Buy, Borrow, Die” strategy and invest in assets, and borrow only to purchase more assets. We launched our YouTube channel to share the strategies we personally use and teach to our students.

Our tips for becoming financially independent (at any age)

Today, my wife and I use M1 as a tool for saving, investing and borrowing. We think of M1 like owning a “family bank.”

If your goal is to become financially independent (at any age), here are a few strategies we use to keep our money working hard for us.

Saving:

Moving “lazy money” from a megabank that is likely paying 0.01% is a no-brainer. M1 earns us 5.00% APY on our cash and it is insured up to $3.75 million by the FDIC. Your megabank is likely only insured up to $250,000.

Investing:

We use an individual/joint “taxable” brokerage account to invest, and we built an M1 Pie focused on maximizing dividends. We love Dynamic Rebalancing as it helps us to maintain a similar risk in our portfolio as we dollar-cost-average into our M1 Pie, without ever selling and triggering a taxable event.

We also use Smart Transfers to dollar-cost-average from our savings into our M1 investments. Once again, Dynamic Rebalancing helps to keep our portfolio evenly weighted as our dividends are automatically reinvested back into our Pie with M1 DRIP.

Tax-Free Retirement:

M1 makes it simple to open a Roth IRA which can provide a 100% tax-free supplemental retirement income. Growth is tax free, however there are tax consequences for premature distributions. Many of our students decided to transfer their Roth IRAs into M1 to benefit from an M1 Pie, which can be optimized with Dynamic Rebalancing. 

M1 Borrow (our personal favorite!):

As sophisticated investors, my wife and I have taken advantage of margin loans to purchase additional shares of stock when we identify opportunities in a declining market.

We used an M1 Margin Loan for the down payment to purchase real estate and borrowed for repairs on our rental property. In the future, we can borrow to expand the business or purchase equipment—while never disrupting the compounding effect in our account.

Many of our students have used an M1 margin loan at 7.25% to pay off 24-29% interest credit card debt! Like M1 says: “Borrow in seconds. Pay back as you please.” (Provided margin maintenance requirements are met.)

I recently had an opportunity to review some of the new features that M1 was launching which can make margin borrowing simpler.

The simplified margin borrowing is important for us when deciding when to borrow for investing outside of M1, or to borrow to invest back into our M1 Pie. The cash buying power vs the margin buying power are now displayed which helps us as investor use leverage more smartly. The Margin health risk dial paints a clear picture of our risk.

Finally, there is the M1 Owner’s Rewards Card which can give us rewards of up to 10% cashback, which can be automatically reinvested back into our M1 Pie.

Measure it!

To me, becoming financially independent isn’t about investing into a retirement account. It is about building dividend income now, and then borrowing to buy other assets that produce additional cash flow—which can be invested back into our M1 Pie to grow and compound. If we never sell, we won’t trigger the taxes on our gains.

I used to pay for a “dividend tracker” outside of M1, but with the new M1 Dividend Tracker, I’ll be canceling that subscription, and funnel that back into my M1 to build even more dividends!

The new M1 Dividend Tracker

When reviewing our dividend trackers, my wife and I will be financially independent from our dividend investing alone, and borrowing only to buy assets, “things that put money in our pocket.” Yes, Robert was right.

“Feeling Light as a Feather.”

I enjoyed reading the recent M1 Blog about how “Jake” who became financially independent at age 37 when using M1 to invest, focusing on building dividend income. He is right, financial independence at an early age makes you feel as “Light as a Feather.” I wish I had also achieved financial independence at age 37, like Jake. The irony is that I was a financial advisor, and most financial advisors don’t know how to become financially free at a young age through investing.

I’m a huge fan of M1 because it simplifies and optimizes investing for my wife and I, and for our students. The easy access to the borrow button allows us to put the “Buy, Borrow, Die” strategy into use, helps us to buy more assets for future growth, and makes it easy to navigate and plan the way we use margin. The new one-step efficiency has made long-term investment easy and seamless, by showing us the total buying power we have available, including our maximum available margin, without having to go through multiple steps. This has made it easier to act on opportunities and be more efficient in how we use our margin buying power, without having to take the time to do manual margin calculations and transfers. This, in return, has allowed us to grow our dividend income and has given us the financial freedom we’ve been looking for. M1 has become a staple for all of our saving, investing and borrowing!

Thank you M1, for helping me relearn investing and enabling us to secure financial freedom in our mid 40’s.

Testimonials may not be representative of the experience of other customers. Not a guarantee of future performance or success.