Why Privatization of Social Security is a Good thing

First of all, not all of your SS contribution is available for you to invest, only a portion of it.

Second, there are degrees of risk/return associated with investing, as you all know. Low risk=low return, high risk=high return. It's up to the individual to manage this part of their contribution.

Third, investing is optional, not mandatory. It is your choice, so if you feel very uncomfortable doing it, don't.

Fourth, you should not be counting on SS to be your sole source of retirement income. I know that for some people, it is by necessity their only source, but this is a way for them to break that mold.

Other stuff:

from sminkeypinkey
Here in the UK we've just had a pensions scandel or two thanks to private companies screwing their customers.......I'm telling yous it happens!

It has happened here, too. Junk bonds traders would buy out companies and raid their pension plans. People get fired when they get close to retirement age. Lowlife corporate officers. etc, etc.

Company pension plans are becoming scarcer and scarcer as companies switch to putting their employees on 401K plans. Cheaper for the companies, but stressful for the worker, especially if they can't afford to invest in a 401K.

There will be opportunities for swindle, but more opportunities for growth. My advice: get a reputable financial advisor and stay away from the flyer on your windshield companies that are bound to spring up.

I also like the idea of being able to pass on your earnings to your heirs.

I think it is a step in the right direction. I wish I had had this opportunity when I first started out.



[edit on 16-12-2004 by jsobecky]

Bush says we should borrow 1 -2 trillion dollars to save 3.7 trillion dollars over 75 years. Pardon me, but if we figure in the interest payments on the 1-2 trillion dollars, I don't see how Bush's proposal is an improvement over the current situation...

www.cnn.com...

IMO he's shot himself in the foot with his own figures. Any actuarial accountant or financial planner is going to tell you that this is a bad deal.

Here's a Fox News - Opinion Dynamic poll that might interest some. It shows that the majority of Americans are for privatization. Not surprisingly, the idea appeals to the younger worker, who are more skeptical about SS in general:

Social Security

Six in 10 Americans support giving people the choice to invest privately a small percentage of their Social Security (search) contributions, down 7 percentage points since the beginning of the year (67 percent in January 2004). More than four in 10 seniors oppose the idea, while almost three out of four Americans age 45 and under like the idea.

Even though there are wide partisan differences on this issue, majorities of both Democrats (53 percent) and Republicans (71 percent) give a thumbs-up to the personal investment option.

A 55 percent majority says if they had the choice today, they would invest some of their Social Security money in personal accounts. Young people under age 30 are the most likely to say they would take this option (71 percent), as would many of those ages 30-45 (69 percent). In addition, more than six in 10 of those living in households with an annual income over $50,000 say they would invest in personal savings accounts.

Not surprisingly, younger people are more skeptical about receiving Social Security benefits. Three out of four baby boomers say they do expect to receive benefits when they retire, but 32 percent of those between the ages of 30-45 and 39 percent of those under age 30 think benefits will not be there for them.

www.foxnews.com...