Fixing Social Security
Dear editor:
Assume, although the opposite is obvious, that President Bush is really interested in helping out young Americans when they retire, and that putting billions more into play into the stock market is not his true aim. Let’s give him the benefit of the doubt that he truly believes that he needs to fix a Social Security system that is not broken.
Examine his idea of privatizing a portion of Social Security payments so that people can have a hand in saving money for their retirement, or for their family, if they should die before they retire and start drawing on their account. The upside of this idea is no where the benefit that would overcome the downside if the market did not pay as well as regular Social Security payments. After all, people lose money in the market all the time. But in Social Security accounts you are guaranteed to have that soft landing for a minimal retirement as originally planned during the depression of the 1930s when older people went hungry with no income at all.
Is the return on Social Security good? I retired at age sixty-two and a half after having paid the maximum throughout my working life, as I did not want to wait until age 65 for a slightly higher amount. After only four years of benefits (December 2004) I have already surpassed all my payments into the system by $6,000. If I live to the average life expectancy of 83 the next sixteen years is pure profit. Not a bad return, and it was guaranteed by the U.S. Government, not by an up and down stock market that couldn’t match that return under any conditions.
If the president and his party’s control of Congress insist on privatization, they should consider a second idea that still isn’t as good as straight Social Security Accounts. Instead of using the stock market, why not force the money into U.S. Government savings bonds that at least have a guaranteed return for the holder and keep some of our national debt, which is running wild under Mr. Bush’s leadership, out of foreign hands. Helps to kill two birds with one stone.
Of course this still isn’t as good as the current system which needs some tweaking, but at least might bring some sanity to a bad idea.
Assume, although the opposite is obvious, that President Bush is really interested in helping out young Americans when they retire, and that putting billions more into play into the stock market is not his true aim. Let’s give him the benefit of the doubt that he truly believes that he needs to fix a Social Security system that is not broken.
Examine his idea of privatizing a portion of Social Security payments so that people can have a hand in saving money for their retirement, or for their family, if they should die before they retire and start drawing on their account. The upside of this idea is no where the benefit that would overcome the downside if the market did not pay as well as regular Social Security payments. After all, people lose money in the market all the time. But in Social Security accounts you are guaranteed to have that soft landing for a minimal retirement as originally planned during the depression of the 1930s when older people went hungry with no income at all.
Is the return on Social Security good? I retired at age sixty-two and a half after having paid the maximum throughout my working life, as I did not want to wait until age 65 for a slightly higher amount. After only four years of benefits (December 2004) I have already surpassed all my payments into the system by $6,000. If I live to the average life expectancy of 83 the next sixteen years is pure profit. Not a bad return, and it was guaranteed by the U.S. Government, not by an up and down stock market that couldn’t match that return under any conditions.
If the president and his party’s control of Congress insist on privatization, they should consider a second idea that still isn’t as good as straight Social Security Accounts. Instead of using the stock market, why not force the money into U.S. Government savings bonds that at least have a guaranteed return for the holder and keep some of our national debt, which is running wild under Mr. Bush’s leadership, out of foreign hands. Helps to kill two birds with one stone.
Of course this still isn’t as good as the current system which needs some tweaking, but at least might bring some sanity to a bad idea.
posted by Sam Schoolsky | 6:46 PM
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