Privatization vs Social Security

I've been thinking about the recent scheme by the Republicans and would like to offer a couple of thoughts in hopes that under a Democratic President we will not let such a swindle threaten the American worker again.

My understanding of Bush's "privatizing" scheme was that he would allow a wage earner to put $1,000 a year into a tax deductible account that the employee could manage himself. The average American worker has no doubt impressed our leader with his keen stock market selection ability.

But let us assume that a young (30 year old) working hero could do no better than the DJIA can under a Republican president. As we have seen for the past seven years the Dow Jones Industrial Average has (questionably) managed a 3% annual return.

If we let our 30 year old employee put in $1,000 a year for 35 years, then we would assume he would retire into the lap of (republican) luxury. Such may not be the case. $1,000 a year compounded at 3% would amount to $62,276 in 35 years at age 65.

Where would our now aged citizen place his retirement funds to bring the most return for his retirement ? This morning I saw a web site hawking that very idea :


"...For a more diversified dividend approach, check out Vanguard High
Dividend Yield (VYM; 2.8 percent yield). ..."

http://tinyurl.com/ys586y (that other url didn't work -- sparky)

That's right ! He can then look forward to receiving 2.8% of his fortune to keep him for the rest of his life. That comes to $1,743 a year ! Do you think any frugal American would have trouble surviving on that ? Bush and his fellow pirates on Wall Street don't seem to think so.

Seriously, folks. That Republican scheme is a sick laugh. Let's say that Bush allowed our 30 year old to double his contribution to $2,000. He would then have $3,486 a year retirement. Let's again double the suggested contribution so our young worker puts in $4,000 a year. He would still be lucky to wind up with an income of $7,000. How much Social Security does an average retiree with 35 years of contributions get ? I'm not sure, but I'd guess well over $10,000.

But what about the down side ? What if our investor lost his contributions ? I suppose Bush would suggest offering him lessons in dumpster diving.

You know, many of us disagree about many of the finer points of politics and government. But I don't think any Democrats would force a plan like that on the American worker. Let us work together for the next year to put such a large majority in Congress that we won't have to fear these Big Business solutions for the rest of this century.


Sparky

except when I was 30 years old I could have given a sh*t about retiring, muchless trying to save $1,000.00 a year for my future. I did not care about *my* future at that time.

I doubt that very many others of this age do either. And then again, where does that $1,000.00 a year come from when you don't make enough to save that much?

One of the great talking points about this SCHEME is that, unlike social security, which expires when you die, this would be YOUR money to leave to your kids...

Just one problem - THAT'S A LIE.

I've checked out these SCHEMES, every OFFICIAL one forced investors to convert your savings into an (approved) ANNUITY upon retirement, which, upon death, would leave NOTHING as well...

Various people have tried to sell me one over the years. I've never "bit" luckily.

:puke: for annuities! :puke:

after all with only 1,000 a year or a little better, you'd be up a creek without a paddle, and no way to recoup.

Now the big investors with 1,000,000 could make a comeback they have a lot of money to play with.

The Wall Street lobbyists have their hooks as deep into the Dems as they do the GOPers. The only thing which prevented it from happening last time was a huge groundswell of opposition from the American public.

Electing Dems is always good, but it is not any guarantee of SS protection.

:eyes:

It was created so senior citizens would have something of a nest egg when they retired. It was never intended to be a "retirement package" in and of itself.

The only people who would benefit from SS privatizing are Wall Street brokers and those with connections to insider-trading information (ie, George W. Bush and Harken Energy). I don't know about you, but I do not trust anything that comes out of the mouths of members of this administration!

edited for spelling...

While it looked successful in the earliest years, people soon found that fees ate up most of their contributions to the privatized plan. Now retirees there have too little to live on and are now on the public dole.

They'd have done better to stick with pay as you go insurance, which is what Social Security is supposed to be.

Resist any scam to take a dime out of the system. It's one of the few things in this country that belongs to US.

now that people are actually trying to live off it.

which is why there was such a desperate need for Social Security in the 30s.

Why do people keep forgetting the reason it was created.
To provide people with an income at retirement regardless of what happens in the stock market or other investment schemes.

All of these things--the lies and the fog--are easily answered if people will just do a little reading; there are actually many great sources with information on all of this. A great book on the history, meaning, and great lifesaving worth, as well as solutions to funding problems of, Social Security, is "The Battle for Social Security--From FDR's Vision to Bush's Gamble," by Nancy Altman. Another thing to do is go to the websites or other publications of such groups as the National Committee to Preserve Social Security and Medicare. Their page, "Myths and Realities About Social Security and Privatization," is very useful here: http://www.ncpssm.org/news/archive/myths/ and you can print that and study it.

Some quick things that people have already mentioned: Social Security is an insurance program, not a retirement program only, and not a personal savings account; if you reduce it to paid-work-savings, you kill it and cut everyone else out. Everyone, sooner or later, by some category, qualifies for Social Security. The invesments made by Social Security bring a higher return than the stock market, and they are guaranteed. Pensions are raided, defunded, outsourced, reduced, invested and totally lost, etc., etc., and workers are out--Social Security is guaranteed and cannot be taken away. Most pensions and other worker benefits do not transfer to children, Social Security does, (they are called "Survivors' Benefits," Einstein). Transferring the account from a Government program to a profit-making managed investment would severely reduce benefits or eat up the amount completely; it would be like "Medicare Part D," where all the profits went to Republican-contributing corporations. Social Security has a surplus and always had, unlike the corporate economy, which is sinking into Depression. These things are easily answered--Social Security is a Godsend, and will always be there, unlike your job or corporate employer.

They will not be able afford to put jack in any account. What are they supposed to do? Sorry, honey, can't EAT today gotta put the food money in our "retirement" account.

Absurd.

or Thrift Savings Plan. From what I've heard, most seem happy with it and have been able to accumulate reasonable sums toward retirement. The TSP seems to let you invest in everything from bonds, govt securites and stocks.