Private Social Security accounts

[shraby]

I can see it all now..
People will open their accounts which will have restrictions on like 401K's do now. You can't withdraw from them without a large penalty and they will also be taxed if you do.

So..people put their money in, the fat cats will let the market go up for a period then take profits and ordinary people are stuck losing their money so have to let it stay and hopefully build back up. The market goes up for another period of time then the fat cats take profits again and ordinary people are back where they started. By the time people can retire, their accounts will not be worth a whole lot of money so they will have to downgrade their standard of living to bare necessities. PLUS the government will tax what they do have left to live on.

Who benefits????? Stock brokers and rich people only.

[RoeBear]

1. Over the long term the stock market

is a good investment. Short term has it's ups and downs.

[NYC]

3. The term will be determined by your retirement date.

A friend lost half of her market value, and she was one year from retirement. Fortunately, she will be getting Social Security.

Overall, the market may average 7-10% per year, but people will have to retire "ready or not".

[Yupster]

11. Long before you retire, you should

have more than half of your money out of the market.

The closer you get to retirement, the more you should put into bonds and fixed investments.

[NYC]

12. Bad advice from her broker.

Will the "independent ownership society" do-it-yourself social security people of the future be guaranteed good advice from their brokers?

[NYC]

2. You are correct re who benefits.

Before the "Great Depression", people had their money in the stock market. That worked so well, that we needed social programs to rescue people from extreme poverty. One of those programs was Social Security.

Now, Bush & Co. want to take the money out of Social Security, and put it back in the stock market.

As individual accounts, these will run up enormous brokerage fees. Excellent for the brokers.

Around the time Bush took office, people's 401K's started dropping precipitously. Many people complained about how much they had lost.

This is not something you ever hear from people regarding their Social Security.

Bush's plan is intended to impoverish us.

[shraby]

4. We will be seeing the return of the poor houses

that used to house people in their old age.

[NYC]

7. I doubt we'll have even that.

I expect lots of tent cities. (Hoovervilles)

This will not be good. And to suggest that old people just keep working until they drop dead? There are fewer jobs, one of the reasons being outsourcing. If people over age 65 must continue to work, there will be more competition for jobs. There will be more unemployment.

This is a very bad and very scary thing.

[Fleshdancer]

5. I'm 27. I never thought I would receive social security.

It wasn't until I was a sophmore in HS that I started thinking about the subject, but since then, I just always assumed I would never receive the money from the system I pay into. If the system remains untouched and the age is raised by a few more years, then I would be happily wrong. With this congress and admin though, it looks like I was pretty realistic at age 16.

I'm already saving for my retirement, but what scares me is the nightmare of the generation before me not having a safety net. My generation consists of far less than the baby boomers and the idea that we might some day be forced to handle their care plus a considerable portion of the workforce...well, I'm a little nervous.

I hope I'm wrong and have nothing to worry about, privatization or not, but it's hard to not think of abusers like Enron and not get discourged.

[shraby]

6. You'll need a combination of

Social Security and savings to make your money cover your expenses when you retire. Unless you're wealthy, neither one will do it by itself.
Social Security by itself will support a small home or trailer house and forget vacations and new things when the old stuff wears out or breaks. What you have when you retire is pretty much what you will die with.

Add in your savings and you're in better shape, but for most people savings or social security each by themselves doesn't allow for a lot of fun. A high majority of people don't make enough for a savings account of any consequence at all. Take away social security and they're screwed.

[NYC]

8. That's correct.

There are so many people who are unable to save money while they are working. Now, miraculously, those people should be able to save enough money to support themselves for possibly 20 years after they stop working. Expenses will go up during those 20 years, perhaps medicare will be greatly decreased.

How many people can save enough money to just coast for 10 or 20 years? Very few.

[tintin99]

9. A wise move

I would never assume anything about who is going to give me money when I retire. The future is always uncertain.

[BlueInRed]

10. And, they found a way to raid the trust fund, they'll find a way to

raid private accounts. As long as you're paying into the govt, they will eventually find a way to get their hands on it, IMO. It's basically the same people making the promises as before and they are no more trustworthy today than they were in 1983.

If we went back and listed all the promises they made us (the boomers) in the early 80s when they raised the SS tax, I'm betting there would be a lot of similarities to the promises they're making about private accounts.

So, I am jaded from experience. I just don't believe them for a second when they say "the money will be yours".

You're absolutely right about Wall Street being the real winner.

[tritsofme]

13. The long term trend is up

But that still doesn't provide justification to destroy the single most successful government program in history.