Wednesday, June 22, 2005

More on Social Security

I don’t know why I think I know all the answers, but I like to propose my solutions anyway! First, personal accounts don’t really matter one way or the other. Most of us, at least those of us who actually think about retirement, already have personal accounts that we contribute to in the form of a 401k, IRA, or other sort of savings. Instead of giving us some government managed personal account, how about giving us some additional incentive to maintain our own personal accounts?

I don’t agree with the proposals to pay reduced benefits to those who have paid the most into the social security system. Although, one solution would be to eliminate the $90,000/year or so cap of wages that you pay social security on. Also, raising the age of retirement isn’t a bad idea. This wouldn’t put a whole lot more into the system, but would effectively reduce benefits for higher income workers, without actually reducing benefits. I would personally be affected by this change, of course, I’d rather have the six percent of the extra few thousand I make to put into my own account, I’d gladly give it up in order to help the system.

What can we all agree on, well, we don’t want to pay a higher percentage of our paycheck into social security? Other than that, the issues can get quite polarizing.

I’m going out on a limb with a crazy idea that doesn’t sound like me at all with this one. Maybe the federal government could find some way to require us to put a percentage of money away for retirement. This would impact me, as I do so without the government telling me too. Not everyone wants to risk their money in stock, bonds, or mutual funds, but putting the money in a standard savings account or in some sort of savings bond program might work. Its an idea that I don’t really like, and doesn’t actually solve the social security funding problem, but it sounds like a way to accomplish the goal of higher returns on private accounts without a huge government management system wrapped around it. It would however, effectively be an additional payroll tax.

What do I like about all of the talk on Capitol Hill? They are committed to leave things the same for older workers and those already receiving benefits. Of course, they have their reasons; these older workers are a huge voting block that they don’t want to upset.


waybar said...

See my post at
You will see some links for what some of the So. American countries have done. PSA's would be great for low wage & younger workers that really don't have the extra money for IRAs. Plus with private accounts you can leave that money to your heirs - if any is left. Obviously, there would have to be some sort of tier system. No one would want people already on SS to be left out. The system will not have any surplus by 2017.
Check it out! I am all for Privatization!

Porkchop said...

I am so glad someone else agrees on privatization. For some reason, most younger people my age don't want to exhert the energy to think about it.

Really, why should the goverment tell me how to invest for my retirement, when I have no guarentee when using their plan?

I guess the same reason they can now bulldoze people's houses down for condos.