In article <41DB3DE3.EE323950[at]earthlink.net> ,
Karen Younge <karenyounge[at]earthlink.net> wrote:
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The vague mutterings say that if you are a young worker and want to
stay in the existing SS system, you can, but your retirement payments
will either not be index to any growth, or indexed to inflation, not
wages, which would result in about 30% less payouts compared to the
current system.

Do you know whether it this plan allows younger workers to opt out of the
private account?

Will Trice wrote:

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Greg Hennessy wrote:

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Currently you pay in 6.2% of your salary (up to a salary max of $89,700
for 2005) into the Social Security system and your employer pays another
6.2% match (or you pay both if you're self-employed). Under the leading
privatization proposal (from the December 2001 report by the President's
Commission to Strengthen Social Security), workers under a certain age
(I haven't seen the age specified anywhere) could choose to divert 4% to
a private account while the remaining 2.2% plus your employer's match
continue to go to Social Security. At retirement you may either have to
buy an annuity with the money in your account or conform to a mandated
minimum systematic withdrawal plan. Presumably you could take the
excess over the witdrawal plan as a lump sum. In addition you will get
a smaller Social Security check.

Of course, just because this plan is leading now doesn't mean that this
is how it will end up...

-Will

"Bill Ragsdale" <bragsdale[at]aol.com> wrote in message
news:20050102135734.12272.00002912[at]mb-m28.aol.com...
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Was this to do with financial planning, or some political rant?

Elizabeth Richardson

In article <33rfkuF4283q7U1[at]individual.net> , MTW <mtwingcpa[at]yahoo.com> wrote:
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No details, but apparently if you chose the "private accounts" you
sacrifice most if not all of the regular social security benefits.

Bill Ragsdale wrote:

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Speaking of "benefits," I've seen next to nothing regarding how
private accounts would factor into eventual social security
benefit calculations. And, specifically as to how this would
eventually "save" the government money.

It seems to me that if a large employer floated rumors that it
was planning big changes in its pension plans, but then refused
to reveal any specifics regarding those changes, such employer
would come in for some harsh criticism. Could even be some legal
issues. But, as we all know, "politics" means never having to say
you're sorry...

MTW

In reviewing the outlook for Social Security in the next Congress I keep
hearing about President Bush's pitch for the 'Ownership Society.' Its apparent
goal is to shift America's financial preference from spending to owning by
encouraging us to save more and consume less. The shift is subtle as one might
think you have to spend in order to own. Will this have an effect on Congress?
How will the shift occur?

By ownership, Bush means homes, businesses and long term savings/investing for
retirement. I assume he doesn't regard power boats and motor cycles as items
targeted for ownership!

The late House Speaker Tip O'Neill christened Social Security as the "third
rail of American politics" because it brought certain death to any candidate
who might touch it. To the dismay of Democratic candidates Bush grabbed this
third rail and benefitted. He won the majority vote from voters over age 65;
likewise, candidates in Florida gained their office using this as a key issue.

Such an attitude shift is a long term process. President Bush mentioned the
topic, without specifics, during his recent election campaign. His advisors
have worked out a three phase program toward moving Social Security to partial
privatization for younger workers.

The first phase started on Dec. 12 in Bush's daily radio address and was
reinforced with an economic summit on Dec. 16 on the future of Social Security.
The summary to that point is that diverting a part of Social Security taxes
into personal accounts will only affect workers under about age 40, preserving
the current program for those nearing retirement age.

The second phase will be a radio-TV advertising campaign budgeted at $40
million, mostly paid for by the business community. The benefit to that group
is workers may well need better financing for retirement than corporations have
been able to provide: witness the recent United Airlines default on pension
benefits plus corporate bankruptcies. Some corporations will be able to reduce
their pension costs. Financial firms may be able to expand their investment
management services.

The third phase is the creation and implementation of a concrete reform plan.
Notice this is placed last as public opinion has to be receptive to counter the
inevitable political fights from the noble opposition. This phase would cover
the structure of alternate investment vehicles, age brackets for participation,
the degree of personal choice offered, etc.

Democrats have already started the chant, "They call it a crisis but they have
no plan." To counter that, Republicans are bypassing the centralized media (TV
new and newspapers) to build emphasize the benefits, especially to young
people, working women and minorities.

Bill Ragsdale