Posted on 02/03/2005 9:30:45 AM PST by 1LongTimeLurker
Under the White House Social Security plan, workers who opt to divert some of their payroll taxes into individual accounts would ultimately get to keep only the investment returns that exceed the rate of return that the money would have accrued in the traditional system.
The mechanism, detailed by a senior administration official before President Bush's State of the Union address, would hold down the cost of Bush's plan to introduce personal accounts to the Social Security system. But it could come as a surprise to lawmakers and voters who have thought of these accounts as akin to an individual retirement account or a 401(k) that they could use fully upon retirement.
(Excerpt) Read more at washingtonpost.com ...
"If a worker sets aside $1,000 a year for 40 years, and earns 4 percent annually on investments, the account would grow to $99,800 in today's dollars, but the government would keep $78,700 -- or about 80 percent of the account. The remainder, $21,100, would be the worker's. "
If this is truly the case, what the heck does GWB think he's trying to accomplish? Put $40,000 in, and get $21,100 back? Such a deal.
Leave it to them to take something simple and turn it into something idiotic.
Who the hell is going to agree to a scam like this?
Also, at its max the account could only get 4% of a person's payroll contribution. I've never seen numbers on this, does a lousy 4% of the SS contribution amount to anything? Sounds miniscule to me.
From the article:
The plan is more complicated. Under the proposal, workers could invest as much as 4 percent of their wages subject to Social Security taxation in a limited assortment of stock, bond and mixed-investment funds. But the government would keep and administer that money. Upon retirement, workers would then be given any money that exceeded inflation-adjusted gains over 3 percent.That money would augment a guaranteed Social Security benefit that would be reduced by a still-undetermined amount from the currently promised benefit.
You currently pay 6.2% of your salary into SS (your employer matches another 6.2%).
In the President's proposal you would only pay 2.2% of your salary into SS, the remaining amount (4% of your salary) would go into your private account. Nothing would change for your employer.
Another part of the plan - you couldn't get your money out at retirement, instead the government would mandate that you buy annuities that would pay you a fixed rate of return.
THAT doesn't sound right. Can someone explain this? This sounds like a flim flam scam, and I cannot believe the Republicans would dream up a scheme that could be explained so clearly as a scam the day after it sees the light of day. Someone would be sure to say "Hey...this is NOT going to fly..."
Can anyone verify this interpretation?
Makes a bit more sense, but still has limitations. For example, if you die early you only own the "excess" earnings.
I don't think that assumption is correct. Your entitlement would be reduced if you participate in the plan (on the assumption that you would get a better rate of return by opting out of your entitlement).
Hmm, I'm confused already.
Yeah, but the President said in the SOTU that people 55 or older would not see benefit cuts. That implies that people under 55, who are eligible for private accts, would see benefit cuts.
They are morons, and further, they think we are morons too.
The problem is, they are more than willing to kill you for resisting. Until we have the same lack of respect for them that they have for us, we'll continue to be their slaves.
Yes, but if your benefit is reduced by your private account contribution, and then you only keep the "extra" your account earned, you never get the bulk of the money you put in the private account. If that's the case, you won't use the private account option. I think that in one of the examples above, the normal SS part would be about 2/3 of the account and the "extra" earned part would only be about 1/3. So no one would trade $2 in benefits to get the "extra" $1.
Chill out. Let's not make a judgement until we know, because we surely don't know the whole story yet.
I'm not ready to call em morons yet. We don't want to jack up their IQ's to higher levels until we know what the plan is about...:)
Like I said, the WaPo article is FUNDAMENTALLY MISLEADING.In other words, Bull$hiat.
Does the employee's 4% include the employer's 4% for a total of 8%?
No, employer contributions would continue to go into the SS general fund.
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