Yes, I do think this model would work to the extent that it did NOT drive up the value of stocks creating a bubble due to a huge influx of money into the investment system.
The bottom line would be that each individual would be required by the government to pay 10-20 percent of their income into the system. In other words, we don’t rid ourselvs of the social security tax by switching to this system, we simply retarget that same amount of money into a new, personal system.
One idea I’ve heard of that might avoid the possibility of creating a bubble is to pool all the money in independent “retirement bank or banks” that then, like any other bank, makes money by lending, investing, etc. with the profits being distributed to the various accounts in the bank. They are untouchable by the government, and depending on the facility of the bank at making a profit, those with their money in it would always see some protected growth of their personal retirement accounts.
Either system, though, the money is required to be taken from a person’s income. While they might no longer be in social security, they are STILL having a SIMILAR amount deducted from their income.
A politician can’t claim their tax plan eliminates the need for social security taxes.
Instead of being forced to pay into a general retirement fund that you may not ever draw from, you would being paying into your own account. Like a forced savings. I kinda like it.
Not keen on this. What guarantee do you have if the bank makes bad investments with your money and goes under? It shouldn't be touched by anyone. jmo