State of the Union

[TRF]

A point about SS vs. Private accounts that perhaps hasn't been brought up. In the 90's the country was prosperous. People made money left and right. Not everybody, but the average person suddenly had access to online trading, the internet provides instant information on new businesses, and the expansion of existing business. I'll get to my point in a moment.

Right now, the average person pays anywhere from say $75 - $200 a month in SS taxes. That money goes to fund... Social Security. There were over 100 million voters in the last presidential election. Now imagine 100 million investors. Imagine 10 billion dollars invested each month, not in products, but in companies themselves. 120 billion per year. Now the possibility of government cotrolled or even advised personal accounts does have the possibility for abuse. But if the private accounts are monitered by a third party that is not in any way affilliated with the companies being invested in, the ripple effect here could be significant.

Americans, while not necessarily smarter than 70 years ago, certainly have access to far more information. We live in a time when a person can go back to college in his/her sixties. Why does the government insist on treating us like we are children?

I'll state this once again. Had the money i paid into SS for the first 12 years of my working life had instead gone into an IRA or Mutual Fund, my retirement would be set, without question. And that retirement would have come at a younger age, freeing up my position in the workforce for a member of the next generation. Instead I see the elderly working at Wal-Mart, not necessarily because they want to, but because they have to.

10 Billion a month invested in the businesses and industries that run America, instead of invested in a holding pattern that may or may not exist in 30 years.

[TRF]

I'm technically a state employee for Illinois, and I am so thankful for that every month when I get my paycheck. No ss taxes, and our money goes into an account the state matches dollar for dollar. It blows away anything SS will provide for me, and I'll only be an employee here for 6 years. I can only hope ss is fixed by this president, for the sake of anyone not 55 or older.

Please tell me you aren't "employed" in Joliet.

[KYRedsFan]

Please tell me you aren't "employed" in Joliet.

No, not so much. :MandJ:

[Red Heeler]

A point about SS vs. Private accounts that perhaps hasn't been brought up. In the 90's the country was prosperous. People made money left and right. Not everybody, but the average person suddenly had access to online trading, the internet provides instant information on new businesses, and the expansion of existing business. I'll get to my point in a moment.

Right now, the average person pays anywhere from say $75 - $200 a month in SS taxes. That money goes to fund... Social Security. There were over 100 million voters in the last presidential election. Now imagine 100 million investors. Imagine 10 billion dollars invested each month, not in products, but in companies themselves. 120 billion per year. Now the possibility of government cotrolled or even advised personal accounts does have the possibility for abuse. But if the private accounts are monitered by a third party that is not in any way affilliated with the companies being invested in, the ripple effect here could be significant.

I agree with you that investing SS into the private sector has some very appealing rewards. The problem with it, though, is twofold.

First, is that the market is volatile. Say a person retired in 1998. Life is wonderful, and their retirement fund is booming. 2001 rolls around and they have 1/2 as much of their retirement fund left. Sticky situation they are in. Gotta sell the beachouse and the new car, maybe some more stuff. What if they run out of stuff to sell? What if they go broke? What does the government do now? Let them starve or give them a safety net? Where does the money for THAT safety net come from?

The second problem is the possibility for government corruption/misuse of the money in the funds. How do you determine which companies to invest in? How do you determine which investment companies to use to manage the funds? Are you going to let the citizens manage their own accounts? What if they screw it up (and based on the internet trading era, they will)? Do you provide a safety net for that? Where does the money come from?

[Phoenix]

It seems that some people are scared by the prospect of investing. Perhaps they have no experience in it, no 401K, and like anything new it may seem daunting. I can understand that. But surely a new system will be devised that incorporates a safe rate of return account. One that doesn't even invest in stocks and perhaps just T-Bills and the like. Of course, most of us know that would be a mistake in the long-term, but I think the option should be there for those you can accept no risk.

[GAC]

I'd like to take the money I put weekly into propping up the SSI system, and add it into my 401K where I am getting alot better return. But then, I'm planning ahead, and not expecting on getting much out of SSI when I retire in about 15 years.

Good article you posted earlier MWM. Much appreciated, and shows the huge flaws in a "pay as you go" system.

There are only two answers to solving the problem with this type of system (and they were mentioned in that article).... benefit cuts, or huge increases in the payroll tax. And both due to the decrease in the worker to retiree ratio.

If they really want to save the current SSI system they need to raise the retirement age so that one is eligible for benefits the day after you die.

[TRF]

honestly, the root of the problem is education. these days probably every kid in the country has access to a computer. whether that's at home, school or even the public library. Schools are now offering dual credit classes in high school. A kid can learn a programming language in their teens, or have access to medical texts online.

But there is nothing, as part of the mandatory curriculum, that teaches about everyday finances, or plannning for the future. There are elective courses, but only a fraction of students take them. And if you come from a hom that has no financial plan, then where will you learn? And when?

IMO SS should be stopped today. Grandfather in everyone that has paid enough into the system to receive benefits, and eat the cost of paying for SS for the next 65 years. Figure out a way to have the SS taxes replaced by IRA's, mutual funds, 401K, 403B whatever. put the money we earn back where it does the MOST good, our economy. Mandate that all highschools teach 4 YEARS of economics based on the reality of life after education. Continue that in college for all degrees. Make that an accreditation issue. Require credit card companies to no longer give credit cards to college students unless they can prove they have been employed at least 6 months.

My 12 year old son gets credit card applications in the mail. I'd force the credit card companies to reform their direct mail policies.

at least that's my opinion.