AARP Is Not Speaking For Me

Although no specific details of the plan for changes in Social Secuity are yet to be debated in Congress, the President's plan for privatising a portion of the
current deduction for younger persons has had a fair amount of debate. I posted on October 18, 2004 noting that President Bush promised that current retirees and those approaching retirement would not experience a change in their benefits. I also noted that Sen. Kerry voted to tax my SS benefits. Much is written in the MSM decrying any tampering with the current program and blaming the Bush administration of having looted the fund. The fund has been looted for years and is replaced by government securities that pay low dividends. The AARP does not speak for me in it's efforts to forestall any change in current SS law.
The following excerpt of articles from the National Review Online LINKsupport my feelings and introduce information which is new to me such as the Thrift Savings Plan for government employees. I was aware for many years that Congress has voted itself a retirement program whose benefits vastly exceed what is available to ordinary citizens since the SS program did not provide sufficiently for those who are or were in power. I knew of many pre-redtirement deaths but never considered the degree to which ethnicity plays a role in many never collecting any benefits because of death at an early age. If they have children under age 18 there is a survivor's benefit as well as a survivor's benefit to a spouse if married 10 years or longer to the deceased. If survivor's do not qualify, the deceased person's entire contribution remains in government control.

As a senior citizen, I am concerned about the integrity of Social Security and wonder how our younger workers will survive if the system is bankrupt at the time they retire. The ratio of workers paying into the system compared to retirees drawing benefits will ultimately have one of two outcomes, the retirees will not get benefits or the taxation of all citizens will continue to rise in an effort to meet the obligations to SS beneficiearies. I believe that this problem deserves serious consideration on the part of Congress to take the steps needed to help future retirees some degree of economic security. Ownership of one's money seems to be a good goal so long as safeguard's against early withdrawal and guidelines by those with true investment expertise assist ordinary citizens in this process.

According to Donald Luskin's article of December 27, 2004,"The critics never mention that there’s already a government-administered retirement system that has shown for over 15 years that personal accounts are prudent, inexpensive, and simple. It’s the Thrift Savings Plan of the United States federal government, currently serving 3.3 million government employees.

The years since Thrift was first offered in 1987 couldn’t make for a better laboratory to crash-test a personal-account system. During this period there have been both bull and bear markets that were among the most severe in history. Through year-end 2003, investments in Thrift personal accounts have earned $44.4 billion in profits for system participants — an average of more than $13,000 per participant."

Tom Nugent writes onJanuary 04, 2005, "Let’s also understand that the so-called “money” that is “saved” in the Social Security trust fund is bogus. The fund holds government securities that pay low market rates to the trust fund. Even if the fund is fully “funded,” it will still hold only government paper. When payment to beneficiaries comes due because current contributions are exceeded by claims, the government has to sell those bonds to get the money to pay beneficiaries.

History demonstrates that private investments fluctuate in value in the short-term. However, if properly diversified, history tells us that a retirement plan’s probability of losing money is near zero. And let’s not forget that, in the short term, government bonds lost half their value back in the 1970s — so don’t just lay the blame on the short-term volatility of private markets."

Rich Lowry writes in the article dated 1/04/04,"According to Social Security expert David John of the Heritage Foundation, one-fifth of white males die between the ages of 50 and 70. But one-third of black males die between those ages. If you die before you reach the age of 62, you have no chance of collecting benefits, and if you die shortly thereafter, you will not recoup the payroll taxes you paid into the system.

Under most reform plans, a private account will fund the same spousal benefit as in the current system, but the remaining balance will go directly to the deceased's family. In the current system, if someone dies and has no wife or children, the money he has paid in simply disappears. Under reform, the beneficiary would be able to designate who receives the assets in his account, whether it is a niece or a church. The money stays in the community.