Sunday, April 10, 2005

I want to be poor when I get old

It seems like we can't remember yesterday. Several years back people were bitching about social security not providing them with enough money for their retirement. Congress took their sweet time, but finally let us put money into IRAs and 401Ks. These private investment accounts were, and are, pretax. There is a substantial penalty for early withdrawal.

Social security fell on hard times and Congress tweaked it. This tweaking is necessary in any financial adventure. We tweak our earnings/debt every week that we get paid. Congress does the same with social security. It needs to be done again to maintain its solvency. Not to become solvent, to maintain.

Now, the big boy on the hill wants to provide people with personal/private retirement accounts while sucking the funding from social security. You can't get more screwed up than that.

First, social security is funded by the same dollars that are supposed to go into these accounts. Money, like most objects, cannot be in two places at once. It can't be funding social security and a private account. Social security would immediately lose out on that dollar. You can lose out on it later.

Second, we already have a way to privately/personally invest. The aforementioned IRA and 401K. Yes, they're in addition to what goes into social security. That is for a good reason.

Third. How much money did people lose in their retirement portfolios several years ago? I know people that lost hundreds of thousands of dollars. Their retirement is being held back several years or they're retiring with less, much less, than they had planned. Why? Because they made their projections for retirement based on their stock portfolio.

Fourth. If we put our retirement into the market, instead of social security, we stand to lose a great deal more. Why more? Because the people that lost money last time around knew they could depend on social security. It might not of been the best deal around, but it sure as hell beats living off of food stamps etc. If the market goes south with all your retirement nest egg in it, you could very well find yourself living in a place more exotic than you ever imagined. That exotic place is the street.

Wake up and fund social security. Use your IRA/401K to help with your retirement. If you want to be able to invest more outside of social security then push Congress to allow you to do that. Do not get rid of the safety net that is already in place. Some people may be ready to fly without the net. Society as a whole is not.

If we do away with social security and the market takes a dive, it will be worse than you ever imagined. The only people that will make out are those who are already rich. You'll be selling your house at firesale prices to put food in your mouth. It will be worse because everyone you know will be doing it as well. Your portfolio will be worthless, and your life as well. Not only that, but the government won't be able to borrow the money to help us through the tough times. They'll be mortgaged to the hilt trying to pay for the social security benefits that are already allowed.

So let's see. Government has no money because they borrowed to pay off current social security benefits. You have no money because your stock just tanked. You lose your job because the company you work for can't sell a product when people have no money. Government can't create jobs because it's already to far in debt. You can't sell your house for enough to pay off the debt, because everyone else is selling too. The rich guy down the street buys half the houses on the street, for next to nothing. Who wins here? Society, or the rich guy who talked you into investing in the stock market instead of social security?


Post a Comment

<< Home