UnThreaded | Threaded | Whole Thread (63) | Ignore Thread Prev | Next
Author: PMcMullenCT Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5267  
Subject: Re: The Transition Cost. Date: 1/18/2001 9:10 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
I'll agree this would be more "comforting",
but where do you plan to get those "increasing percentages"?


The population of retirees without such private accounts would reduce over time through attrition. With each passing year, new retirees would have held these accounts with compounded returns for increasingly longer periods of time, replacing more and more of the benefits that must be provided to them.

Someone who is 55 when private accounts are created, will have only 10 years of compounded interest on that account, and will likely still require some level of SS benefit. However, an individual who was 30 at the time of the program's creation will have 35 years for those assets to grow, and might have his SS benefits completely replaced by income from that private account.

As older retirees, who received 100% SS benefits, die, they are replaced by new retirees who will have their benefits reduced by amounts equal to the revenue on their private accounts.

Retirees will be increasingly supporting themselves via private accounts. As fewer benefits must be paid by the government, more SS taxes can be diverted into private accounts.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (63) | Ignore Thread Prev | Next

Announcements

Social Security Website
www.ssa.gov is a massive information storehouse about all things Social Security. Check it out if you're looking for anything from general info to personalized answers.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Saul's Investing Discussions

Why Did I Buy a Bunch of PFIE Today?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement