*****WARNING . . . I might update this later since I'm brainstorming on my lunch break*****
Taken from a thread we had worked on in the past:
That is why I am in favor of privatizing portions of Social Security. I have better ways to invest in my future than what the Government can do with my funds. However, I am financially responsible. Not everyone is, so I would like to see some degree of requirement for individuals to be eligible for participating in the privatization. I don't need Joe Drug-user spending his portion to get high, and then having me being taxed to support him.
Once again, Social Security has raised its head in this election, between all the discussions on terrorism and Iraq. http://news.yahoo.com/news?tmpl=story&u=/ap/20040922/ap_on_el_pr/kerry_7
The following are some key points from the article:Kerry:
Kerry, however, contended that diverting money from Social Security to private accounts was a "bad, old idea."Bush:
The Bush-Cheney campaign said Kerry hasn't explained how he'd meet the challenges posed to Social Security by aging Baby Boomers.Kerry:
"That's not a plan, it's a rip-off," he said. "George Bush's scheme hurts seniors by cutting benefits, and it hurts our economy by increasing the deficit." Bush:
"His record is one of voting for higher taxes on current retirees and ignoring the needs of future retirees," said Bush campaign spokesman Steve Schmidt.
As I stated before, I am in support of privatizing portions of the Social Security plan, but only in controlled environments. The individuals who are allowed to participate in the plan must show fiscal responsibility and be headed towards personal financial security. Using myself as an example, for the last 6 years, I've been actively contributing towards my 401(k) plans with two employers, as well as participating in Employee Stock Purchase Plans (ESPP) over the last 8 years with three employers. Now saying "actively," that doesn't mean just setting aside money from my paycheck, but also analyzing which plans are growing and which ones are shrinking. I know a lot of people whom I've worked with in the past which stopped looking at their contributions during the recession following the collapse of the tech bubble since they didn't want to see how much money they lost. I did my best to educate these individuals that if there was ever a time to REALLY look at their statements, it was then. Being passive about your contributions only hurts your future wealth.
Now, with that being said, I could qualify in a SS privatization program since I have already stored up a decent nest egg for retirement, and I have plenty of years to go before retiring (unless I win the lotto), and shown personal fiscal responsibility. Now, where would the cut-off for eligibility fall? That's the real question.
My thoughts on this are, at a minimum, a person must already have a sizable 401(k) of at least $50K. That way, any mistake made by the individual or collapse of the stock market will be buffered by the individuals’ personal holdings. Additionally, I would use the credit scores of the individual. A high credit score would indicate financial stability and responsibility.
Other requirements I would have would be on the investment groups involved. Privatizing Social Security would be like a secondary 401(k) plan, so there should be tax-free/commission-free investment regulations when contributing to the approved funds. In order to meet the needs of the whole nation, there should be a minimum of 25 publicly-traded funds to choose from, which cover the medium and low-risk spectrum of investing. That way, their declines won't be as significant during poor economic periods. Additionally, they need to be publicly-traded so that those who are investing non-SS money into the fund will pay for the fund manager through their commissions, saving the expense on the government.
Anyway, this isn't "old" as Kerry claims, but something quite new. The discussion on this idea was shelved following 9/11, but I think it deserves an honest look at the federal level, and maybe we can provide input if anyone knows of a Congressman working on this concept which we can send our material to.
(Back to work)