• President’s plan for Social Security President’s plan for Social Security By Robert Yount There need to are a lot of truths and un-truths being said about revising the Social Security System. Some be clarified. What President Bush has proposed
• President’s plan for Social Security
President’s plan for Social Security
By Robert Yount
There need to are a lot of truths and un-truths being said about revising the Social Security System. Some be clarified.
What President Bush has proposed is that a small portion of the Social Security deductions from your pay-check be invested in a stock and or bond fund. This would be entirely voluntary. If you choose your Social Security deductions will go into the regular program.
Currently the money is mostly put into government bonds and over a 20-40 year period earns a little under two percent. Over the same period money put into stocks and bonds has earned about five percent. Some say the President wants to privatize Social Security.
This charge is false.
Details have not been worked out but the plan proposed would allow you to voluntarily put less than ten percent into the private fund. The rest of the money would go into the tradtional fund and would be paid out at retirement. For those who voluntarily contribute to this fund it seems that money would be paid in addition to the Social Security payments.
Using the private fund would mean the amount you would receive from regular Social Security would be less than someone who chose not to participate. It appears the private fund would contribute substantially more so that those who contribute to the fund would receive substantially more than those who chose to stay with the standard Social Security plan.
The President has said that those fifty five and older would continue toward retirement and receive their regular benefits. Would they who are under fifty five receive less at retirement under the new plan. Probably. Why.
When FDR first established the plan people died much earlier than they do now. The current life span now is at least ten years longer than when the plan was established in the 1930’s. It appears whether you wish to call it a crisis or a problem, something must be done in order to preserve the system.
When FDR submitted the proposal to congress it included unemployment benefits and the Social Security plan. Among the statements he made was “Old age benefits must include compulsory and voluntary annuties.” So he was recommending a plan similar to what is being proposed, private accounts. Another benefit about the proposal is that the individual’s family would inherit any remaining funds in the private account.
Currently when a person drawing Social Security dies the family is allowed about $250.00 for burial. No one knows what plan will be worked out, but something needs to be done. To simply say there is no problem is short sighted and dangerous. Wouldn’t it be refreshing if Republicans and Democrats would actually work together for the benefit of the american people.
Robert W. Yount is a resident of Koloa
