Quote:For the 4th point, if people started funding their own retirement, who would continue pumping money into SS for those already retired?

 

That's a good point, and I'm not sure of the ideal solution to keep the current system funded and "wean off" those that have paid into the system for some time and/or are nearing retirement age.

 

Quote:My dad is on Medicare, he gets really good healthcare.


I agree that social security should be a supplement to a primary plan... But it should also be recognized that the plan actually works and shouldn't be cut or privatized.

 

It has actually worked over the years, but it's headed towards insolvency at a pretty rapid pace.  Part of the problem is that there are far too many people that think SS is their retirement plan and don't save or plan appropriately.  The idea is to modify the plan in order to give people a better option.  Read my Third Point of Discussion.  Currently it is not something that you "pay into" and "get back".  What if it was changed to something that you do in fact "pay into" and "get back"?  What if it becomes personal to the point that if someone dies they can pass whatever funds are left on to heirs?

 

The point is to change the system to benefit people and keep government's hands off of our earnings.  Take a look at what you pay in SS tax and imagine if you put it into an interest earning investment.  Over time you would have a better "benefit" upon reaching retirement than you would with the current system.  This is aimed at the millions of people that don't save for retirement at all.

 

Quote:I don't believe anyone should be managing their own social security account as it's meant to be a safety net not another avenue for some to mishandle their own discretionary funds, but the money in the social security trust fund should be invested in a well diversified conservative portfolio that is largely made up of corporate investment grade bonds with some stock exposure (no more than 20%) and perhaps some treasuries instead of being comprised of only treasuries.  When it's all treasuries, it's similar to just giving the government all of the money and them putting an IOU back in the "lockbox".  Not only that but a conservative mix portfolio historically outperforms an all treasury portfolio.

 

The idea of forcing the government to no longer use the money to purchase treasuries isn't likely to get much traction in Washington though.

 

That's the thing.  There is no such thing as a person's "own social security account".  What I think is a better idea is to actually create a system where each individual would have their own account.  The idea wouldn't be for people to actually manage their own account, but have it get invested more-or-less as you describe.

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