Social Security Privatization

[gae]

Originally posted by Jumper69:
I have never been a fan of nor an advocate for privitazation of social security. It is a boondoggle.

<font size="2" face="Verdana, Helvetica, sans-serif">But isn't part of the problem with people saving for retirement the notion that they don't have to, because of Social Security? If it's privatized, people get to decide where to invest and can watch the potential growth.

Reason's 75/25 split sounds reasonable. Surprising enough. [img]smile.gif[/img]

[reason]

Originally posted by gae:
</font><blockquote><font size="1" face="Verdana, Helvetica, sans-serif">quote:</font><hr /><font size="2" face="Verdana, Helvetica, sans-serif">Originally posted by Jumper69:
I have never been a fan of nor an advocate for privitazation of social security. It is a boondoggle.

<font size="2" face="Verdana, Helvetica, sans-serif">But isn't part of the problem with people saving for retirement the notion that they don't have to, because of Social Security? If it's privatized, people get to decide where to invest and can watch the potential growth.

Reason's 75/25 split sounds reasonable. Surprising enough. [img]smile.gif[/img] </font><hr /></blockquote><font size="2" face="Verdana, Helvetica, sans-serif">I happen to know a major corporation that invests its monies somewhat according to that 75/25 fixed income/equity split. But interestingly, the market value of its investments is almost exactly inverse in proportion - 75% equity, 25% fixed income. Why? Because over time, equities tend to perform better. I can go on about my doubts about future performance of the stock market, but I still like my idea. But then, when don't I like my ideas?

[LanDroid]

"Right now I can go out and buy 10 year munis and make something like 3.5%."

OK, but interest rates are going up, which means the value of those bonds will go down, AY?

"But isn't part of the problem with people saving for retirement the notion that they don't have to, because of Social Security?"

Gawd, I hope you're wrong about that. I hope the public understands SS is meant to provide bare bones protection and must be supplemented with personal savings. I hope my hope is not a false hope. [img]redface.gif[/img]

[gae]

I don't have a source at my fingertips Lan, but IIRC, more than 50% of folks 65 and over will live at the poverty level.

[Lew]

Boondoggle is the perfect word for it. I'm against privatization of SSI for the reasons mentioned above, but I would have been against the creation of it in the first place exactly for those same reasons. I don't know what the answer is, I think we're in trouble either way, it's just a matter of which route would cause less bleeding. On the whole, I respect FDR's policies but on some things he was dead wrong, and this one of them.

[LanDroid]

GAE you reminded me of a stat I posted a week or so ago.

Average retirement savings for 50 year olds: $2395.78

Egads, if that's accurate we are DOOMED! [img]graemlins/gulp.gif[/img]

[reason]

"Right now I can go out and buy 10 year munis and make something like 3.5%."
OK, but interest rates are going up, which means the value of those bonds will go down, AY?

<font size="2" face="Verdana, Helvetica, sans-serif">Right now I don't have to worry about selling the munis as I am far from retirement. With a buy and hold strategy, the value of the bond while I hold it is meaningless. Besides, as you well know, the price of a muni heads to par the closer it gets to maturity, so there is some built in protection on the downside. Generally speaking, the price volatility should be greatest on a financially sound muni in the early years and subside as the bond comes closer to maturity.

I assume that as interest rates go up, I would continue to buy securities at those higher levels and as the interest rates go down, the price of my munis goes up.

Regardless, if you'll notice I suggested muni funds, which means they are managed by professionals and the individual will not have to worry about the fluctuation of the price on individual bonds.

While I'm not personally a big fan of mutual funds, I think if the government mandates the formation of privately managed funds for personal SS accounts and regulates them with regards to cost and investment objectives, I think this can work better than what we have.

I'd rather have this than let the government keep our money to spend on other things while writing us an IOU.

edited because I said something about calls that was incorrect

<font color="#a52a2a" size="1">[ December 20, 2004 10:25 AM: Message edited by: reason ]</font>

[Lew]

I normally don't give out free advice, but out of respect for this board and its posters....a little tip:

Buy low.

Sell high.


Trust me, you make a lot of dough that way.

[reason]

Originally posted by Lew:
I normally don't give out free advice, but out of respect for this board and its posters....a little tip:

Buy low.

Sell high.


Trust me, you make a lot of dough that way.

<font size="2" face="Verdana, Helvetica, sans-serif">You forgot one: Marry bread.