I have always been for this concept as long as there we different investment options for people. If , for example, you think the stock market is like gambling then you can invest in money market funds.

 

I'm guessing there are many BGPers opposed to this and I'm curious as to why.

For it.

100% in favor, but seriously doubt it will ever happen.

Thought it was a good idea when Bush tried it. Still think it's a good idea.

Should have been done years ago.

Come on now. I know there are those that were against it. Speak up.

What do we tell people who weren't in the proper investment vehicle and the market drops as it did in 2008? Tough luck?

What do we tell people who weren't in the proper investment vehicle and the market drops as it did in 2008? Tough luck?

 

Fair question. Are we talking about people who are really close to retiring or someone in their 30s/40s?

Fair question. Are we talking about people who are really close to retiring or someone in their 30s/40s?

 

The obvious answer is closer to retirement age, but even so folks in their 30's and 40's may not be able to recover from a large dip and not have enough when they need to retire.

The obvious answer is closer to retirement age, but even so folks in their 30's and 40's may not be able to recover from a large dip and not have enough when they need to retire.

 

How about if we say one has the option to invest their SS money OR they can leave it as is?

 

Is there a downside to that(besides Congress not having as much to dip into)?

How about if we say one has the option to invest their SS money OR they can leave it as is?

 

Is there a downside to that(besides Congress not having as much to dip into)?

 

IMO the same downside as completely doing it. Are we prepared as a society to see seniors sleeping on the streets and going hungry if they choose to invest privately. Are you willing to do that if they choose that route and it ends badly? Much more likely is there would be some emergency legislation or a dramatic increase in welfare type benefits that would eat up any savings from privatization. All my opinion of course.

IMO the same downside as completely doing it. Are we prepared as a society to see seniors sleeping on the streets and going hungry if they choose to invest privately. Are you willing to do that if they choose that route and it ends badly? Much more likely is there would be some emergency legislation or a dramatic increase in welfare type benefits that would eat up any savings from privatization. All my opinion of course.

 

Without question there are people who would squander everything if you let them, so there would need to be some pretty explicit rules around it.

 

There are definitely issues to be worked out if we were to ever move that way. IMO it could not be an open, invest in anything you want type of arrangement. Would need to be more along the line of current low risk retirement type investments.

 

Crunching a few numbers, an account started at 20 with $1950(current SS deduct of $30k salary) per year and increasing investment by 3% each year would yield $640,000 at age 67, and at 6% would be $845,000.

 

It would have to be set up like current annuity type payouts.

 

It doen't take extremely high interest rates or investment amounts if you start at a very young age. Remaining money should be passed to your children tax free.

 

This is just a simple look at it.

I'm not wild about it for this reason: if, as 2 Humped Camel suggested above, someone's investments were to go bad, what happens to them? I'll tell you: we end up taking care of them anyway. This amounts to an individual losing their own money that they've put in throughout their life and so now need other people's money as well. In order to counter-balance that, you'd need at least one person who did VERY well in their own investments or a couple people who did pretty well. I'm just concerned that this doesn't necessarily lead to financial independence for our aging population, but leads to further problems.

The obvious answer is closer to retirement age, but even so folks in their 30's and 40's may not be able to recover from a large dip and not have enough when they need to retire.

 

Someone close to retirement age who had invested very wisely since they were 18 would have come out WAY ahead of the current system even considering the past 2 years. The problem would come from those who try to time the market and hit home runs with every investment.

I'm 52. Under it's current form, SSI not going to be there when I retire, or the retirement age will be way up into the 70's. Also, if privatized, Congress would not be able to raid it to channel money into the General Fund.