Originally posted by Honed Diva:
The general public has access to far greater growth investments now than they did prior to Social Security. It is possible and feasible to take a small fraction of your income, invest it in a well diversified portfolio, and have a lump sum enough to guarantee a stong income for life. A 3% contribution into a diversified stock/income portfolio in a Money Purchase Pension grew to a lump sum more than adequate to replace my father's work income.
The Enron people who did not diversify their retirement accounts and held large percentages of a single security were stupid and irresponsible. While it does not excuse the executive fraud, those people had the power to mitigate the damage.
The other advantage to private accounts is you have the ownership of the assets to bequeath to your heirs. Under the current Social Security system, you die at 57, and you don't get squat for the 30-40 years you've paid in. My father dies at 57, and my sister and I were able to receive the proceeds of the Money Purchase Pension to jump start our financial security.
Well said! Although Soc Sec. helps the poor widow/er who was a homemaker all his/her life in the event that the spouse wasn't able/willing to set up a retirement, in every other sense it is just too much big government taking your money that you could use in your own way.
Perhaps a mandatory retirement tax that allowed you some control over how it was invested would work as long as there was a minimum system available like their is now. So essentiall if you do nothing then SS would work for you like it does now. If you applied then it could be set up to where you have limited investment options into very low-risk/secure investments that would set you up for success in the future years.
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