(private Soc Sec)Accounts Hold Risks, Rewards

[papau]

Explaining how if you are average lucky and do not lose money, an account with returns of 3% and annual deposits of $1000 would be $27,357 after 20 years, but if you get lucky and get a 9% annual average return, that account would be worth $55,655. Roll the dice! - and while your at it, pay a higher annual Federal tax so as to pay more to the gov as it pays more out as the interest on the $2 trillion "transition cost" needed to set these private accounts up. But do not say roll the dice or lucky - Bush is "giving" us personal accounts so that we have the ability to make up for those cuts in the Social Security benefit by by investing our Social Security contributions "wisely".

IF YOU WIN, YOU WERE WISE! Love it :-)


http://www.latimes.com/services/site/premium/access-registered.intercept
THE NATION
Accounts Hold Risks, Rewards
By Kathy M. Kristof
Times Staff Writer

<snip>Others could find themselves living on far less at retirement — including people who don't have a long time to contribute, or whose investment choices turn out poorly. People who live very long lives also could come up short.<snip>

The plan is likely to exclude older workers — those in their 50s and 60s — because Bush has said that he wants to leave Social Security alone for those at or near retirement. Older workers wouldn't have enough time to accumulate balances in personal accounts substantial enough to make up for losing a portion of their guaranteed monthly Social Security benefits.<snip>

In addition, private accounts can be depleted before the worker dies, so there's a chance that workers could outlive their savings. That means a worker could be forced to live out their final years on two-thirds of their regular retirement benefit (if they divert one-third of their Social Security taxes).<snip>

Bush has said that he wants the accounts to be voluntary. But because the system is expected to run short of the money it needs to finance current Social Security benefit levels by 2042, it's likely that today's young workers would face benefit cuts in the future, according to a report by a presidential panel charged with studying Social Security. <snip>

[FormerDittoHead]

1. Risk? What risk?

Imagine someone retiring in 1928...

Interesting note: If you bought RCA in 1929, for example, it would take *50 YEARS* to get back your investment. Is THAT what they mean by "in the long run"?

[papau]

2. LOL - I should live that long! :-)

:-)