Privatization of Social Security

I've wanted to post on Social Security for a while now. I think that that the only problem with the partial privatization of Social Security is that it doesn't go far enough. The number I consistently see bandied about is 4%. I don't know if that is 4% of your contribution or 4% of your income. Either way, big whoop. I say let me invest 50% of my contribution or even 75%. The problem is that every administration and congress since Johnson has raided the funds in Social Security to cover budget deficits. It's how Clinton was able to "balance" the budget too.

There are 20 countries that have either switched to a privatized model or are in the process of switching. Take a look at the Chilean model.


See Dave for more on Social Security.

The other thing I would like to point out is that Federal employees and many state and county employees can opt out of Social Security and privatize, much like the plan being proposed for the entire country. It has been very successful. Almost too successful as CalPers occationally has trouble finding companies to invest in that don't have contracts with the State of California. Why is the plan good enough for some and not all?

Let's sum up. Privatization keeps Congress from robbing from my retirement account, I'll earn a higher return, and I can take some control. It's been proven to work here in the US or else Federal employees wouldn't be using it. The ONLY downside is that Congress will be forced to stop pulling money out of the Social Security piggy bank.

For those of you that want to say that any investment is risky, I'll respond now by saying that the current plan is up to the whims of Congress. If they decide to pull the plug, the program is over. If they decide to raise the age benefits start paying, you lose. If they decide to lower the amount paid or not raise for cost of living adjustments, you lose. I don't know about you, but my personal retirement plan made 11% during the bear year 3 years ago and has been getting over 20% the past couple of years. Is that an indicator of what I'll earn next year? No, but I stand a better chance of earning it than not. And it's certainly a better return than Social Security as it stands now, which is a negative percentage.