Why are older Americans so against Bush's Social Security plan?

[SOS2008]

If the issue really is that we are not getting a high enough return on our tax dollars, why not simply have the gov't invest part of the SS fund in the market on our behalf? It would certainly be MUCH cheaper in terms of fees than maintaining millions of “personal accounts”. People like my dad's brokerage firm will be the only ones benefitting.

I asked this question before in regard to the "Trust Fund" because I agree this is better than individual accounts (and as others have stated above, SS would provide a guaranteed retirement check in addition to riskier investments individuals may choose to make). But what about the changing ratio of workers per retirees, and longer life span with poorer quality of health? The D-line is that this can be adjusted for, beginning with removal of Bush's tax cuts for the wealthy, but I'd still like to hear something more substantial.

 

[russ_watters]

adrenaline, one of the keys to the plan is that there is a limit on what individuals can do with the money. You can't just bet your money on penny stocks - you have a choice of half a dozen safe mutual funds, bond funds, etc., and that's it. That also means that brokers are not a part of the process at all.

Regarding the original issue and, more specifically, Bush's plan, I had a discussion with my dad about this yesterday (he's 60). He pointed out that the loss of the income from younger people would lead to a short-term fundage problem, which means something would have to be done about existing and near retirees. And that "something" could be a reduction in (taxing of) benefits (it could also just be taking on more debt).

Anyway, while that is a short-term problem that needs to be dealt with, it still doesn't explain the poll results.

 

[selfAdjoint]

Anyway, while that is a short-term problem that needs to be dealt with, it still doesn't explain the poll results.

Doesn't it? Your "short-term" is your Dad's, and my, "long term". While you young folks won't care about that little cut in current benefits that comes along with your privastisation, it will be my lifestyle that goes down the drain. I am just able to stay comfortable now; I don't know what I would do if there were a significant cut. And every non-rich oldster is in that fix. Wake up and smell the coffee.

 

[russ_watters]

Doesn't it? Your "short-term" is your Dad's, and my, "long term". While you young folks won't care about that little cut in current benefits that comes along with your privastisation, it will be my lifestyle that goes down the drain.

Check the poll in the OP: my dad is in the 50-64 age bracket that is overwealmingly in favor of privatization (my dad didn't really say if he was for or against it, we just discussed pros and cons). If worry over short-term loss was the whole issue, I'd expect that age bracket to lean closer to the 65+ bracket. It seems like the key difference between the two brackets is one is getting that monthly check now and the other will be getting it soon. But it "soon" is 10 years or less and the "short term" negative impact on the fund is 5 years or more, those two brackets should overlap more than they do.

I am just able to stay comfortable now; I don't know what I would do if there were a significant cut. And every non-rich oldster is in that fix. Wake up and smell the coffee.

I am perfectly aware that people have planned all their lives for the time when they will get SS and that getting that monthly check is a status quo that people don't want/can't afford to have messed with. But do you really have more to lose than I do? Indeed, you've had the luxury of (near) certainty - when you were my age, you didn't have to consider the possibility that you wouldn't get SS. I do have to consider it. Plus, you've already gotten some of your money back, so its impossible to lose all of it: it is still possible for me to lose all of what I've put in and will put in. And a failure of the system would certainly hurt my dad more than you, since he's put in about all he will and has yet to get any money back. Yet his age group still favors privatization.

I'm planning ahead and trying to be able to provide for myself with or without SS - but should I really have to do that? Perhaps the main difference is one of confidence: you're confident that if nothing changes before you die, you'll get all those checks. My dad's bracket, having yet to receive a check is less confident. Guys like me (the ones who think about it at all at my age) are downright pessimistic about the long-term prospects of SS - and for a country predicated on optomism, pessimism is a very destructive thing.

 

[SOS2008]

I'm planning ahead and trying to be able to provide for myself with or without SS - but should I really have to do that?

What do you think the older generation did? As stated before, many worked all their lives at the same job in order to get a pension, most paid off their homes, most had savings, some had investments, and most did not have credit card debt and learned to spend wisely. The younger generation will need this check even more. If we get rid of SS, we should get rid of all social programs (welfare), because we won't be able to sustain the needy with programs that have not been paid in to. As a side note, I've asked a few retired folks their thoughts, and they express concern with the reliability of the stock market, and just exactly what Wall Street interests will be served (Enron? Haliburton?).

 

[selfAdjoint]

I thought that after the tech bubble collapsed people would get over the notion that the securities markets are some magic cash machine, but I guess vanity springs eternal. It's not greed, but the fantasy that you can outthink the wise guys.

 

[SOS2008]

These individuals are losing money in the market right now during their retirement--one said they've lost $30,000 or more so far, and who knows how these stocks will perform over the remaining years of their life. Like my own parents who are retired and on SS, they own their homes, have no debt, and live very frugally so they are making it okay.