Inventing a Crisis

[Lawrence of Arabia]

privatize. or at least give me the oppertunity not to pay into SS and let me keep my money, and invest it myself.

[chequita guevara]

Privitization.

[GePap]

Originally posted by Lawrence of Arabia
privatize. or at least give me the oppertunity not to pay into SS and let me keep my money, and invest it myself.

And then when you don;t have money when you are old, what should the state do with you? Leave you to die in the streets?

[chequita guevara]

Just the libertarians, GePap.

[Lawrence of Arabia]

And then when you don;t have money when you are old, what should the state do with you? Leave you to die in the streets?

of course I'll have money. ill invest the money that goes to SS (10% a year) into the stock market on the lowest performing least risk stocks, and by the time I retire, I can retire an millionaire.

[chequita guevara]

Originally posted by Lawrence of Arabia


of course I'll have money. ill invest the money that goes to SS (10% a year) into the stock market on the lowest performing least risk stocks, and by the time I retire, I can retire an millionaire.

You'll need to put away $10K a year at 6% interest for 30 years to retire a millionaire. And in thirty years, a million will be worth what? If inflation is the same as the last 30 years, then it will only be worth about a third to one half what it's worth today, so you'll need to sock away twice that amount. Do you make so much you can invest $20K a year?

[Lawrence of Arabia]

whats so funny?

[GePap]

Originally posted by Lawrence of Arabia


of course I'll have money. ill invest the money that goes to SS (10% a year) into the stock market on the lowest performing least risk stocks, and by the time I retire, I can retire an millionaire.

You know, this is the fantasy people can't get away from.

Assuming of course you ever make enough money to invest and you have the discipline to put money away for investment as opposed to spending it all, and supposing you have no huge costs that come out of nowhere (victim of crime, act of God, medical tragedy), and supposing that there is no large market decline, then yes, maybe that will be true.

The odds are that this is just your fantasy. Public policy should be based on reality, not fantasy.

So again, when you are opld and struggling, should the state leave you to die?

[Ramo]

Incidentally, Bill Frist's campaign just reported that they lost half a million dollars in the stock market since 2000.

[chequita guevara]

Originally posted by Lawrence of Arabia
whats so funny?

That's 80% of the average wage. It also assumes the market doesn't tumble around the time you want to retire.

[Lawrence of Arabia]

You'll need to put away $10K a year at 6% interest for 30 years to retire a millionaire. And in thirty years, a million will be worth what? If inflation is the same as the last 30 years, then it will only be worth about a third to one half what it's worth today, so you'll need to sock away twice that amount. Do you make so much you can invest $20K a year?

no you dont, its compounded interest, not simple interest. each year the principal grows, and the interest from last year goes up, meaning an exponential growth rate.

Assuming of course you ever make enough money to invest and you have the discipline to put money away for investment as opposed to spending it all, and supposing you have no huge costs that come out of nowhere (victim of crime, act of God, medical tragedy), and supposing that there is no large market decline, then yes, maybe that will be true.

of course ill have enough, ill have the money that the govt gives back to me that wont be put in SS. market decline? this is over a long time 40 years, any market decline will come and go, i wont cash out till the end.

[Lawrence of Arabia]

It also assumes the market doesn't tumble around the time you want to retire.

they'll be down for what? 2 or three years max? 4 at the outside? thats no problem

[DanS]

Bush knows a total privitization won't fly so he's proposing that 3% of everyone's SSI taxes be put into a private account. The problem is if you make 50k per year that 3% will add up to less then $100. It's hard to see the big returns Republicans are promising when most of the people will get a total of $2000 in capital spread out over a twenty year period.

Your math is totally FUBAR, dude. Bush is taking 3 percentage points of everyone's SSI contribution (i.e., 3 percentage points of 12.75 percentage points) and putting it into private accounts. A 3% annual contribution on a $50k salary is $1,500 per annum.

[Whaleboy]

"This report, by its very length, defends itself against the risk of being read." -- Winston Churchill

[GePap]

Originally posted by Lawrence of Arabia
of course ill have enough, ill have the money that the govt gives back to me that wont be put in SS. market decline? this is over a long time 40 years, any market decline will come and go, i wont cash out till the end.

On average if you put money into equities in 1929, your rate of returns would have been lower than those of bonds for the decades of the 30's, 40's and 50's. The notion that the market must be ever upwards is a new one, not a long time truth.

You also utterly ignore the issue of possible out of pocket costs you do not envision (like lets say you get divorced and your wife takes half and you have to pay child support).

There is a reason SS came into being-because people do NOT actually take all their money and squirrel it way in investments for their old age-most American stock ownership comes from people's IRA and other retirement plans not run individually, and our national savings rate is miserable.

Reality is clear- this dream that you might retire a millionaire is possible, but not probable. Public policy must be based on probability, not random possibilities.