Social Security: Pros' doubts cause for pause

[stevebreeze]

I always say if you want to know what is really going on read the business pages! CEO need real information in order to act in the real world not the world the rest of the media sells us on. You know the, world were seeing J Jackson's breast is of concern.
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The debate over Social Security reform has exposed a little secret among professional money managers: They're not sure what they're doing, either.

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John Bogle, the leading critic of mutual fund practices, said the cost of investing through professional intermediaries is a crucial issue, not an incidental matter hardly to be mentioned in the Social Security debate.

"Fifty percent or more of the returns on stocks can be consumed in the cost of the system," he said. Over time, investment costs compound to cancel the potential gains for owning stocks, he said.

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http://www.chicagotribune.com/business/chi-0502130027feb13,1,1907104.column?coll=chi-business-nav&ctrack=2&cset=true


What really going on here is Wall Street wants those billions of dollars to flow through their hands, and less of it will be trickling down to the public. This is class warfare no more no less. This is a war those of us not fortunate enough to have a fortune have been loosing for 30 years, and it needs to stop. Just look at the numbers in the SS trustee's report. If the middle and lower income classes grow there is NO PROBLEM in SS. The problem is the powers that be desperately want to keep the working in their place! They can only do this if we, the general public, remain ignorant of the dispute.

[nodictators]

1. How True! Hidden fees, such as marketing, can eat an investor alive

The federal employees can invest in a savings plan, TSP, which is completely separate from Social Security.

A recent article noted one of the more aggressive funds in the plan had losses of more than 20% in each of three recent years. Yet, TSP is touted as a model for Bush's Social Security heist. So much for professional management.

If the market takes a sharp dip, the aggressive funds are going to take a much bigger hit than the blue chip funds. Of course, had an investor gotten in early on a market run-up, such as the one from 1982 to 2000, the go-go funds may have done as well overall as the blue chip funds.

Actually, though, the Bush privatization scam is sucker-bait for destroying Social Security by creating a huge mountain of debt that would cause SS to go bankrupt for good.

[stevebreeze]

2. by early start I assume you mean the first people in win

when big amounts of money follow you into a stock. Of course those who hold stock now would do well with a giant infusion of SS money into the market.

[LiberalFighter]

3. Federal Thrift Plan is not in lieu of Social Security for Federal workers

The Federal Thrift Plan was modeled after 401k's.

Federal employees have three parts to their retirement.

1) Social Security
2) Federal Pension
3) FTP

That is no different to what I have in the private sector.
1) Social Security
2) Company Pension
3) 401k

If employees don't have the option of a 401k they have the Roth IRA.

The only gap that I can see for some/many employees would be the pension.


We’ve Already Tried Private Accounts!
T@P The 401(k) experience shows that individual account holders often make unwise decisions and are at the mercy of financial markets.

By Alicia H. Munnell
Issue Date: 02.04.05

President Bush wants to “privatize” a portion of the Social Security program. As part of that debate, we should remember that our experience with 401(k) plans provides some evidence about how well such a program might work. The results to date are not encouraging and should serve as a blinking yellow light.

401(k) plans, which are tax-favored savings accounts, emerged in the 1980s as supplements to traditional employer-defined benefit pensions, where benefits are based on years of service and final salary. Individual 401(k) accounts, funded with employer and employee contributions, end employer liability for pension payments. Not surprisingly, 401(k)s have emerged as the dominant pension arrangement. And in the private sector, most of the responsibility for retirement security has moved from employer to employee.