Reep Social Security Plan Comparison Calculator Needs DEBUNKING

[elehhhhna]

Calculator here:http://www.heritage.org/research/features/socialsecurity/welcome.asp

Results for 45 year old woman, here:

http://www.heritage.org/research/features/socialsecurity/Results.asp?CL_AGE=45&CL_GENDER=F&Cl_FirstTime=1&Cl_ZipCode=-1&Cl_RetirementAge=-1&Cl_LifeExpectancy=-1&Cl_Stock=50&Cl_Stock=0&Cl_Stock=0&Cl_Stock=50&Cl_ProjectSalary=USAVG&CL_SimYear=2005&CL_BequestLevel=50&CL_Changed=WELCOME

The Bullshit Lying Recap: "You can expect to pay $259,018 in Social Security taxes over your working life for retirement and survivors benefits. For those taxes, you can expect to receive $2,095 a month in Social Security retirement benefits. Your rate of return under today's Social Security is 0.24%.

However, if you had been able to invest all of your Social Security taxes in a Personal Retirement Account (PRA), you would have had a total of $938,400 when you retired. Your monthly benefits would have been $7,644. You lost $5,549 a month."

[papau]

1. Let me see - the insurance of that heir protection for spouse and kids did

not get in the calculation did it.

And since only 10% of the new jobs over the last few months have been over $45,000 per year, perhaps we should do the comparison for a person making $10 per hour - 20,000 a year.

[SharonAnn]

2. Social Security is Guaranteed and has Cost of Living Adjustments

Your personal investment has neither of those.

Social Security means you won't run out of income while you're still alive. Private accounts can let you run out of money.

Social Security provides disability benefits, private accounts don't. And that can be HUGE! Especially if you get disabled young and need support for the rest of your life.

Social Security provides survivor benefits for dependent family members. For spouses, it provides benefits for the rest of their lives after they reach retirement age.

[papau]

13. Very True - - :-)

:-)

[nbsmom]

3. Their math is definitely suspect.

SNIF....is that the fragrance of complete bovine excrement?

It's hard to know where to begin.

-the default portfolio is 50% large cap, 50% bonds...you have to adjust the portfolio risk down as the person gets older, and adjust the return accordingly
-annuitization is still part of the solution, which is basically all Social Security is anyway
-time value of money is not addressed at all (compounding/reinvesting dividends, etc.)
-NO CALCULATION for fees, expenses, commissions, etc. to capture the true costs of private investment.

So many other things...but I'm sure others will weigh in...

[Liberal In Texas]

4. First of all, SS is not an investment plan.

Which is where the neocons have it all wrong.

This is a safety net for everybody. Not everyone is going to earn $45-65K/yr and have the ability to put in the kind of $ that will make those kind of returns.

What about the kid born with birth defects, or the guy injured in an accident when he's in his 20's?

Lastly, their calculator assumes you're going to make 6.5% on money you invest. That is awfully optimistic. What happens if we have another crash of '29 or a recession like in the 70's? Bye bye nest egg.

Give us gov't sponsored 401K's instead that are in addition to SS.

[papau]

5. requires javascript - a bad virus hole - be open - screw them

I was going to see what they said about a 45 year old making 30,000 but I will not open my firewall to javascript.

[Liberal In Texas]

6. Here ya go....(for papau)

You can expect to pay $121,365 in Social Security taxes over your working life for retirement and survivors benefits. For those taxes, you can expect to receive $1,299 a month in Social Security retirement benefits. Your rate of return under today's Social Security is 1.36%.

However, if you had been able to invest all of your Social Security taxes in a Personal Retirement Account (PRA), you would have had a total of $439,696 when you retired. Your monthly benefits would have been $3,582. You lost $2,283 a month.

[sallyseven]

8. Well maybe the gov. should invest the SS

in private accounts for us. Then the SS program would not
go out of business. Of course if the gov lost all the money we would revolt and then they would go to jail. Too risky for me. bush is A big fat lier.

[Inland]

11. Paul Krugman asks exactly that

If the goverment is so sure that stock returns will always exceed goverment bonds, then why doesn't it borrow two trillion, invest it in stocks, and cash it in in 2042 to save the system and buy us all a car too?

Because it is risky and likely not to work.

[papau]

12. I like that - hell - just buy the options and Eliminateall taxes since the

profits could finance everything!

:-)

[papau]

10. thanks :-) seems age 45 does not matter - it is all as if in effect for

all of working lifetime.

Must there are some numbers they do not want us to see :-)

[creeksneakers2]

7. For starters

They base this on the entire amount of SS tax paid since 21 years of age with the stock market paying 7%. Bush's plan is only for 32% of SS. The calculator uses 100%. It leaves no money at all for disability or survivor benefits. It also says nothing about all the retirees before you who would get exactly zero SS.

[Inland]

9. the calculator admits it doensn't add a "return" for disability insuranc

Of course, calculating a return for insurance is idiotic--but then why do it for SS retirement income?