Can we learn something from Chile's experience with Private Accounts?

[redqueen]

http://www.latimes.com/business/la-fi-chile13feb13,0,1868444,print.story?coll=la-home-business

A Personal Burden

Chile switched to a privatized pension system nearly 25 years ago, and millions of workers still fall through the cracks
By Marla Dickerson
Times Staff Writer

February 13, 2005

Weary from decades of working nights and weekends at a public hospital, nursing assistant Inelia Pardo Acevedo recently retired.

But the 64-year-old plans to look for a part-time job to pad the nest egg in her personal retirement account. The $225 a month she draws under Chile's privatized system doesn't stretch far. And what galls her is that colleagues who stuck with traditional pension plans get three times as much, guaranteed for the rest of their lives.

The government "painted this wonderful picture of private accounts," Pardo said. "They fooled me. They fooled us all."

As the Social Security debate heats up in the United States, many are looking south to Chile, where nearly a quarter century of experience with privatization hasn't settled the question of how to best construct an old-age safety net.

(more)
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I've been encouraged by AARP's statements on this issue... hopefully people will come to their senses before we make a huge mistake.

[illflem]

1. But, sez bush

In Chile they hate freedom

[DinahMoeHum]

2. A number of investment advisors ain't too keen on the idea either

Link:
http://www.newsday.com/mynews/ny-saul4141135feb12,0,4054919.column

(snip)
...Bush's plan to privatize part of Social Security would begin with the creation of millions of individual retirement savings accounts like IRAs or 401(k)s. So I asked an acknowledged guru of these savings plans, Rockville Centre CPA Ed Slott, what he thought.
His reply was practical:

"I am against them ," he wrote. "While everyone wants to think they can invest better than the government, all of these people screaming to keep government out of Social Security and invest on their own will be the first on line to cry to the government to bail them out when they lose their money through their own investing mistakes or fraud. ... Having this much money up for grabs on Wall Street is scary. ... Private accounts seem to have all the makings of a breeding ground for massive fraud, followed by a government bailout that would make the savings and loan bailout look like a mere warm-up....

"Social Security is the only system that guarantees a monthly check, and that is something that I believe is sacred and should not be tampered with.... Who will protect the people that will lose their money? It sounds great to take control of your money, and I am all for that through funding your own IRA and other retirement accounts, but not at the expense of Social Security."
(snip)

:evilfrown: