it seems that these PRIVATE acounts are only private until you retire and then you have to buy A GOVERNMENT ANNUITY !!!!!!!
Beginning in 2009, workers could invest up to 4 percent of their wages in individual investment accounts up to $1,000 a year initially. The maximum contribution would rise by at least $100 a year afterward.
The program would be phased in. In 2009, this option would be available to workers born between 1950 and 1965; in 2010, workers born as late as 1978 could participate; and beginning in 2011, all those born after 1949 would be eligible.
Account holders would have to choose from a small menu of diversified stock and bond funds with varying degrees of risk, similar to the Thrift Savings Plan available to federal government workers.
The personal accounts would be administered by the government; private companies would manage the investment funds under contract with the government.
No withdrawals would be permitted before retirement.
When workers retired, most would be required to use at least part of their accounts to buy from the government lifetime annuities, financial instruments that provide a guaranteed monthly payment for life but that expire at death. Despite Mr. Bush's declaration that money in the accounts could be passed on to children and grandchildren, the principal of an annuity cannot be inherited.
Money left over after the annuities were purchased would belong to retirees to spend or invest as they wished and could be bequeathed.
<snip>
Peter R. Orszag, a Clinton administration Social Security expert, calculated that the program would cost the government over $1 trillion in the first 10 years the accounts were in place would be over $1 trillion and more than $3.5 trillion in the second 10 years.
<snip>
There was no mention of what would happen to workers who become disabled, currently 16 percent of Social Security beneficiaries, or the minor children of workers who die, now 7 percent of beneficiaries. People who stop working or die young would obviously have much less in their retirement accounts than those who worked until retirement age. Nor was there discussion of whether spouses would have access to the private accounts or what would happen in the case of divorce.
No one in the administration mentioned how workers who retired when the market was in a slump would be protected financially.
<snip>
Workers who decided not to put part of their tax money in personal accounts would presumably be subject to the same benefit reductions as those who participated.
<snip>
The official poverty rate in 2004 was $9,310 for an individual and $12,490 for a couple.
<snip>He did not take account of the fact that low-paid workers might find that most or all of the money that had accrued in their accounts had to be placed in an annuity to insure a poverty-level income.
more at:
http://bipolarinvesting.blogspot.com/I suspect much of the above came from the NYT - so "Copyright 2005 The New York Times Company"
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