Real Social Security

Have you ever wondered how much money is sitting in your Social Security retirement account within the SS trust fund in West Virginia? You get monthly, quarterly or annual balance statements from your other private retirement accounts as required by law although sometimes I would rather not see them. When was the last time you got a statement from the SSA other than the one showing how much your monthly benefit will be when you retire?

Citing a poll conducted by Pulse Opinion Research of 1,000 likely voters, The Hill online newspaper posted today the following:

"Thirty-six percent of likely voters believe diverting payroll taxes to personal accounts should not be permitted at all, while 37 percent backed being able to invest either 25 percent or 50 percent. Sixteen percent supported the ability to invest three-fourths or all of one's Social Security taxes."

While 36% oppose any privatization of SS, 53% favor partial to full privatization. Privatization appears to have the green light. Even if the undecided 11% eventually oppose it, there is still a slim majority in favor of it. While women more than men, old more than young, black more than white and Dem more than GOP oppose privatization, the overall group favors it and each sub-group admits the program is in dire straits. More people favor restructuring our broken retirement system than our broken healthcare system which recently realized a major overhaul.

I would actually like to thank the President for floating the idea and signing into law the partial privatization of the program. He essentially did as much by reducing the historical 6.2% payroll tax to 4.2%. I will set aside that extra 2% in my personal retirement account, and I highly recommend everyone do so for two reasons. First, this tax cut is slated to expire at the end of the year, so if you are spending it, you will have to readjust your lifestyle. Second, depending on your age, it may be the only portion of that "tax" you ever get to spend in your retirement because all trust fund "profits", when there were any, were spent in the general budget in exchange for I.O.U.'s, and, as the same article noted, that same trust fund was in the red last year for the first time. By the way, those I.O.U.'s, or unfunded liabilities, amount to $17.5 trillion as of 2009 according to its trustees.

Yes. Private accounts do run the risk of losing money; many people were reminded of that 2-3 years ago in the crash of 2008. If you were less than 5 years from retirement, that was financially devastating. However, all ideas put forth so far plan to privatize accounts, even partially, only for those 55 or younger.

Private account balances may rise and fall, but at least that money really exists and will belong to you, not to your children and grandchildren who have yet to earn it.