Thursday, January 06, 2005

Social Security: "Plan 2" the new "Plan 9" ?

In a recent article posted on CNN, What privitization alone can't do, some interesting numbers are presented. I include an excerpt of the article here. Note that my excerpt is biased, so see the full article for a LESS biased handling of this subject.

Additionally, note that "Plan 2" is the leading Bush administration proposal for social security reform.

[ also note that "Plan 9" is the name of a research operating system developed to bring to research what UNIX cannot; it was named after the "Worst Film Ever Made", Ed Wood's Plan 9 From Outer Space ]

The CBO estimates that [under Plan 2] when a worker
earning the median income born in 1990 retires, he would receive
$14,500 a year in today's dollars. That includes the money he'd
draw from his personal investment account – assuming a 4.9
percent annual return -- and his Social Security benefits.

Under the current system, that worker is promised a benefit of
$23,300. But even critics of privatization acknowledge that the
current promise can't be met since the system won't be taking
in enough revenue when he retires to pay out all its obligations.

But even if the system only paid out what it could afford to --
about 80 percent of the current promise -- the worker in this
example would receive $18,100, which is $3,600 more than
he'd get under Plan 2.

Whatever changes are made to Social Security, President
Bush has made clear that the benefit levels of current and near
retirees would not be affected, although he has not specified
what ages define "near" retirees.

Now, to put things into perspective:

Social Security Today

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