Privatized Social Security Individual Retirement Accounts

Aug 2010
Cliffside Park, NJ
Privatized Social Security Individual Retirement Accounts:
A “privatized Social Security’s individual retirement accounts would be funded by the payroll taxes of employees and their employers. Employees would self-direct investments of their individual accounts. Thus, the values of the accounts upon the commencement day of an employee’s retirement will be determined by the consequences of the taxes paid into their accounts and their self-directed investment decisions of those funds. There are general alternatives as to how those individual accounts could be handled. Those values are determined by individuals’ lifetime wages, and their self-directed investment decisions of retirement.

Monthly retirement benefits could be distributed by an insurer to pay out lifetime annuities based upon actuary calculations. If the annuity is to be a life-time annuity, it is less feasible for the fund to remain the property of the retirees’ estates and passed on to their families. If the annuity insurer is not the federal government, the insurer would pay fees similar to a quasi-government insurer similar to the manner of banks now paying Federal Deposit Insurance Corporation fees.

Retaining the current Social Security retirement’s considerations for widows, ex-wives, and dependent children will be less feasible and/or of greater expensive (than they currently are).

If Federal Supplemental Insurance Income, (SSI) will be retained, it will continue to guarantee some minimum rate of monthly SS retirement benefits. Privatized SS retirement policy will then encourage employees, (particularly the lowest earning employees), to risk more, for greater retirement incomes. Due to Federal SSI, employees would still be guaranteed minimum retirement benefits. I believe SSI is currently and would remain funded by general tax revenues rather than by FICA taxes based upon payrolls. SSI will be the greatest ongoing increased federal expense due to our transforming to privatized SS retirement system.

Respectfully, Supposn