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Politics : Formerly About Advanced Micro Devices
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To: RetiredNow who wrote (213574)12/19/2004 12:10:00 AM
From: neolib  Read Replies (1) of 1576923
 

Anyway, I was wrong. They aren't going to reduce your future benefits by 2%. It will be reduced by much less than that.

Thanks for the link. It seems to me to clearly state that your SS benefits are reduced dollar for dollar (+ 2% interest), so that will be a good deal more than 2% of SS benefits. In theory, you are better of, because as you noted, one should get better than 2% growth on the dollars in your own account, so that would make up the difference.

One thing that is not clear however is the issue of life expectancy. SS pays as long as you live, but your private account will run out when the funds are depleted. Are the estimates based on average life expectancy. In that case, if your life expectancy is realistically longer as is the case for myself, it might not be a good deal.

As boomers retire and start spending their accumulated savings, stock growths might be under additional pressure in the 10-30 year timeframe as well. Unfortunately economic projects are problematic.
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