Just for a minute, let's ignore why this system was created since most would probably agree that it was needed at that time to provide a base retirement benefit for retirees. Financial planning was unheard of, investing in the stock market was not as advanced as it is today, and the average person could not speak in great detail of asset allocation.
That being said, I would like to make three points. First, if this current system is not changed, we are looking at the possibility of not even having a safety net in place for the poor. Once the system is bankrupt-what can be done then? Isn't it interesting that, when a private business wants to set up a retirement plan that would provide the retired employees with a monthly benefit, it must prove to the federal government that the plan is funded? Shouldn't this be the same with the current Social Security system? I have never received my own account statement.
Second, your grandmother and mine have been the recipients of Social Security payments that will far exceed what they ever put into the system even if you account for interest along the way. If that could continue for my generation, I would say keep the current plan in place, but the bottom line is that it will catch up with us. That will mean lower benefits, an older retirement age, and a higher payroll tax. I agree with none of those. We need to change this system now while guaranteeing that the benefits will continue for those at or near retirement.
Finally, [columnist William Hoffman] implies that investing wisely is like gambling. Our population is far more educated in the investments arena than it has ever been. There are methods to invest that help reduce the risk involved with investing in common stocks. I am suggesting that taxpayers be given the choice to direct a portion of their hard-earned money. The 12.4 percent that the employer and employee contribute is greater than most people contribute to their retirement plans. The investment choices can be very broad and can include government bonds if an individual desires to invest in them. Privatizing a portion would continue to encourage investors to become educated about investments.
For these reasons, I am in support of U.S. Sen. Santorum's efforts to reform the Social Security system while continuing payments to those at or near retirement.
I encourage Mr. Hoffman to consider another editorial that is not so cynical-please come up with your own suggestions instead of bashing those who are trying to improve the system so all can be better off in the long-run.
Jonathan Kuhn, CFP
Allegheny Financial Group
Consider the crown of dental plans
I enjoyed your article on dental plans in the June issue of Small Business News.
[You should also consider] direct-reimbursement plans endorsed by the American Dental Association. Direct-reimbursement plans provide the greatest savings to both the employer and employee by reducing third-party insurance participation.
Bartley Morrow, D.D.S. & Associates