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We have an obligation to retirees no matter how old they are or how far from retirement they might be. In a country this size and with a program that has worked to keep many people from poverty in their golden years, changing the risk level from zero would leave a nation with retirement benefits based on skill in investing.
Investing in privatization of the program benefit current shareholders of equities - by raising the prices of shares they already own. This will create a market that has risen because of increased participation and not because the companies have vastly improved. In other words, the new private accounts would be buying stocks - through mutual funds - at inflated prices. The fees would be paid by the returns on these accounts, eating away at retirement income as well as creating new wealth for those that are involved in the trade and management of these funds. For a deeper look at these changes, we have answered some of the most frequent questions about the proposed reform in the program: What exactly is meant by privatization? Will everyone get these accounts when the program changes? What kind of accounts would be created? Is there a risk? How much is this going to cost? Would you be able to invest if your retirement was your responsibility? [ Close Window ] This site and all its contents are copyright 1998-2005 by Paul Petillo/Editor/BlueCollarDollar.com. All Rights Reserved. |