Tuesday, January 13, 2009
Social Security privatization could be deadly if retirees have to take disbursements at specific ages
Allan Sloan has a great article on the perils of social security privatization (“W.” style) today on page D01 (Business) of the Jan. 13 2009 Washington Post. It’s called “Deals: Here’s How It Could Have Been Worse”. One risk that he points out is that retirees could have been forced to “cash in” at bad times, sell, and take annuities with lower interest rates and lower values, resulting in much lower payments if taken at the end of 2008 than at the end of 2007. The link is here.
The writer says he favors some privatization if it’s done carefully enough. For one thing, you have to change the rules so you don’t force people to sell assets and take distributions at specific ages. You also have to limit investment classes to vehicles that protect principal. But we’re facing changes like this anyway. It’s likely that early retirement (62) will go away as entitlements are cut back in order to stimulate jobs for those who are still working – and to encourage older people to try to keep working and to encourage employers to hire them. And it’s going to be a real problem to make the jobs “real” – not simply based on lifestyle hucksterism and false socialization (as I noted in my main blog Sunday Jan. 11 – look at my Profile for the link).