Focus Point - Social SecurityCommentary by Pete du Pont
November 23, 2001
I'm Pete du Pont with the National Center for Policy Analysis. It's no secret I'm in favor of private retirement accounts to supplement social security. That's because I think it would be good for everybody - and a recent study by the Federal Reserve Bank of Cleveland suggests that I'm right.
Economist Jagadeesh Gokhale's research shows low-income people would be better off with private retirement accounts. Noting that many poor people don't save for retirement because so much of their pay goes toward social security taxes, he ran some retirement computer simulations.
Based on 1995 dollars, a child growing up in a family with few financial assets has a 40 percent likelihood of retiring with little in the way of assets -- a total of $99,000.
But replace social security with individual accounts, and that falls to 16 percent. The chance of retiring with $200,000 to $400,000 in assets would nearly triple. And the chance of retiring with more than $455,000 would more than double.
So go ahead. Give me one good reason for denying low income people prosperity.
Those are my ideas, and at the N-C-P-A we know ideas can change the world. Visit the ncpa website at http://www.ncpa.org/. I'm Pete du Pont. And I'll see you nextime.