TITLE

Benefits of Individual Social Security Accounts Are, Well, Individual

PUB. DATE
August 2005
SOURCE
Journal of Financial Planning;Aug2005, Vol. 18 Issue 9, p20
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article reports on a 2005 study conducted by the Employee Benefit Research Institute in the U.S. which shows that the benefits of a system of individual accounts would vary significantly depending on the worker's retirement date, earnings and investment choices. The study compared private accounts with options that: maintain benefits under current law; cut back benefits when the trust fund is exhausted; and gradually reduce current-law benefits. The study examined possible benefits for those not born until 2015, low-income 20-year-olds, and higher-income 50-year-olds. Those not yet born would do better under the current system than under individual accounts. Lower-income workers are likely to do better than higher-income workers under individual accounts, but there would be variance among comparable individual beneficiaries, particularly depending on investment choices. The study includes a chart showing 42 examples of possible Social Security benefit levels for the four policy options. It also details the percentage of a worker's retirement income that Social Security would replace under the different policy options.
ACCESSION #
17857435

 

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