If a person lives longer than their money lasts in a privatized Social

[patricia92243]

Security account - what happens?

Example:

$200,000 in privatized Social Security account
You retire at age 65
Draw $20,00 a year for 10 years
$200,000 is gone
You live for another 10 years with no income.

What am I missing here? Is my idea correct?

Somehow the American people think there will be money left to pass on to their families. In many, many, many cases there will not be enough money to last for the rest of a person's life - much less pass on to their families.

Why aren't law makers pointing out this little fact?

[papau]

1. 1895 Tory letter to London Times "Should go quietly to room and die"

and not be a burden on my pocket book via taxes for welfare.

[Cleita]

4. Yes but will you have a room to die in?

Or should you just go curl up in a ditch and die like an unwanted animal. If that happens to me, I'm going to die on the front lawn of my nearest Republican politician's house.

[The Zanti Regent]

2. Out of money? why the CHURCHES will help you!

Yes siree, the CHURCHES will take care of the truly needy, just like they do now!

(SARCASM MODE NOW OFF)

[wishlist]

3. There won't be anything to pass on to heirs, just lifetime benefits

In the unlikely case someone ends up with $200,000 in their private account, the govt will annuitize it when they retire and they will end up getting a guaranteed $10,000 or so (not $20,000) per year if they had that much in it. There will not be anything left for heirs once they have drawn the equivalent of what they paid in, but they will be able to draw the annuity until they die. That's my understanding of the plan, but they have not released the details of how Bush's scheme would work.

Hillary was interviewed today and said there was really no way to discuss Bush's plan since we are in a vacuum with no details provided so far by Bush.

[patricia92243]

5. Draw the annuity til they die? What does that mean?

[papau]

6. I assume example is"excess annuity"-with what's left the of Soc Sec guar

continuing to death.

But current projections of the 4% Bush plan is that concurrent Bush cuts in SS leave you with 7% of final salary as the benefit for middle-class (in 50 years)

So after the excess 200,000 runs out - you "live" on that 7%.

But not for long :-)

DUer wishlist is just noting that the current Bush "outlined" proposal retains a bit of guaranteed for life Soc Sec - just not a lot!

:-)

[Yupster]

7. An annuity is

an investment where you take a lump of money and convert it to a guaranteed payment for life. The lump is then gone.

For instance, if you have $ 100,000 and you're 30 years old you can annuitize it. You will get a check for $ 4,743 (just my approximation) per year for the rest of your life. When you die the payment stops.

If you are 65 years old, you could annuitize the same $ 100,000 and get a check for $ 7,889 per year (again just a guess) for the rest of your life.

The above examples are called standard annuities.

There are other settlement options though. Few people ever choose the standard annuity option.

Using the 65 example, you could choose the joint life annuity in which you would get a check for $ 7,654 per year until both you and your spouse died.

Or you can get a lifetime annuity with 20 year term certain which would pay you $ 7,551 per year for as long as you or your wife lives, but there's also a guarantee that someone would get the check for at least 20 years so if you and your wife died in the eleventh year, then the check would continue to the kids for an additional nine years.

There are usually about 8-12 different settlement options including term certains and even life with 50 % and 75 % to survivor.

Hope that all makes sense.

[Jim Lane]

8. How the annuity component would work

An annuity is a financial instrument you can buy on the private market today. You pay the issuer (a bank or an insurance company) a flat amount of money in a one-time payment. In return, you receive a guaranteed annual amount until you die. If you die quickly, the issuing company pockets the difference. If you live for many years, the issuer has to grit its teeth and keep paying you, taking a loss if necessary. Therefore, the price of the annuity is geared to your life expectancy. The older you are, the less you'll pay.

Bush hasn't backed a specific plan, but the trial balloon is for something like this: When you retire, you'll still get a guaranteed benefit from "regular" Social Security, although, if you've chosen to divert any money into a private account, your guaranteed benefit will be less than under current law. The government then calculates how much more yearly income you need to avoid poverty. An annuity that will provide that much is purchased from the accumulated amount in your private account. That way, you can't spend yourself into poverty. The money that's yours to do with as you please, and that you can pass on to your heirs, is only whatever is left in your private account (if anything) after the price of the annuity is subtracted.

Therefore, quite a few people will find that this blather about "an ownership society" rings hollow. They'll actually have little or nothing to pass on to their heirs. This will be especially true of people who had lower earnings during their working lives, because they will have paid in less to Social Security and will therefore have a lower guaranteed benefit.

[oneighty]

9. My life time annuity

started with X amount of money invested. I draw dividends as long as I live. The dividends fluctuate annually at the whim of the stock market. When Bush took over I took a 32 percent drop in dividends which has lasted almost to this day.

When I die if there is any of the X amount of investment my wife or children Will get dividends until that is gone(Which it already is) so she and they will get ZIP--NADA.

Young people invest in this scheme if you dare. It is a crap shoot.

180

[morningglory]

10. The next generation will have to reeeeaaallllllllyy stretch

that 2k because they will have to take care of their grandparents, or leave them to die in a ditch. See the problem? One of the reasons the middle class has been so affluent since WWII is because SS was taking care of their parents and grandparents. Now we gone be all crowded up in the house....