Letter to the Editor: Support Private Investment Accounts

This letter was originally published in the LaCrosse Tribune on Jan. 17, 2005.

Support private investment accounts
By CHRIS MULLER Onalaska, Wis.

Much has been made of the possible windfall for Wall Street if Social Security reform included personal retirement accounts. Opponents of PRAs have been spreading this rhetoric since it was first suggested in 1997 that a greater rate of return had to be made on Social Security dollars to meet its long-term obligations.

Those long-term obligations are skyrocketing upwards of $12 trillion, and grow by $320 billion every two years that reform is postponed. By 2018 Social Security will run deficits as more retirees draw off the system than workers pay in.

If PRAs are implemented, younger workers would be allowed to divert a portion of their FICA taxes into government approved investments with greater returns than the current minus-0.25 percent under Social Security.

The idea mirrors modern pensions and the government employee thrift savings plan.

As I look at my 401(k), I notice a nominal fee for administrative costs, and I certainly have no reservation about paying for the sound management of my retirement account. We pay plumbers and electricians and carpenters for the ser ices they provide. Are we to expect free service from investors?

I did some research and found that I can plan to receive $2,387 per month under the current system by the time I retire. If PRAs are implemented, that number could grow to as much as $7,611. I am blessed to work for a company that offers a good 401(k) package but what about those workers who will rely solely on Social Security? Don’t they deserve better?