Page 17 - Book12E

portfolios has declined significantly over the past few years—especially in the latter half of 2008.
As far as personal accounts bringing new control, people already have control over their money when they invest in private pensions, IRAs, and 401(k) plans. When combined with the solid foundation that Social Security provides, these are excellent vehicles for retirement savings.
Q . Isn’t Social Security a bad deal for African Americans?
A: On the contrary—Social Security is indispensable to African Americans’ overall income security. Most studies claiming Social Security is a bad deal for African Americans have several fundamental flaws. They look only at retirement benefits and completely ignore Social Security’s disability and survivor benefits. Although African Americans have a shorter life expectancy than whites, they rely more on the life insurance and disability protection that Social Security provides.
Q: Isn’t Social Security a bad deal for Hispanics?
A: Social Security benefits are especially important to Hispanic Americans because they tend to live longer on average than do other Americans. Social Security’s retirement benefits are guaranteed to last a lifetime and provide annual cost-of-living adjustments. Hispanic Americans are also less likely than whites to have pensions or other sources of retirement income, so Social Security benefits are integral to their retirement security.
Q: Wouldn’t women do better with individual accounts?
A: No. The size of an individual’s account would depend largely on how much he or she contributed to the account. Since women tend to have lower earnings and more years out of the paid workforce, they would have fewer dollars going into their accounts. At retirement, because of their longer life expectancies, women would have to make their smaller accounts last over more years.
New Views About Retirement 9