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1/18/2005

Real Social Security Reform

At last someone with a real plan to save Social Security and not end it under the guise of saving it. The following is from Jim Trippon, CPA, who suggests using TIPS as a solution to current debates over President Bush's proposal to privatize Social Security.

"Anyone who's trying to research what's going on in Social Security is not getting all the facts," says financial planning expert, Jim Trippon, CPA, "It's important to have unbiased and sound information, but unfortunately most of the stuff out there is slanted."

Trippon believes that the current system is fatally flawed, and is need of reform if it is to last. He puts forth three possibilities to save it, cut benefits, increase taxes or improve the rate of return.
"Our system needs to be changed in order to survive," says Trippon, "I don't think it's a good idea to raise taxes on younger Americans and removing benefits isn't the solution either. We're left with improving the rate of return." Trippon believes the answer is this: citizens should be allowed to privatize their retirement funds using only Treasury Inflation-Protected Securities (TIPS). With TIPS, citizens can invest their money in five, 10 or 20 year terms. Owners receive interest payments every six months and the bonds are protected from inflation, meaning the worth of their retirement investment ultimately cannot be depleted in value. "This is, in my opinion, the safest investment anyone can have in their future," says Trippon, "It has nothing to do with South American-style privatization and it will put an end to this media freak show Bush has caused."

As I've mentioned here before, this is essentially the system that Galveston County Texas has adopted. The Bush administration will keep pointing to Galveston has a successful experiment in privatization. Just keep in mind when you hear that, that Galveston County employees don't have any more control over their Social Security than you or I do. They are all automatically invested in guaranteed annuities from life insurance companies. They also had to come up with separate life insurance and disability components to replace those that are part of Social Security. The right wing just doesn't want to talk about this part of the plan at all. My only point is, change isn't necessarily bad here. I mean having your money in a private account that the government can't touch is probably a good thing, just make sure they are comparing apples to apples when they start selling privatization to you.

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