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Title:

The Social Security System

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Prefunding Retirement Benefits. Exposing Retirement Funds to ... 'Galveston Plan' Delivers Far Superior Disability Benefit. Why is the Galveston Plan Important? ... – PowerPoint PPT presentation

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Title: The Social Security System


1
The Social Security System
  • A Catastrophic Problem
  • A Transforming Solution

2
Social Securitys Catastrophic Problem
3
Social Securitys Transforming Solution
  • Prefunding Retirement Benefits
  • Exposing Retirement Funds to Market Rates of
    Return
  • Personalization of Social Security Accounts Its
    really your money!

4
Personal Social Security Accounts in Action . . .
  • . . . In Texas!

5
The Lucky Few
  • Galveston County
  • Brazoria County
  • Matagorda County

6
How An IRA Works
7
How the Galveston Plan Works
8
Galveston Plan Contributions vs. Social
Security Contributions
  • Under the Galveston Plan, employees contribute
    LESS than do employees under the Social Security
    System
  • Under the Galveston Plan, employers contribute
    the same amount that employers contribute under
    the Social Security System

9
Survivorship Benefits Compared
  • Social Security 255
  • Galveston Plan 3x the workers salary, between
    50,000 and 150,000!

10
Galveston Plan Delivers Far Superior Retirement
Benefit
11
Rates of Return Compared
  • Social Security Less than 3 on average (thats
    lower than the rate of inflation).
  • Galveston Plan Between 5 and 15.5, averaging
    abou 7.8.
  • Have to be careful--there is a lot more
    redistribution going on in Social Security than
    most people think. A few workers get a very good
    rate of return from the current Social Security
    system.

12
Galveston Plan Delivers Far Superior Disability
Benefit
13
Why is the Galveston Plan Important?
  • 20-year track record of success shows it can be
    done.
  • Rates of return supply a precedent for
    projections for other proposals.

14
Can Galveston Plan be a Model for Federal Social
Security Transformation?
  • Yes, with a few slight changes

15
Galveston Plan Contributions
  • In the Galveston Plan, workers contribute 9.737
    percentage points of their income toward
    retirement savings.
  • The Galveston Plan privatized everything,
    retirement, disability, survivorship, not just
    retirement.

16
Social Security Transformation is Bigger than the
Galveston Plan
  • No one is seriously proposing privatizing
    everything (as Galveston does) at the federal
    level. 0nly the retirement portion of Social
    Security.
  • So, to maintain the remaining portions of Social
    Security, fewer percentage points are available
    for personal accounts.

17
How Much is Available for Personal Accounts?
This is the maximum available for personal
accounts
18
What Would that 6.3 Get You?
19
Benefits of Social Security Transformation
  • Biggest Tax Cut in World History
  • Biggest Debt Reduction in World History
  • Biggest Wealth Creation Device in World History
  • Dramatically Broaden the Distribution of Wealth
  • Greater Social Equity for Minorities

20
For More Information
  • www.ipi.org
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