Sunday, March 25, 2012

Opting out of Social Security

Probably the sort of thing Roger Douglas promoted for so long.

Research described in the Spectator (hat-tip NCPA) finds that US citizens who opted out of social security for an 'alternate' plan are much better off when it comes to retirement.

According to the Spectator,

There is also a disability benefit that pays immediately upon injury. Social Security's comparable benefit comes with a six-month wait, and includes other restrictions. 

The NCPA comments,  

The plan avoids the pitfalls of pay-as-you-go systems by giving workers only what they pay in....The experience of the three counties' employees over the past 30 years speaks to the effectiveness and efficiency of the plans. While paying out substantially higher payments to retired workers, the plans do not face burdensome unfunded liabilities that haunt many states' legislatures.

Perhaps the left would prefer the lower pay-outs because they are more even under state social security (the lower income contributors are topped up from higher). Individuals at all levels however are better off under the alternate plan.

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