Galveston, Tex., alternative to Social Security held up as model

[jaxx]

Galveston, Tex., alternative to Social Security held up as model

In the late 1970s, county employees in Galveston, Tex., made an unusual and risky decision that they thought would help secure their financial future. They took advantage of a federal provision available at the time and opted out of Social Security.

<..> Today, Galveston has become a poster child for critics of the Social Security system who say the decision is proof that there is a better way. Among those critics are at least two Republicans in the 2012 presidential race, which in recent days has centered on whether it is better to fix or to replace Social Security.

<..> “If you’re single, if you’re well off and you die within 10 years [of retirement], maybe you’ve done better,” said Eric Kingson, a professor of social work at Syracuse University and a vocal critic of the Galveston alternative. “For most people, it’s somewhere between ‘very bad’ and ‘not very good.’ ”

<..> “We did not weight it in favor of higher- or lower-income people,” said Rick Gornto, the financial planner who devised the program. “You put your money in, you invest it, and you get your money out.”

http://www.washingtonpost.com/politics/g...l_politics

What a model. The poor do not do well and the rich cash in for a few years. This is what Perry wants, what the pubs want, and what would destroy the elderly.

[RoyGBiv]

You know what's also just awesome about this model?

The whole time you're in the system, you're not paying into Social Security. If you move away from Galveston (or other places in Texas that do this also, e.g. the teacher's retirement system) and then spend the rest of your life *anywhere else*, what you've done is divide your resources such that you have minimized any possible returns. Your SS benefit will be crap, and your benefit from this mess will be crap or nothing.

Yeah, it's a model alright.

[jaxx]

Good catch RoyG. It looks to me like a model for the wealthy.

[RoyGBiv]

(09-14-2011 10:23 AM)jaxx Wrote:  Good catch RoyG. It looks to me like a model for the wealthy.

One of several reasons I left Texas in 2010 was that I was afraid I would utterly screw myself with this very thing. I crunched the numbers, and it was going to be very, very bad. People who move to Texas in their late 30s or later and find employment that gets them into the Texas teachers retirement system (or this mess) are screwing themselves royally.

[Born_A_Truman]

Windfall Elimination Provision will decrease any SS benefits they are due, right?

[Sheepshank]

Yeah...my employer (City Gov't) had done the same. Want me to describe (after 27 years of employment), how those State retirement and 401K's monies are doing? Want me to cheer about 3 years left to retire and what I don't have for the long term? Bullshit.