Reply #9: 19 yrs old making $38,566????

[warpigs]

From the article:

"Take somebody who will be 19 this year and will enter the workforce in 2011 - the first year in which younger workers will be allowed to open personal accounts - earning $38,566 in today's dollars, what the Social Security Administration calls the "medium wage." That is the figure, annually adjusted to reflect the rising cost of living, that the Social Security Administration uses to calculate the effect of Mr. Bush's plan on the typical American worker."

What 19 year-old is making the median wage?? Due to the compounding effect of interest, this would overstate the amount the worker would have at retirement. The actual calculation should be done using the median wage at each age. This is an outright manipulation of reality!!


The way SS works now, the benefit you get is based on your wages at retirement (or the last few years) and not your average salary over your life - since people (typically) are paid more at the end of their career the comparison should be based on that.

Also, what happens to someone who stays home and cares for children and then enters the workforce at a later age say 45-50? The current SS system would treat them no differently than anyone else at retirement - but this proposed system they would have significantly less. That is why you can't compare the "average" or "median" case for a social insurance program - you need to look at all (or majority ) of each types of workers.