The President's Commission to Strengthen Social Security meets
today in Washington to discuss how the program can be reformed for
future generations. If Congress changes Social Security by allowing
workers to invest a small portion of their payroll taxes in in
their own Personal Retirement Accounts, their lives can be
dramatically different.
A low-income single African American man who is 28 today will
have an additional $19,000 at retirement (in inflation-adjusted
2001 dollars), which he could use to buy an annuity that would
increase his retirement income by over $150 per month. This
represents a full 15 percent increase in his retirement income
under current law Social Security.
A 33 year old Hispanic couple earning a combined $37,000 this
year could leave a substantial sum to their children through their
Personal Retirement Account. If PRA reforms were enacted now, they
could leave over $225,000 to their family when they die (which
equals nearly $47,000 in inflation-adjusted 2001 dollars).
Finally, two 33 year old middle class teachers could send their
grandchildren to an Ivy League college with their PRA funds when
they die. They will amass over half a million dollars (or over
$110,000 in today's dollars).