I've been feeling unwell, and consequently have had little inclination to blog. However, a letter to the editor in today's Seattle Times set me off. Bruce Ramsey, a moderately conservative columnist for the paper, wrote an editorial yesterday which endorsed the concept of individual retirement accounts instead of the current government-managed Social Security system. Predictably, Seattle's loony left were displeased.
So, Times' editorial columnist Bruce Ramsey says in regard to private accounts and Social Security, "I should have the option of managing my own money" (editorial column, Jan. 26).
Well, guess what, Mr. Ramsey, you already have that option. It's called a 401(k)!
— Talia Goeke, Seattle
Seattle's limousine liberals strike again. Ms. Goeke is right in that Mr. Ramsey has the option of a 401(k). The Seattle Times Company offers a 401(k) plan, as do most large companies (about 70 percent of companies with 100 or more employees offer such a plan). Goeke's offhanded dismissal of Ramsey's entire piece ignores the fact that few small employers offer such a plan. Some large employers also lack a full 401(k); federal employees (like those of us in the military) can sock away money in a tax-deferred Thrift Savings Plan (TSP), but there is no matching contribution from the government. Additionally, it ignores the obvious; 401(k) contributions are voluntary, while Social Security taxes are mandatory.
It's interesting that the most ardent opponents of Social Security reform are those who are also disdainful of big business, and loudly proclaim their support of small business. Ms Goeke's politics are not indisputably left-wing, but it's likely that they are, considering the sneering condescencion in her letter. By dismissing Ramsey's arguments, she is ignoring the concerns of small-business employees and anyonoe who does not benefit from 401(k) plans, which is awfully self-centered and arrogant. She probably doesn't need to worry about Social Security; her investment portfolio will tide her over when SSA bites the dust.
As for Social Security, after 2018 the system will be operating at a defecit; it will eventually go bankrupt unless some structural reforms are enacted. 2032 is the year I have seen cited most often as the drop-dead date; I am eligible for benefits in 2033, so I most assuredly have a stake in the issue. I will be extremely upset if I spend a lifetime paying into a system that is insolvent when I can reap the benefits I was promised during that lifetime. It's easy to dismiss concerns for those who are rich or who don't expect to live that long, but for those of us who are not rich, and do expect to be around, it's not something to be treated so lightly.
posted on January 27, 2005 09:58 PM
TSP does have a government match for civilian federal employees (up to 5%). You are right that the uniformed military doesn't get a government match.