If social security taxes diverted to private account, is it better for aliens??

[AmericanWannabe]

Do you still have to work for 10 years to get hold of your private SS account?

[leroythelion]

Originally Posted by AmericanWannabe

Do you still have to work for 10 years to get hold of your private SS account?

Excellent question. Don't forget, the 40 quarters rule also applies to citizens.

Frankly, this is more about politics than allowing people to make their own investments. Very dangerous.

Brian

[AmericanWannabe]

Originally Posted by leroythelion

Excellent question. Don't forget, the 40 quarters rule also applies to citizens.

Frankly, this is more about politics than allowing people to make their own investments. Very dangerous.

Brian

If 4% of SS taxes is put into our private account, this means we only need to pay 3.5% taxes and the employer pays the other 7.5%.

I assume the private account of SS taxes can be passed to benficiary

[TheRealCanadian]

Originally Posted by AmericanWannabe

Do you still have to work for 10 years to get hold of your private SS account?

In theory, no. You make whatever you make, and then at 65 (or 59 and a half, or whenever) you can take the money out. Private accounts is a good idea; between my employer and I, we paid more in SS tax than federal income tax (and I grossed $95k last year).

With the caveat that I didn't listen to the speech tonight, the problem is that most published accounts have the Bush plan involve borrowing much more money than it would cost to merely subsidize the current pay as you go system until the Baby Boomers get flushed through the system.

[brb2]

I chose a 401k account over my employer's defined benefit plan (I can't remember the exact name). I sleep better knowing my money is mine and not at the mercy of my employer's financial condition when I retire. Same with SS accounts. One just needs to be aware where the money is being invested and balance the risks. I don't know why such a hoopla is being made about "privatizing" SS. It is taking personal responsibility for our own well being.

[AmericanWannabe]

Originally Posted by leroythelion

Excellent question. Don't forget, the 40 quarters rule also applies to citizens.

What I meant is an alien is more likely to leave the states so that
he will be short of 10 years to get retirement benefits. If some of
SS taxes were put into his private account, then he should
be able to get it no matter how many years he works.
In this way, I say the private account idea may be better
for aliens, expecially for H1B workers

[pv1976]

Originally Posted by AmericanWannabe

What I meant is an alien is more likely to leave the states so that
he will be short of 10 years to get retirement benefits. If some of
SS taxes were put into his private account, then he should
be able to get it no matter how many years he works.
In this way, I say the private account idea may be better
for aliens, expecially for H1B workers

I agree. For those who plan to retire in their home country, private accounts are the best bet. Currently, you can reap benefits of whatever money you pay as SS tax, only after the retirement age. Otherwise that money is just gone as far as the individual is concerned. With private accounts, you shud be able to withdraw the money (may be there would be some penalty like in 401ks) before reaching retirement age.

[qwertyisback]

Originally Posted by pv1976

I agree. For those who plan to retire in their home country, private accounts are the best bet. Currently, you can reap benefits of whatever money you pay as SS tax, only after the retirement age. Otherwise that money is just gone as far as the individual is concerned. With private accounts, you shud be able to withdraw the money (may be there would be some penalty like in 401ks) before reaching retirement age.

I don' think private SS account makes difference from that aspect. You won't get money until retirement age from private account as well(as per Bush's proposed plan). Only thing that, you got a choice where to invest in a limited sense. Its just one more plan to get more money to money brokers (rich people, who already got tax cut) to play around /bet huge money on stock market and give us promise to pay back at retirement age if that money survives until then. Its a one more ploy to make middle class poor and rich class more richer. No more or less.

[AmericanWannabe]

Originally Posted by qwertyisback

I don' think private SS account makes difference from that aspect. You won't get money until retirement age from private account as well(as per Bush's proposed plan). Only thing that, you got a choice where to invest in a limited sense. Its just one more plan to get more money to money brokers (rich people, who already got tax cut) to play around /bet huge money on stock market and give us promise to pay back at retirement age if that money survives until then. Its a one more ploy to make middle class poor and rich class more richer. No more or less.

But do you still need to work minimum 10 years to own your private
SS accounts? If yes, then it make great difference for people
who work only up to 9 years in the USA in their lifetimes

[dravisha]

From what I understand, the only change would be that when you retire, you will get your "income" (or pension) from 2 sources - your private account and Social Security instead of just social security. All other rules, like eligibility etc. remain the same.

[pv1976]

Originally Posted by dravisha

From what I understand, the only change would be that when you retire, you will get your "income" (or pension) from 2 sources - your private account and Social Security instead of just social security. All other rules, like eligibility etc. remain the same.

that is not entirely correct. If private accounts get implemented, the income from the current social security will be far less when you retire than what you wou'dve got otherwise. That is the whole point in creating private accounts.

With private accounts, you still dont have a choice but contribute into the accounts (like paying SS tax itself). The only difference is the money in private account is yours when you retire, whereas the SS tax that you pay today goes to some other retired person some where else.