Social Security vs. Personal Retirement Accounts: Which Way for Gays?
‘œThey want the federal government controlling Social Security like it’s some kind of federal program.’ ‘“ George W. Bush
Recently, I heard from Lea Abdnor, the Executive Director at Women for a Social Security Choice in response to my post about how gays and lesbians are Denied Social Security Benefits. In case you forgot, families of gays and lesbians (upon the death of a spouse) are denied the same benefits of heterosexual Americans, even though we contribute equally to Social Security throughout our careers.
Abdnor writes, ‘œYou are SO right about Social Security penalizing gays and lesbians. I’m straight but I’ve complained about this for years! ‘˜Legal’ spouses who don’t work a day in their life, and pay zero in Social Security benefits are granted FREE an additional 50% on top of his/her spouse’s Social Security benefit. A relic from the old ages.’
‘œIf the system allowed workers to put part of their 12.4% taxes in a personal Social Security IRA that the worker OWNED, then the assets in the account (which could be considerable over a working career) would be inheritable.’
‘œI’ve never been able to understand why the gay and lesbian community hasn’t been screaming in support of those protected accounts. It wouldn’t preclude working for legal ‘˜marriage’ status, but personal accounts are a whole lot more likely!’
I have to plead ignorance on Social Security reform but Abdnor’s comment gave me good reason to research and then post here on the topic. What I found is that gay liberals typically don’t like the idea of Personal Retirement Accounts (PRA) because it falls under Bush’s reform plan.
But there are two sides to every coin so hear me out. According to the libertarian Cato Institute, ‘œAndrew Lee, an undergraduate student at Claremont McKenna College, writes that Social Security reform is an issue that the typically left-leaning gay population should consider supporting. Same sex partners stand to gain significantly from a system of personal retirement accounts since under such a plan, individuals get to choose who receives survivor or dependent benefits.’ If you want to read his thoughts in entirety then click over to the San Francisco Chronicle site. He makes some valid points.
Back in 2004, Mike Hill wrote a brief but compelling piece called, Social Insecurity and why queers should push for PRAs. He writes, ‘œA bitter cat fight has broken out between two leading gay rights organizations over whether or not to support a social security privitization initiative which would, as a part of the reform, allow same-sex couples the same access to the system’s benefits as heterosexual married couples. The left-leaning National Gay and Lesbian Task Force is against this, because they are reflexively against any social security reform, while the centrist Human Rights Campaign is likely to come out in favor of such an initiative.’
‘œI don’t care who proposes social security reform — whether it’s Noam Chomsky or Pat Robertson — on this issue, they would have my support. I am 32 years old, and every year thousands of dollars ‘“ money I will never see again, since social security will be long since broke by the time I retire ‘“ are sucked from my paycheck to pay for Cadillac hood-ornament polishings for wealthy seniors.’
‘œSocial security reform cannot come too soon — it is my money, so let me save it as I wish. I should note, I am not some anti-tax zealot. I know taxes pay for a civilized society, and I even accept the need for welfare for the truly needy. But social security is not welfare, and it is not a tax which benefits society as a whole. It is a special-interest subsidy for the elderly, including many who are quite well-off. I believe the program should be rolled up…pay people back what they put into it (and no more) and phase it out over the next decade or so, to be replaced with a system where people get to choose where their retirement savings are invested, and where they money is kept in their own names, in private accounts.’
Interesting! The problem is: none of the Democrats are for PRAs. You can find out where all the candidates stand (both Democrats and Republicans) by clicking on this link.
Social Security aside, Dan Woog argues that today’s same-sex partners still fare better than preceding generations (due to changing governmental policies and the policies of private employers) in his article: Retirement Issues for Gay/Lesbian Couples.
He writes, ‘œUntil recently, private savings vehicles like 401ks varied enormously between same-sex and married couples. In August 2006, however, Congress revised the Pension Protection Act of 2006, giving same-sex couples (and nonmarried heterosexual partners) much fairer ‘“ though still not equal ‘“ treatment.’ It’s a start.
So back to PRA’s ‘“ what do you think? Should we or shouldn’t we? Comments encouraged.
I would be very pleased to see other gay people take a more critical look at the economic policies of the Democratic party. Their stance on Social Security is just one element of a very socialist platform, which is why I can never stomach voting Democrat. I usually end up voting Libertarian or occasionally for a Republican because of this. I would love to see some Democrats supporting private retirement accounts, and being friendlier in general to the idea of individuals keeping their money and deciding what to do with it and how to invest it.
I become very worried when we start talking about siphoning off a part of the social security system’s financing.
Social Security should not be anyone’s sole plan for retirement, but for many elderly and disabled people, it is the thing that saves them from homelessness and starvation, not a means of obtaining a “cadillac hood ornament.”
It’s easy for many Queercents readers, employed people in our 20s-40s mostly, to complain about our taxes and to come up with plans that will leave us better off. But my grandfather can’t go out and make a better retirement plan, or work for additional income. He’s 92 and has severe alzheimers. He and the millions of other people who depend on social security should be able to continue depending on it.
Also, I find the idea that because Social Security benefits are currently structured to be totally unfair to queer families, therefore we should be in favor of getting rid of it, just incomprehensible.
Marriage benefits are currently structured to be totally unfair to queer families (in most places). Should we get rid of marriage? No, we should try to apply marriage laws in a non-discriminatory manner. The military is currently structured to be unfair to gays and lesbians who want to serve, forcing them to hide their personal relationships. Should we get rid of the military? Again, I’d go with no, and even if you think the answer is yes, that’s probably not the main reason. We should try to conduct military operations in a non-discriminatory manner.
Likewise, we should change the discrimination in social security benefits. But we shouldn’t scrap the safety net. People need it. And one day, we might be those people.
The reason most politicians dislike the PRA’s is since the money is not segregated out with your name on it when you die your heirs have no idea how much they may have lost.
If, like my own parents who died at ages 63 and 64 and NEVER collected a Dime from Social Security and paid the absolute Maximum into the system all their working lives, you kick the bucket early the “System” keeps all the money and you have no idea how much was paid in.
Though in my parents case a little judicious calculating gives me an estimate of roughly $250,000 between their portion and the employers portion paid in over their lives….WITHOUT ANY INTEREST FIGURED IN!!!!!!
At leat half of the tax one pays should be able to be directed to an Inheritable PRA with the balance into a general fund to pay for those who for whatever reason cannot contribute to the system.
~ Roland
P.S. Chew on this~~~~ $30 a week (your $15 and your employers $15 match on a $200 Gross Pay) at 6% interest from the time your 25 until your 65 and assume you NEVER get a Raise will give you an account with $250,000 in it that at 6% earns $15,000 a year interest…which is equal to $300 a Week.
Don’t believe me get a copy of Financial Compounding Tables at the bookstore and do the math!!!!!
Those are all great comments. My post wasn’t exactly an “I’m all about reform” piece, but rather something to encourage conversation. You all make some great points.
Just for the record… I am one of those that have tired of taxes and big government. On social issues, I’m a Democrat, but fiscally, I tend to side with the Republicans. Oxymoron? Or does this make me a gay Libertarian… still not sure.