Monday, July 23, 2012

Opting out of Social Security

I've been following a few debates over at the GOPPlatform2012 site, where they are looking for ideas and arguments about how the platform for the party should change. I was a Republican as I left high school, somewhat switched to the Democratic party with Clinton, but have leaned towards the Libertarians in the new millennium.

However I try to follow both major parties more as they shape our country. Without a lot of people thinking, and talking, more about politics, I'm not sure the Libertarians will come to power in any significant numbers in the near future.

One of the debates is on opting out of Social Security/Medicare. I supported this as a college kid, thinking obviously I could do better than social security. As a middle-aged adult, I'm not so sure, and more importantly, I'm not sure most people can. Financial planning is hard, and it's not something most people do well. While I think those that do it poorly should perhaps retire poorly, I don't think anyone should retire without anything, and I don't want people going homeless at age 80 because they didn't save enough. By the time you know what's "enough", it can be too late.

We are frail as humans, fraught with inconsistencies, short-sightedness, and an astounding lack of discipline. Diet marketers make millions a year because of the latter. In the Christian world, we absolve people of sin, not accepting it, but allowing for the fact that people make mistakes. People are imperfect, and they can't be condemned for a single mistake.

In terms of retirement and healthcare I believe people will make mistakes. More will than won't, and while a small safety net is good, I think some structure around forced savings ought to be included here. Call it a tax, call it a framework that requires you to save xx% of your income and self-direct it through certain investments, but I think the idea of SS/Medicare are good. We can make it better, but we can't eliminate it, and I think allowing people to opt out, who think they are smarter than the system, will lead to more problems than it will eliminate.

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