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Who's Counting on Social Security? Not We Twenty-Somethings

By Laura Thomas
Sunday, February 6, 2005; Page B03

People my age are as likely to believe in Social Security as they are in Santa Claus. And, if you ask me, it would be equally naive for a twenty-something to believe in either one.

As I watched bits of President Bush's State of the Union address last Wednesday night, I couldn't help but think back to this past Christmas Eve with my large, loud and lovable Italian family. Somehow I found myself debating Social Security's future with some of my older relatives. It started with them asking me about my job -- my first real job -- but soon veered close to violating the family rule against discussing politics at the dinner table.

_____Security Matters_____

Security has become the word of our age: Last week in his State of the Union speech, President Bush used it 29 times - 7 in reference to national security and 22 in discussing Social Security. But as the two pieces here show, security has always been a goal, not a given.

What Bin Laden Sees in Hiroshima, By Steve Coll

The Selling of Retirement, and How We Bought It, By Marc Freedman

Who's Counting on Social Security? Not We Twenty-Somethings, By Laura Thomas

It seemed as though my family (a mixture of partisan extremes, from Rush Limbaugh fans to passionate antiwar protesters) saw Social Security's troubles as a small matter -- contrary to the president's description last week. Whether the impending collapse of Social Security is a myth or not, I shouldn't be relying on Social Security to take care of me when I retire anyway, they said. I was taken aback by their mistaken impression that I had a sense of entitlement to Social Security, just as I was amused during the State of the Union speech to hear that Bush thought I was expecting to receive it.

I didn't want to stir up a Christmas Eve brawl, but I nonetheless felt compelled to explain that never in my life had I assumed that Social Security was coming to me. Every time I see that somewhat shocking Social Security dollar figure subtracted on my pay stub, I choose to look at it as giving back to my older family members who've been known to drop random checks in the mail to their poor, desperate niece or granddaughter.

By the time we finished the antipasto, we decided that we were all more or less on the same side: Start saving now, because Social Security, if it still exists when you're older, will only be for people on welfare or those who didn't have the foresight or willpower to save (which will not be you, Laura).

"As we fix Social Security, we also have the responsibility to make the system a better deal for younger workers," said the president. "And the best way to reach that goal is through voluntary personal retirement accounts."

I will be 62 in 2042, the exact year the Social Security Administration forecasts that the system's trust fund will run out of money, and benefits will be cut to match cash flow from tax payments, unless a fix is made earlier. Some say that Social Security is fated to be a distant memory by then, while others say it will be alive and kicking. Either way, I'm looking out for No. 1.

What Bush's "deal" looks like to me is exactly the same "deal" most of my twenty- and thirty-something friends already have. To borrow Bush's language from the State of the Union, I just opened a personal account called a 401(k) that I will pay into every two weeks, building a "nest egg" for my future. My money will grow tax-deferred, it will provide for my retirement and I'll be able to pass it along to my loved ones when I die. Right now, I'm also paying into Social Security every two weeks to help my grandma, not myself.

But these are two separate tabs, as I see it. On one hand, I'm willing to do my part to help people, young and old, have a roof over their heads, food in their tummies and clothes on their backs; so I'm not opposed to paying Social Security. On the other, when it comes to my retirement money, I don't want anyone else touching it, especially the government, which has done such a dandy job of handling retirement funds so far.

I see a pitfall to this so-called privatization. Is it really private if the government's involved? Isn't it possible that kids entering the workforce will think: "Hey, the government is putting money in my retirement fund, I don't need to open up another account until later. Now where is that BMW dealership?" Sure, some money will be taken from our paychecks and put in private accounts courtesy of Uncle Sam, but how much? A percentage? What percentage? Into which stocks and bonds? Who's choosing them? Do I have a say? What if those of us in our mid-twenties live to be 120 years old? Will there be enough money to live that long comfortably? These questions keep this 25-year-old holding onto her retirement fund, one the government can't tamper with. Better be safe than sorry, Mama always said.

The president's "deal" will ensure that everyone , which is supposed to include low-income Americans in his "ownership society," saves for retirement. But why can't low- and high-income Americans do it on their own? If Bush passes his deal into legislation, the money's still coming out of those paychecks, whether any of us like it or not.

My generation and our government need to figure it out: Should we all save together or save separately? I've never been one for labels, but I think the logic goes: Democrats and liberals lean toward saving together in case we all don't or can't save separately, and Republicans and conservatives lean toward saving separately because the only helping hand is the one at the end of your sleeve. Or something like that.

Politics notwithstanding, my logic goes like this: It's time to "prepare and plan" for the future as the president put it Tuesday. That's why last week, as soon as I hit the one-year mark at my job and became eligible for a 401 (k) plan, I signed up -- much to the relief of my family, I'm sure. And I don't think other people my age are just sitting in the dark waiting for a glimpse of Santa Claus, or tossing their money up the chimney while counting on Social Security.

Author's e-mail: thomaslaura@washpost.com

Laura Thomas is a news aide in The Post's Style section, assisting with the "Out & About" column and coordinating classical music reviews.

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