Folks, sometimes mistakes happen. The Personal Finance weekly e-letter that went out earlier today quoted extensively from a Washington Post article that was substantially updated and corrected after the e-letter was sent to subscribers.
In writing off that article, I said President Bush failed to disclose all the details about his plan to add private accounts as an option in the Social Security system. I noted that the original Post article about the president's plan said workers would only be able to keep a portion of the total amount their personal account accrue over their working years.
That's not the case, as Post reporter Jonathan Weisman makes clear in the corrected version of that article: "[W]orkers who opt to invest in the new private accounts would lose a proportionate share of their guaranteed payment from Social Security plus interest. They should be able to recoup those lost benefits through their private accounts, as long as their investments realize a return greater than the 3 percent that the money would have made if it had stayed in the traditional plan."
And, more to the point, the amount workers contribute to their personal accounts -- and all the gains those accounts earn over the years -- "would belong to the worker upon retirement, according to White House officials."
You can read the new version of the article here: "Participants Would Lose Some Profits From Accounts."
Here's how I still feel about the president's Social Security agenda -- I don't like it. If very smart Washington Post reporters can have trouble dissecting the complex details of the plan, then it's going to be even harder for the rest of us.
Yes, workers will own their personal accounts, but there are no guarantees that those accounts will earn more than what the system as currently constructed would deliver. As I wrote two weeks ago in my e-letter, "I believe the winners will be some wealthy Wall Street types who are already jumping for joy at the prospect of earning billions (yes, that's billions with a 'b') managing the millions of private accounts that would have to be set up under the Bush administration's plan."
I will continue writing about the Social Security debate in this e-letter and in my newspaper columns. Please keep sending your own thoughts to colorofmoney@washpost.com.
-- Michelle Singletary
P.S. The rest of this week's e-letter contents -- from the reader comments on Social Security to the income tax tips and Color of Money Book Club announcement -- stand as they are, so don't toss out the earlier e-mail until you've had a chance to check out those other items.
