Tuesday, April 26, 2005
I have been holding back my enthusiasm for John Tierney's columns since you never know what will happen when a libertarian starts writing for the New York Times. But today we have an excellent piece by this writer comparing his social security retirement fund with that of a Chilean friend from second grade. He points out that:
You may suspect that Pablo has prospered only because he's a sophisticated investor, but he simply put his money into one of the most popular mutual funds. He has more money in it than most Chileans because his salary is above average, but lower-paid workers who contributed to that fund for the same period of time would be in relatively good shape, too, because their projected pension would amount to more than 90 percent of their salaries. By contrast, Social Security replaces less than 60 percent of your salary - and that's only if you were a low-income worker. Typical recipients get back less than half of their salaries.Mr. Tierney's story reminds me of our recent cab ride in Boston.