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[Jim Allman <jim AT ibang.com>]

On Feb 8, 2005, at 12:16 PM, Tanner Lovelace wrote:
> Instead, at age 65 you get to give all that money to the government 
> who will then dribble it back to you in small payments, JUST LIKE 
> SOCIAL SECURITY

Actually, under the administration guidelines, this "annuitized" payout 
(guaranteed yearly payments, til you die) would be required only for 
low-income retirees--people whose other sources of income, including 
their remaining traditional SS benefit, would not get them above the 
poverty line.

Hopefully your 401(k) will throw off enough in dividends (and asset 
sales) to keep you out of this category. I haven't heard whether this 
will be recalculated every year--say, after a market crash. This would 
be interesting, since buying an annuity is pretty much a one-way 
street. You've given your money to an insurance company, and they're 
your daddy now.

It seems to me that we keep coming back to this: Shared risk is shared 
risk. If there are only one or two insurers backing all these SS 
annuities, they'll do it with investments. If their investments fail, 
the insurer fails. Ouch.

  =jimA=

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Jim Allman
Interrobang Digital Media
http://www.ibang.com/
(919) 649-5760