(U-WIRE) WASHINGTON – Saving money for retirement may not be on the minds of many college students. But in his push to transform Social Security, President George W. Bush hopes to reach out to the 20-something age group.
The President wants to add individual investment accounts to Social Security so that workers could invest in stocks and bonds and watch the money grow as they age. President Bush maintains that young workers, living paycheck to paycheck, have the most to gain from the proposal. With such accounts, the President believes, workers could create a nest egg that could even be passed on to their children.
“If you’re in your mid-20s, I want you to think about a Social Security system that will be flat bust, bankrupt, unless the United States Congress has got the willingness to act now,” The President said in a January speech.
But as far as college students are concerned, polls show that young people are not tuned in to the Social Security debate. A March poll by the Pew Research Center for People and the Press found that 47 percent of people age 18-29 knew “nothing at all” about the private investment proposal. Only 14 percent of this age group said they were following the debate “very closely” in the news.
“I don’t get to watch the news as much because I’m at work and class all day and after that in the animation lab or doing homework in a study lounge,” says Columbia College film student Anthony Taylor. “But I think I should worry about it because I’m going to need that money someday.”
The current retirement program under Social Security provides a lifetime monthly income for qualified workers once they reach their full retirement age. Depending on when they were born, that age ranges from 65 to 67. The amount of retirement benefits that a worker receives is based on his or her income while working.
But the Bush administration says that the money backing Social Security is rapidly dwindling. According to the White House Web site, in 1950 there were 16 workers supporting every one beneficiary of Social Security. The President says by the time that younger workers retire, there will be only two workers supporting each beneficiary.
With young people working more years, they would have more time for their investments to compound interest. Under the President’s proposed plan, a young person who earns on average $35,000 a year over his career would have saved nearly a quarter million dollars for retirement. There are no plans to reduce benefits for current or soon-to-be retirees.
But his proposal is not without criticisms, from Democrats and many interests groups like the AARP. Critics say that the plan carries higher risks of losing money by investing in the stock market, and guaranteed benefits would be reduced. Opponents also worry that the reform would burden the next generation with trillions of dollars in federal debt. Democrats maintain that a less drastic measure is a better solution.
And most Republicans seem wary about fully backing the President’s plan. Senate Finance Chairman Chuck Grassley of Iowa is ready to put individual investment accounts aside and focus on mending the current system, according to USA Today.
Wheaton College senior Maegan Mitchell doubts Bush’s current proposal for private accounts will ever receive bipartisan support.
“If Democrats have anything to do with it, I think, and I hope they’ll stop it,” Mitchell says. “I don’t think they will fix it, but I’m sure they’ll come to some compromises if and when it is absolutely necessary.”