March 30, 2005

Full Benefit Plans are Full of It

Carroll Andrew Morse

Uber-consultant Dick Morris’ New York Post column on social security has a problem. The 2nd reform option is misleading.

Option B — No increase in taxes. A later retirement age. The current level of benefits.
A later retirement age is a cut in benefits. If you are forced to wait longer before you can start taking (your) money out of the system, you receive less than you would have if you had started earlier.

Be aware of this point. In the coming months, different plans for providing “full benefits” indefinitely into the future will be proposed. Almost all of them will involve benefit cuts hidden by a redefinition of the meaning of “full”.