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In EquitiesBy Rick Horowitz Hating, as I do, to be the bearer of distressing news, there are times, nonetheless, when the solemn obligations of column creation take precedence over the niceties of reader comfort. At such moments, the only proper course is full speed ahead, and damn the consequences. It is out of necessity rather than desire, therefore, that I offer you, Dear Reader, the following information pertaining to the debate much on the minds of the citizenry in recent days, to wit: Somebody's gonna get screwed. More than one somebody, more than likely -- whole bunches of somebodies. And strangely enough -- I know this will shock you -- the folks most likely to take it on the chin are some of the very folks most in need of help. While the folks most likely to come out smelling like roses are the ones who didn't really need the help in the first place. You're stunned. I can tell you're stunned. Who'd have imagined it? A plan from the administration of George W. Bush that could wind up giving most of the goodies to those who've already got it pretty good? I'm talking, this time around, about the proposal to deform -- sorry, to "reform" -- Social Security. Private investment accounts -- decades in the dreaming up, the pride and joy of conservative think tankdom, and coming soon to a sales pitch near you! A chance to cut the evil cord of dependence on government. A chance to build yourself a nest egg. Or to fall right out of the tree. "Poorest Face Most Risk on Social Security" -- that's the recent headline in the Washington Post, atop a story detailing some of the ways things might go badly for the less-than-well-to-do among us if the president's latest leanings actually become law. A stock market that goes slack just when you're ready to retire. A "safe" investment in stock or bond funds that never quite lives up to your expectations. A sudden need for more money than this new plan allows you to withdraw at one time. Etcetera. Of course, it could also be the case that none of these things happens, that everything goes just swimmingly and you glide into your golden years without a care. But it could be just the opposite -- in which case, you'll wish you had those guaranteed benefits. Enough to live on all by themselves? Maybe not. But at least a basic income, a floor to keep you from free fall. That's why they call it Social Security. Not Social Possibility -- Social Security. But can't you protect yourself from the vagaries of the markets? It's a fair question. And the fair answer is: Maybe. If you know what you're doing. (You can do all sorts of things if you know what you're doing.) "What if you retire the day after a crash," a recent editorial, also from the Washington Post, hypothesizes, "and are forced to convert your savings into an annuity just when your account has tanked?" Sounds like a problem. But not to the Post's editorial writer. "Workers could avoid that danger by shifting their savings gradually out of stocks and into bonds in their last working years, thus insulating themselves from a collapse in equities." Why didn't you think of that? Just shift your savings gradually out of stocks and into bonds in your last working years, thus insulating yourself from a collapse in equities! It's the most natural thing in the world -- if you happen to know your way around an investment portfolio. But lots of us don't. Right here in America -- land of the free, home of the brave -- lots of us don't know our equities from our egg whites. Lots of us insulate ourselves in hand-me-down quilts and pray the heating bills don't go any higher. And if the floor collapses... Posted 2/22/05. Get
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Rick Horowitz
